Exhibit 10.1
PURCHASE AND SALE AGREEMENT
(Niobrara Shallow Gas Project)
THIS PURCHASE AND SALE AGREEMENT (the "Agreement") is made January....,
2005, by and among ATEC Energy Ventures, LLC ("ATEC"), a........ limited
liability company whose address is......and Apollo Energy, LLC ("Apollo"), a
Colorado limited liability company whose address is 0000 Xxxxx Xxxxxx, Xxxxx
000, Xxxxxx, Xxxxxxxx 00000 (collectively, "ATEC/Apollo"), as sellers, and Teton
Petroleum Company ("Teton"), a Delaware corporation whose address is 0000
Xxxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000, as buyer. ATEC and Apollo are
collectively referred to as ATEC/Apollo, while ATEC, Apollo and Teton are
sometimes referred to individually as a "Party" or collectively as the
"Parties."
1. Background. On December 17, 2004, ATEC/Apollo and Teton executed a
binding letter of intent, concerning Teton's anticipated purchase of all of
ATEC/Apollo's leasehold interests in the Shallow Niobrara Gas Project covering
approximately 162,427 net acres (determined in respect of each lease by
multiplying the aggregate percentage working interest of ATEC/Apollo in that
lease by the number of net mineral acres covered by the lease), as more
particularly described in Appendix 1 to this Agreement (the "Leases"). The
letter of intent was conditioned upon securing the approval of Teton's board of
directors and contemplated the eventual execution of a more detailed purchase
and sale agreement. Teton's board of directors has now approved the transaction,
and the Parties set forth below the detailed terms of their purchase and sale.
2. Purchase and Sale.
2.1 Agreement. ATEC/Apollo shall sell, assign, transfer and convey to
Teton, and Teton shall purchase, pay for and receive, all of ATEC/Apollo's
leasehold interest in and to the Leases (subject to ATEC/Apollo's reserved
overriding royalty, as described in Section 8.2, below) at Closing, on the
terms and conditions set forth herein. The rights, obligations and
liabilities of ATEC and Apollo under this Agreement are joint and several,
and both ATEC and Apollo unconditionally agree to sell their entire
leasehold interest in the Leases, so that Teton will acquire the entire
collective leasehold interest of ATEC/Apollo in the Leases at Closing. ATEC
has authorized Apollo to act as ATEC's agent in receiving notices and
payments under this Agreement, and ATEC hereby releases Teton from any
obligation to ensure that such notices and payments are transmitted by
Apollo to ATEC.
2.2 The Leases. As used herein, the term "Leases" includes not only
the leasehold interests shown in Appendix 1, but also the entire interest
of ATEC/Apollo in all xxxxx and wellbores located on lands covered by the
Leases or pooled therewith; all easements, equipment and other ancillary
rights and property associated with the Leases and xxxxx; and all land,
technical and other data, files and records in the possession or control of
ATEC/Apollo relating to the Leases and to all lands in the AMI, as defined
in Section 5 below, including without limitation the Petra data set, Power
Point Presentation and other technical data, but only to the extent that
such transfer is permitted by applicable licensing agreements.
2.3 Purchase Price. The purchase price, subject to possible adjustment
pursuant to Sections 3.1, 3.4 and 4 below (as adjusted, the "Purchase
Price"), for the Leases shall be $3,248,540 plus two unregistered stock
purchase warrants, to be delivered as follows:
(a) $25,000 in cash, which was paid to Apollo as an initial
binder upon execution of the letter of intent on December 17, 2004;
(b) $322,354 in cash, which is today being paid as xxxxxxx money
by wire transfer to Apollo upon execution of this Agreement;
(c) $2,251,481, which shall be paid by wire transfer to Apollo at
Closing; and
(d) 371,260 shares of unregistered Teton common stock, which
shall be delivered in two certificates at Closing, one issued in the
name of Apollo for .... shares and one in the name of ATEC for....
shares; and
(e) two unregistered warrants allowing the purchase of an
aggregate 185,630 shares of unregistered Teton common stock at any
time during the three-year period following Closing at a purchase
price of $1.75 per share which shall be delivered at Closing, one
issued in the name of Apollo allowing the purchase of.... shares and
one in the name of ATEC allowing the purchase of.... shares.
2.4 Share Matters.
(a) Disclosure. ATEC/Apollo shall advise anyone inquiring about
the Leases that the Leases are under contract and are not available
for sale or discussion. ATEC/Apollo shall not, however, identify Teton
as the buyer or disclose any other information concerning the purchase
and sale until Teton has publicly disclosed such information and, even
after Teton's public disclosure, ATEC/Apollo will disclose no
information other than that contained in Teton's public disclosure.
ATEC/Apollo acknowledges that Teton is subject to the reporting
requirements of the Securities Exchange Act of 1934, that Teton's
common stock is traded publicly, and that federal and state securities
laws impose significant restrictions concerning the use or disclosure
of the non-public information in general and in buying or selling, or
discussing with others the possibility of buying or selling, Teton
securities by persons who have access to information concerning Teton
that is not generally available to members of the general public.
(b) Registration Rights.
(1) After one year from the date hereof, ATEC/Apollo, shall
have a collective right by written notice to Teton (a "Demand
Notice") to require Teton to file a registration statement (a
"Registration Statement") on an appropriate form under the
Securities Act registering for resale up to 50% of the shares
issued in respect of the Purchase Price and any shares issued to
date upon the exercise of the Warrants which are held by
ATEC/Apollo (the "Registrable Securities") which are covered by
such Demand Notice. Upon receipt of a Demand Notice, Teton shall
use its commercially reasonable efforts to file such Registration
Statement and cause it to be declared effective as soon as
practicable.
(2) If at any time after six months but prior to the end of
the one year period from the date hereof, Teton proposes to file
a Registration Statement with respect to an offering of Teton
Common Stock (except on Form X-0, Xxxx X-0 or any successor form
thereto), for its own account for cash, then Teton shall give
written notice of such proposed filing to holders of the
Registrable Securities at least fifteen days before the
anticipated filing date (the "Piggyback Notice"). The Piggyback
Notice shall offer ATEC/Apollo the opportunity to register all of
the Registrable Securities on the Registration Statement (a
"Piggyback Registration"). If ATEC/Apollo requests such Piggyback
Registration, Teton shall, subject to the limitation set forth in
Section 2.4(b)(3) below, include in the Piggyback Registration
the requested number of Registrable Securities.
(3) If Teton is undertaking a Piggyback Registration, Teton
shall use its commercially reasonable efforts to cause the
managing underwriters of a proposed underwritten offering of
equity securities to include all requested Registrable Securities
on the same terms and conditions as any similar equity securities
of Teton included therein. Notwithstanding the foregoing, if the
managing underwriters of such underwritten offering determine in
good faith that the total number of securities that ATEC/Apollo
and Teton propose to include in such offering is such as to
materially and adversely affect the success of such offering,
then the securities to be offered for the account of ATEC/Apollo
shall be reduced or limited to the amount recommended by such
managing underwriters.
(4) If, after the second year from the date hereof any
shares issued or issuable pursuant to the Warrants held by
ATEC/Apollo remain unregistered after such group has exercised
its rights pursuant to Section 2.4(b)(1) (the "Remaining Warrant
Shares"), ATEC/Apollo shall have the right by written notice (a
"Warrant Demand Notice") to require Teton to file a Registration
Statement on an appropriate form under the Securities Act
registering for resale all of the Remaining Warrant Shares (a
"Warrant Share Registration") held by ATEC/Apollo that have been
issued to date and that have not been previously registered
pursuant to either Section 2.4(b)(1) or 2.4(b)(2).
(5) Teton shall use its commercially reasonable efforts to
cause the Registration Statement to be declared effective by the
Securities and Exchange Commission (the "SEC") and any state
securities commission as soon as practicable after its filing
with the SEC, and to remain effective and current until such time
as all of the Registrable Securities included in such
Registration Statement are sold pursuant to the Registration
Statement (the "Effective Period") and to execute an underwriting
agreement in customary form and reasonably satisfactory to Teton
and to reasonably assist such sale; provided, however, that (i)
ATEC/Apollo shall use its reasonable efforts to provide written
notice to Teton prior to any sale of Registrable Securities, (ii)
Teton shall have no obligation to cause the Registration
Statement to remain effective for the benefit of ATEC/Apollo if
ATEC/Apollo is able to sell all remaining Registrable Securities
owned by it in compliance with Rule 144 in a single transaction
to which the volume limitations of Rule 144(e) do not apply or if
such volume limitations are applicable without exceeding such
limitations. Teton shall promptly notify ATEC/Apollo, its counsel
and the managing underwriters, if any, and confirm such notice in
writing (an "Occurrence Notice"), (i) of the issuance by the SEC
of any stop order suspending the effectiveness of a Registration
Statement or of any order preventing or suspending the
effectiveness of a Registration Statement or of any order
preventing or suspending the use of any prospectus or the
initiation of any proceeding by any person or entity for that
purpose, (ii) of the happening of any event that makes any
statement made in such Registration Statement or related
prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect
or that requires the making of any changes in such Registration
Statement, prospectus or documents so that it will not contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made (in the case of the related prospectus only), not
misleading, and (iii) of Teton's reasonable determination that a
post-effective amendment to a Registration Statement would be
appropriate. Upon receipt of an Occurrence Notice, ATEC/Apollo
shall forthwith discontinue disposition of the Registrable
Securities covered by the applicable Registration Statement or
prospectus until the earlier to occur of (x) the receipt of
ATEC/Apollo of a supplemented or amended Registration Statement
or Prospectus as contemplated by the following sentence or (y)
the receipt by ATEC/Apollo of written notice from Teton (a
"Clearance Notice") that the use of the applicable prospectus or
Registration Statement may be resumed. If Teton shall deliver an
Occurrence Notice to ATEC/Apollo, (i) the Registrable Securities
subject to such Registration Statement or prospectus shall remain
Registrable Securities for purposes of this Agreement, and (ii)
Teton shall use its commercially reasonable efforts to promptly
prepare and file a supplement or post-effective amendment to the
Registration Statement, prospectus or document incorporated or
deemed incorporated by reference or prepare and file such other
documents and take such other actions as may be required to
permit ATEC/Apollo to consummate the sale of the Registrable
Securities subject to such Registration Statement or prospectus.
(6) Notwithstanding anything to the contrary herein, Teton
shall not be required to register any Registrable Securities or
Remaining Warrant Shares more than once in a Demand Registration
or Warrant Share Registration, as appropriate, and shall not be
required to effect more than one Demand Registration and two
Warrant Share Registrations for ATEC/Apollo; provided, however,
that if (i) any offering or sale of any Registrable Securities or
Remaining Warrant Shares pursuant to a Demand Registration or
Warrant Share Registration, as appropriate, is not consummated
due to (A) any failure by Teton to perform its obligations under
this Agreement or (B) the withdrawal by ATEC/Apollo having given
the Demand Notice or Warrant Demand Notice at any time before the
Registration Statement has become effective or (ii) in the case
of an underwritten offering, if a material adverse change in
Teton's financial position or business occurs that causes such
offering not to close, then the Demand Notice or Warrant Demand
Notice with respect to which such Registration Statement was
filed shall not be counted as a Demand Notice or Warrant Demand
Notice for such purposes.
(7) Teton shall pay all expenses on any registration
hereunder, other than underwriting discounts and commissions;
transfer, stamp, and similar taxes; and other than expenses
incurred by ATEC/Apollo whose Registrable Securities are being
sold for legal, investment banking, or other similar services
obtained by ATEC/Apollo in connection with such registration and
sale.
(8) The registration rights set forth in this Section 2.4(b)
with respect to the Registrable Securities or Remaining Warrant
Shares are not assignable without the express written consent of
Teton, which consent shall not be unreasonably withheld.
3. Title and Environmental Due Diligence Examination
3.1 Title and Environmental Defects. For the purposes of this
Agreement, a Lease will be deemed to have a "Defect" if ATEC/Apollo's title
to the Lease in question or the environmental condition of the lands
covered thereby is defective to a degree that a reasonably prudent operator
in the Rocky Mountains would not drill (or, in the case of environmental
condition, acquire) such Lease until appropriate curative work had been
performed. The Purchase Price has been computed on the basis that Teton
will be acquiring Defect-free Leases covering 162,427 net acres, with no
lease having a net revenue interest less than 80%, and the Parties have
entered into this Agreement based on a mutual factual belief that the
Defect-free Leases will, when considered together, have a mean average net
revenue interest of approximately 82.4%. If the Leases do not cover the
full 162,427 net acres at a minimum net revenue of 80%, the Purchase Price
shall be reduced by $20 per net acre below 162,427, and will be increased
by $20 per net acre above 162,427 (without adjustment for net revenue
interest), in both cases rounding the net acres to the nearest whole
number. Adjustments, whether up or down, will be applied 80% to the cash
portion of the Purchase Price and 20% to the Teton stock portion of the
Purchase Price, with the aggregate number of warrants adjusted so that the
number of shares available for purchase under the warrants is always equal
to 50% of the number of shares forming the Teton stock portion of the
Purchase Price. Neither fractional shares nor warrants allowing the
purchase of fractional shares will be issued; instead, any adjustment
necessary to ensure the use of whole shares will be made in cash at the end
of the 60-day period provided in Section 3.4, below.
3.2 Access to Records and Leases. Immediately after execution of this
Agreement, ATEC/Apollo will make all books, records, data and information
relating to the Leases available to Teton and its representatives for
inspection and review at the offices of ATEC/Apollo in order to allow Teton
to perform its due diligence review. In addition, ATEC/Apollo agrees to
grant Teton access to the lands covered by the Leases so Teton may conduct,
at its sole risk and expense, on-site inspections and environmental
assessments of such lands. Subject to the consent and cooperation of third
parties, ATEC/Apollo will assist Teton in Teton's efforts to obtain, at
Teton's expense, such additional information from third parties as Teton
may reasonably request for the purpose of its due diligence examinations.
3.3 Notice of Title Defects. While Teton will endeavor to provide
ATEC/Apollo with information concerning Defects as such Defects are
discovered, Teton must notify Apollo in writing of all Defects no later
than March 31, 2005. Any such written notice shall include (i) the specific
Lease affected by the Defect, (ii) a brief description of the matter
constituting the Defect, and (iii) the Defect Amount attributable thereto.
3.4 ATEC/Apollo's Right to Cure Defects and Effect of Failure to Cure.
The Parties may unanimously agree before Closing that the acreage is
greater or less than the anticipated 162,427 net acres or that certain
leases have Defects that ATEC/Apollo does not wish to cure and, in both
such events, the Purchase Price will be adjusted before Closing as provided
in this Section 3 based upon the acreage that will be conveyed at Closing,
and any leases suffering such Defects will be excluded from the assignments
and bills of sale that are delivered at Closing. As to all other Defects,
ATEC/Apollo will have the right, but not the obligation, to cure or
remediate the remaining Defects at its sole cost and expense during the
period ending 30 days after Closing. If ATEC/Apollo fails adequately to
cure or remediate any such Defect within that period, then each portion of
an undivided interest in a Lease affected by such uncured and unwaived
Defect will be a "Defect Property" and all such portions will collectively
be "Defect Properties;" provided, however, that any controversy or claim
arising out of the claimed existence of a Defect, the Purchase Price
adjustment required therefor, or the adequacy of curative or remediation
work shall be settled by arbitration administered by the American
Arbitration Association under its Commercial Arbitration Rules, and
judgment on the award rendered by the arbitrator may be entered in any
court having jurisdiction thereof. No later than 60 days after Closing (or,
if applicable, after the final determination by the arbitrator), Teton
will, as to each Defect Property, elect by written notice to ATEC/Apollo,
as Teton's sole and exclusive remedy, either to (a) waive the Defects
associated with such Defect Property or (b) convey to ATEC/Apollo such
Defect Property (together with all rights, titles and interests
attributable thereto), and obtain a refund in cash from ATEC/Apollo of a
portion of the Purchase Price equal to $20 per net acre so conveyed to
ATEC/Apollo. Failure by Teton to make an election with respect to any
Defect within the aforesaid time period will be deemed an election to waive
that Defect. Nothing contained in this Section 3 will, however, operate to
limit or diminish the liability of ATEC/Apollo under the special warranty
of title contained in the assignment of the Leases that is delivered at
Closing.
3.5 Catastrophic Defect Losses. If it is ultimately determined that
ATEC/Apollo owns Defect-free Leases covering less than 138,063 net acres at
a minimum net revenue interest of 80%, then Teton shall have the right
unilaterally to terminate this Agreement, in which event the $322,354
xxxxxxx money and any other amounts paid by Teton to ATEC/Apollo, other
than the initial $25,000 binder amount, will be immediately refunded to
Teton by ATEC/Apollo and the Parties will be released from all further
obligations under this Agreement.
4. Pending Acreage. ATEC/Apollo is currently seeking additional leases, as
specifically identified in Appendix 2, covering approximately 18,000 net acres
within the area shown in Appendix 3. No later than March 31, 2005, ATEC/Apollo
will provide Teton with copies of all such leases that have been obtained and
that have been recorded in the concerned real property records (the "Additional
Leases"). Teton agrees to pay ATEC/Apollo $20.00 per net acre in cash and stock,
together with additional warrants, computed and paid in the same manner as the
Purchase Price adjustments described at the end of Section 3.1. Additional
Leases covering acreage in excess of 18,000 net acres will be handled under the
provisions of Section 5, below.
5. Area of Mutual Interest. The Parties hereby establish an Area of Mutual
Interest (the "AMI") consisting of the lands shown in Appendix 3. The Parties
hereby agree that, if ATEC/Apollo or Teton acquires leases or rights to acquire
leases within the AMI through December 31, 2007 (a period which may hereafter be
extended by written agreement of the Parties), ATEC/Apollo and their successors
and assigns shall offer such leases or rights to Teton, its successors and
assigns, for a purchase price equal to 110% of the actual cash amount paid by
ATEC/Apollo to the lessor, assignor of farmor. For the avoidance of doubt, the
110% has been consciously selected by the Parties with the understanding that
the additional 10% will be deemed full compensation and reimbursement for all
costs, fees and expenses associated with securing such leases or rights, and
that no additional charges will be imposed. Teton shall have a period of 20
calendar days from receipt of said offer from ATEC/Apollo to elect to acquire
said interest offered. Failure of Teton to respond within the time allowed shall
be an election not to acquire said interest and at such time ATEC/Apollo shall
have no further obligation under the terms of this paragraph to Teton with
regard to such interest offered. If the payment due to a third party by
ATEC/Apollo is less than the standard thirty day draft, then ATEC/Apollo agrees
to notify Teton as soon as practical of a potential interest to purchase and
Teton shall make said election to acquire said interest in as timely a manner as
practical. If Teton elects to acquire such interest or right, or if Teton itself
obtains such a lease or right from a source other than ATEC/Apollo, ATEC/Apollo
will be allowed to reserve (or will be granted) an overriding royalty interest
(subject to proportionate reduction) equal to 50% of the difference between the
net revenue interest delivered to ATEC/Apollo and an 80% net revenue interest,
although the retained overriding royalty interest shall never exceed 2.50%, as
illustrated below:
Total Burdens Teton NRI ATEC/Apollo ORRI
0.1250 0.85000 0.02500
0.1875 0.80625 0.00625
0.2000 0.80000 0.00000
Teton shall use its best efforts in future acquisitions within the AMI to
obtain a net revenue interest so that ATEC/Apollo will be able to receive some
overriding royalty interest under the above formula.
6. Mineral Interests. Until December 31, 2006, ATEC/Apollo and Teton each
may purchase for their own account any mineral, royalty or overriding royalty
interest in the AMI, but, if either Party does so, it will offer half of the
interest so acquired to the other Party in exchange for that Party's payment of
half of the actual purchase price. If ATEC/Apollo acquires an unleased mineral
interest within the AMI, then ATEC/Apollo and its successors and assigns agree
to lease its share of such mineral interest to Teton, its successors and
assigns, utilizing a lease in a form substantially similar to the form attached
hereto as Appendix 4; provided, that, such agreement contain a landowner royalty
interest (before proportionate reduction) of greater than 18.75%, with paid-up
consideration of $20.00 per net acre (again before proportionate reduction) and
a five-year primary term.
7. Closing.
7.1 Date and Time. Closing shall occur in Teton's Denver office at 10
a.m. on Friday, April 15, 2005, or at such other place and time as may be
agreed by all Parties.
7.2 Closing Obligations. At Closing, the following events shall occur,
each being a condition precedent to the others and each being deemed to
have occurred simultaneously with the others:
(a) ATEC/Apollo shall execute, acknowledge and deliver to Teton
(or a subsidiary of Teton if Teton so desires), two assignments and
bills of sale (one with the overriding royalty reservation provided by
Section 8.2 and the other without) substantially in the form attached
as Appendix 5, conveying the Leases to Teton, with a special warranty
of title by, through and under ATEC/Apollo, but not otherwise;
(b) ATEC/Apollo shall deliver to Teton copies or originals of all
land, technical and other data, files and records in their possession
or their control relating to the Leases and to all lands in the AMI,
including without limitation the Petra data set, Power Point
Presentation and other technical data, but only to the extent that
such transfer is permitted by applicable licensing agreements;
(c) Teton shall deliver $2,251,481, as adjusted pursuant to
Sections 3.1, 3.4 and 4 above, by wire transfer in immediately
available funds to the account designated by Apollo;
(d) Teton shall deliver two certificates evidencing a total of
371,260 shares of unregistered Teton common stock, as adjusted
pursuant to Sections 3.1, 3.4 and 4 above, one issued in the name of
Apollo for....% of the total shares and one in the name of ATEC
for....% of the total shares;
(e) two unregistered warrants allowing the purchase of a total of
185,630 shares of unregistered Teton common stock, as adjusted
pursuant to Sections 3.1, 3.4 and 4 above, at any time during the
three-year period following Closing at a purchase price of $1.75 per
share, one issued in the name of Apollo allowing the purchase of....%
of the total shares and one in the name of ATEC allowing the purchase
of....% of the total shares; and
(f) the Parties shall take such other actions and deliver such
other documents as may be necessary or convenient to effect the
purchase and sale contemplated herein.
8. ATEC/Apollo Overriding Royalties.
8.1 Previously Granted Overriding Royalty. ATEC/Apollo has previously
granted a 5% overriding royalty interest (subject to proportionate
reduction) on all Leases in which ATEC/Apollo then had an 87.5% net revenue
interest. ATEC/Apollo will not grant or reserve any additional overriding
royalties or place any other burdens on these Leases prior to Closing, so
that all such Leases will be delivered to Teton at Closing with an 82.5%
net revenue interest.
8.2 Reserved Overriding Royalty. In all Leases that were not included
in the overriding royalty grant referred to in Section 8.1, ATEC/Apollo
will, in the assignment and xxxx of sale delivered at Closing, reserve an
overriding royalty interest (subject to proportionate reduction based upon
both the fee oil and gas interest covered by the lease and the leasehold
interest being assigned to Teton by ATEC/Apollo) equal to the difference
between 20% and then-existing burdens, but never exceeding 5% of 8/8ths.
Such reserved overriding royalty interest will be free of all production
costs through the wellhead, but will bear its proportionate share of all
costs incurred after the wellhead in a typical arms'-length industry sale
and all taxes.
9. Post-Closing Data Delivery. After Closing, Teton shall furnish
ATEC/Apollo, at the request of ATEC/Apollo and subject to reimbursement of
actual copying costs, one legible copy of any and all well or lease data as
generated, which shall include but not necessarily be limited to the following:
application for permit to drill, survey plats, drilling reports, completion
reports, test reports, well logs, plugging and abandoning reports, and drilling
and division order title opinions. Teton further agrees to furnish ATEC/Apollo,
again at the request of ATEC/Apollo and again subject to the reimbursement of
actual copying costs, a complete data set on all linear seismic and 3-D seismic.
All such data, information and reports shall, when requested, be mailed in a
timely manner to ATEC/Apollo. ATEC/Apollo will keep all information strictly
confidential until made public by Teton. ATEC/Apollo will not own a license to
any data transferred and will have no rights to sell, show to others or
otherwise use data except for its own internal purposes.
10. Rentals and Obligations. From January 1, 2005 until April 15, 2006,
ATEC/Apollo shall make all rental payments necessary to keep the Leases in
effect, although Teton shall promptly reimburse ATEC/Apollo for all rental
amounts so paid. The lease assignments delivered at closing will contain the
following reassignment clause: "If Assignee desires to surrender or relinquish
an interest in any lease herein assigned, in whole or in part, Assignee shall
mail an appropriate notice to Assignor at least 60 days in advance of the
proposed surrender or relinquishment date; provided, however, that if Assignee
fails to do so, it will never have any liability to Assignor greater than $20
per net acre covered by such leasehold interest. If Assignor desires to
reacquire such interest as to the lands to be surrendered, Assignor shall notify
Assignee within 15 days after receipt of such notice, and thereupon Assignee
shall reassign such interest to Assignor; if Assignor does not within 15 days
after receipt of such notice from Assignee elect to reacquire said interest,
Assignee shall then have the right to surrender such interest. Failure of
Assignor to respond within the time allowed shall be an election to not
reacquire said interest. Any reassignment under the terms of this paragraph
shall be free and clear of all burdens, encumbrances or outstanding interests
other than those existing on the date hereof."
11. Miscellaneous.
11.1 Notices. Except as otherwise expressly provided in this
Agreement, all communications required or permitted under this Agreement
will be in writing and any such communication or delivery will be deemed to
have been duly given and received when actually delivered to the address
set forth below of the Party to be notified personally (by a recognized
commercial courier or delivery service that provides a receipt) or by
telecopier (confirmed in writing by a personal delivery as set forth
above), addressed as follows:
If to ATEC//Apollo: Louis A, Xxxxxx, III
Apollo Energy, LLC
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Facsimile: 303.830.2818
If to Teton: Xxxx X. Xxxxxx
Teton Petroleum Company
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Facsimile: 303.542.1817
Any Party may, by written notice so delivered to the other, change the
address to which delivery will thereafter be made.
11.2 Expenses. Each Party will be solely responsible for all costs
that it incurs in connection with this Agreement and the activities
contemplated herein, with no right to recovery or contribution from any
other Party.
11.3 Entire Agreement. This Agreement embodies the entire agreement
between the Parties with respect to the subject matter of this Agreement
(superseding all prior agreements, arrangements, understandings and
solicitations of interest or offers related to the subject matter of this
Agreement, including the letter of intent executed on December 17, 2004),
and may be supplemented, altered, amended, modified or revoked by writing
only, signed by all of the Parties to this Agreement. The headings in this
Agreement are for convenience only and will have no significance in the
interpretation of any term or provision of this Agreement.
11.4 Governing Law. This Agreement will be governed and construed and
enforced in accordance with the laws of the State of Colorado, without
regard to rules concerning conflicts of laws.
11.5 Counterparts. This Agreement may be executed in any number of
counterparts, and each and every counterpart will be deemed for all
purposes one agreement.
11.6 Binding Effect; Assignment. All the terms, provisions, covenants,
representations and conditions of this Agreement will be binding upon and
inure to the benefit of and be enforceable by the Parties to this Agreement
and their respective successors and assigns, although this Agreement and
the rights and obligations hereunder will not be assignable or delegable by
any Party without the prior written consent of the non-assigning or
non-delegating Parties, which may be withheld at the sole discretion of
such Parties. Notwithstanding the foregoing, Teton may assign all of its
rights and obligations under this Agreement to a wholly owned subsidiary,
without the need for any consent by ATEC/Apollo.
[Signatures appear on page 11]
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as
of the date first above written.
APOLLO ENERGY, LLC ATEC ENERGY VENTURES, LLC
By: _________________________ By: _________________________
Xxxxx X. Xxxxxx, III, Manager Xxxxxx X. Xxxxxx, Manager
TETON PETROLEUM COMPANY
By: _______________________________
Xxxx X. Xxxxxx, President
Appendix 1: The Leases
Appendix 2: Pending Acreage
Appendix 3: AMI
Appendix 4: Oil and Gas Lease Form
Appendix 5: Assignment Form
