Document:

f8k012010ex10i_recovery.htm

    Exhibit
10.1

     

    
      PURCHASE AND SALE
AGREEMENT

      

      Church
Field

      Washington
County, Colorado

      

      THIS
PURCHASE AND SALE AGREEMENT (this “Agreement”), dated effective as of October 1,
2009 at 7:00 a.m. Mountain Time (the “Effective Time”), is between RECOVERY
ENERGY, INC., a Nevada corporation (“Seller”), and Roger A. Parker (“Buyer”).
Seller and Buyer shall be referred to herein, individually, as a “Party,” and
collectively, as the “Parties.”

      

      Recitals

      

      A. Seller
purchased certain rights and interests in and to the Church Field (collectively,
the “Assets”) described in Exhibit A hereto, located in Washington County,
Colorado and has previously sold 50% of Seller's interest in the
Assets.

      

      B. Seller
desires to sell and assign to Buyer, and Buyer desires to purchase and acquire
from Seller, the remaining 50% of the Assets in accordance with the terms and
conditions hereof.

      

      Agreement

      

      IN
CONSIDERATION OF $100.00, the mutual premises and covenants contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties hereby agree as follows:

      

      1. In
consideration of the payment of the Purchase Price (described below), and in
accordance with the terms and conditions of this Agreement, Buyer agrees to
purchase and acquire from Seller, and Seller agrees to sell, assign, transfer
and convey to Buyer, an undivided 50% of Seller’s original right, title and
interest in and to the following (collectively, the “Purchased
Assets”):

      

      (a) The
leasehold estates created by the oil and gas leases (the “Leases") described in
Exhibit A hereto, insofar as and only insofar as the Leases cover and relate to
the land (the “Land”) described in Exhibit A hereto.

      

      (b) The wells
(the “Wells”) located upon the Land described in Exhibit A hereto.

      

      (c) The
production of oil, gas, natural gas liquids, condensate and other hydrocarbons
produced from the Land covered by the Leases (the “Production”), or attributable
or allocable thereto, or to lands pooled or unitized therewith, from and after
the Effective Time.

      

      (d) The
equipment, personal property, facilities, pipelines, improvements, fixtures,
buildings and structures located upon the Land, or used in connection with the
Leases, the Land or the Wells for the production, gathering, treatment,
compression, transportation, processing, sale or disposal of 

       

      
        
           

        

        
          
          

          
            

          

        

        
           

        

         

        hydrocarbons
or water produced from the Land, or attributable thereto (collectively, the
“Equipment”), including, without limitation, all the wells, well-bores, casing,
tubing, gauges, valves, rods, flow lines, gear boxes, pumps, tanks, separators,
gathering system, compressors, pipelines, fixtures, pits, buildings and
improvements described in Exhibit A-3 hereto.

      

      

      (e) The
surface rights incident or appurtenant to the Leases, the Land and the Wells,
and all easements, rights-of-way, permits, licenses, servitudes, surface use
agreements or other similar interests affecting the Land, the Leases and the
Wells (collectively, the “Surface Rights”).

      

      (f) The
agreements, contracts, options, leases, licenses, permits and other documents
(collectively, the “Material Contracts”) related to the ownership or operation
of the Leases, the Land, the Wells, the Production, the Equipment and the
Surface Rights including, without limitation, all operating, unit, pooling,
exploration, farm-out, participation, operating, unit, pooling, communitization,
gathering, water disposal, processing, transportation and product purchase
agreements, and options, permits, orders and decisions of state and federal
regulatory authorities.

      

      (g) Copies of
Seller’s files and records related to the Leases, the Land and the Wells (the
“Records”) including, without limitation, all of the following: (i) land, lease,
title, contracts, rights of way, surveys, maps, plats, correspondence and
other documents; (ii) division of interest and accounting records; (iii)
severance, production and property tax records; and (iv) well, operations,
engineering, environmental and maintenance records.

      

      2. The
working interest assigned by Seller to Buyer shall be subject to a 20% royalty
and overriding royalty (the “Royalty”) burden, so that after closing of the sale
contemplated by this Agreement, Buyer shall own a 50.00% working interest and
being a 40.00% net revenue interest. If Seller owned less than 100% of the
leasehold interest under the Leases, or in the event the Leases cover less than
the full mineral estate in the lands covered by the Leases, then the interest
assigned and the Royalty shall be reduced proportionately with respect to
Seller’s interest in such Lease or the partial mineral interest covered by the
Lease. Seller represents that it only owns interests from the stratigraphic
equivalent of the base of the Niobrara formation to the stratigraphic equivalent
of the total depth drilled in the Church No. 41-25 well, located in Section 25
of Township 3 South, Range 51 West, 6th
P.M., Washington County, Colorado. No reduction shall occur as result of Seller
not owning interests in zones outside such stratigraphic interval.

      

      3. The
purchase price for the Purchased Assets shall be $750,000.00 (the “Purchase
Price”), as adjusted hereunder. The payment of the Purchase Price shall be paid
by Buyer to Seller at the Closing by bank wire as instructed by
Seller.

      

      4. Ownership
of Buyer’s interest in the Purchased Assets shall be transferred from Seller to
Buyer at Closing, but effective as of the Effective Time. All costs and expenses
attributable to the Purchased Assets incurred prior to the Effective Time shall
be the responsibility and obligation of Seller, and Seller shall be entitled to
all of the proceeds from the sale of production attributable to the Purchased
Assets prior to the Effective Time. In addition, at the Closing, Buyer shall

       

      
        
           

        

        
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        pay
Seller for the value of all oil in the tanks and line fill at the Effective Time
at the contract price which Seller is receiving from the purchaser of production
from the Purchased Assets for the month in which the Closing occurs. All costs
and expenses attributable to Buyer’s interest in the Purchased Assets and
incurred at or after the Effective Time shall be the responsibility and
obligation of Buyer, and Buyer shall be entitled to all proceeds from the sale
of production attributable to Buyer’s interest in the Purchased Assets at or
after the Effective Time. Buyer shall be responsible for and shall pay all of
the operating expenses, direct charges and operator’s overhead attributable to
Buyer’s interest in the Purchased Assets from and after the Effective
Time.

      

      

      5. Seller
hereby represents and warrants to Buyer as follows:

      

      (a) Seller is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada, and is authorized to do business in the State of
Colorado.

      

       

      (b) Seller
has all requisite power and authority to carry on its business as presently conducted, to enter into this
Agreement, and perform its obligations under this Agreement. The consummation of
the transactions contemplated by this Agreement will not violate nor be in
conflict with any provision of Seller’s articles of organization or
organizational documents, or any agreement or instrument to which Seller is a
party or is bound, or any judgment, decree, order, writ, injunction, statute,
rule or regulation applicable to Seller. The execution, delivery and performance
of this Agreement, and the transactions contemplated hereby, have been duly and
validly authorized by all requisite action on the part of Seller.

      

       

      (c) This
Agreement has been duly executed and delivered on behalf of Seller, and, at the
Closing, all documents and instruments required hereunder to be executed and
delivered by Seller shall have been duly executed and delivered. This Agreement
does, and such documents and instruments shall, constitute legal, valid and
binding obligations of Seller enforceable in accordance with their
terms.

      

      (d) Seller
hereby agrees to warrant and defend the title to the Purchased Assets against
all liens, encumbrances and defects of title arising by, through, or under
Seller, but not otherwise.

      

       

      (e) To
Seller’s knowledge, all rentals and royalties under the Leases have been timely
and fully paid.

      

      (f) To
Seller’s knowledge, all ad valorem, property, production, severance, excise
taxes and assessments attributable to the Leases, the Land and the Production
have been timely and fully paid.

      

      (g) Seller
has not received notice of any breach, default or violation under any of the
Leases or the Material Contracts. No claim, demand, filing, cause of action,
administrative proceeding, lawsuit or other litigation has been served upon
Seller or notice received by Seller or, to Seller’s knowledge, threatened with
respect to any of the Assets.

      

      
        
           

        

        
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      (l)           To
Seller’s knowledge, there are no consents required to be obtained for, and no
preferential rights to purchase exercisable in connection with, the assignment
of the Purchased Assets by Seller to Buyer hereunder.

       

      (m)  To
Seller’s knowledge, there are no outstanding authorities for expenditure or
other commitments to make capital expenditures which are binding on the Assets,
and which Seller reasonably anticipates will require expenditures in excess of
$25,000.00 per item.

       

      (n)           To
Seller’s knowledge, Seller’s interest in the Purchased Assets is not subject to
any contract for the sale of the production attributable to periods after the
Effective Time, other than contracts that may be terminated by 30 days prior
written notice. To Seller’s knowledge, Seller’s interest in the Purchased Assets
is not subject to or burdened by any obligation under a sales, take-or-pay, gas
balancing, marketing, hedging, forward sale or similar arrangement, to deliver
the production attributable to such interest in the Purchased Assets without
receiving payment at the time of or subsequent to delivery, or to deliver the
Production in the future for which payment has already been received (e.g., a
“forward” sale contract).

       

      (h) Seller
has not intentionally omitted any material information from the
Records.

      

      (i) Seller is
not a “foreign person” within the meaning of Section 1445 of the Internal
Revenue Code.

      

      (j) There are
no bankruptcy, reorganization or receivership proceedings pending, or, to
Seller’s knowledge, threatened against Seller.

      

       

      (k) Seller
has not incurred any liability for brokers or finders fees relating to the
transactions contemplated by this Agreement for which Buyer shall have any
responsibility whatsoever.

      

      6. Buyer
hereby represents and warrants to Seller as follows:

      

      (a) Buyer is
an individual resident in the State of Colorado.

      

       

      (b) Buyer has
all requisite power and authority to enter into this Agreement and perform his
obligations under this Agreement. The consummation of the transactions
contemplated by this Agreement will not violate nor be in conflict with any
provision of any agreement or instrument to which Buyer is a party or is bound,
or any judgment, decree, order, writ, injunction, statute, rule or regulation
applicable to Buyer. The execution, delivery and performance of this Agreement,
and the transactions contemplated hereby, have been duly and validly authorized
by all requisite action on the part of Buyer.

       

       

      
        
           

        

        
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      (c) This
Agreement has been duly executed and delivered by Buyer, and, at the Closing,
all documents and instruments required hereunder to be executed and delivered by
Buyer shall have been duly executed and delivered. This Agreement does, and such
documents and instruments shall, constitute legal, valid and binding obligations
of Buyer enforceable in accordance with their terms.

      

      (d) Buyer is
acquiring the Purchased Assets for Buyer’s own benefit and account, and not with
the intent of resale or distribution such as would be subject to regulation by
federal or state securities laws (collectively, the “Securities Laws”), and in
the future, if Buyer should sell, transfer or otherwise dispose of the Purchased
Assets or fractional undivided interests therein, Buyer will do so in compliance
with all applicable Securities Laws.

      

      (e) Buyer has
such knowledge and experience in financial and business matters, and in oil and
gas investments of the type contemplated by this Agreement, that Buyer is
capable of evaluating the merits and risks of this Agreement and its investment
in the Purchased Assets, and Buyer is not in need of the protection afforded
investors by the Securities Laws. In addition, Buyer is an “accredited investor”
as defined in Rule 501(a) of Regulation D promulgated by the Securities and
Exchange Commission under the Securities Act of 1933, as amended. Buyer
recognizes that this investment is speculative and involves substantial risk,
and that Seller has not made any guaranty upon which Buyer has relied concerning
the possibility or probability of profit or loss as a result of Buyer’s
acquisition of the Purchased Assets.

      

      (f) By reason
of Buyer’s experience and knowledge in the evaluation, acquisition and operation
of similar properties, Buyer has evaluated the merits and risks of the proposed
investment in the Purchased Assets, and has formed opinions based solely upon
Seller’s experience and knowledge, and not upon any representations or
warranties by Seller, other than as expressly set forth in this Agreement. Buyer
has conducted or will conduct its own evaluation of the Purchased Assets and,
except for the express representations set forth in this Agreement, Buyer is
acquiring the Purchased Assets “AS IS, WHERE IS, WITH ALL FAULTS, AND WITHOUT
RECOURSE.”

      

      (g) Buyer is
provided the opportunity to conduct an independent inspection of the Records,
Assets and the public records including, without limitation, for the purpose of
detecting the presence of any environmentally hazardous substances or
contamination, including petroleum, and the presence and concentration of NORM,
and Buyer shall satisfy itself as to the physical condition and environmental
condition of the Assets, both surface and subsurface. Buyer acknowledges that,
except as set forth in this Agreement, no representations have been made by
Seller regarding physical or environmental conditions, past or
present.

      

      (h) Buyer has
not incurred any liability, contingent or otherwise, for brokers’ or finders’
fees relating to the transactions contemplated by this Agreement for which
Seller shall have any responsibility whatsoever.

      

      7. The
purchase and sale of the Purchased Assets pursuant to this Agreement (the
“Closing”) shall occur at such date and time as Buyer and Seller may mutually
agree in writing. At the Closing, the following shall occur:

       

       

      
        
           

        

        
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      (a) Seller
shall execute, acknowledge and deliver to Buyer (in sufficient counterparts to
facilitate recording) an assignment, conveyance and bill of sale (the
“Assignment”) covering Buyer’s interest in the Purchased Assets, substantially
in the form of Exhibit B hereto, with sufficient counterparts for filing in the
appropriate governmental offices.

      

      (b) Buyer
shall pay to Seller the Purchase Price, in accordance with the terms and
conditions hereof.

      

      8. EXCEPT AS EXPRESSLY STATED IN THIS
AGREEMENT AND THE ASSIGNMENT, THIS AGREEMENT IS MADE WITHOUT WARRANTY OF ANY
KIND, EXPRESS, IMPLIED, STATUTORY, AT COMMON LAW OR OTHERWISE, AND THE PARTIES
HEREBY EXPRESSLY DISCLAIM, WAIVE AND RELEASE ANY WARRANTY OF MERCHANTABILITY,
CONDITION, SAFETY, OR FITNESS FOR A PARTICULAR PURPOSE, AND BUYER ACCEPTS THE
PURCHASED ASSETS “AS IS, WHERE IS, WITH ALL FAULTS, AND WITHOUT RECOURSE.”
SELLER DOES NOT IN ANY WAY REPRESENT OR WARRANT THE ACCURACY OR COMPLETENESS OF
ANY INFORMATION, DATA OR OTHER MATERIALS (WRITTEN OR ORAL) FURNISHED TO BUYER BY
OR ON BEHALF OF SELLER. BUYER HEREBY AGREES THAT IT HAS INSPECTED OR HAS BEEN
GIVEN THE OPPORTUNITY TO INSPECT THE ASSETS, INCLUDING THE LEASES AND ASSOCIATED
AGREEMENTS, WELLS, PERSONAL PROPERTY, AND EQUIPMENT ASSIGNED AND CONVEYED
HEREIN. ANY COVENANTS OR
WARRANTIES IMPLIED BY STATUTE OR LAW BY THE USE OF THE WORD “GRANT,” “TRANSFER,”
OR “CONVEY” OR OTHER WORDS OF GRANT ARE HEREBY EXPRESSLY WAIVED, DISCLAIMED AND
RELEASED BY THE PARTIES HERETO. THE PARTIES HEREBY ACKNOWLEDGE AND
AGREE THAT, TO THE EXTENT REQUIRED BY APPLICABLE LAW, THE DISCLAIMERS CONTAINED
IN THIS AGREEMENT ARE “CONSPICUOUS” FOR THE PURPOSES OF ALL APPLICABLE
LAW.

      

      9. All
production, severance, excise and other taxes (other than income taxes) relating
to production of oil, gas and condensate attributable to the Purchased Assets
prior to the Effective Time shall be paid by Seller, and Buyer shall bear and
pay all such taxes relating to Buyer’s interest in such production on or after
the Effective Time. Buyer shall be responsible for any and all state and local
taxes or fees imposed on the transfer of the Purchased Assets.

      

      10. Seller
and Buyer shall use their commercially reasonable efforts in good faith to
obtain all of the consents or waivers of preferential rights that are required
to be obtained with respect to the transfer of the Purchased Assets to
Buyer.

      

      11. The
Leases and the Land shall be subject to and burdened by the terms and conditions
of the A.A.P.L. Form 610-1989 Model Form Operating Agreement (the “Operating
Agreement”). The Operating Agreement shall govern and control all operations
conducted upon the Land. Pursuant to the terms of the Operating Agreement,
Seller shall be designated as Operator, the non-consent penalty shall be equal
to 300%, and the COPAS overhead rate for an operating 

       

      
        
           

        

        
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        well
shall be equal to $500 per month per well. Under the terms of this Agreement,
Buyer shall be an owner of undivided interests in and to the Leases subject to
the Operating Agreement, and Buyer hereby shall be bound by the terms of the
Operating Agreement. In the event of a conflict between the terms and condition
of this Agreement and the Operating Agreement, the terms and conditions of this
Agreement shall control and govern the point in conflict.

      

      

      12. Buyer
shall have the right, but not the obligation, to cause Seller to purchase and
acquire the Purchased Assets from Buyer for $825,000.00 (the “Repurchase Price”)
by written notice delivered to Seller on or before March 15, 2010 (the
“Repurchase Deadline”). If Seller does not elect to cause Buyer to sell the
Purchased Assets on or before the Repurchase Deadline, Seller’s right to cause
Buyer to Sell the Purchased Assets hereunder shall expire automatically. If
Seller elects to cause Buyer to sell the Purchased Assets on or before the
Repurchase Deadline, the closing of the purchase and sale of the Purchased
Assets shall occur at the offices of Seller on or before March 15, 2010. At the
closing: (a) Buyer shall execute, acknowledge and deliver to Seller (in
sufficient counterparts to facilitate recording) an assignment, conveyance and
bill of sale covering the Purchased Assets, with a special warranty of title
from Buyer against liens, encumbrances and defects of title arising by, through
or under Buyer, but not otherwise, substantially in the form of the Assignment,
with sufficient counterparts for filing in the appropriate governmental offices;
and (b) Seller shall pay to Buyer the Repurchase Price by wire transfer to
Buyer’s account.

      

      13. It is not
the intention of the Parties to create a partnership, joint venture, mining
partnership or association; and neither this Agreement nor the operations
hereunder shall be construed as creating such a relationship. The liability of
the Parties shall be several and separate, and not joint or collective, and each
Party shall be responsible for its obligations only. Nothing contained herein
shall be construed to constitute either Party to be the partner or agent of the
other Party. Each Party hereby expressly waives, disclaims and releases any and
all fiduciary duties between the Parties.

      

      14. All
notices authorized or required by the terms of this Agreement shall be deemed
given upon the first to occur of actual receipt by the Party to be notified or
three days after deposit in the mail, postage prepaid, return receipt requested,
certified, Federal Express or other reputable overnight delivery service,
addressed as set forth herein. Any party may, from time to time, change its
address hereunder by written notice to the other Parties. The Parties’
respective addresses for notice are:

      

      
        	
                If
      to Seller:

                Recovery
      Energy, Inc.

                 

              	
                With
      a copy to:

                 

                Jeffrey
      Knetsch

                Brownstein
      Hyatt Farber Schreck, LLP

                410
      17th
      Street, Suite 2200

                Denver,
      Colorado 80202

                Fax:
      (303) 223-1111

                E-Mail:
      jknetsch@bhfs.com

                 

              
	
                If
      to Buyer:

                 

                Roger
      A. Parker

                 

              	 
      

      

       

       

      
        
           

        

        
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      15. All
exhibits attached to this Agreement are hereby incorporated by reference herein
and made a part hereof for all purposes as if set forth in their entirety
herein. This Agreement, including the exhibits attached hereto, constitutes the
entire agreement between the Parties as to the subject matter of this Agreement
and supersedes all prior agreements, understandings, negotiations and
discussions of the Parties, whether oral or written. No supplement, amendment,
alteration, modification or waiver of this Agreement shall be binding unless
executed in writing by the Parties. All other drafts whether written or oral of
this Agreement are rescinded and this Agreement supersedes any prior draft of
this Agreement whether written or oral, including all previous letters or emails
rescinding or cancelling the selling and buying of the Purchased
Assets.

      

      16. The
rights of Seller and Buyer may be assigned and the provisions of this Agreement
shall extend to their successors and assigns, provided, however, no assignment
shall relieve successors or assigns of its obligations under this
Agreement.  Any assignment hereunder shall be subject to all of the
terms and conditions of this Agreement, and the assignee shall agree to assume,
bear and perform the assignor’s duties and obligations hereunder.

      

      17. This
Agreement shall be governed and construed in accordance with the laws of the
State of Colorado. In the event of any dispute arising out of or relating to
this Agreement, the prevailing Party shall be entitled to recover from the other
Party court costs and reasonable attorneys’ fees.

      

      18. The
Parties agree to execute, acknowledge and deliver such additional instruments,
agreements or other documents, and take such other action as may be necessary or
advisable to consummate the transactions contemplated by this Agreement. None of
the terms and conditions of this Agreement shall be deemed to have merged with
any assignments to be executed in connection herewith.

      

      19. This
Agreement may be executed in counterparts, and each such counterpart shall be
deemed to be an original instrument, but all such counterparts together shall
constitute for all purposes one agreement.  Facsimiles shall be
effective as originals. Facsimiles and electronic copies of this Agreement shall
be effective as originals.

       

       

      
        
           

        

        
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      IN
WITNESS WHEREOF, Buyer and Seller have executed and delivered this Agreement on
the dates below the signatures hereto, to be effective for all purposes as of
the Effective Time.

      

      
        	
                SELLER:

                 

                Recovery
      Energy, Inc.

                 

                By:  _____________________________

                        Jeffrey
      Beunier, President

              	
                BUYER:

                 

                 

                 

                ______________________________

                          Roger
      A. Parker

              

      

       

       

       

       

      
        
           

        

        
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      EXHIBIT
A

      Attached
to and made a part of that certain Purchase and Sale Agreement

      dated
effective October 1, 2009

      between
Recovery Energy, Inc. and

      Roger A.
Parker

      

      
        
          	
                  The Leases and the
      Land:

                
	 
      	 
      
	
                  Lessor:

                	
                  Deane
      M. White

                
	
                  Lessee:

                	
                  R.D.
      Brew

                
	
                  Dated:

                	
                  July
      26, 1972

                
	
                  Recorded:

                	
                  Book
      654, Page 419 in Washington County, Colorado

                
	
                  Description:

                	
                  Insofar
      and Only Insofar as the Lease covers:

                
	 
      	
                  Township 3 south, Range 51
      West

                
	 
      	
                  Section
      25:  NE/4

                
	 
      	 
      
	
                  Lessor:

                	
                  Mary
      Black Phillips

                
	
                  Lessee:

                	
                  R.D.
      Brew

                
	
                  Dated:

                	
                  July
      26, 1972

                
	
                  Recorded:

                	
                  Book
      654, Page 421 in Washington County, Colorado

                
	
                  Description:

                	
                  Insofar
      and Only Insofar as the Lease covers:

                
	 
      	
                  Township 3 south, Range 51
      West

                
	 
      	
                  Section
      25:  NE/4

                
	 
      	 
      
	
                  Lessor:

                	
                  Waymon
      G. Peavy

                
	
                  Lessee:

                	
                  R.D.
      Brew

                
	
                  Dated:

                	
                  July
      26, 1972

                
	
                  Recorded:

                	
                  Book
      654, Page 423 in Washington County, Colorado

                
	
                  Description:

                	
                  Insofar
      and Only Insofar as the Lease covers:

                
	 
      	
                  Township 3 south, Range 51
      West

                
	 
      	
                  Section
      25:  NE/44

                
	 
      	 
      
	
                  Lessor:

                	
                  Oliver
      H. Daniel

                
	
                  Lessee:

                	
                  R.D.
      Brew

                
	
                  Dated:

                	
                  July
      26, 1972

                
	
                  Recorded:

                	
                  Book
      654, Page 425 in Washington County, Colorado

                
	
                  Description:

                	
                  Insofar
      and Only Insofar as the Lease covers:

                
	 
      	
                  Township 3 south, Range 51
      West

                
	 
      	
                  Section
      25:  NE/4

                
	 
      	 
      
	
                  Lessor:

                	
                  C-H-M
      Company

                
	
                  Lessee:

                	
                  R.D.
      Brew

                
	
                  Dated:

                	
                  July
      27, 1972

                
	
                  Recorded:

                	
                  Book
      654, Page 429 in Washington County, Colorado

                
	
                  Description:

                	
                  Insofar
      and Only Insofar as the Lease covers:

                
	 
      	
                  Township 3 south, Range 51
      West

                
	 
      	
                  Section
      25:  NE/4

                

        

      

       

       

      
        
           

        

        
          A-1

          
            

          

        

        
           

        

      

       

      
        
          	
                  Lessor:

                	
                  Chester
      Kincheloe

                
	
                  Lessee:

                	
                  R.D.
      Brew

                
	
                  Dated:

                	
                  July
      27, 1972

                
	
                  Recorded:

                	
                  Book
      654, Page 431 in Washington County, Colorado

                
	
                  Description:

                	
                  Insofar
      and Only Insofar as the Lease covers:

                
	 
      	
                  Township 3 south, Range 51
      West

                
	 
      	
                  Section
      25:  NE/4

                
	 
      	 
      
	
                  Lessor:

                	
                  George
      N. Church

                
	
                  Lessee:

                	
                  R.D.
      Brew

                
	
                  Dated:

                	
                  June
      23, 1972

                
	
                  Recorded:

                	
                  Book
      654, Page 433 in Washington County, Colorado

                
	
                  Description:

                	
                  Insofar
      and Only Insofar as the Lease covers:

                
	 
      	
                  Township 3 south, Range 51
      West

                
	 
      	
                  Section
      25:  NE/4

                
	
                  Correction
      of Description

                
	
                  Recorded:

                	
                  Book
      790, Page 107 in Washington County, Colorado

                
	
                  Description:

                	
                  Insofar
      and Only Insofar as the Lease covers:

                
	 
      	
                  Township 3 south, Range 51
      West

                
	 
      	
                  Section
      25:  NE/4

                
	 
      	 
      
	
                  Lessor:

                	
                  Frank
      De Allen, Jr.

                
	
                  Lessee:

                	
                  R.D.
      Brew

                
	
                  Dated:

                	
                  July
      7, 1972

                
	
                  Recorded:

                	
                  Book
      654, Page 435 in Washington County, Colorado

                
	
                  Description:

                	
                  Insofar
      and Only Insofar as the Lease covers:

                
	 
      	
                  Township 3 south, Range 51
      West

                
	 
      	
                  Section
      25:  NE/44

                
	 
      	 
      
	
                  Lessor:

                	
                  Jack
      H. Allen, Executor of the Estate of W.O. Allen,
Deceased

                
	
                  Lessee:

                	
                  R.D.
      Brew

                
	
                  Dated:

                	
                  October
      30, 1972

                
	
                  Recorded:

                	
                  Book
      656, Page 118 in Washington County, Colorado

                
	
                  Description:

                	
                  Insofar
      and Only Insofar as the Lease covers:

                
	 
      	
                  Township 3 south, Range 51
      West

                
	 
      	
                  Section
      25:  NE/4

                

        

      

       

       

      
        
           

        

        
          A-2

          
            

          

        

        
           

        

      

       

      
        
          	
                  The
    Wells:

                
	 
      	 
      
	
                  Well
      Name:

                	
                  Church
      41-25

                
	
                  Located:

                	
                  NE/4NE/4
      of Section 25, T3S-R51W, Washington County, CO

                
	
                  API:

                	
                  05-121-10858

                
	
                  Working
      Interest 100% - Net Revenue Interest 80%

                
	 
      	 
      
	
                  Well
      Name:

                	
                  Church
      41A-25

                
	
                  Located:

                	
                  NE/4NE/4
      of Section 25, T3S-R51W, Washington County, CO

                
	
                  API:

                	
                  05-121-10865

                
	
                  Working
      Interest 100% - Net Revenue Interest 80%

                
	 
      	 
      
	
                  Well
      Name:

                	
                  Church
      41B-25

                
	
                  Located:

                	
                  NE/4NE/4
      of Section 25, T3S-R51W, Washington County, CO

                
	
                  API:

                	
                  05-121-10985

                
	
                  Working
      Interest 100% - Net Revenue Interest
80%

                

        

      The above
three wells located on the Lands, including without limitation the rods, tubing,
casing and pumping units currently on the Wells (all wells have Grenco drive
gear boxes with P.C. pumps) and four 300-barrel production tanks and one 10’ by
27’ treater, one 8’ by 30’ horizontal tank, one 500-barrel bolted water tank,
one 300-barrel water tank, one 300-barrel safety tank, one 500-barrel tank (not
in use) and two permitted produced water pits located on the Lands.

       

       

       

      
        
           

        

        
          A-3

          
            

          

        

        
           

        

      

       

      
 

      EXHIBIT
B

      Attached
to and made a part of that certain Purchase and Sale Agreement

      dated
effective October 1, 2009

      between
Recovery Energy, Inc. and

      Roger A.
Parker

      

      

      

      When
Recorded Return To:

      Recovery
Energy, Inc.

      1515
Wynkoop St., # 200

      Denver,
Colorado 80202

      Attn:
Jefffrey Beunier, President

       

      

       

       

      ASSIGNMENT, CONVEYANCE AND
BILL OF SALE

       

      

      STATE
OF COLORADO    §

                                    
§           ss.

      WASHINGTON
COUNTY       §

      

      THIS ASSIGNMENT, CONVEYANCE AND BILL
OF SALE (this “Assignment”), dated effective as of October 1st,
2009 at 7:00 a.m. Mountain Time (the “Effective Time”), is from RECOVERY ENERGY,
INC., a Nevada corporation (“Assignee”), [Address], to ROGER A. PARKER
(“Assignee”), [Address]. Assignor and Assignee are referred to herein,
individually, as a “Party,” and, collectively, as the “Parties.”

      

      FOR TEN DOLLARS, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Assignor hereby sells, assigns, transfers and conveys unto
Assignee Assignor’s 50% right, title and interest in and to the following
(collectively, the “Purchased Assets”):

      

      (a) The
leasehold estates created by the oil and gas leases (the “Leases") described in
Exhibit A hereto, insofar as and only insofar as the Leases cover and relate to
the land (the “Land”) described in Exhibit A hereto.

      

      (b) The wells
(the “Wells”) located upon the Land described in Exhibit A hereto.

      

      (c) The
production of oil, gas, natural gas liquids, condensate and other hydrocarbons
produced from the Land covered by the Leases (the “Production”), or attributable
or allocable thereto, or to lands pooled or unitized therewith, from and after
the Effective Time.

       

       

      
        
           

        

        
          B-1

          
            

          

        

        
           

        

      

      
 

      (d) The
equipment, personal property, facilities, pipelines, improvements, fixtures,
buildings and structures located upon the Land, or used in connection with the
Leases, the Land or the Wells for the production, gathering, treatment,
compression, transportation, processing, sale or disposal of hydrocarbons or
water produced from the Land, or attributable thereto (collectively, the
“Equipment”), including, without limitation, all the wells, well-bores, casing,
tubing, gauges, valves, rods, flow lines, gear boxes, pumps, tanks, separators,
gathering system, compressors, pipelines, fixtures, pits, buildings and
improvements described in Exhibit A-3 hereto.

      

      (e) The
surface rights incident or appurtenant to the Leases, the Land and the Wells,
and all easements, rights-of-way, permits, licenses, servitudes, surface use
agreements or other similar interests affecting the Land, the Leases and the
Wells (collectively, the “Surface Rights”).

      

      (f) The
agreements, contracts, options, leases, licenses, permits and other documents
(collectively, the “Material Contracts”) related to the ownership or operation
of the Leases, the Land, the Wells, the Production, the Equipment and the
Surface Rights including, without limitation, all operating, unit, pooling,
exploration, farm-out, participation, operating, unit, pooling, communitization,
gathering, water disposal, processing, transportation and product purchase
agreements, and options, permits, orders and decisions of state and federal
regulatory authorities.

      

      (g) Copies of
Assignor’s files and records related to the Leases, the Land and the Wells (the
“Records”) including, without limitation, all of the following: (i) land, lease,
title, contracts, rights of way, surveys, maps, plats, correspondence and
other documents; (ii) division of interest and accounting records; (iii)
severance, production and property tax records; and (iv) well, operations,
engineering, environmental and maintenance records.

      

      The
working interest assigned by Assignor to Assignee hereunder shall be subject to
a 20% royalty and overriding royalty (the “Royalty”) burden, so that Assignee
shall own a 50.00% working interest and being a 40.00% net revenue interest. If
Assignor owns less than 100% of the leasehold interest under the Leases, or in
the event the Leases cover less than the full mineral estate in the lands
covered by the Leases, then the interest assigned and the Royalty shall be
reduced proportionately with respect to Assignor’s interest in such Lease or the
partial mineral interest covered by the Lease. Assignor represents that it only
owns interests from the stratigraphic equivalent of the base of the Niobrara
formation to the stratigraphic equivalent of the total depth drilled in the
Church No. 41-25 well, located in Section 25 of Township 3 South, Range 51 West,
6th
P.M., Washington County, Colorado. No reduction shall occur as result of
Assignor not owning interests in zones outside such stratigraphic
interval.

      

      Assignor
hereby agrees to warrant and defend the title to the Purchased Assets against
all liens, encumbrances and defects of title arising by, through, or under
Assignor, but not otherwise. EXCEPT AS EXPRESSLY STATED IN THIS
ASSIGNMENT, THIS ASSIGNMENT IS MADE WITHOUT WARRANTY OF ANY KIND, EXPRESS,
IMPLIED, STATUTORY, AT COMMON LAW OR OTHERWISE, AND THE PARTIES HEREBY EXPRESSLY
DISCLAIM, WAIVE AND RELEASE ANY WARRANTY OF MERCHANTABILITY, CONDITION, SAFETY,
OR FITNESS FOR A PARTICULAR PURPOSE, AND ASSIGNOR 

       

      
        
           

        

        
          B-2

          
            

          

        

        
           

        

         

        ACCEPTS THE PURCHASED ASSETS “AS IS,
WHERE IS, WITH ALL FAULTS, AND WITHOUT RECOURSE.” ANY COVENANTS OR WARRANTIES
IMPLIED BY STATUTE OR LAW BY THE USE OF THE WORD “GRANT,” “TRANSFER,” OR
“CONVEY” OR OTHER WORDS OF GRANT ARE HEREBY EXPRESSLY WAIVED, DISCLAIMED AND
RELEASED BY THE PARTIES HERETO. THE PARTIES HEREBY ACKNOWLEDGE AND
AGREE THAT, TO THE EXTENT REQUIRED BY APPLICABLE LAW, THE DISCLAIMERS CONTAINED
IN THIS ASSIGNMENT ARE “CONSPICUOUS” FOR THE PURPOSES OF ALL APPLICABLE
LAW

      

      

      TO HAVE AND TO HOLD the
Purchased Assets, unto Assignee, and Assignee’s successors and assigns,
forever.

      

      All
exhibits attached hereto are hereby incorporated herein and made a part hereof
for all purposes, as if set forth in full herein. References in such exhibits to
instruments on file in the public records are hereby incorporated by reference
herein for all purposes. This Assignment shall be binding upon and inure to the
benefit of the Parties, and their respective successors and assigns. The
references in this Assignment or in the exhibits hereto to liens, encumbrances,
agreements and other burdens shall not be deemed to recognize or create any
rights in third parties. Assignor and Assignee hereby agree to take all action,
and execute, acknowledge and deliver all such instruments as are necessary or
advisable to effectuate the purposes of this Assignment.

      

      This
Assignment may be executed in one or more counterparts, and each counterpart
hereof shall be an original instrument, but all such counterparts shall
constitute but one assignment.

      

      EXECUTED on the dates below
the signatures hereto, to be effective for all purposes as of the Effective
Time.

      

      
        	
                ASSIGNOR:

                Recovery
      Energy, Inc.

                By:_____________________________

                      Jeffrey
      Beunier, President

              	
                ASSIGNEE:

                ______________________________

                          Roger
      A. Parker

              

      

      
 

       

       

      B-3ex10_1.htm

    
      EXHIBIT
10.1

    

     

    SINOHUB,
INC.

    NOTICE
OF GRANT OF RESTRICTED STOCK AWARD

    (For U.S.
Participant)

    

    The
Participant has been granted an Restricted Stock Award (the “Award”) of shares of Stock of
SinoHub, Inc. pursuant to the SinoHub, Inc. 2008 Stock Plan, as amended and
restated (the “Plan”), as follows:

    
    

     

    
      
        
          	
                  Participant:

                	 
      	 	 Employee
      ID:	 
	 	 	 	 	 
	
                  Date
      of Grant:

                	
                  January 18, 2010

                	 	 
      
	 	 	 	 
	
                  Number
      of Restricted Shares:

                	 
      	 	 
      
	 	 	 	 
	
                  Vesting
      Commencement Date:

                	
                  January 18,
      2010                                    

                	 	 
      
	 	 
	
                  Vested
      Shares:

                   

                	
                  Except
      as provided in the Restricted Stock Agreement and provided the
      Participant’s Service has not terminated prior to the applicable date, the
      number of Vested Shares (disregarding any resulting fractional share) as
      of any date is determined by multiplying the Number of Restricted Shares
      by the “Vested
      Percentage”
      determined as of such date as follows:

                
	 
      	 
      	 	
                  Vested
      Percentage

                
	 
      	
                  On
      December 31, 2010

                	 	
                  100%

                

        

      

       

       

    

    By their
signatures below, the Company and the Participant agree that the Award is
governed by this Grant Notice and by the provisions of the Plan and the
Restricted Stock Agreement, both of which are attached to and made a part of
this document. The Participant acknowledges receipt of copies of the Plan and
the Restricted Stock Agreement, represents that the Participant has read and is
familiar with their provisions, and hereby accepts the Award subject to all of
their terms and conditions.

     

    
    

    
      
        
          	
                  SINOHUB,
      INC.

                   

                   

                  _________________________________

                	
                  PARTICIPANT

                   

                   

                  _________________________________

                
	
                  By:  Lei
      Xia

                   

                	 
      
	
                  Its:  President

                   

                	
                  Date:  __________________

                
	Address: 	 	 	Address:     	 
	 	 
	 	 	 
	 	 
	 	 	 
	
                                                                                     

                   

                   

                   

                   

                	
                                                                                 

                   

                   

                   

                   

                

        

      

    

     

    ATTACHMENTS:

    2008
Stock Plan, as amended to the Date of Grant; Restricted Stock
Agreement

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    THE
SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OF 1933.

     

    SINOHUB,
INC.

    RESTRICTED
STOCK AGREEMENT

     

    (For
U.S. Participant)

     

    Sinohub,
Inc. has granted to the Participant named in the Notice of Grant of Award (the
“Grant
Notice”) to which this Restricted Stock Agreement (the “Agreement”)
is attached an Award (the “Award”)
consisting of certain shares of Stock (the “Shares”)
subject to the terms and conditions set forth in the Grant Notice and this
Agreement. The Award has been granted pursuant and shall in all respects be
subject to the terms conditions of the Sinohub, Inc. 2008 Stock Plan, as amended
and restated (the “Plan”),
the provisions of which are incorporated herein by reference. By signing the
Grant Notice, the Participant: (a) acknowledges receipt of and represents that
the Participant has read and is familiar with the Grant Notice, this Agreement
and the Plan, (b) accepts the Award subject to all of the terms and conditions
of the Grant Notice, this Agreement and the Plan and (c) agrees to accept as
binding, conclusive and final all decisions or interpretations of the Committee
upon any questions arising under the Grant Notice, this Agreement or the
Plan.

     

    1.      Definitions
and Construction.

     

    1.1          
 Definitions.
Unless otherwise defined herein, capitalized terms shall have the meanings
assigned in the Grant Notice or the Plan. Wherever used herein, the following
terms shall have their respective meanings set forth below:

     

    (a)           “Grant
Date” means the effective Grant Date of the Award as set forth in the
Grant Notice.

     

    (b)           “Total Number of
Shares” means the total number of Shares subject to the Award as set
forth in the Grant Notice and as adjusted from time to time pursuant to Section
4.3 of the Plan.

     

    1.2          
 Construction.
Captions and titles contained herein are for convenience only and shall not
affect the meaning or interpretation of any provision of this Agreement. Except
when otherwise indicated by the context, the singular shall include the plural
and the plural shall include the singular. Use of the term “or” is not intended
to be exclusive, unless the context clearly requires otherwise.

     

    2.             
Administration.  All questions of
interpretation concerning the Grant Notice, this Agreement and the Plan shall be
determined by the Committee. All determinations by the Committee shall be final
and binding upon all persons having an interest in the Award as provided by the
Plan.

     

    3.          
  The
Award.

     

    3.1          
 Grant and Issuance of
Shares. On the Grant Date, the Participant shall acquire and the Company
shall issue, subject to the provisions of this Agreement, a number of Shares
equal to the Total Number of Shares. As a condition to the issuance of the
Shares, the Participant shall execute and deliver the Grant Notice to the
Company, and, if required by the Company, an Assignment Separate from
Certificate duly endorsed (with date and number of Shares blank) in the form
provided by the Company.

     

    3.2         
  No Monetary Payment
Required. The Participant is not required to make any monetary payment
(other than applicable tax withholding, if any) as a condition to receiving the
Shares, the consideration for which shall be past services actually rendered
and/or future services to be rendered to a Participating Company or for its
benefit. Notwithstanding the foregoing, if required by applicable state
corporate law, the Participant shall furnish consideration in the form of cash
or past services rendered to a Participating Company or for its benefit having a
value not less than the par value of the Shares issued pursuant to the
Award.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.3        
   Beneficial
Ownership of Shares; Certificate Registration. The Participant hereby
authorizes the Company, in its sole discretion, to deposit the Shares with the
Company’s transfer agent, including any successor transfer agent, to be held in
book entry form during the term of the Escrow pursuant to Section 7.
Furthermore, the Participant hereby authorizes the Company, in its sole
discretion, to deposit, following the term of such Escrow, for the benefit of
the Participant with any broker with which the Participant has an account
relationship of which the Company has notice any or all Shares which are no
longer subject to such Escrow. Except as provided by the foregoing, a
certificate for the Shares shall be registered in the name of the Participant,
or, if applicable, in the names of the heirs of the Participant.

     

    3.4          
 Issuance of Shares in
Compliance with Law. The issuance of the Shares shall be subject to
compliance with all applicable requirements of federal, state or foreign law
with respect to such securities. No Shares shall be issued hereunder if their
issuance would constitute a violation of any applicable federal, state or
foreign securities laws or other law or regulations or the requirements of any
stock exchange or market system upon which the Stock may then be listed. The
inability of the Company to obtain from any regulatory body having jurisdiction
the authority, if any, deemed by the Company’s legal counsel to be necessary to
the lawful issuance of any Shares shall relieve the Company of any liability in
respect of the failure to issue such Shares as to which such requisite authority
shall not have been obtained. As a condition to the issuance of the Shares, the
Company may require the Participant to satisfy any qualifications that may be
necessary or appropriate, to evidence compliance with any applicable law or
regulation and to make any representation or warranty with respect thereto as
may be requested by the Company.

     

    4.            
 Vesting
of Shares.

     

    4.1         
  Normal
Vesting. Except as provided in Section 4.2, the Shares shall vest and
become Vested Shares as provided in the Grant Notice. Except as set forth in
Section 4.2, no additional Shares will become Vested Shares following the
Participant’s termination of Service for any reason.

     

    4.2         
  Acceleration of
Vesting. Subject to Section 4.3, in the event of a Change in Control, the
vesting of the Shares shall be accelerated in full, and the Total Number of
Shares shall be deemed Vested Shares effective as of the date of the Change in
Control, provided that the Participant’s Service has not terminated prior to
such date. In addition, if the Participant’s Service is terminated due to his or
her death, Disability or termination by the Company without Cause, the Total
Number of Shares shall be deemed Vested Shares effective as of the date of
termination.

     

    4.3           
Federal Excise Tax Under
Section 4999 of the Code.

     

    (a)           Excess Parachute
Payment. In the event that any acceleration of vesting pursuant to this
Agreement and any other payment or benefit received or to be received by the
Participant would subject the Participant to any excise tax pursuant to Section
4999 of the Code due to the characterization of such acceleration of vesting,
payment or benefit as an excess parachute payment under Section 280G of the
Code, the Participant may elect, in his or her sole discretion, to reduce the
amount of any acceleration of vesting called for under this Agreement in order
to avoid such characterization.

     

    (b)           Determination by
Independent Accountants. To aid the Participant in making any election
called for under Section 4.3(a), upon the occurrence of any event that might
reasonably be anticipated to give rise to the acceleration of vesting under
Section 4.2 (an “Event”),
the Company shall promptly request a determination in writing by independent
public accountants selected by the Company (the “Accountants”).
Unless the Company and the Participant otherwise agree in writing, the
Accountants shall determine and report to the Company and the Participant within
twenty (20) days of the date of the Event the amount of such acceleration of
vesting, payments and benefits which would produce the greatest after-tax
benefit to the Participant. For the purposes of such determination, the
Accountants may rely on reasonable, good faith interpretations concerning the
application of Sections 280G and 4999 of the Code. The Company and the
Participant shall furnish to the Accountants such information and documents as
the Accountants may reasonably request in order to make their required
determination. The Company shall bear all fees and expenses the Accountants may
reasonably charge in connection with their services contemplated by this Section
4.3(b).

     

    5.            
Company
Reacquisition Right.

     

    5.1          
 Grant of Company
Reacquisition Right.  In the event that (a) the Participant’s
Service terminates for any reason or no reason, with or without cause, or (b)
the Participant, the Participant’s legal representative, or other holder of the
Shares, attempts to sell, exchange, transfer, pledge, or otherwise dispose of
(other than pursuant to an Ownership Change Event), including, without
limitation, any transfer to a nominee or agent of the Participant, any Shares
which are not Vested Shares (“Unvested
Shares”), the Company shall automatically reacquire the Unvested Shares,
and the Participant shall not be entitled to any payment therefor (the “Company
Reacquisition Right”).

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    5.2         
  Ownership Change
Event, Dividends, Distributions and Adjustments. Upon the occurrence of
an Ownership Change Event, a dividend or distribution to the stockholders of the
Company paid in Shares or other property, or any other adjustment upon a change
in the capital structure of the Company as described in Section 4.3 of the Plan,
any and all new, substituted or additional securities or other property (other
than regular, periodic dividends paid on Stock pursuant to the Company’s
dividend policy) to which the Participant is entitled by reason of the
Participant’s ownership of Unvested Shares shall be immediately subject to the
Company Reacquisition Right and included in the terms “Shares,” “Stock” and
“Unvested Shares” for all purposes of the Company Reacquisition Right with the
same force and effect as the Unvested Shares immediately prior to the Ownership
Change Event, dividend, distribution or adjustment, as the case may be. For
purposes of determining the number of Vested Shares following an Ownership
Change Event, dividend, distribution or adjustment, credited Service shall
include all Service with any corporation which is a Participating Company at the
time the Service is rendered, whether or not such corporation is a Participating
Company both before and after any such event.

     

    6.            
Tax
Matters.

     

    6.1          
 Tax
Withholding.

     

    (a)           In General.
At the time the Grant Notice is executed, or at any time thereafter as
requested by a Participating Company, the Participant hereby authorizes
withholding from payroll and any other amounts payable to the Participant, and
otherwise agrees to make adequate provision for, any sums required to satisfy
the federal, state, local and foreign tax (including any social insurance)
withholding obligations of the Participating Company, if any, which arise in
connection with the Award, including, without limitation, obligations arising
upon (a) the transfer of Shares to the Participant, (b) the lapsing of any
restriction with respect to any Shares, (c) the filing of an election to
recognize tax liability, or (d) the transfer by the Participant of any Shares.
The Company shall have no obligation to deliver the Shares or to release any
Shares from the Escrow established pursuant to Section 7 until the tax
withholding obligations of the Participating Company have been satisfied by the
Participant.

     

    (b)           Assignment of
Sale Proceeds; Payment of Tax Withholding by Check. Subject to compliance
with applicable law and any insider trading policy of the Company, the Company
may permit the Participant to satisfy the Participating Company’s tax
withholding obligations in accordance with procedures established by the Company
providing for either (i) delivery by the Participant to the Company or a broker
approved by the Company of properly executed instructions, in a form approved by
the Company, providing for the assignment to the Company of the proceeds of a
sale with respect to some or all of the Vested Shares, or (ii) payment by check.
The Participant shall deliver written notice of any such permitted election to
the Company on a form specified by the Company for this purpose at least thirty
(30) days (or such other period established by the Company) prior to the date on
which the Company’s tax withholding obligation arises (the “Withholding
Date”). If the Participant elects payment by check, the Participant
agrees to deliver a check for the full amount of the required tax withholding to
the applicable Participating Company on or before the third business day
following the Withholding Date. If the Participant elects payment by check but
fails to make such payment as required by the preceding sentence, the Company is
hereby authorized, at its discretion, to satisfy the tax withholding obligations
through any means authorized by this Section 6.1, including by directing a sale
for the account of the Participant of some or all of the Vested Shares from
which the required taxes shall be withheld, by withholding from payroll and any
other amounts payable to the Participant or by withholding shares in accordance
with Section 6.1(c).

     

    (c)           Withholding in
Shares. The Company may require the Participant to satisfy all or any
portion of a Participating Company’s tax withholding obligations by deducting a
number of whole, Vested Shares otherwise deliverable to the Participant or by
the Participant’s tender to the Company of a number of whole, Vested Shares or
Vested Shares acquired otherwise than pursuant to this Agreement having, in any
such case, a fair market value, as determined by the Company as of the date on
which the tax withholding obligations arise, not in excess of the amount of such
tax withholding obligations determined by the applicable minimum statutory
withholding rates.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    6.2           
Election Under Section 83(b) of
the Code.

     

    (a)           The
Participant understands that Section 83 of the Code taxes as ordinary income the
difference between the amount paid for the Shares, if anything, and the fair
market value of the Shares as of the date on which the Shares are “substantially
vested,” within the meaning of Section 83. In this context, “substantially
vested” means that the right of the Company to reacquire the Shares pursuant to
the Company Reacquisition Right has lapsed. The Participant understands that he
or she may elect to have his or her taxable income determined at the time he or
she acquires the Shares rather than when and as the Company Reacquisition Right
lapses by filing an election under Section 83(b) of the Code with the Internal
Revenue Service no later than thirty (30) days after the date of acquisition of
the Shares. The Participant understands that failure to make a timely filing
under Section 83(b) will result in his or her recognition of ordinary income, as
the Company Reacquisition Right lapses, on the difference between the purchase
price, if anything, and the fair market value of the Shares at the time such
restrictions lapse. The Participant further understands, however, that if Shares
with respect to which an election under Section 83(b) has been made are
forfeited to the Company pursuant to its Company Reacquisition Right, such
forfeiture will be treated as a sale on which there is realized a loss equal to
the excess (if any) of the amount paid (if any) by the Participant for the
forfeited Shares over the amount realized (if any) upon their forfeiture. If the
Participant has paid nothing for the forfeited Shares and has received no
payment upon their forfeiture, the Participant understands that he or she will
be unable to recognize any loss on the forfeiture of the Shares even though the
Participant incurred a tax liability by making an election under Section
83(b).

     

    (b)           The
Participant understands that he or she should consult with his or her tax
advisor regarding the advisability of filing with the Internal Revenue Service
an election under Section 83(b) of the Code, which must be filed no later than
thirty (30) days after the date of the acquisition of the Shares pursuant to
this Agreement. Failure to file an election under Section 83(b), if appropriate,
may result in adverse tax consequences to the Participant. The Participant
acknowledges that he or she has been advised to consult with a tax advisor
regarding the tax consequences to the Participant of the acquisition of Shares
hereunder. ANY ELECTION UNDER SECTION 83(b) THE PARTICIPANT WISHES TO MAKE MUST
BE FILED NO LATER THAN 30 DAYS AFTER THE DATE ON WHICH THE PARTICIPANT ACQUIRES
THE SHARES. THIS TIME PERIOD CANNOT BE EXTENDED. THE PARTICIPANT ACKNOWLEDGES
THAT TIMELY FILING OF A SECTION 83(b) ELECTION IS THE PARTICIPANT’S SOLE
RESPONSIBILITY, EVEN IF THE PARTICIPANT REQUESTS THE COMPANY OR ITS
REPRESENTATIVE TO FILE SUCH ELECTION ON HIS OR HER BEHALF.

     

    (c)           The
Participant will notify the Company in writing within 30 days if the Participant
files an election pursuant to Section 83(b) of the Code. The Company intends, in
the event it does not receive from the Participant evidence of such filing, to
claim a tax deduction for any amount which would otherwise be taxable to the
Participant in the absence of such an election.

     

    6.3          
 Tax Gross-Up. The
Company shall make a cash payment sufficient to pay the income taxes payable by
the Participant with respect to the Shares and income taxes payable on such cash
payment assuming a value per share of  $3.87.  Such payments
shall be made in a lump sum after January 1, 2011, but not later than January
31, 2011.

     

    7.           
 Escrow.

     

    7.1         
  Appointment of
Agent. To ensure that Shares subject to the Company Reacquisition Right
will be available for reacquisition, the Participant and the Company hereby
appoint the Secretary of the Company, or any other person designated by the
Company, as their agent and as attorney-in-fact for the Participant (the “Agent”) to
hold any and all Unvested Shares and to sell, assign and transfer to the Company
any such Unvested Shares reacquired by the Company pursuant to the Company
Reacquisition Right. The Participant understands that appointment of the Agent
is a material inducement to make this Agreement and that such appointment is
coupled with an interest and is irrevocable. The Agent shall not be personally
liable for any act the Agent may do or omit to do hereunder as escrow agent,
agent for the Company, or attorney in fact for the Participant while acting in
good faith and in the exercise of the Agent’s own good judgment, and any act
done or omitted by the Agent pursuant to the advice of the Agent’s own attorneys
shall be conclusive evidence of such good faith. The Agent may rely upon any
letter, notice or other document executed by any signature purporting to be
genuine and may resign at any time.

     

    
      
        
        

      

      
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    7.2         
  Establishment of
Escrow. The Participant authorizes the Company to deposit the Unvested
Shares with the Company’s transfer agent to be held in book entry form, as
provided in Section 3.3, and the Participant agrees to deliver to and deposit
with the Agent each certificate, if any, evidencing the Shares and, if required
by the Company, an Assignment Separate from Certificate with respect to such
book entry shares and each such certificate duly endorsed (with date and number
of Shares blank) in the form attached to this Agreement, to be held by the Agent
under the terms and conditions of this Section 7 (the “Escrow”).
Upon the occurrence of an Ownership Change Event, a dividend or distribution to
the stockholders of the Company paid in Shares or other property (other than
regular, periodic dividends paid on Stock pursuant to the Company’s dividend
policy), or any other adjustment upon a change in the capital structure of the
Company, as described in Section 4.3 of the Plan, in the character or amount of
any outstanding stock of the corporation the stock of which is subject to the
provisions of this Agreement, any and all new, substituted or additional
securities or other property to which the Participant is entitled by reason of
his or her ownership of the Shares that remain, following such Ownership Change
Event, dividend, distribution or change described in Section 4.3 of the Plan,
subject to the Company Reacquisition Right shall be immediately subject to the
Escrow to the same extent as the Shares immediately before such event. The
Company shall bear the expenses of the Escrow.

     

    7.3         
  Delivery of Shares
to Participant. The Escrow shall continue with respect to any Shares for
so long as such Shares remain subject to the Company Reacquisition Right. Upon
termination of the Company Reacquisition Right with respect to Shares, the
Company shall so notify the Agent and direct the Agent to deliver such number of
Shares to the Participant in accordance with Section 18.6 of the Plan. As soon
as practicable after receipt of such notice, the Agent shall cause to be
delivered to the Participant the Shares specified by such notice, and the Escrow
shall terminate with respect to such Shares.

     

    8.          
  Legends.

     

    The
Company may at any time place legends referencing the Company Reacquisition
Right and any applicable federal, state or foreign securities law restrictions
on all certificates representing the Shares. The Participant shall, at the
request of the Company, promptly present to the Company any and all certificates
representing the Shares in the possession of the Participant in order to carry
out the provisions of this Section. Unless otherwise specified by the Company,
legends placed on such certificates may include, but shall not be limited to,
the following:

     

    “THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS SET FORTH
IN AN AGREEMENT BETWEEN THIS CORPORATION AND THE REGISTERED HOLDER, OR HIS
PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF
THIS CORPORATION.”

     

    “THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED
OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER
THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS
EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH
ACT.”

     

    9.           
 Restrictions
on Transfers of Shares.

     

    No Shares
may be sold, exchanged, transferred, assigned, pledged, hypothecated or
otherwise disposed of, including by operation of law, in any manner which
violates any of the provisions of this Agreement and, except pursuant to an
Ownership Change Event, until the date on which such Shares become Vested
Shares, and any such attempted disposition shall be void. The Company shall not
be required (a) to transfer on its books any Shares which will have been
transferred in violation of any of the provisions set forth in this Agreement or
(b) to treat as owner of such Shares or to accord the right to vote as such
owner or to pay dividends to any transferee to whom such Shares will have been
so transferred. In order to enforce its rights under this Section, the Company
shall be authorized to give a stop transfer instruction with respect to the
Shares to the Company’s transfer agent.

     

    10.           Rights as
a Stockholder.

     

    The
Participant shall have no rights as a stockholder with respect to any Shares
subject to the Award until the date of the issuance of a certificate for such
Shares (as evidenced by the appropriate entry on the books of the Company or of
a duly authorized transfer agent of the Company). No adjustment shall be made
for dividends, distributions or other rights for which the record date is prior
to the date such certificate is issued, except as provided in Section 4.3 of the
Plan. Subject the provisions of this Agreement, the Participant shall exercise
all rights and privileges of a stockholder of the Company with respect to Shares
deposited in the Escrow pursuant to Section 7.

     

    
      
        
        

      

      
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    11.           Rights As
Employee, Consultant or Board Member.

     

    If the
Participant is an Employee, the Participant understands and acknowledges that,
except as otherwise provided in a separate, written employment agreement between
a Participating Company and the Participant, the Participant’s employment is “at
will” and is for no specified term. Nothing in this Agreement shall confer upon
the Participant any right to continue in the Service of a Participating Company
or interfere in any way with any right of the Participating Company Group to
terminate the Participant’s Service at any time.

     

    12.           Representations
and Warranties.

     

    In
connection with the grant of Restricted Stock (collectively, the “Securities”),
the Participant hereby agrees, represents and warrants as follows:

     

    12.1          Investment Intent. The
Participant is acquiring the Securities solely for the Participant’s own account
for investment and not with a view to or for sale in connection with any
distribution of the Securities or any portion thereof and not with any present
intention of selling, offering to sell or otherwise disposing of or distributing
the Securities or any portion thereof in any transaction other than a
transaction exempt from registration under the Securities Act. The Participant
further represents that the entire legal and beneficial interest of the
Securities is being acquired, and will be held, for the account of the
Participant only and neither in whole nor in part for any other
person.

     

    12.2          Absence of Solicitation. The
Participant was not presented with or solicited by any form of general
solicitation or general advertising, including, but not limited to, any
advertisement, article, notice, or other communication published in any
newspaper, magazine, or similar media, or broadcast over television, radio or
similar communications media, or presented at any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising.

     

    12.3          Residence. The Participant’s
principal residence is located at the address indicated beneath the
Participant’s signature on the Grant Notice.

     

    12.4          Information Concerning the Company.
The Participant is aware of the Company’s business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Securities. The Participant
further represents and warrants that the Participant has discussed the Company
and its plans, operations and financial condition with its officers, has
received all such information as the Participant deems necessary and appropriate
to enable the Participant to evaluate the financial risk inherent in acquiring
the Securities and has received satisfactory and complete information concerning
the business and financial condition of the Company in response to all inquiries
in respect thereof.

     

    12.5          Economic Risk. The Participant
realizes that his acquisition of the Securities will be a highly speculative
investment and that the Participant is able, without impairing his or her
financial condition, to hold the Securities for an indefinite period of time and
to suffer a complete loss on the Participant’s investment.

     

    12.6          Capacity to Protect Interests.
The Participant has (i) a preexisting personal or business relationship with the
Company or any of its Officers, directors, or controlling persons, consisting of
personal or business contacts of a nature and duration to enable the Participant
to be aware of the character, business acumen and general business and financial
circumstances of the person with whom such relationship exists, or (ii) such
knowledge and experience in financial and business matters as to make the
Participant capable of evaluating the merits and risks of an investment in the
Securities and to protect the Participant’s own interests in the transaction, or
(iii) both such relationship and such knowledge and experience.

     

    12.7          Restricted Securities. The
Participant understands and acknowledges that:

     

    (a)           The
issuance of the Securities to the Participant has not been registered under the
Securities Act, and the Securities must be held indefinitely unless a transfer
of the Securities is subsequently registered under the Securities Act or an
exemption from such registration is available, and that the Company is under no
obligation to register the Securities;

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    (b)           The
Company will make a notation in its records of the aforementioned restrictions
on transfer and legends.

     

    12.8          Disposition Under Rule 144.
The Participant understands that any Shares acquired pursuant to this Agreement
will be restricted securities within the meaning of Rule 144 promulgated under
the Securities Act; that the exemption from registration under Rule 144 will not
be available in any event for at least one year from the date of acquisition of
the Shares, and even then will not be available unless (a) a public trading
market then exists for the Common Stock of the Company, (b) adequate information
concerning the Company is then available to the public, and (c) other terms and
conditions of Rule 144 are complied with; and that any sale of the Shares may be
made only in limited amounts in accordance with such terms and conditions. There
can be no assurance that the requirements of Rule 144 will be met, or that the
Shares will ever be salable.

     

    12.9          Further Limitations on Disposition.
Without in any way limiting the Participant’s representations and
warranties set forth above, the Participant further agrees that the Participant
will in no event make any disposition of all or any portion of any Shares which
the Participant acquires pursuant to this Agreement unless:

     

    (a)           There
is then in effect a Registration Statement under the Securities Act covering
such proposed disposition and such disposition is made in accordance with said
Registration Statement; or

     

    (b)           The
Participant will have notified the Company of the proposed disposition and
furnished the Company with a detailed statement of the circumstances surrounding
the proposed disposition, and either:

     

    (i)           The
Participant will have furnished the Company with an opinion of the Participant’s
own counsel to the effect that such disposition will not require registration of
such Shares under the Securities Act, and such opinion of the Participant’s
counsel will have been concurred in by counsel for the Company and the Company
will have advised the Participant of such concurrence; or

     

    (ii)          The
disposition is made in compliance with Rule 144 or Rule 701 after the
Participant has furnished the Company such detailed statement and after the
Company has had a reasonable opportunity to discuss the matter with the
Participant.

     

    13.           Miscellaneous
Provisions.

     

    13.1          Termination or Amendment. The
Committee may terminate or amend the Plan or this Agreement at any time;
provided, however, that no such termination or amendment may adversely affect
the Participant’s rights under this Agreement without the consent of the
Participant unless such termination or amendment is necessary to comply with any
applicable present or future law, regulation or rule.  No amendment or
addition to this Agreement shall be effective unless in writing.

     

    13.2          Further Instruments.  The
parties hereto agree to execute such further instruments and to take such
further action as may reasonably be necessary to carry out the intent of this
Agreement.

     

    13.3          Binding Effect. This Agreement
shall inure to the benefit of the successors and assigns of the Company and,
subject to the restrictions on transfer set forth herein, be binding upon the
Participant and the Participant’s heirs, executors, administrators, successors
and assigns.

     

    13.4          Delivery of Documents and Notices.
Any document relating to participation in the Plan or any notice required
or permitted hereunder shall be given in writing and shall be deemed effectively
given (except to the extent that this Agreement provides for effectiveness only
upon actual receipt of such notice) upon personal delivery, electronic delivery
at the e-mail address, if any, provided for the Participant by a Participating
Company, or upon deposit in the U.S. Post Office or foreign postal service, by
registered or certified mail, or with a nationally recognized overnight courier
service, with postage and fees prepaid, addressed to the other party at the
address of such party set forth in the Grant Notice or at such other address as
such party may designate in writing from time to time to the other
party.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (a)           Description of
Electronic Delivery. The Plan documents, which may include but do not
necessarily include: the Plan, the Grant Notice, this Agreement, and any reports
of the Company provided generally to the Company’s stockholders, may be
delivered to the Participant electronically. In addition, the parties may
deliver electronically any notices called for in connection with the Escrow and
the Participant may deliver electronically the Grant Notice to the Company or to
such third party involved in administering the Plan as the Company may designate
from time to time. Such means of electronic delivery may include but do not
necessarily include the delivery of a link to a Company intranet or the Internet
site of a third party involved in administering the Plan, the delivery of the
document via e-mail or such other means of electronic delivery specified by the
Company.

     

    (b)           Consent to
Electronic Delivery. The Participant acknowledges that the Participant
has read Section 13.4(a) of this Agreement and consents to the electronic
delivery of the Plan documents, the Grant Notice and notices in connection with
the Escrow, as described in Section 13.4(a). The Participant acknowledges that
he or she may receive from the Company a paper copy of any documents delivered
electronically at no cost to the Participant by contacting the Company by
telephone or in writing. The Participant further acknowledges that the
Participant will be provided with a paper copy of any documents if the attempted
electronic delivery of such documents fails. Similarly, the Participant
understands that the Participant must provide the Company or any designated
third party administrator with a paper copy of any documents if the attempted
electronic delivery of such documents fails. The Participant may revoke his or
her consent to the electronic delivery of documents described in Section 13.4(a)
or may change the electronic mail address to which such documents are to be
delivered (if Participant has provided an electronic mail address) at any time
by notifying the Company of such revoked consent or revised e-mail address by
telephone, postal service or electronic mail. Finally, the Participant
understands that he or she is not required to consent to electronic delivery of
documents described in Section 13.4(a).

     

    13.5          Integrated Agreement. The
Grant Notice, this Agreement and the Plan, together with any employment, service
or other agreement between the Participant and a Participating Company referring
to the Award, shall constitute the entire understanding and agreement of the
Participant and the Participating Company Group with respect to the subject
matter contained herein or therein and supersede any prior agreements,
understandings, restrictions, representations, or warranties among the
Participant and the Participating Company Group with respect to such subject
matter other than those as set forth or provided for herein or therein. To the
extent contemplated herein or therein, the provisions of the Grant Notice, this
Agreement and the Plan shall survive any settlement of the Award and shall
remain in full force and effect.

     

    13.6          Applicable Law. This Agreement
shall be governed by the laws of the State of Delaware as such laws are applied
to agreements between Delaware residents entered into and to be performed
entirely within the State of Delaware.

     

    13.7          Counterparts. The Grant Notice
may be executed in counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

     

     

     

    8

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