ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT ("Agreement"), dated as of April 12, 2006, between
Xxxxxx X. Xxxx, Xx. ("Seller"), and Sun River Energy, Inc., a Colorado
Corporation company ("Buyer").
R E C I T A L S:
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WHEREAS, Seller holds certain fee minerals listed on Exhibit A and oil
and gas lease interest listed on Exhibit B for the exploration of minerals
("Assets") hereafter;
WHEREAS, Seller desires to convey such assets to Buyer subject to
certain conditions, and Buyer desires to acquire such assets, upon the terms and
subject to the conditions herein set forth; and
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Seller and Buyer agree as follows:
ARTICLE 1 TERMS OF TRANSACTION
1.1 Assets to be Transferred. At the Closing, and on the terms and subject of
the conditions set forth in this Agreement, Seller shall sell, assign,
transfer, deliver and convey to Buyer, and Buyer shall purchase from
Seller, the assets listed on Exhibit A & B.
1.2 Purchase Price and Payment. In consideration of the transfer by Seller to
Buyer of the assets, Buyer shall provide to Seller the consideration as
follows: $600,000 in the form of a Promissory Note due in two payments:
$300,000 at closing and $300,000 by January 31, 2007 and 7,333,333 shares
of common stock of Buyer, the Note to be secured by assets listed on
Exhibits A & B.
ARTICLE 2 CLOSING
2.1 Closing; Closing Date. The closing of the transactions contemplated hereby
(the "Closing") shall occur on or before April 15, 2006
At the Closing, each of the parties hereto shall make the following
deliveries or such deliveries in substitution therefore as are satisfactory to
the indicated recipient:
2.2 Deliveries by Seller.
(1) Seller shall deliver to Buyer: Xxxx of Sale, Quit Claim Deed, and
Assignment of Leases to the assets as is appropriate.
(2) The deed and assignments shall contain reverter clauses in the event
of non exploration and development as contained on Exhibit C hereto.
2.3 Deliveries by Buyer.
(1) Buyer shall issue a Promissory Note payable to Seller in the amount of
$600,000 as required herein and a Mortgage, Security and Pledge
Agreement and UCC - 1 securing the note against the assets and shares
of common stock of Buyer consisting of 7,333,333 shares.
ARTICLE 3 WARRANTIES OF SELLER
Seller represents and warrants to Buyer that:
3.l Authority Relative to this Agreement. Seller has full power and authority
to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby.
3.2 Title to Assets. Seller is the owner of, and has good and indefeasible
title to the fee minerals and valid leases on the mineral leases..
3.3 Seller's. Seller has no knowledge of any facts or circumstances the
existence or absence of which are reasonably likely to cause assets to be
valueless.
3.4 The assets will be delivered free and clear of liens and encumbrances
except those required in this contract.
ARTICLE 4 ADDITIONAL AGREEMENTS & WARRANTIES OF BUYER
4.1 Buyer agrees to the terms of Reverter Clauses as listed on Exhibit C.
4.2 Buyer represents that there are only currently a total of 1,000,000 shares
of Sun River Energy issued and outstanding to shareholders and no options
or warrants outstanding.
4.3 Fees and expenses. Except as otherwise expressly provided in this
Agreement, all fees and expenses, including fees and expenses of counsel,
financial advisors and accountants, incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the
party incurring such fee or expense.
ARTICLE 5 TERMINATION
5.1 Termination. This Agreement may be terminated and the transaction
contemplated hereby abandoned at any time prior to the Closing in the
following manner:
(a) by Seller, if Buyer shall have failed to fulfill in any material
respect any of its material obligations under this Agreement; or
(b) by Buyer, if Seller shall have failed to fulfill in an material
respect any of its material obligations under this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement, or caused this
Agreement to be executed by their duly authorized representatives, all as of the
day and year first above written.
SELLER:
Xxxxxx X. Xxxx, Xx.
By: __________________________________
Title:_________________________________
Date: _________________________________
BUYER:
Sun River Energy, Inc.
By: ___________________________________
Title: __________________________________
Date: __________________________________
EXHIBIT A
A 90% undivided fee interest in the oil, gas, coal, and coal bed methane
minerals and any other minerals or substances excepting placer deposits of gold
or silver, on the described land as shown in A-1 attached hereto.
EXHIBIT B
As conditional assignment of 80% NRI in and to the following described
mineral leases:
As shown on Exhibit B-1
Condition subject to a drilling and development commitment as follows:
At least 4 xxxxx shall be drilled on or before January 1, 2007 or all
undrilled acreage (each well holds 160 acres) shall revert to Seller. Thereafter
at least 8 xxxxx per year shall be drilled on the acreage in order to continue
to hold.
The leases for which the assignment is made, have specific limitations,
and the assignment is made subject to those limitations.
EXHIBIT C
Subject to a reverter clause which provides as follows: At least 1
EXPLORATION OR DEVELOPMENTAL well shall have been drilled on prospects within
the acreage within 1 year from date of deed, in order to continue to hold the
acreage and thereafter, at least 5 xxxxx, exploratory or developmental, shall be
drilled on the acreage per year, in order to maintain the acreage position. If,
at any year, the drilling commitment is not met, the drilled acreage shall be
held 640 acres per well and all remaining undrilled acreage shall revert back to
Seller upon the filing of an Affidavit of Non-performance by Seller and
Recording of a Quit Claim Deed for which Purchaser grants Seller an Irrevocable
Limited Power of Attorney (coupled with an interest to sign on Purchaser's
behalf.
