Exhibit 10.1
NEW FRONTIER ENERGY, INC.
X.X. Xxx 000, Xxxxxxxxx, XX 00000-0000
TEL: 000-000-0000
FAX: 000-000-0000
May 10, 2006
Natural Resource Group Gathering, LLC
0000 Xxxxxxxxx
Xxxxxxxxx, XX 00000
PURCHASE AND SALE AGREEMENT
This agreement is made and entered into as a result of discussions between
Xxxx Xxxxxx representing Natural Resource Group Gathering, LLC ("NRGG") and Xxx
Xxxxx representing New Frontier Energy, Inc. ("NFE"). NRGG and NFE are referred
to collectively herein sometimes as the "Parties" and individually as a "Party."
RECITALS:
WHEREAS, the NRGG is the General Partner of Xxxxxx Dome Gathering, LLLP
("SDG") and is also the owner of 12.1639 Class A Limited Partnership units (the
"Units") of SDG; and
WHEREAS, the NRGG desires to sell, and NFE desires to purchase the Units,
and the Parties desire to memorialize the terms and conditions of the purchase
and the sale thereof.
NOW THEREFORE, in consideration of mutual promises and conditions
hereinafter set forth, and for other good and valuable consideration, receipt
and sufficiency of which is hereby acknowledged, NRGG and NFE hereby agree as
follows:
ARTICLE I
SALE OF UNITS
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1.1 Sale and Purchase of the Units. Subject to the terms and conditions of
this Agreement, at the Closing, as defined in Section 1.4 below, NRGG shall
sell, transfer, convey, assign and deliver to NFE, and NFE shall purchase from
NRGG, all of NRGG's right, title and interest in the Units.
1.2 Conveyance of Units. NRGG shall convey to NFE all of NRGG's right,
title and interest in and to the Units as evidenced by a xxxx of sale in the
form attached hereto as Exhibit A (the "Xxxx of Sale"), executed by NRGG and
delivered to NFE at the Closing.
1.3. Purchase Price. The purchase price for the Units will be $608,194 (the
"Purchase Price"). The Purchase Price will be paid by NFE by the issuance of a
subordinated convertible debenture, substantially in the form attached hereto as
Exhibit B (the "Debenture"). The Debenture will be for a term of two years, will
bear interest at a rate of 2.5% per annum and the principal amount and all
accrued and unpaid interest is convertible into shares of NFE's $0.001 par value
common stock at a price of $2.00 per share (the "Debenture Shares"). The
Debenture will be subordinate to NFE's outstanding 2.5% Convertible Debentures
due July 22, 2007.
1.4. Closing. The closing of the transactions contemplated in this
Agreement shall take place simultaneously with the execution of this Agreement
on February 22nd, 2006, 11:00 AM. (the "Closing" or "Closing Date") at 0000
Xxxxxxxxx Xxxx, Xxxxxxxxx, XX 00000, or at another date and location as mutually
agreed by the Parties in writing. The Parties agree that the Closing shall be
deemed to be effective as of 12:01 a.m. on January 1, 2006 for accounting
purposes as it relates to SDG's accounting for the transfer of interest. The
closing for all other purposes shall be on the date closed.
ARTICLE II
NRGG REPRESENTATIONS AND WARRANTIES
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NRGG represents and warrants to NFE that as of the Closing Date, the
following statements contained in this Article II are correct and complete:
2.1. Authorization. NRGG has full company power and authority to execute
and deliver this Agreement, to perform its obligations under this Agreement and
to consummate the transactions contemplated herein. The execution, delivery and
performance of this Agreement by NRGG has been duly authorized by all requisite
company action. This Agreement is the legal, valid and binding obligation of
NRGG enforceable in accordance with its terms and conditions, subject, as to
enforcement of remedies, to applicable bankruptcy, insolvency, moratorium,
reorganization and similar laws affecting creditors' rights generally and to
general equitable principles.
2.2. Noncontravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which NRGG is subject, (ii) violate any
provision of the Articles of Organization or Operating Agreement of NRGG or
(iii) conflict with, result in a breach of, constitute a default under, result
in the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which NRGG is a party or by which
it is bound or to which any of its assets is subject. NRGG does not need to give
any notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order for the Parties to
consummate the transactions contemplated by this Agreement.
2.3. Consents and Approvals. No consent, approval, or authorization of, or
declaration, filing, registration with, any governmental or regulatory authority
or other third party is required in connection with the execution, delivery and
performance of this Agreement and the consummation of the transaction
contemplated hereby.
2.4. NRGG Action. All action, approvals, waivers and consents required by
NRGG to authorize, approve and consummate the transactions contemplated hereby
have been taken, including, but not limited to compliance with restrictions
applicable to the transfer of the Units, as more specifically set forth in
Section 14.2 of SDG's limited liability limited partnership agreement.
2.5. Litigation. No action, suit, proceeding or investigation is pending
against NRGG. NRGG has not received notice of any threatened action, suit,
proceeding or investigation against NRGG, which could reasonably be expected,
either individually or in the aggregate, to result in any liability on the part
of NRGG, and there is no action relating to the Units by NRGG currently pending
or which NRGG intends to initiate. Furthermore, NRGG is not a party to or
subject to the provisions of any order, writ, injunction, judgment or decree of
any court or government agency or instrumentality.
2.6. Title to Units. NRGG has good and marketable title to the Units,
subject to no mortgage, pledge, lien, encumbrance, security interest,
restrictions on transfer or charge of any kind. Upon NRGG's transfer of the
Units, NFE will, as a result, receive good and marketable title to the Units
purchased, free and clear of all liens and encumbrances, subject to applicable
state and federal securities laws.
2.7. No Other Agreement. NRGG does not have any contract, agreement,
arrangement or understanding with respect to the sale or other disposition of
any of the Units, except as set forth in this Agreement.
2.8. Investment. NRGG (i) understands that the Debenture and the Debenture
Shares have not been and will not be registered under the Securities Act of
1933, as amended (the "Securities Act"), or under any state securities laws, and
are being offered and sold in reliance upon federal and state exemptions for
transactions not involving any public offering, (ii) are acquiring the Debenture
and the Debenture Shares solely for its own account for investment purposes, and
not with a view to the distribution thereof, (iii) is a sophisticated investor
with knowledge and experience in business and financial matters, (iv) have
received certain information concerning NFE and has had the opportunity to
obtain additional information and ask questions of to is satisfaction in order
to evaluate the merits and the risks inherent in holding the Debenture and the
Debenture Shares, and (v) are able to bear the economic risk and lack of
liquidity in holding the Debenture and the Debenture Shares. Further, NRGG
understands and agrees that the Debenture and the Debenture Shares may not be
sold, transferred for value, pledged, hypothecated, or otherwise encumbered in
the absence of an effective registration of them under the Securities Act,
and/or the securities laws of any applicable state or in the absence of an
opinion of counsel acceptable to NFE that such registration is not required
under such act or acts. NRGG is further aware that the Debenture and the
certificates, when issued evidencing the Debenture Shares, will include a legend
setting forth the above-described restrictions.
2.9. Restrictive Legend. NRGG hereby agrees that the certificates
evidencing the Debentures and the Debenture Shares will bear the following
restrictive legend:
"These securities have not been registered under the Securities Act of
1933, as amended (the "Securities Act") or under the securities laws
of any state. They may not be sold, offered for sale or hypothecated
in the absence of a registration statement in effect with respect to
the securities under such act or an opinion of counsel reasonably
satisfactory to the company that such registration is not required
pursuant to a valid exemption therefrom under the Securities Act.
2.10 Review of Agreement. NRGG has thoroughly read this Agreement and has
had the opportunity to review this Agreement with a competent legal and/or
financial professional advisor of its choice.
2.11 Possible Future Appreciation of Units. NRGG understands that by
transferring the Units to NFE, NRGG may be foregoing the possibility of
substantial appreciation in the future with regard to the Units. NRGG has
determined, after making the inquiries referred to in this Agreement and after
consideration of all material and significant facts relating to NFE, that the
purchase price outlined above is reasonable and fair. NRGG acknowledges that
this determination of value is the result of arms-length negotiations with NFE.
2.12. Subordinate. NRGG understands that the Debenture is subject to
Subordination of payments of principal and interest to NFE's outstanding 2.5%
Convertible Debentures due July 22, 2007.
2.13 Indemnification. NRGG acknowledges that it understands the meaning and
legal consequences of the representations and warranties contained above. NRGG
hereby agrees to indemnify and hold harmless NFE, and its Officers, Directors
and controlling shareholders, and their affiliates, attorneys, and agents from
and against any loss, damage or liability due to or arising out of a breach of
any representation or warranty of NRGG contained in this Agreement. With regard
to claims for which indemnification is payable hereunder, such indemnification
shall be paid promptly NRGG upon demand by NFE.
ARTICLE III
NFE REPRESENTATIONS AND WARRANTIES
----------------------------------
NFE hereby represents and warrants to NFE that as of the Closing Date, the
following statements contained in this Article III are correct and complete:
3.1. Authorization. NFE has full corporate power and authority to execute
and deliver this Agreement, to perform its obligations under this Agreement and
to consummate the transactions contemplated herein. The execution, delivery and
performance of this Agreement by NFE has been duly authorized by all requisite
corporate action. This Agreement is the legal, valid and binding obligation of
NFE enforceable in accordance with its terms and conditions, subject, as to
enforcement of remedies, to applicable bankruptcy, insolvency, moratorium,
reorganization and similar laws affecting creditors' rights generally and to
general equitable principles.
ARTICLE IV
COVENANTS
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4.1. Full Access and Information; Confidentiality. Prior to the Closing of
the transactions contemplated by this Agreement, NRGG has given to NFE and its
representatives reasonable access to NRGG's properties, books, records,
contracts and commitments, as NFE has reasonably requested, and NFE has
furnished to NRGG and its representatives all such information and documents
relating to NFE as NRGG has reasonably requested. Each of the Parties will
treat, and will cause its representatives to treat, all information that they
received in connection with the transaction contemplated herein, if not in the
public domain, as confidential.
4.2 Regulatory Filings. Each of the Parties has given or will give all
notices to and made any necessary filings with governments and governmental
agencies.
4.3 Post-Closing Covenant. If at any time after the Closing any further
action is necessary to carry out the purposes of this Agreement, each of NRGG
and NFE will take such further action (including the execution and delivery of
such further instruments and documents) as the other Party reasonably may
request.
ARTICLE V
MISCELLANEOUS
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5.1. Costs. Each party shall bear all the costs incurred by it in the
transactions contemplated in this Agreement.
5.2. Entire Agreement; Incorporation. This Agreement and the documents and
instruments and other agreements among the Parties hereto as contemplated by or
referred to herein contain every obligation and understanding between the
Parties relating to the subject matter hereof and merges all prior discussions,
negotiations, agreements and understandings, both written and oral, if any,
between them, and none of the Parties shall be bound by any conditions,
definitions, understandings, warranties or representations other than as
expressly provided or referred to herein. All exhibits and other documents and
agreements executed and delivered pursuant hereto are incorporated herein as if
set forth in their entirety herein.
5.3 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their respective successors, heirs, personal
representatives, legal representatives, and permitted assigns.
5.4 Amendment. This Agreement may not be altered or amended, nor any rights
or conditions hereunder waived, except by mutual agreement of the Parties in
writing.
5.5 Further Assurances. The Parties to this Agreement shall execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered
such documents and instruments and shall take other action as may be necessary
or advisable to carry out their respective obligations under this Agreement.
5.6 Assignment. No party may assign its rights or delegate its duties or
obligations under this Agreement without prior written consent of the other
party.
5.7 Headings. The headings of the articles and sections of the Agreement
are for convenience of reference only and shall not limit or otherwise affect
any of the terms or provisions of this Agreement.
5.8 Governing Law/Venue. This Agreement has been entered into and shall be
construed and enforced in accordance with the laws of the State of Colorado,
without reference to the choice of law principles thereof. This Agreement shall
be subject to the exclusive jurisdiction of the courts of the state of Colorado.
The Parties to this Agreement agree that any breach of any term or condition of
this Agreement shall be deemed to be a breach occurring in the State of Colorado
by virtue of a failure to perform an act required to be performed in the State
of Colorado and irrevocably and expressly agree to submit to the jurisdiction of
the courts of the State of Colorado for the purpose of resolving any disputes
among the Parties relating to this Agreement or the transactions contemplated
hereby. The Parties irrevocably waive, to the fullest extent permitted by law,
any objection which they may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement, or any
judgment entered by any court in respect hereof brought in the State of
Colorado, and further irrevocably waive any claim that any suit, action or
proceeding brought in the State of Colorado has been brought in an inconvenient
forum.
5.9 Survival. All of the covenants, agreements, representations and
warranties set forth in this Agreement shall survive the Closing.
5.10 Counterparts. This Agreement may be executed by the Parties in
counterparts, each of which shall be deemed an original instrument, all of which
together shall constitute one and the same Agreement.
5.11. No Third Party Beneficiary. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any Person
other than the Parties hereto and their respective heirs, personal
representatives, legal representatives, successors and permitted assigns, any
rights or remedies under or by reason of this Agreement, except as otherwise
provided herein.
5.12 Waiver and Severability. No waiver by either party of any breach or
default hereof by the other shall be deemed to be a waiver of any preceding or
succeeding breach or default hereof, and no waiver shall be operative unless the
same shall be in writing.
5.13 Severability. In the event that any one or more of the provisions
contained in this Agreement, or the application thereof, shall be declared
invalid, void or unenforceable by a court of competent jurisdiction, the
remainder of this Agreement shall remain in full force and effect and the
application of such provision to other Persons or circumstances will be
interpreted so as reasonably to effect the intent of the Parties hereto. The
Parties further agree to replace such invalid, void or unenforceable provision
with a valid and enforceable provision that will achieve, to the extent
possible, the economic, business and other purposes of such invalid, void or
unenforceable provision.
5.14 Participation of Parties. The Parties hereby agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding, or rule
of construction providing that ambiguities in an agreement or other document
will be construed against the party drafting such agreement or document.
5.15 Disclosure and Waiver of Conflicts. The Parties acknowledge and
agree that Xxxxx X. Xxxxxxxxx of Xxxxxxxxx & Associates, P.C. the attorney that
prepared this Agreement (the "Attorney") has advised the Parties in the past and
that the Attorney represents NFE. Notwithstanding the foregoing, the Parties
jointly and severally forever waive any claim that the Attorney's representation
of NFE or preparation of this Agreement constitutes a conflict of interest.
Further, each of the Parties acknowledge that they have executed conflict waiver
letters for the benefit of Attorney in connection with this transaction.
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IN WITNESS WHEREOF, this Agreement has been executed by the Parties as of
the 10th of May 2006.
Purchaser: Seller:
NEW FRONTIER ENERGY, INC. NATURAL RESOURCES
GROUP GATHERING, LLP
BY: /s/ Xxx Xxxxx BY: /s/ Xxxxxxx Xxxxxx
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Xxx Xxxxx Xxxxxxx Xxxxxx
TITLE: Chief Financial Officer Title: Manager
