PURCHASE AND SALE AGREEMENT between Hallador Petroleum Company as Seller and Approach Oil & Gas Inc. as Buyer Dated May 10, 2006
EXHIBIT 10.1
between
as
Seller
and
Approach
Oil & Gas Inc.
as
Buyer
Dated
May
10,
2006
THIS
PURCHASE AND SALE AGREEMENT
dated
May 10, 2006, is made by and between Hallador Petroleum Company,
a
Colorado corporation (“Seller”),
and
Approach Oil & Gas Inc., a Delaware corporation (“Buyer”).
W
I T N E S E T H:
WHEREAS,
Seller
has acquired interests in certain oil and gas properties pursuant to the Oil
and
Gas Project Agreement dated June 3, 2005 among Global GeoData, J. Xxxxx Xxxxxxx
and Seller, as amended by a First Amendment dated July 7, 2005, a Marketing
Contract dated December 15, 2005, and a Second Amendment dated
February 28, 2006 (together, the “Global Agreement”).
WHEREAS,
Seller
shall sell and convey the oil and gas properties acquired under the Global
Agreement to Buyer, and Buyer shall purchase and accept title to such
properties;
WHEREAS,
Seller
and Buyer desire to set forth herein the purchase price for such assets and
certain representations, warranties and covenants that shall survive the
execution and delivery of the Conveyance;
NOW,
THEREFORE,
Seller
and Buyer agree as follows:
| 1. |
Property
Sold and Purchased
|
Section
1.1. Property
Sold and Purchased.
Seller
shall contemporaneously sell and convey to Buyer and Buyer shall
contemporaneously purchase the following:
(a) All
of
the right, title and interest of Seller under the oil, gas and/or mineral leases
(collectively, “Leases”
and
individually a “Lease”)
described on Exhibit
I
attached
hereto;
(b) Without
limitation of the foregoing, all of Seller’s right, title and interest (of
whatever kind or character, whether legal or equitable, and whether vested
or
contingent) in and to the oil, gas and other minerals in and under or that
may
be produced from any and all land in Caldwell, Crittenden, Hopkins, Lyon,
Xxxxxxxx, Xxxxxxxxxx and Xxxxx Counties, Kentucky (including, without
limitation, all interests in oil, gas and/or mineral leases and fee mineral
interests);
(c) All
of
Seller’s rights and obligations under the Global Agreement with respect to the
properties, rights, and interests described in clauses (a) and (b) above and
Buyer shall accept and assume all obligations under the Global Agreement;
and
(d) All
of
Seller’s lease files, abstracts and title opinions, seismic records and surveys,
gravity maps, electric logs, geological or geophysical data and records, and
other files, documents and records of every kind and description which relate
to
the properties described above (collectively, “Seller’s
Files”).
The
properties, rights and interests described in the foregoing subparagraphs (a),
(b), (c), and (d) are herein sometimes collectively called the “Properties”.
(e) The
Properties shall be conveyed by Seller to Buyer by one or more conveyances
(whether one or more, the “Conveyance”)
in the
form attached hereto as Exhibit II.
The
Conveyances shall contain a limited warranty of title by through and under
Seller but shall be subject to the terms and conditions of the Global
Agreement.
| 2. |
Purchase
Price
|
Section
2.1. Purchase
Price.
Buyer
shall pay Seller, by wire transfer of immediately available funds to an account
designated by Seller in a bank located in the United States, an amount equal
to
$3,393,687.00 (“Purchase
Price”)
for the
Properties.
| 3. |
Representations
and Warranties of
Seller
|
Seller
represents to Buyer that as of the Effective Date:
Section
3.1. Organization
and Existence.
Seller
is duly organized, validly existing, and in good standing under the laws of
the
state of its formation. Seller is duly qualified to transact business and is
in
good standing in the State of Kentucky.
Section
3.2. Power
and Authority.
Seller
has the authority to execute, deliver, and perform this Agreement and the
Conveyance.
Section
3.3. Valid
and Binding Agreement.
This
Agreement and the Conveyance when executed will constitute, a valid and legally
binding obligation of Seller, and will be enforceable against it in accordance
with their respective terms, except that such enforceability may be limited
by
(a) applicable bankruptcy, insolvency, reorganization, moratorium, and similar
laws affecting creditors’ rights generally and (b) equitable principles which
may limit the availability of certain equitable remedies (such as specific
performance) in certain instances.
Section
3.4. Non-Contravention.
Neither
the execution, delivery, nor performance by Seller of this Agreement and the
Conveyance (a) violate any governing instruments of Seller, (b) violate any
provision of, or constitute (with or without the giving of notice or the passage
of time or both) a default under, or give rise (with or without the giving
of
notice or the passage of time or both) to any right of termination,
cancellation, or acceleration under, any bond, debenture, note, mortgage or
indenture, or the Global Agreement, or any material lease, contract, agreement,
or other instrument or obligation to which Seller is a party or by which Seller
or any of the Properties may be bound, (c) result in the creation or
imposition of any lien or other encumbrance upon the Properties or
(d) violate any applicable law, rule or regulation binding upon Seller or
the Properties.
Section
3.5. Approvals.
No
consent, approval, order, or authorization of, or declaration, filing, or
registration with, any court or governmental agency or of any third party is
required to be obtained or made by Seller in connection with the execution,
delivery, or performance by Seller of this Agreement or the
Conveyance.
Section
3.6. Pending
Litigation.
There
are no pending suits, actions, notices of violations, or other proceedings
or
claims filed (collectively, “Claims”)
or, to
Seller’s knowledge, any such threatened Claims in which Seller is or may be a
party and which relate to the Properties, or affect the execution and delivery
of this Agreement or the Conveyance.
Section
3.7. Preferential
Rights and Consents to Assign.
There
are no consents to assignment or waivers of preferential rights to purchase
that
must be obtained from third parties in order for Seller to convey the Properties
to Buyer without violating or breaching a duty or obligation of
Seller.
Section
3.8. No
Instruments Not of Record.
Seller’s title to the Leases, as defined in the Conveyance, is not based upon or
subject to any understanding, agreement, assignment or conveyance that is not
recorded in the official records of the county where the lands covered by the
Leases are located. A true, correct and complete copy of the Global Agreement
is
attached hereto as Exhibit
III. Except
as
shown in Exhibit
III,
the
Global
Agreement has not been modified, amended or supplemented and none of Seller’s
rights have been waived, released or otherwise extinguished.
Section
3.9. Leases
and Global Agreement.
(a) To
Seller’s knowledge, no breach or default by Seller or any third party (or
situation which with the passage of time or giving of notice would create a
breach or default) exists under any Lease, or the Global Agreement, to the
extent such breach or default (whether by Seller or such a third party) could
reasonably be expected to materially adversely affect the ownership,
exploration, development, operation, maintenance, value or use of the Properties
or the Global Agreement, after the Effective Date
(b) Any
payments owing under each Lease or the Global Agreement have been and are being
made (timely, and before the same became delinquent) by Seller where the
non-payment of same could materially and adversely affect the ownership,
exploration, development, operation, maintenance, value or use of any of the
Properties or the rights of Buyer under the Global Agreement after the Effective
Date. Without limitation of the foregoing, all Acreage Fees, Project Fees,
bonuses, rental and other payments that are to be paid under the Global
Agreement or the Leases for or in connection with the acquisition of the Leases
have been paid.
For
the
purposes of the representations contained in this Section (and without
limitation of such representations), the non-payment of an amount, or
non-performance of an obligation, where such non-payment, or non-performance,
could result in the forfeiture or termination of rights of Seller under a Lease
or the Global Agreement, shall be considered material and to materially
adversely affect the ownership, exploration, development, operation,
maintenance, value or use of such Lease or the Global Agreement. The remedy
for
such breach shall be a monetary damages claim based on $52.00 per acre and
shall
not be the basis for a claim for rescission or cancellation of this Agreement.
Section
3.10. No
Sales or Other Contracts.
There
exist no agreements or arrangements for the sale of production from the Leases
or under which production from the Leases is dedicated or committed for sale,
gathering, transportation, processing, treating, or any other
services.
Section
3.11. No
Area of Mutual Interest, Tax Partnerships and Other
Agreements.
Except
for the Global Agreement, no Property is subject to (or has related to it)
any
area of mutual interest agreements. No Property is subject to (or has related
to
it) any farm-out or farm-in agreement under which any party thereto is entitled
to receive assignments not yet made, or could earn additional assignments after
the Effective Date. No Property is subject to (or has related to it) any tax
partnership. No Property is subject to any unitization, pooling, or
communization agreements.
Section
3.12. Payment
of Expenses.
Any
expenses and taxes relating to the ownership of the Properties, have been,
and
are being, paid (timely, and before the same become delinquent) by
Seller.
Section
3.13. Compliance
with Laws.
To the
knowledge of Seller, the ownership of the Properties has been in conformity,
in
all material respects, with all applicable laws, rules, regulations guidelines
and orders of all governmental agencies having jurisdiction, relating to the
Properties.
Section
3.14. No
Alienation.
Seller
has not sold, assigned, conveyed, or transferred or contracted to sell, assign,
convey or transfer any right or title to, or interest in, the
Leases.
Section
3.15. Information.
Except
for the land maps which will be revised periodically to reflect new information,
to Seller’s knowledge, all of the information (written or oral) heretofore or
hereafter furnished by Seller with respect to the Properties is true and correct
in all material respects, and, to Seller’s knowledge, does not omit any
information that is necessary to prevent such information from being misleading
in any material respect.
Section
3.16. No
Oral Contracts.
Seller
has not entered into any material oral contract with respect to the Properties
which is still in force and effect.
Section
3.17. No
ORRI.
Without
limitation of the special warranty contained on the Conveyance, the Leases
are
not subject to any overriding royalties or any other burdens except for the
royalties provided in the Leases as filed of record and the overriding royalty
provided for in the Global Agreement.
| 4. |
Representations
and Warranties of
Buyer
|
Buyer
represents to Seller that:
Section
4.1. Organization
and Existence.
Buyer
is duly organized, legally existing and in good standing under the laws of
its
state of formation, and is or, after Closing will promptly become, qualified
to
do business in the State of Kentucky.
Section
4.2. Power
and Authority.
Buyer
has all necessary and appropriate authority to execute, deliver, and perform
this Agreement and each other document executed by Buyer in connection with
the
transactions contemplated hereby. The execution, delivery, and performance
by
Buyer of this Agreement and each other document executed by Buyer in connection
with the transactions contemplated hereby have been duly authorized by all
necessary action of Buyer.
Section
4.3. Valid
and Binding Agreement.
This
Agreement has been duly executed and delivered by Buyer and constitutes a valid
and legally binding obligation of Buyer, enforceable against it in accordance
with their respective terms, except that such enforceability may be limited
by
(a) applicable bankruptcy, insolvency, reorganization, moratorium, and similar
laws affecting creditors’ rights generally and (b) equitable principles which
may limit the availability of certain equitable remedies (such as specific
performance) in certain instances.
Section
4.4. Non-Contravention.
The
execution, delivery, and performance by Buyer of this Agreement and the
acquisition of the Properties will not (a) violate any provision of any
governing instruments of Buyer, or (b) violate any applicable law, rule or
regulation binding upon Buyer.
Section
4.5. Approvals.
No
consent, approval, order, or authorization of, or declaration, filing, or
registration with, any court or governmental agency or of any third party is
required to be obtained or made by Buyer in connection with the execution,
delivery, or performance by Buyer of this Agreement.
Section
4.6. Pending
Litigation.
There
are no pending suits, actions, or other proceedings in which Buyer is a party
which affect the execution and delivery of this Agreement.
| 5. |
Closing
of Transaction
|
Section
5.1. Conveyance
of Properties.
Contemporaneous with the execution and delivery of this Agreement, Seller shall
execute, acknowledge and deliver the Conveyance to Buyer. The date of the
Conveyance shall be referred to herein as the “Effective
Date”.
Section
5.2. Payment
of Purchase Price.
Contemporaneous with the execution and delivery of this Agreement, Buyer shall
deliver the Purchase Price to the Seller, by wire transfer to the an account
to
be designated by Hallador in writing.
Section
5.3. Delivery
of Files.
No later
than five (5) business days after the execution and delivery of this Agreement,
and the performance of the obligations of the parties under Sections
5.1 and
5.2
(collectively herein called the “Closing”)
Seller
shall deliver Seller’s Files, as defined in the Conveyance, to Buyer.
| 6. |
No
Sales Taxes
|
No
sales,
transfer or similar tax have been collected at Closing from Buyer in connection
with this transaction. If, however, this transaction is later deemed to be
subject to sales, transfer or similar tax, at any time, for any reason, Seller
shall indemnify and hold Buyer and its affiliates, and its and their directors,
officers, employees, attorneys, contractors and agents harmless, for any and
all
sales, transfer or other similar taxes (including related penalty, interest
or
legal costs) due by virtue of this transaction and the Seller shall remit such
taxes at that time. Seller and Buyer shall cooperate with each other in
demonstrating that the requirements for any exemption from such taxes have
been
met.
| 7. |
Post
Closing Obligations
|
Section
7.1. Indemnification
Obligations.
(a) Subject
to Section
9.1,
Seller
shall, remain responsible for and indemnify and hold Buyer harmless from and
against any and all claims, obligations, actions, liabilities, damages, expenses
or losses, including without limitation attorney’s fees and court costs
(collectively, “Buyer’s
Losses”)
(i) resulting from any misrepresentation or breach of any warranty,
covenant or agreement of Seller contained in this Agreement; (ii) arising
out of, or caused by, the Seller’s ownership of the Properties before the
Effective Date provided that Seller shall not be obligated to indemnify or
hold
Buyer harmless for any of Seller’s Losses; or (iii) arising out of or
resulting from any agreement, arrangement or understanding alleged to have
been
made by, or on behalf of, Seller with any broker or finder in connection with
this Agreement or the purchase and sale of the Properties.
(b) Subject
to Section
9.1,
Buyer
agrees to indemnify and hold Seller harmless from and against any and all
claims, obligations, actions, liabilities, damages, costs, expenses, or losses
including without limitation attorney’s fees and court costs (collectively,
“Seller’s
Losses”)
(i)
resulting from any misrepresentation or breach of any warranty, covenant or
agreement of Buyer contained in this Agreement; (ii) arising out of, or caused
by, Buyer’s ownership or operation of the Properties after the Effective Date,
provided that Buyer shall not be obligated to indemnify or hold Seller harmless
for any of Buyer’s Losses; or (iii) arising out of or resulting from any
agreement, arrangement or understanding alleged to have been made by, or on
behalf of, Buyer with any broker or finder in connection with this Agreement
or
the purchase and sale of the Properties.
Section
7.2. Notice
of Claim.
If
indemnification pursuant to Section 7.1(a)
or
7.1(b)
is
sought, the party seeking indemnification (the “Indemnitee”)
shall
give written notice to the indemnifying party of an event giving rise to the
obligation to indemnify, describing in reasonable detail the factual basis
for
such claim, and shall allow the indemnifying party to assume and conduct the
defense of the claim or action with counsel reasonably satisfactory to the
Indemnitee, and cooperate with the indemnifying party in the defense thereof;
provided, however, that the omission to give such notice to the indemnifying
party shall not relieve the indemnifying party from any liability which it
may
have to the Indemnitee, except to the extent that the indemnifying party is
prejudiced by the failure to give such notice. The Indemnitee shall have the
right to employ separate counsel to represent the Indemnitee if the Indemnitee
is advised by counsel that an actual conflict of interest makes it advisable
for
the Indemnitee to be represented by separate counsel and the reasonable expenses
and fees of such separate counsel shall be paid by the indemnifying
party.
Section
7.3. Participation
Rights.
(a) Drilling
Obligation.
Buyer
shall drill three exploratory xxxxx each at a location chosen by Buyer, in
its
sole discretion, on the lands covered by the Leases to a depth sufficient in
Buyer’s sole opinion to test the New Albany Shale (each a “Commitment
Well” and
collectively the“Commitment
Xxxxx” ).
The
first Commitment Well shall be commenced no later than May 1, 2007. Buyer shall
commence the second and third Commitment Xxxxx on or before the later of May
1,
2008, or within one year from commencement of the first Commitment Well.
(b) Well
by Well Participation.
When
the drilling rig is released from the third Commitment Well that is commenced
pursuant to the obligations described in Section 7.3(a) or if Buyer fails to
drill all three Commitment Xxxxx then when the drilling rig is released from
the
last of the Commitment Xxxxx drilled hereunder (“Rig
Release”),
Buyer
shall promptly notify Seller in writing and Seller shall thereupon have a
one-time option on a well-by-well basis to take assignment of a one-third (1/3)
working interest in each Commitment Well and the Properties covering the
drillsite spacing unit or proration unit for the Commitment Well; provided
that
Seller may not exercise such option unless Seller simultaneously therewith
exercises its Repurchase Option (as defined below) under Section 7.3(c). The
Properties acquired shall also include any real or personal property interests
acquired for the development of the well and pursuant to the AMI under the
Global Agreement. In order to exercise such option, Seller must (1) give Buyer
written notice of its exercise within 60 days after receipt of notice of the
Rig
Release or such option shall expire and (2) simultaneously therewith exercise
its Repurchase Option under Section 7.3(c). Within 5 business days after
Seller’s receipt of payment by Buyer for the exercise of its Repurchase Option
under Section 7.3(c), Buyer shall convey a one-third (1/3) working interest
in
each Commitment Well in which Buyer has elected to participate and the
Properties covering the drillsite spacing unit or proration unit for such
Commitment Xxxxx by a conveyance that contains the special warranty in the
Conveyance.
The
assignment shall be effective on the first day of the month following the date
on which Rig Release occurs (the “Option Exercise Date”) and shall be free and
clear of any lien or encumbrance or any additional royalty burdens on the Leases
arising after the Effective date.
(c) Lease
Acreage Acquisition.
In the
event either (i) Seller gives notice of its election to participate in a
Commitment Well under Section 7.3(b) or (ii) Buyer drills three Commitment
Xxxxx
in accordance with the terms of this Agreement, then upon Rig Release, Seller
shall have a one time option (the “Repurchase Option”) to repurchase a one third
working interest in all of the Properties and any real or personal property
interests acquired pursuant to the AMI under the terms of the Global Agreement,
excluding, however, the Properties described in Section 7.3(b) with respect
to
the Commitment Xxxxx. It being understood that Seller may exercise the
Repurchase Option without participating in any Commitment Well, but that Seller
may not participate in any Commitment Well without exercising its Repurchase
Option. In order to exercise the Repurchase Option, Seller must give Buyer
written notice of its exercise on the earlier to occur of (i) the date Seller
gives notice of its election to participate in a Commitment Well under Section
7.3(b) or (ii) the sixtieth (60th)
day
after the Rig Release Date for the third Commitment Well that is commenced
pursuant to the foregoing obligations or the Repurchase Option shall expire.
Within 5 business days of the giving of written notice exercising the Repurchase
Option, Seller shall pay Buyer for the Properties being acquired pursuant to
the
exercise of the Repurchase Option an amount equal to fifty two dollars ($52.00)
per Net Leasehold Acre. “Net
Leasehold Acres”
shall
mean the sum of the net leasehold acres being acquired by Seller which sum
shall
be determined as follows for each such Lease, (a) the number of acres of land
that are described and covered by such Lease (i.e. gross acres), multiplied
by
(b) the lessor’s mineral interest in the land described and covered by such
Lease, multiplied by (c) Buyer’s undivided interest in such Lease (provided that
if items (b) and (c) vary as to different areas covered by the Lease, a separate
calculation shall be done for each such area). Within 5 business days after
receipt of such payment, Buyer shall convey such Properties to Seller by a
conveyance that contains the special warranty in the Conveyance. The assignment
shall be effective on
the
Option Exercise Date and shall be free and clear of any lien or encumbrance
or
any additional royalty burdens on the Leases arising after the Effective date.
(d) Failure
to drill Commitment Xxxxx.
In the
event that Buyer fails to drill the first Commitment Well in the time and manner
as set forth herein then Seller shall have the option of having Buyer reassign
to Seller all of the Properties, less the wellbore interest of any previously
drilled well, free and clear of any lien or encumbrance or any additional
royalty burdens on the Leases arising after the Effective Date. In the event
that Buyer fails to drill the second Commitment Well in the time and manner
as
set forth herein then Seller shall have the option of having Buyer reassign
to
Seller an undivided two-thirds interest in the Properties, less the wellbore
interest of any previously drilled well, free and clear of any lien or
encumbrance or any additional royalty burdens on the Leases arising after the
Effective Date. In the event that Buyer fails to drill the third Commitment
Well
in the time and manner as set forth herein then Seller shall have the option
of
having Buyer reassign to Seller an undivided one-third interest in all of the
Properties, less the wellbore interest of any previously drilled well, free
and
clear of any lien or encumbrance or any additional royalty burdens on the Leases
arising after the Effective Date.
Section
7.4. JOA
and Carried Costs.
If
Seller exercises its option pursuant to Section
7.3,
Seller
and Buyer shall enter into a Joint Operating Agreement in the form attached
hereto on Exhibit
IV,
in
which Buyer or its affiliate or designee shall be the operator (“JOA”).
The
initial well provided for in Article VI A of the JOA shall be the first
Commitment Well. Seller shall assume its proportionate share of the obligations
and costs under the JOA and receive its proportionate share of the revenue
arising after the Option
Exercise Date with respect to the options under Section 7.3(b) or
7.3(c). Buyer
shall be the responsible for and shall assume all
obligations, costs and revenues arising under the JOA or attributable to the
Properties before the Option
Exercise Date with respect to the options under Section 7.3(b) or 7.3(c).
Section
7.5. Access
to Information.
Seller
shall be given thirty (30) days notice prior to commencement of all drilling
operations. Seller’s representative (as appointed by Seller) shall have the
right, at Seller’s risk, to have access to the xxxxxxx floor and to observe all
operations on all xxxxx drilled on the Leases or leases pooled therewith. Buyer
shall promptly furnish Seller’s representative a copy of all applications and
reports pertaining to the Leases, all seismic data pertaining to the Properties,
daily drilling reports, and each well log, core analysis or other data taken
from xxxxx located on the Leases or acreage pooled therewith. Buyer agrees,
at
Seller’s request, to furnish Seller’s representative true and correct
information pertaining to each well, the production therefrom (including true
and complete copies of all contracts or agreements and all amendments and
modifications thereof) for sale, processing or other disposition of any product
produced from the well(s) and such technical information as Buyer may acquire
with respect to sands, coals and formations encountered. Seller’s representative
shall have the right to be present when xxxxx are tested and/or tanks are gauged
and shall have the right to examine all run tickets and to have full information
as to production and runs, including copies of all run tickets upon request.
Seller agrees, until the termination of this agreement or for a period not
to
exceed the period that a particular matter is held confidential by the
appropriate federal or state agency, whichever is the shorter period of time,
not to disclose any information or data provided to Seller pursuant to this
Section 7.5 to any third party unless and until such time as such information
or
data becomes available to the public. This shall not be interpreted to require
Buyer to furnish Seller or Seller’s representative with any information or data
which Buyer is obligated to keep confidential.
Section
7.6. Further
Assurances.
After
the
Closing, Seller shall execute and deliver, and shall otherwise cause to be
executed and delivered, from time to time, such further instruments, notices,
division orders, transfer orders and other documents, and do such other and
further acts and things, as may be reasonably necessary to more fully and
effectively grant, convey and assign the Properties,
including
without limitation the Leases,
to
Buyer.
| 8. |
Notices
|
Section
8.1. Notices.
All
notices and other communications required under this Agreement shall (unless
otherwise specifically provided herein) be in writing and be delivered
personally, by recognized commercial courier or delivery service (which provides
a receipt), by telecopier (with receipt acknowledged), or by registered or
certified mail (postage prepaid), at the following addresses:
If
to
Seller: Hallador
Petroleum Company
|
0000
Xxxxxxx Xxxxxx, Xxxxx 0000
|
|
Xxxxxx,
XX 00000
|
|
Attention:
Xxxxxx Xxxxxx
|
Fax
No.:
000-000-0000
If
to
Buyer: Approach
Oil & Gas Inc.
0000
Xxxxxxx Xxxxx, Xxxxx 0000
Xxxx
Xxxxx, XX 00000
Attention:
X. Xxxx Craft
Fax
No.:
(000) 000-0000
and
shall
be considered delivered on the date of receipt, provided that facsimile
deliveries received after business hours or a non business day shall be deemed
to have been received the next business day. Either Buyer or Seller may specify
as its proper address any other post office address within the continental
limits of the United States by giving notice to the other party, in the manner
provided in this Article, at least ten (10) days prior to the effective date
of
such change of address.
| 9. |
Miscellaneous
Matters
|
Section
9.1. Survival
of Provisions.
All
representations and warranties of Seller and Buyer contained in this Agreement
shall survive the Closing shall survive the closing for a period of one year
(“Survival
Period”).
All
covenants of Seller and Buyer contained in this Agreement shall survive the
Closing, except (a) any covenant of indemnification (whether based on a breach
or representation or warranty or otherwise) which shall only survive for the
Survival Period, and (b) any covenant which by its terms terminates as of a
specific date, or is only made for a specified period. Notwithstanding the
foregoing, the indemnity obligation of each party hereto shall continue after
the expiration of the Survival Period with respect to any indemnified matter
for
which the party seeking indemnity shall have given the other party written
notice as provided herein prior to the expiration of the Survival
Period.
Section
9.2. Binding
Effect; Successors and Assigns.
The
Agreement shall be binding on the parties hereto and their respective successors
and permitted assigns. Neither party shall have the right to assign its rights
under this Agreement, without the prior written consent of the other party
first
having been obtained.
Section
9.3. Expenses.
Each
party shall bear and pay all expenses incurred by it in connection with the
transaction contemplated by this Agreement.
Section
9.4. Entire
Agreement - Amendment.
This
Agreement contains the entire understanding of the parties hereto with respect
to subject matter hereof and supersedes all prior agreements, understandings,
negotiations, and discussions among the parties with respect to such subject
matter, including without limitation the letter of intent between the parties.
This Agreement may only be amended or waived in writing.
Section
9.5. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of Texas applicable to a contract executed and performed
in
such State, without giving effect to conflicts of laws principles requiring
the
application of the law of another State.
Section
9.6. Multiple
Counterparts; Fax.
This
instrument may be executed in a number of identical counterparts, each of which
for all purposes is to be deemed an original, and all of which constitute
collectively, one instrument. It is not necessary that each party hereto execute
the same counterpart so long as identical counterparts are executed by each
such
party hereto. This instrument may be validly executed and delivered by facsimile
or other electronic transmission.
Section
9.7. Confidentiality.
Seller
shall keep all information related to the Properties in strict confidence.
Seller shall not disclose such information to any person except to their
accountants, attorneys and other representatives and the extent such disclosure
is required by applicable law and shall not use such information to its
competitive advantage when in competition with Buyer.
IN
WITNESS WHEREOF,
this
Agreement is executed by the parties hereto on the date set forth
above.
SELLER:
By:
/S/XXXXXX X. XXXXXX
|
Name:
|
Xxxxxx
X. Xxxxxx
|
|
Title:
|
CEO
& President
|
BUYER:
APPROACH
OIL & GAS INC.
By: /S/X.
XXXX CRAFT
|
Name:
|
X.
Xxxx Craft
|
|
Title:
|
President
|
Exhibit
I Leases
Exhibit
II Form
of
Conveyance
Exhibit
III Global
Agreement
Exhibit
IV Form
of
JOA
Exhibit
II
CONVEYANCE
Hallador
Petroleum Company,
a
Colorado corporation (herein called “Grantor”),
whose
address is 1660 Lincoln, Suite 2700, Xxxxxx, Xxxxxxxx 00000, for Ten Dollars
and
other good and valuable consideration (the receipt and sufficiency of which
are
hereby acknowledged), does hereby GRANT, BARGAIN, SELL, CONVEY, ASSIGN,
TRANSFER, SET OVER, and DELIVER unto Approach
Oil & Gas Inc.,
(herein
called “Grantee”),
whose
address is 0000 Xxxxxxx Xxxxx, Xxxxx 0000, Xxxx Xxxxx, Xxxxx 00000 the following
described properties, rights and interests:
(a) All
of
the right, title and interest of the lessee under the oil, gas and/or mineral
leases (collectively, “Leases”
and
individually a “Lease”)
described on Exhibit
A attached
hereto and made part hereof; and
(b) Without
limitation of the foregoing, all of Grantor’s right, title and interest (of
whatever kind or character, whether legal or equitable, and whether vested
or
contingent) in and to the oil, gas and other minerals in and under or that
may
be produced from any and all land in Caldwell, Crittenden, Hopkins, Lyon,
Xxxxxxxx, Xxxxxxxxxx and Xxxxx Counties, Kentucky (including, without
limitation, all interests in oil, gas and/or mineral leases and fee mineral
interests).
(c) All
of
Grantor’s rights and obligations under the Oil and Gas Project Agreement dated
June 3, 2005 among Global GeoData, J. Xxxxx Xxxxxxx and Grantor (the
“Global
Agreement”)
with
respect to the properties, rights, and interests described in clauses (a) and
(b) above; and
(d) All
of
Grantor’s lease files, abstracts and title opinions, seismic records and
surveys, gravity maps, electric logs, geological or geophysical data and
records, and other files, documents and records of every kind and description
which relate to the properties described above (collectively, “Seller’s
Files”).
The
properties, rights and interests described in the foregoing subparagraphs (a)
and (b) are herein sometimes collectively called the “Properties”.
TO
HAVE
AND TO HOLD the Properties unto Grantee, its successors and assigns,
forever.
EXCEPT
FOR THE RIGHTS OF THE PARTIES UNDER THE GLOBAL AGREEMENT, GRANTOR AGREES TO
WARRANT AND FOREVER DEFEND TITLE TO THE PROPERTIES, UNTO GRANTEE, ITS SUCCESSORS
AND ASSIGNS, AGAINST THE CLAIMS AND DEMANDS OF ALL PERSONS CLAIMING, OR TO
CLAIM
THE SAME, OR ANY PART THEREOF, BY, THROUGH OR UNDER GRANTOR, BUT NOT OTHERWISE.
Grantor
agrees to execute and deliver to Grantee, from time to time, such other and
additional instruments, and other documents, and to do all such other and
further acts and things as may be necessary to more fully and effectively grant,
convey and assign to Grantee the Properties.
This
Conveyance may be executed in several counterparts all of which are identical.
All of such counterparts together shall constitute one and the same
instrument.
This
Conveyance is made subject to that certain Purchase and Sale Agreement between
Grantor and Grantee dated May 10, 2006. Such Agreement contains certain
representations, warranties, covenants and agreements between the parties,
which
survive the delivery of this Conveyance, as more particular provided for
therein, but third parties may conclusively rely on this Conveyance to vest
title to the Properties in Grantee. The covenants of the Agreement include
the
right of Grantor to obtain reassignment of the leases if the drilling
obligations are not satisfied and the option to participate as to a one-third
interest in the leases.
Without
limitation of Grantor’s obligations under said Purchase and Sale Agreement,
Grantee assumes all of Grantor’s obligations under the Global
Agreement.
IN
WITNESS WHEREOF this Conveyance has been executed by Grantor on the date of
its
acknowledgement.
“GRANTOR”
By:
/s/XXXXXX X. XXXXXX
Name:
Xxxxxx
X. Xxxxxx
Title:
CEO & President
ACKNOWLEDGEMENT
STATE
OF
COLORADO§
§
COUNTY
OF
DENVER §
The
foregoing instrument was acknowledged before me this 10th day of May by Xxxxxx
X. Xxxxxx, CEO and President of Hallador Petroleum Company, a Colorado
corporation, on behalf of such corporation.
IN
WITNESS WHEREOF, given under my hand and official seal this `10th day of May,
2006.
Notary
Public in the State of Colorado
My
Commission Expires:___________
[SEAL]
