Document:

form8kervin20090918sepagmt.htm

  

  

  

Exhibit 10.1

AGREEMENT AND GENERAL RELEASE

American Safety Insurance Services, Inc., 100 Galleria Parkway, Suite 700, Atlanta, GA 30339 (“Employer”) and Laura L. Ervin, 188 Covered Bridge Trail, SW, Smyrna, GA 30082, her heirs, executors, administrators, successors, and assigns (collectively referred to throughout this Agreement as “Employee”), agree that:

 

	
1.  
	
Last Day of Employment.  Employee’s last day of employment with Employer is to be Friday, August 28, 2009 (the “Separation Date”).

 

	
2.  
	
Consideration.  In consideration of the agreements and mutual covenants contained in this Agreement and General Release, and complying with its terms, Employer agrees:

 

	
a.  
	
Payments. On the next regularly scheduled payroll date (in accordance with Employer’s usual and customary payroll practices) after Employer receives an original of this Agreement and General Release executed by Employee and a letter of non-revocation in the form of
Exhibit A, attached to this Agreement and General Release, executed by Employee:

 

	
i.  
	
Severance Pay.  ASI shall pay to Employee in a lump sum four months (the “Severance Period”) of salary at Employee’s base rate of pay, or $63,070.00, less lawful deductions.

 

	
ii.  
	
Accrued Paid Time Off.  ASI shall pay Employee all earned, but unused paid time off as outlined in ASI’s Paid Time Off Policy.

 

	
iii.  
	
COBRA.  ASI shall pay Employee in a lump sum twelve months of the Employee’s portion of the premium for COBRA continuation coverage, or $10,463.16, less lawful deductions.

 

	
b.  
	
Outplacement Services.  ASI shall provide Employee with outplacement services for a period of six (6) months, such period to commence when Employee initiates outplacement services which must occur within the first six months after the Separation Date.

 

	
c.  
	
Equity Awards.   ASI shall immediately vest all unvested stock option grants and unvested awards of restricted stock as set forth on Exhibit B to this Agreement and General Release.  All options, whether vested prior to this Agreement and General Release or accelerated pursuant
to the terms hereof shall be exercisable for the shorter of the normal expiration date of such option or the date which is 90 days from the Separation Date.

 

	
3.  
	
No Consideration Absent Execution of this Agreement.  Employee understands and agrees that Employee would not receive the monies and/or benefits specified in paragraph “2” above, except for Employee’s execution of this Agreement and General Release
and the fulfillment of the promises contained herein.

 

	
4.  
	
General Release of All Claims.  Employee knowingly and voluntarily releases and forever discharges Employer, its parent corporation, affiliates, subsidiaries, divisions, predecessors, insurers, successors and assigns, and their current and former employees, attorneys,
officers, directors and agents thereof, both individually and in their business capacities, and their employee benefit plans and programs and their administrators and fiduciaries (collectively referred to throughout the remainder of this Agreement as "Releasees"), of and from any and all claims, known and unknown, asserted or unasserted, which the Employee has or may have against Releasees as of the date of execution of this Agreement and General Release, including, but not limited to, any alleged violation of:

 

	
§  
	
Title VII of the Civil Rights Act of 1964;

 

	
§  
	
Sections 1981 through 1988 of Title 42 of the United States Code;

 

	
§  
	
The Employee Retirement Income Security Act of 1974 ("ERISA") (except for any vested benefits under any tax qualified benefit plan);

 

	
§  
	
The Immigration Reform and Control Act;

 

	
§  
	
The Americans with Disabilities Act of 1990;

 

	
§  
	
The Family and Medical Leave Act;

 

	
§  
	
The Workers Adjustment and Retraining Notification Act;

 

	
§  
	
The Fair Credit Reporting Act;

 

	
§  
	
The Georgia Equal Pay Act (Sex Discrimination in Employment) – O.C.G.A. § 34-5-1 et seq.;

 

	
§  
	
The Georgia Equal Employment for Persons with Disabilities Code – O.C.G.A. § 34-6A-1 et seq.;

 

	
§  
	
The Georgia Wage Payment and Work Hour Laws;

 

	
§  
	
The City of Atlanta Anti-Discrimination Ordinance, Part II, Chapter 94, Article 11, Section 94-10 et seq.;

 

	
§  
	
any other federal, state or local law, rule, regulation, or ordinance;

 

	
§  
	
any public policy, contract, tort, or common law; or

 

	
§  
	
any basis for recovering costs, fees, or other expenses including attorneys' fees incurred in these matters.

 

	
5.  
	
Acknowledgments and Affirmations.

 

Employee affirms that Employee has not filed, caused to be filed, or presently is a party to any claim against Employer.

 

Employee also affirms that Employee has received all compensation, wages, bonuses, commissions, and/or benefits to which Employee may be entitled.  Employee affirms that Employee has been granted any leave to which Employee was entitled under the Family and Medical Leave Act or related state or local leave or disability accommodation
laws.

 

Employee further affirms that Employee has no known workplace injuries or occupational diseases.

 

Employee also affirms that Employee has not divulged any proprietary or confidential information of Employer and will continue to maintain the confidentiality of such information consistent with Employer’s policies and Employee’s agreement(s) with Employer and/or common law.

 

Employee further affirms that Employee has not been retaliated against for reporting any allegations of wrongdoing by Employer or its officers, including any allegations of corporate fraud.  Both Parties acknowledge that this Agreement does not limit either party’s right, where applicable, to file or participate in an
investigative proceeding of any federal, state or local governmental agency.  To the extent permitted by law, Employee agrees that if such an administrative claim is made, Employee shall not be entitled to recover any individual monetary relief or other individual remedies.

 

	
6.  
	
Confidentiality and Return of Property.  Employee agrees not to disclose any information regarding the underlying facts leading up to or the existence or substance of this Agreement and General Release, except to Employee’s spouse, tax advisor, and/or an
attorney with whom Employee chooses to consult regarding Employee’s consideration of this Agreement and General Release.

 

Employee affirms that Employee has returned all of Employer's property, documents, and/or any confidential information in Employee’s possession or control.  Employee also affirms that Employee is in possession of all of Employee’s property that Employee had at Employer’s premises and that Employer is not in
possession of any of Employee’s property.

 

	
7.  
	
Non-Solicitation of Employees and Customers.

 

	
a.  
	
Employee agrees for one (1) year after the cessation of employment with Employer, she will not directly or indirectly, solicit any insureds, agent, broker, or producer of ASI (“Customers”) for the purpose of providing any services competitive with those provided by ASI.  This restriction is limited to Customers with whom Employee had contact
during her employment for purposes of performing her job duties and responsibilities.

 

	
b.  
	
Employee agrees for one (1) year after the cessation of employment with Employer, she will not directly or indirectly: 1) solicit, recruit, offer to employ or employ any person who is employed by the Employer; this restriction is limited to solicitation, recruiting and offers of employment that are intended to encourage such person to terminate his or
her employment with Employer, or 2) solicit or induce any agent, broker or producer of the Employer to terminate his or her relationship with the Employer.  Both restrictions in this subsection (b) are limited to employees, agents, brokers and producers with whom Employee had contact during her employment for purposes of performing her job duties and responsibilities.

 

	
8.  
	
Non-Disclosure of Trade Secrets and Confidential Information.

 

	
a.  
	
Employee agrees she will not directly or indirectly use, disclose or disseminate to any other person, organization or entity or otherwise employ any Trade Secrets of Employer.  Employee further agrees she will not for two (2) years after her last day of employment with Employer for any reason disclose or disseminate to any other person, organization
or entity or otherwise employ any Confidential Information.  These obligations, however, shall not apply to any Trade Secrets or Confidential Information, which have become generally known to competitors of Employer through no act or omission of Employee.

 

	
b.  
	
For the purpose of this Agreement, the term “Trade Secrets” means any scientific or technical information, design, process, procedure, formula or improvement that is valuable and not generally known to Employer’s competitors including, without limitation, information, lists, and documentation pertaining to the policies, practices and
procedures concerning Employer’s present and future products and services, and its customers.

 

	
c.  
	
The term “Confidential Information” means any data or information and documentation, other than Trade Secrets, which is valuable to Employer and not generally known to the public, including but not limited to:  (a) Financial information, including, but not limited to, earnings, assets, debts, prices, fee structures, volumes of purchases
or sales, or other financial data, whether relating to Employer generally, or to particular products, services, geographic areas, or time periods; (b) Marketing information, including, but not limited to, details about ongoing or proposed marketing programs or agreements by or on behalf of Employer, marketing forecasts, results of marketing efforts or information about impending transactions; (c) Personnel information, including, but not limited to, employees’ personal or medical histories, compensation
or other terms of employment, actual or proposed promotions, hiring, resignations, disciplinary actions, terminations or reasons therefore, training methods, performance or other employee information; and (d) Customer information, including, but not limited to, any compilations of past, existing or prospective customers, customer proposals or agreements between customers and Employer, status of customer accounts or credit, or related information about actual or prospective customers; though written customer lists
and related documents also qualify as trade secrets.

 

	
9.  
	
Cooperation.  Employee agrees that she will cooperate and provide reasonable assistance at the request of Employer for a period of Sixty (60) days after the date of Separation Agreement.  Employer agrees that to the extent it requests assistance from
Employee during such period, it will compensate her for her time at the rate of $100/hour.

 

	
10.  
	
Indemnification.  Employer agrees to indemnify and hold harmless Employee to the full extent allowed by applicable law against any and all costs, losses, liabilities, expenses (including reasonable attorney’s fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with third party claims against Employee which result (i) from any act or omission committed within the scope or her employment by Employer or (ii) in connection with any services rendered by Employee at the request of Employer pursuant to Section  9 of this Agreement.

 

	
11.  
	
Non-Disparagement.  Each of Employer and Employee agrees not to defame, disparage or demean the other at any time.  In the event Employer is asked about Employee’s employment and or performance while employed, Employer will respond only with verification
of employment, dates of employment and verification of salary.

 

	
12.  
	
Governing Law and Interpretation.  This Agreement and General Release shall be governed and conformed in accordance with the laws of Georgia without regard to its conflict of laws provision.  In the event of a breach of any provision of this Agreement
and General Release, either party may institute an action specifically to enforce any term or terms of this Agreement and General Release and/or to seek any damages for breach.  Should any provision of this Agreement and General Release be declared illegal or unenforceable by any court of competent jurisdiction and cannot be modified to be enforceable, excluding the general release language, such provision shall immediately become null and void, leaving the remainder of this Agreement and General Release
in full force and effect.

 

	
13.  
	
Nonadmission of Wrongdoing.  The Parties agree that neither this Agreement and General Release nor the furnishing of the consideration for this Agreement and General Release shall be deemed or construed at any time for any purpose as an admission by Releasees
of wrongdoing or evidence of any liability or unlawful conduct of any kind.

 

	
14.  
	
Amendment.  This Agreement and General Release may not be modified, altered or changed except in writing and signed by both Parties wherein specific reference is made to this Agreement and General Release.

 

	
15.  
	
Revocation.  Employee may revoke this Agreement and General Release for a period of seven (7) calendar days following the day he/she executes this Agreement.  Any revocation within this period must be submitted, in writing, to Laurie Raimondi, Vice President
Human Resources, American Safety Administrative Services, Inc., 100 Galleria Parkway, Suite 700, Atlanta, Georgia  30339, and state, “I hereby revoke my acceptance of our Agreement and General Release.”  The revocation must be personally delivered to Laurie Raimondi, or her designee, or mailed to Ms. Raimondi at the above address and postmarked within seven (7) calendar days of execution of this Agreement.  This Agreement shall not become effective or enforceable until
the revocation period has expired and a letter in the form attached as Exhibit “A,” dated and signed no sooner than eight (8) days after Employee dates and signs this Agreement, is received by Ms. Raimondi or her designee.  If the last day of the revocation period is a Saturday, Sunday, or legal holiday in Georgia, then the revocation period shall not expire until the next following day which is not a Saturday, Sunday, or legal holiday in Georgia.

 

	
16.  
	
Entire Agreement.  This Agreement and General Release sets forth the entire agreement between the Parties hereto, and fully supersedes any prior agreements or understandings between the Parties.  Employee acknowledges that Employee has not relied on
any representations, promises, or agreements of any kind made to Employee in connection with Employee’s decision to accept this Agreement and General Release, except for those set forth in this Agreement and General Release.

 

EMPLOYEE IS ADVISED SHE HAS UP TO TWENTY-ONE (21) CALENDAR DAYS TO REVIEW THIS AGREEMENT AND GENERAL RELEASE.  EMPLOYEE IS FURTHER ADVISED TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTION OF THIS AGREEMENT AND GENERAL RELEASE.

 

EMPLOYEE AGREES ANY MODIFICATIONS, MATERIAL OR OTHERWISE, MADE TO THIS AGREEMENT AND GENERAL RELEASE DO NOT RESTART OR AFFECT IN ANY MANNER THE ORIGINAL TWENTY-ONE (21) CALENDAR DAY REVIEW PERIOD.

 

HAVING ELECTED TO EXECUTE THIS AGREEMENT AND GENERAL RELEASE, TO FULFILL THE PROMISES IN THIS AGREEMENT AND GENERAL RELEASE, AND TO RECEIVE THE SUMS AND BENEFITS IN PARAGRAPH 2 ABOVE, EMPLOYEE FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT
AND GENERAL RELEASE INTENDING TO WAIVE, SETTLE AND RELEASE ALL CLAIMS SHE HAS OR MIGHT HAVE AGAINST EMPLOYER.

 

* * * * * * * * * *

(Signatures appear on next following page)

  

  

  

The Parties knowingly and voluntarily sign this Agreement and General Release as of the date(s) set forth below:

	
 

By: /s/ Randolph L. Hutto

     Randolph L. Hutto

     President, American Safety Administrative

     Services, Inc.

 

 

 
	
 

By: /s/ Laura L. Ervin

       Laura L. Ervin

 

	
Date: September 17, 2009
	
Date: September 17, 2009

 

  

  

  

EXHIBIT A

Ms. Laurie J. Raimondi

Vice President Human Resources

American Safety Insurance Services, Inc.

100 Galleria Parkway, Suite 700

Atlanta, GA  30339

Re:           Separation Agreement and General Release

Dear Laurie:

On                                   [insert date], I executed a Separation Agreement and General Release (“Agreement”)
between American Safety Administrative Services, Inc. and me.  I was advised by American Safety Administrative Services, Inc., in writing, to consult with an attorney prior to executing the Agreement.

More than seven (7) calendar days have passed since I executed the Agreement.  I have at no time revoked my acceptance or execution of the Agreement and reaffirm my acceptance of it.  Therefore, in accordance with the terms of the Agreement, I request the payments described
in Paragraph 2 of the Agreement.

Very truly yours,

Laura L. Ervin

  

  

  

EXHIBIT B

Stock Option Grants:

	
 

Grant Date
	
Number of Shares
	
Exercise Price
	
Previously vested
	
 

Accelerated

	
December 17, 2007
	
3,000
	
$19.68
	
0
	
3,000

	
March 4, 2008
	
1,000
	
$17.95
	
0
	
1,000

Restricted Stock Awards:

	
Award Date
	
Number of Shares
	
Previously vested
	
Accelerated

	
March 4, 2008
	
1,033
	
258.25
	
774.75

	
March 11, 2009
	
2,038
	
0
	
2,038exh10-1.htm

Exhibit 10.1

PURCHASE AND SALE AGREEMENT

BY AND BETWEEN

HALLADOR PETROLEUM COMPANY

(a Colorado corporation)

and

[                                               ]

(a [                               ])

with respect to

SUNRISE COAL, LLC

(an Indiana limited liability company)

dated

as of September       , 2009

  

  

  

PURCHASE AND SALE AGREEMENT

 

This Purchase and Sale Agreement (this “Agreement”) is made and entered into as of September __, 2009, by and between [                                              ],
a [                             ] (“Seller”) and Hallador Petroleum Company, a Colorado corporation (“Purchaser”).

 

RECITALS

 

WHEREAS, Seller and Purchaser are each members of Sunrise Coal, LLC, an Indiana limited liability company (“Sunrise”).

 

WHEREAS, Seller and Purchaser and the other members of Sunrise are each a party to the Amended and Restated Operating Agreement of Sunrise dated as of July 31, 2006, as amended to date (the “Operating Agreement”).  Capitalized terms used and not otherwise
defined herein shall have the meaning provided in the Operating Agreement. 

 

WHEREAS, subject to payment of the Purchase Price by Purchaser to Seller and the other terms and conditions set forth herein, Seller desires to sell to Purchaser and Purchaser desires to purchase from Seller (i) all of the Common Units in Sunrise held by Seller, which represent the percentage membership interest of Sunrise set forth in
the column corresponding to the name of Seller on Exhibit A (the “Membership Interest”), and (ii) all Unreturned Capital Balance (the “Unreturned Capital Balance”), all Unsatisfied Preferred Return (the “Unsatisfied Preferred
Return”) and the future rights to receive any Preferred Returns, in each case accompanying such Membership Interest of Seller, and (iii) all rights of Seller as a member of the Sunrise pursuant to the Operating Agreement. 

 

WHEREAS, the accrued cash value of Seller’s Unreturned Capital Balance and Unsatisfied Preferred Return are also set forth in the column corresponding to the name of Seller on Exhibit A.

 

NOW, THEREFORE, in consideration of the premises and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser agree as follows:

 

ARTICLE 1

 

PURCHASE AND SALE

 

1.1              Agreement to Purchase and Sell.  Upon the terms and subject to the satisfaction of the conditions contained herein, Seller hereby (a) agrees
to assign, transfer, convey and deliver to Purchaser, and Purchaser agrees to accept the assignment, transfer and conveyance to it of the Membership Interest, and (b) agrees to sell, assign, transfer and convey or cause the sale, assignment, transfer or conveyance to Purchaser of the Unreturned Capital Balance, the Unsatisfied Preferred Return and any future rights to receive Preferred Returns in accordance with the Operating Agreement. Upon the terms and subject to the satisfaction of the conditions contained
herein, Purchaser hereby agrees to assume all of the obligations of Seller with respect to the Membership Interest as of the Closing Date and to purchase and accept the sale, assignment, transfer and conveyance to Purchaser of the Unreturned Capital Balance, the Unsatisfied Preferred Return and any future rights to receive Preferred Returns pursuant to the Operating Agreement.

 

1.2              Purchase Price.  At the Closing, Purchaser shall pay to Seller, for the transfer and sale to Purchaser of the Membership Interest, the
Unreturned Capital Balance, the Unsatisfied Preferred Return and any future rights to receive Preferred Returns, an aggregate amount equal to [                                 ] Dollars ($[                              ])
(the “Purchase Price”).  The portion of the Purchase Price to be paid for the Membership Interest (which shall include the right to receive any furture Preferred Return) shall be composed of One Million Five Hundred Thousand Dollars ($1,500,000.00) of value for each percent of Membership Interest sold and transferred to Purchaser hereunder, pro-rated as applicable, and shall be paid in the form of cash and shares of common stock,
par value $0.01, of Purchaser (“HPCo common stock”) as follows: [                                    ] Dollars ($[      ])
of immediately available cash and [                ] shares of HPCo common stock (which are valued at $6.00 per share for purposes of this Agreement), free and clear of all liens, pledges, charges, security interests, adverse claims or other encumbrances other than restrictions on future sale, assignment, disposition or transfer of such shares of HPCo common stock imposed
by applicable federal and state securities laws (the “Stock Consideration”). The portion of the Purchase Price to be paid for the Unreturned Capital Balance and the Unsatisfied Preferred Return shall be paid in immediately available cash (such cash, along with the cash paid in respect of the Membership Interest, being the “Cash Consideration”). 

 

1.3              Closing.  Subject to the satisfaction of each of the conditions precedent to the Closing set forth in Article 4,
or the waiver of such condition by the relevant party, the closing of the transactions contemplated hereunder (the “Closing”) shall take place at 8:00 a.m. Pacific time on September 16, 2009 or such later date as Purchaser notifies Seller that the Closing will occur (the “Closing Date”), at the offices of Morgan, Lewis & Bockius LLP, 300 South
Grand Avenue, 22nd Floor, Los Angeles, California 90071, or at such other place as mutually agreed upon between Purchaser and Seller. 

 

1.4              Closing Deliveries. 

 

(a)                At the Closing, Seller will deliver, or cause to be delivered to Purchaser:

 

(i)                  The certificate representing the Membership Interest or an Affidavit of Lost Certificate (the “Affidavit”)
in the form attached hereto as Exhibit B;

 

(ii)                An assignment of the Membership Interest, the Unreturned Capital Balance, the Unsatisfied Preferred Return and any future rights to receive Preferred Returns, in favor of Purchaser, in a form
reasonably satisfactory to Purchaser;

 

(iii)               If applicable, the Spousal Consent (the “Spousal Consent”), substantially in the form attached hereto as Exhibit C,
executed by Seller’s spouse; and

 

(iv)              The Accredited Investor Questionnaire substantially in the form attached hereto as Exhibit D.

 

(b)               At the Closing, Purchaser will deliver, or cause to be delivered:

 

(i)                  to Seller, the Cash Consideration; and

 

(ii)                either (A) a certificate representing the Stock Consideration to Seller, or (B) an instruction letter to Purchaser’s transfer agent instructing the transfer agent to record the issuance
of the Stock Consideration to Seller in the transfer agents direct registration system. 

 

ARTICLE 2

 

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller hereby represents and warrants to Purchaser as follows:

 

2.1              Authority; Binding Obligations.  Seller has the full legal capacity and authority to enter into this Agreement and has entered into this
Agreement as its own free act.  This Agreement (a) has been duly executed and delivered by Seller, and (b) assuming the due execution and delivery thereof by the other parties hereto, constitutes legal, valid and binding obligations of Seller, enforceable in accordance with its terms, except as the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws in effect from time to time relating to or affecting the enforcement of creditors’ rights generally
and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

 

2.2              Title; Liens.  Except as set forth on Schedule 2.2 hereto,
Seller is the owner of the Membership Interest, the Unreturned Capital Balance, the Unsatisfied Preferred Return and any future rights to receive Preferred Returns, free and clear of all liens, pledges and encumbrances, other than those restrictions imposed by applicable federal and state securities laws.  At the Closing, Seller will deliver, or cause to be delivered to Purchaser good and valid title to the Membership Interest, the Unreturned Capital Balance, the Unsatisfied Preferred Return and any future
rights to receive Preferred Returns, free and clear of all liens, pledges or encumbrances, other than those restrictions imposed by applicable federal and state securities laws.

 

2.3              No Bankruptcy.  No voluntary proceeding or petition has been instituted by Seller and no proceeding has been instituted or, to Seller’s
knowledge, been threatened to be instituted against Seller under the bankruptcy laws of the United States or any other country or any political subdivision thereof.  Seller has not made any assignment of any assets or properties for the benefit of creditors, consented to the appointment of a receiver or trustee for any assets or properties, been adjudicated bankrupt or made a bulk sale or taken any action which contemplates the making of a bulk sale.  No court has entered any order appointing a receiver
or trustee for any assets or properties of Seller or has assumed the custody of or sequestered any assets or properties of Seller and no attachment has been made on any assets or properties of Seller.

 

2.4              Independent Decision to Sell; Certain Grants of Restricted Stock Units.  Seller acknowledges that he or she has independently and without
reliance upon Purchaser made its own analysis and decision to sell the Membership Interest, the Unreturned Capital Balance, the Unsatisfied Preferred Return and any future rights to receive Preferred Returns to Purchaser.  Seller further acknowledges that Purchaser may possess material non-public information not known to Seller regarding or relating to Sunrise, and Seller acknowledges that it has not requested such information and agrees that the Purchaser shall have no liability whatsoever (and Seller hereby
waives and releases all claims which it would otherwise have) with respect to the non-disclosure of such information either prior to the date hereof or subsequent hereto.  Seller also acknowledges that in connection with the transactions contemplated by this Agreement, Brent K. Bilsland will become an officer and a member of the Board of Directors of Hallador, and that Hallador may in the future grant cash or equity awards to Brent K. Bilsland in connection with his service to Hallador.

 

2.5              Purchase for Investment.  The Stock Consideration that Seller will receive hereunder as part of the Purchase Price is being acquired for
investment only and not with a view to any public distribution thereof.  Seller shall not offer to sell or otherwise dispose of, or sell or otherwise dispose of, such Stock Consideration in violation of any of the registration requirements of the Securities Act of 1933, as amended, or any applicable state securities laws. 

 

2.6              No Registration.  Seller acknowledges that the Stock Consideration that Seller will receive hereunder has not been registered under the
Securities Act of 1933, as amended, and are being issued to Seller in reliance upon the exemption from such registration provided by Section 4(2) of the Securities Act of 1933, as amended, and exemptions available under applicable state securities laws.  Seller has been informed that the Stock Consideration that Seller will receive hereunder consists of “restricted securities” under the Securities Act of 1933, as amended, and may not be resold or transferred unless it is first registered
under the federal securities laws or unless an exemption from such registration is available.  Accordingly, Seller hereby acknowledges that Seller is prepared to hold the Stock Consideration to be acquired by it hereunder for an indefinite period.

 

2.7              Restricted Legend.  Seller acknowledges that the certificates or entries in the transfer agent’s direct registration system evidencing
the Stock Consideration hereunder will bear the following legend, which shall be in addition to any other legends required by law or contract:

 

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS.

 

2.8              Seller Sophistication.  Seller has such knowledge, skill and experience in investment financial and business matters that Seller is capable
of evaluating the merits and risks of accepting the Stock Consideration and of protecting Seller’s interests in connection therewith.  Seller is able to fend for itself in connection with the acceptance of the Stock Consideration and has the ability to bear the economic risk of the investment, including complete loss of the investment.  Seller understands that no federal or state agency has passed upon the Stock Consideration or made any finding or determination concerning the fairness or advisability
of this investment.  To the extent that Seller has deemed it appropriate to do so, Seller has retained, and relied upon, appropriate professional advice regarding the tax, legal and financial merits and consequences of an investment in the Stock Consideration.

 

2.9              Seller’s Investigation.  Seller, either alone or together with Seller’s advisors (if any), has made such independent investigation
of Purchaser, its management and related matters as Seller deems to be, or such advisors (if any) have advised to be, necessary or advisable in connection with an investment in the Stock Consideration.  Seller and Seller’s advisors (if any) have had the opportunity to ask questions and receive answers regarding the terms and conditions of the investment and have received all information and data that Seller and such advisors (if any) believe to be necessary in order to reach an informed decision as
to the advisability of an investment in the Stock Consideration.

 

2.10          Accredited Investor.  Seller is an “Accredited Investor” within the meaning of Rule 501 promulgated under the Securities Act, and has completed
or will complete and deliver to Purchaser on or before the Closing an Accredited Investor Questionnaire.

 

2.11          Rule 144 Unavailable; Limited Market.  Seller is aware of the adoption of Rule 144 by the Securities and Commission (“Rule
144”), promulgated under the Securities Act of 1933, as amended, which permits limited public resales of securities acquired in a nonpublic offering, subject to the satisfaction of certain conditions, including, among other things:  the availability of certain current public information about the issuer, the sale being through a broker in an unsolicited “broker’s transaction” and the amount of securities being sold during any three (3) month period not exceeding specified limitations. 
Seller is aware that Rule 144 is not presently available to exempt the sale of the Stock Consideration that Seller will receive hereunder from the registration requirements of the Securities Act of 1933, as amended.  Seller further represents that it understands that at the time it wishes to sell the Stock Consideration to be acquired by it hereunder there may be a limited public market or no public market upon which to make such a sale, and that, even if a public market exists for Purchaser’s common
stock, Purchaser may not then satisfy the current public information requirement of Rule 144 or other conditions under Rule 144 that are required of Purchaser.  If so, Seller understands that it may be precluded from selling the Stock Consideration it receives hereunder under Rule 144.

 

ARTICLE 3

 

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser hereby represents and warrants to Seller as follows:

 

3.1              Organization; Due Authorization.  Purchaser is a corporation duly formed, validly existing and in good standing under the laws of the State
of Colorado.  This Agreement (a) has been duly authorized, executed and delivered by Purchaser and (b) assuming the due execution and delivery thereof by the other parties thereto, constitutes legal, valid and binding obligations of Purchaser, enforceable in accordance with its terms, except as the same may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws in effect from time to time relating to or affecting the enforcement of creditors’ rights generally
and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).

 

3.2              Issuance of Stock Consideration.  All of the Stock Consideration that Seller will receive hereunder has been duly and validly authorized,
and when issued upon the terms and conditions hereof, will be fully paid and non-assessable and, subject to restrictions on future sale, assignment, disposition or transfer of such Stock Consideration imposed by applicable federal and state securities laws, will be free and clear of all liens, pledges, charges, security interests, adverse claims or other encumbrances. 

 

ARTICLE 4

 

CLOSING CONDITIONS

 

4.1              Conditions to Purchaser’s Obligations.  The obligation of Purchaser to purchase the Membership Interest, together with the Unreturned
Capital Balance, the Unsatisfied Preferred Return and any future rights to receive Preferred Returns pursuant to this Agreement, is subject to the satisfaction prior to or on the Closing Date of the following conditions, any of which may be waived in whole or in part by Purchaser:

 

(a)                The representations and warranties of Seller contained herein shall be true and correct in all material respects as of the Closing Date with the same effect as though made on the Closing Date.

 

(b)               Seller shall have performed and complied with all agreements, obligations and covenants contained herein.

 

(c)                Seller shall have delivered (i) either (A) the certificate representing the Membership Interest, or (B) the Affidavit.

 

(d)               Seller shall have delivered an assignment in accordance with Section 1.4(a)(ii).

 

(e)                Seller shall have delivered, if applicable, the Spousal Consent in accordance with Section 1.4(a)(iii).

 

(f)                 Seller shall have completed, executed and delivered to Purchaser an Accredited Investor Questionnaire in accordance with Section
1.4(a)(iv).

 

(g)                Purchaser shall have received cash proceeds of at least Twenty One Million Dollars ($21,000,000) from the sale of shares of its common stock in a private placement. 

 

(h)                Between the date hereof and the Closing Date, there shall have been no material adverse change in the business, financial condition or operations of Sunrise.

 

(i)                  Purchaser shall have completed, or shall concurrently complete, the purchase of all of the outstanding Common Units, together with the Unreturned Capital Balance, the Unsatisfied Preferred
Return and any future rights to receive Preferred Returns of each of the current members of Sunrise other than Seller and Purchaser.

 

4.2              Conditions to Seller’s Obligations.  The obligation of Seller to sell the Membership Interest, together with the Unreturned Capital
Balance and the Preferred Return pursuant to this Agreement, is subject to the satisfaction prior to or on the Closing Date of the following conditions, any of which may be waived in whole or in part by Seller:

 

(a)                The representations and warranties of Purchaser contained herein shall be true and correct in all material respects as of the Closing Date with the same effect as though made on the Closing Date.

 

(b)               Purchaser shall have delivered the Purchase Price.

 

ARTICLE 5

 

MISCELLANEOUS

 

5.1              Termination.  This Agreement and the transactions contemplated hereby may be terminated at any time prior to the Closing Date:

 

(a)                by mutual written consent of the parties hereto;

 

(b)               by Purchaser, if (i) Seller fails to comply in any material respect with any of its covenants or agreements contained herein, (ii) any of the representations and warranties of Seller set forth
in Article 2 hereof is breached or is inaccurate in any material respect, or (iii) if there is any material adverse change in the business, financial condition or operation of Sunrise, including, but not limited to Sunrise’s operation of the Carlisle Mine.

 

(c)                by Seller, if (i) Purchaser fails to comply in any material respect with any of its covenants or agreements contained herein, or (ii) any of the representations and warranties of Purchaser
set forth in Article 3 hereof is breached or is inaccurate in any material respect.

 

In the event of termination of this Agreement pursuant to Sections 5.1(b) or 5.1(c), the party entitled to terminate shall provide written notice to the other parties and this Agreement shall automatically
terminate and the transactions contemplated hereby shall be abandoned without liability of any party. 

 

5.2              Notices.  All notices, requests and other communications to any party hereunder shall be in writing (including facsimile or similar writing)
and shall be given to such party at its address or facsimile number set forth below, or such other address or facsimile number as such party may hereafter specify for the purpose to the party giving such notice.  Each such notice, request or other communication shall be effective (a) if given by facsimile, when such facsimile is transmitted to the facsimile number specified in this Section 5.2 and the appropriate electronic confirmation
is received, or, (b) if given by overnight mail, 72 hours after such communication is deposited with an overnight courier, addressed as aforesaid, or (c) if given by any other means, when delivered at the address specified in this Section 5.2.

 

If to Seller, to:

 

 

[                                               ]

 

[                                               ]

 

[                                               ]

 

If to Purchaser, to:

 

 

Hallador Petroleum Company

 

1660 Lincoln Street, Suite 2700

 

Denver, Colorado  80264

 

Attn:  Victor P. Stabio

 

Tel:  (303) 839-5506

 

Fax:  (303) 832-3013

 

with a copy to:

 

 

Morgan, Lewis & Bockius LLP

 

300 South Grand Avenue

 

22nd Floor

 

Los Angeles, California 90071

 

Attn: Ingrid A. Myers

 

Tel:  (213) 612-2500

 

Fax:  (213) 612-2501

 

5.3              Further Assurance.  From time to time, Seller and Purchaser agree to execute such instruments and documents and take such action as may
be reasonably necessary or appropriate to carry out the provisions of this Agreement and the intentions of the parties as expressed herein.

 

5.4              Entire Agreement.  This Agreement together with any exhibits or schedules attached hereto and any other agreements and documents executed
and delivered in connection herewith and therewith, constitute the entire agreement by and between the parties and supersedes any prior understandings, agreements or representation by or between the parties, written or oral, to the extent they have related in any way to the subject matter hereof.

 

5.5              Amendments and Modifications.  This Agreement may be amended or modified only by an instrument in writing duly executed by the parties
hereto.

 

5.6              Successors and Assigns.  All the terms and conditions of this Agreement shall be binding upon, inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto; provided, however, that neither party may assign any of its rights, benefits, interest or obligations under this Agreement without the prior written consent of the other party hereto, except that Purchaser’s rights or interests under this Agreement may be assigned at any time, to any affiliate of Purchaser, including,
without limitation, to Sunrise.

 

5.7              Benefits.  Except as otherwise specifically provided herein, nothing in this Agreement, express or implied, is intended to confer upon
any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement.

 

5.8              GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF INDIANA WITHOUT REGARD TO THE CONFLICTS
OF LAWS PROVISIONS THEREOF.

 

5.9              Severability.  If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

 

5.10          Headings.  The captions and section headings used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this
Agreement.

 

5.11          Counterparts.  This Agreement may be executed in two or more counterparts, each of which, when executed and delivered to the other party, shall be deemed an original,
but all of which together shall constitute one and the same instrument.

 

5.12          Entire Agreement.  This Agreement constitutes the entire agreement and understanding among the Parties with respect to, and supersedes all prior agreements and
understandings, written or oral, relating to, the subject matter hereof.

 

* * *

 

  

  

  

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

 

	  	
SELLER:

 

 

                                                                       

 

SSN:   

 

	  	  
	  	
PURCHASER:

HALLADOR PETROLEUM COMPANY

a Colorado corporation

By:                                                                  

Name:                                                             

Title:                                                                

 

  

  

  

Exhibit A

 

MEMBER BUYOUT SUMMARY

 

{see attached}

 

 

 

	
Member Name
	
Common Units
	
Percentage
	
Unreturned Capital Balance
	
Unsatisfied Preferred Return*

	
[                              ]
	
[           ]
	
[          ]%
	
$[         ]
	
$[         ]

 

 

	
  
	
*   The amount of the Unsatisfied Preferred Return will be updated to reflect the new Closing Date in the event Purchaser elects to move the Closing Date pursuant to Section 1.3 of the Agreement. 

 

 

 

  

  

  

Exhibit B

 

FORM OF AFFIDAVIT OF LOST CERTIFICATE

 

The undersigned (“Declarant”) hereby makes the following declaration of facts and undertakes the following covenants for the benefit of SUNRISE COAL, LLC (the “Company”):

 

1.                  As of September __, 2009 (the “Transfer Date”) Declarant was the lawful owner of _____ Common Units in the Company, which constituted ___% of the outstanding Common Units
of the Company (the “Securities”) and which were represented by Membership Certificate No. ___ of the Company (the “Certificate”). 

 

2.                  As of the Transfer Date, Declarant was entitled to the full and exclusive possession of the Securities and the Certificate.

 

3.                  The Certificate is lost and Declarant has made or caused to be made diligent search for the Certificate and has been unable to find or recover it.  Declarant agrees immediately
to surrender the original Certificate to the Company if it at any time hereafter comes into the possession or control of the Declarant.

 

4.                  On the Transfer Date, Declarant entered into that certain Purchase and Sale Agreement (the “Agreement”) whereby Declarant agreed to sell the Securities to Hallador Petroleum
Company (“Hallador”).

 

5.                  Declarant agrees, for itself, and his successors and assigns, to fully and completely reimburse, hold harmless, indemnify and defend the Company from and against any and all claims,
damages, losses, liabilities and expenses, including reasonable attorneys’ fees, which may be incurred, directly or indirectly, by the Company in connection with the presentment to the Company of the Certificate by any person, firm, partnership, corporation or other entity other than Hallador (collectively, the “Third Party”), whether or not the Third Party is a holder in due course, from and after the date hereof.

 

6.                  Declarant hereby requests that the Company accept this Affidavit of Lost Certificate and issue to Hallador a certificate representing the Securities. 

 

Declarant declares that the matters set forth in this document are true and correct of Declarant’s own knowledge.

 

Signed effective as of this ___ day of ___________, 2009.

 

 

__________________________________________

 

 

Name of member:

 

 

  

  

  

Exhibit C

 

FORM OF SPOUSAL CONSENT

 

I, [                                ], declare:

 

I am the spouse of [____________], and acknowledge that I may have an interest in [______] Common Units of Sunrise Coal, LLC, an Indiana limited liability company (the “Company”), including any Unreturned Capital Balance, Unsatisfied Preferred Return and any future rights to receive Preferred Returns which may accompany such Common
Units (collectively, the “Common Units”), representing [___]% of the issued and outstanding membership interests of the Company.

 

I have read and understand the Purchase and Sale Agreement, dated as of the date hereof (the “Agreement”) and acknowledge that [__________________] is a party thereto.  Capitalized terms used and not defined herein will have the meaning provided in the Agreement. 

 

To whatever extent I have a marital property or other interest in the membership interests of the Company, any Unreturned Capital Balance, Unsatisfied Preferred Return and any future rights to receive Preferred Returns, I hereby consent to the provisions of the Agreement and agree to abide by its terms and conditions.

 

I have carefully read the Agreement and am fully aware of the content of the Agreement and its legal effect.

 

I have been advised to secure counsel of my own choosing to represent me in connection with this matter and acknowledge that the provisions of the Agreement have been fully explained to me by my counsel, or that I have declined to retain counsel.

 

I acknowledge that this Spousal Consent shall be attached to the Agreement and made a part thereof.

 

 

 

Dated:  September __, 2009

 

 

 

 

                                                                       

 

 

Name of Spouse:

 

  

  

  

Exhibit D

 

FORM OF ACCREDITED INVESTOR QUESTIONNAIRE

 

Reference is hereby made to that certain Purchase and Sale Agreement, made and entered into as of September ___, 2009 (the “Agreement”), between Hallador Petroleum Company, a Colorado corporation (the “Purchaser”)
and ___________________________ (the “Seller”).  Terms used in this Accredited Investor Questionnaire but not defined herein shall have the meanings set forth in the Agreement.

 

7.                  Accredited Investor Status.  The undersigned Seller hereby certifies to the Purchaser that, at the Closing, he/she/it
qualifies as an “Accredited Investor” as defined by Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”) because such Seller is one or more of the following types of persons or entities (check all that apply).

 

	
  
	
_____        A natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of such person’s purchase exceeds $1,000,000;

 

	
  
	
_____        a natural person who had an individual income in excess of $200,000 in 2008 and 2007 or joint income with that individual’s spouse in excess of $300,000 in each of those years and who reasonably expects to reach the same income level in 2009;

 

	
  
	
_____        a bank as defined in Section 3(a)(2) of the Securities Act, or a savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary capacity;

 

	
  
	
_____        a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934;

 

	
  
	
_____        an insurance company as defined in Section 2(a)(13) of the Securities Act;

 

	
  
	
_____        an investment company registered under the Investment Company Act of 1940 (the “1940 Act”) or a business development company as defined in Section 2(a)(48) of the 1940 Act;

 

	
  
	
_____        a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958;

 

	
  
	
_____        any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000;

 

	
  
	
_____        any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 (“ERISA”), if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of ERISA, which is either a bank, savings and loan association, insurance company or registered investment adviser, or, if the employee benefit plan has total
assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;

 

	
  
	
_____        a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;

 

	
  
	
_____        an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, a corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the Stock Consideration offered, with total assets in excess of $5,000,000;

 

	
  
	
_____        any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Stock Consideration, whose purchase is directed by a person who has such knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of the investment contemplated by the Subscription Agreement;

 

	
  
	
_____        any director, executive officer, or general partner of the Purchaser, or a director, executive officer, or general partner of a general partner of the Purchaser; or

 

	
  
	
_____        an entity in which all of the equity owners are Accredited Investors (i.e., come within one of the above categories).

 

  

  

  

            IN WITNESS WHEREOF, the undersigned has executed this Accredited Investor Questionnaire this ___ day of September 2009.

 

	  	
SELLER

 

 

_________________________________

 

 

                     By:                                                         
           

                     Name:

                     Title:

 

 

 

 

 

  

  

  

Schedule 2.2

 

Title; Liens

 

 

 

{to be completed by Seller, if none state “None”}

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