Document:

f8k032510ex10i_recovery.htm

     

    EXHIBIT
10.1

     

     

    
      PURCHASE AND SALE
AGREEMENT

       

      
        	
                ·  

              	
                Albin
      West Field Banner County, Nebraska

              

      

      
        	
                ·  

              	
                Albin
      Area and Tracy Prospect, Banner County, Nebraska and Laramie County,
      Wyoming

              

      

      
        	
                ·  

              	
                Vrtatko
      Area Prospect, Kimball County,
Nebraska

              

      

       

       

      THIS
PURCHASE AND SALE AGREEMENT (this “Agreement”), dated
effective as of April 1, 2010 at 7:00 a.m. Mountain Time (the “Effective Time”), is
between EDWARD MIKE DAVIS,
L.L.C., a Nevada limited liability company (“Seller”), and RECOVERY ENERGY, INC., a
Nevada corporation, 1515 Wynkoop Street, Suite 200, Denver, Colorado 80202
(“Buyer”).
Seller and Buyer are sometimes referred to in this Agreement, collectively, as
the “Parties,”
and individually, as a “Party.”

      

      Recitals

      

      A. Seller
owns certain rights and interests in and to the Albin West Field (Egle and Palm
Leases) located in Banner County, Nebraska, the Albin Area Prospect located in
Banner County, Nebraska and in Laramie County, Wyoming (the “Assets” as defined
below).

      

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

      

      Agreement

      

      IN
CONSIDERATION OF ONE HUNDRED DOLLARS ($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
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 the following (collectively, the “Assets”):

      

      (a) The
following described leasehold estates (“Interests”) created by the oil and gas
leases (the “Leases) described in
Exhibit A and B hereto, insofar as and only insofar as the Leases cover and
relate to the land described in Exhibits A, B and C hereto (the “Land”),
including:

      

      
        	
                (i)  

              	
                an
      undivided one hundred percent (100.00%) working interest and eighty
      percent (80.00%) net revenue interest in, to and under the Egle and Palm
      (Albin West Field) Leases, insofar and only insofar as those leases cover
      the Land described as the Egle and Palm (Albin West Field) Leases and
      Lands in Exhibit A hereto;

              

      

      

      
        	
                (ii)  

              	
                an
      one hundred percent (100.00%) working interest and a seventy-five percent
      (75.00%) net revenue interest in, to and under the Albin Area and Tracy
      Prospect Leases, insofar and only insofar as those leases cover the Land
      located in Banner County, Nebraska and Laramie County, Wyoming, described
      in Exhibit B hereto and;

              

      

       

       

      
        
          
          

        

        
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                (iii)  

              	
                an
      one hundred percent (100.00%) working interest and an eighty percent
      (80.00%) net revenue interest in, to and under the Vrtatko Area Prospect
      Leases, insofar and only insofar as those leases cover the Land located in
      Kimball County, Nebraska, described in Exhibit C
  hereto.

              

      

      

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

      

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

      

      (d) The
equipment, personal property, facilities, pipelines, improvements, fixtures,
buildings and structures located upon the Land, and 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, 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
hereto and attributable to the Interests (collectively, the “Equipment”).

      

      (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 and attributable to the Interests (collectively, the “Surface
Rights”).

      

      (f) The
agreements, contracts, options, leases, licenses, permits and other documents
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 to the extent such
documents are attributable to the Interests (collectively, the “Material
Contracts”).

      

      (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.

       

       

      
        
          
          

        

        
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      2. The
working interest assigned by Seller to Buyer in the Egle and Palm (Albin West
Field) Leases and Egle and Palm (Albin West Field) Wells 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
an undivided one hundred percent (100.00%) working interest and eighty percent
(80.00%) net revenue interest in the Egle and Palm (Albin West Field) Leases and
Egle and Palm (Albin West Field) Wells, located in Banner County,
Nebraska.  The working interest assigned by Seller to Buyer in the
Albin Area and Tracy Prospect Leases in Banner County, Nebraska and Laramie
County, Wyoming shall be subject to a 25% royalty and overriding royalty (the
“Royalty”)
burden, so that after closing of the sale contemplated by this Agreement, Buyer
shall own an one hundred percent (100.00%) working interest and seventy-five
percent (75.00%) net revenue interest in the Albin Area and Tracy Prospect
Leases in Banner County, Nebraska and Laramie County, Wyoming.  The
working interest assigned by Seller to Buyer in the Vrtatko Area Prospect Leases
in Kimball County, Nebraska 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
an one hundred percent (100.00%) working interest and eighty percent (80.00%)
net revenue interest in the Vrtatko Area Prospect Leases in Kimball County,
Nebraska.  If Seller owns less than 100% of the leasehold interest
created by the Leases, or in the event the Leases cover less than the full fee
mineral estate in the Land covered by the Leases, then the Royalty shall be
reduced proportionately with respect to Seller’s interest in such Lease or the
partial mineral interest covered by the Lease.

      

      3. The
purchase price for the Assets shall be Five Hundred Fifty Thousand (550,000)
shares of restricted common stock of Buyer (the “Shares”), and Six
Million Dollars ($6,000,000.00) (the “Cash”)(the Shares and
the Cash shall be referred to, collectively, as the “Purchase Price”), as
adjusted hereunder. The Shares shall be non-refundable and delivered to
Seller    at the time this Agreement is executed by the
Parties. The cash portion of the Purchase Price shall be paid by Buyer to Seller
at Closing by bank wire to Seller’s account pursuant to the following wiring
instructions:

      

      Bank of
America - Nevada;

      

      Routing
No.

      Credit to
the account of

      

      4. Buyer
shall (i) file a registration statement with the Securities and Exchange
Commission with respect to the Shares (the “Registration”) as
soon as possible after the execution of this Agreement, and (ii) thereafter
diligently pursue the Registration to effectiveness. Buyer may include other
equity securities of Buyer in the Registration as well, in Buyer’s discretion.
In connection with the Registration, Seller shall execute such underwriting
agreement and other documents as are customary under the circumstances and/or as
are executed by all holders of stock included in the Registration. Buyer shall
pay all underwriting commissions, filing fees, and other expenses of the
Registration. As a consequence of the Registration, the Shares will become “free
trading stock” with no restrictions of any kind.

       

       

      
        
          
          

        

        
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      5. Ownership
of the Assets shall be transferred from Seller to Buyer at Closing, but
effective as of the Effective Time. All costs and expenses attributable to the
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 Assets prior to the Effective Time.
In addition, at the Closing, Buyer shall 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 Assets for the month in
which the Closing occurs. The determination of the amount of oil in the tanks
shall be done by gauging at the Effective Time which shall be jointly measured
and observed by representatives of Seller and Buyer. All costs and expenses
attributable to the 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 the 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 the
Assets from and after the Effective Time.

      

      6. In the
event that Buyer does not wire the Cash at Closing, then Seller shall retain the
Shares issued to Seller pursuant to this Agreement.

      

      7. Buyer
shall commence the drilling of an initial test well to a depth of 100 feet into
the Skull Creek formation in the N/2SE/4 of Section 17, Township 17 North, Range
58 West, Banner County, Nebraska within 6 months of the Effective Date of this
Agreement ("Drilling
Commitment 1") and either run production casing for an attempt to
complete such well as a producer of oil or gas or plug and abandon the same as a
dry hole.  Buyer shall commence the drilling of a second test well to
a depth of 100 feet into the Skull Creek formation in Section 19, Township 17
North, Range 58 West, Banner County, Nebraska within 9 months of the Effective
Date of this Agreement ("Drilling Commitment
2") and either run production casing for an attempt to complete such well
as a producer of oil or gas or plug and abandon the same as a dry
hole.  If Buyer fails to satisfy Drilling Commitment 1, the lands and
leases in N/2SE/4 of Section 17, Township 17 North, Range 58 West, Banner
County, Nebraska shall revert to Seller.  If Buyer fails to satisfy
Drilling Commitment 2, the lands and leases in Section 19, Township 17 North,
Range 58 West, Banner County, Nebraska shall revert to Seller.

      

      8. Seller
hereby represents and warrants to Buyer that the following representations and
warranties shall be true and correct at and as of Closing:

      

      (a) Seller is
a limited liability company 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 Wyoming and the State of Nebraska.

      

      (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.

       

       

       

      
        
          
          

        

        
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      (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 Assets against all liens,
encumbrances and defects of title arising by, through, or under Seller, but not
otherwise.  The Assets are free and clear of all mortgages, liens or
other encumbrances.

      

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

      

      (f) Seller
has paid all ad valorem, property, production, severance, excise taxes and
assessments attributable to the Leases, the Land and the
Production.

      

      (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.

      

      (h) 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 Assets by Seller to Buyer hereunder.

      

      (i) 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
Twenty-five Thousand Dollars ($25,000.00) per item.

      

      (j) Seller’s
interest in the 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 thirty (30) days prior written notice. To
Seller’s knowledge, Seller’s interest in the 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 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).

      

      (k) The
Records have been maintained in the ordinary course of Seller’s business, and
Seller has not intentionally omitted any material information from the
Records.

       

       

      
        
          
          

        

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

      

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

      

      (n) 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.

      

      (o) The
Shares are being purchased for Seller’s own account, for investment purposes
only, not for the account of any other person and not with a view to
distribution, assignment or resale to others. Seller will not sell, hypothecate
or otherwise transfer Seller’s Shares unless (i) the transfer is registered
under the Securities Act of 1933, as amended (the “1933 Act”), and
registered or qualified under applicable state securities laws, or (ii) Buyer
has received a written opinion of counsel (which opinion and counsel are
satisfactory to Buyer) that an exemption from the registration or qualification
requirements of the 1933 Act and such state laws is available.

      

      (p) Seller is
familiar with and understands the current and proposed business activities of
Buyer. Seller has been given the opportunity to obtain additional information
from Buyer and to discuss the current and proposed business of Buyer with
representatives of Buyer.   Buyer has made available to Seller
all documents and information that Seller has requested relating to an
investment in the Shares. Seller has reviewed and approved the financial
statements and other filings of Buyer of public record. With respect to tax and
other economic considerations involved in this investment, Seller is not relying
on any advice or opinions from Buyer or any person acting on its behalf. Seller
has carefully considered and has, to the extent Seller believes appropriate,
discussed with its legal, tax, accounting and financial advisors the suitability
of an investment in the Shares for his or her particular tax and financial
situation, and has determined that the Shares for which Seller is subscribing
are a suitable investment. Seller (i) has adequate means for providing for
Seller’s current financial needs and contingencies; (ii) has no need for
liquidity in this investment; (iii) can afford a complete loss of the funds
invested in the Shares; and (iv) does not have an overall commitment to illiquid
investments that is disproportionate to Seller’s net worth (and Seller’s
investment in the Shares will not cause such overall commitment to become
excessive).

      

      (q) Seller
understands that an investment in the Shares is speculative in nature and
involves a substantial degree of risk, including risk of losing all or a portion
of Seller’s investment. Seller understands that the return of Seller’s money,
not just the return on Seller’s money, is not assured. Seller, in reaching a
decision to subscribe, has such knowledge and experience in financial and
business matters that Seller is capable of reading and interpreting financial
statements and evaluating the merits and risk of an investment in the
Shares.

      

      (r) Seller
was not offered or sold the Shares, directly or indirectly, by means of any form
of general advertising or general solicitation, including, but not limited to,
the following: (i) any advertisement, article, notice or other communication
published in any newspaper, magazine, or similar medium of or broadcast over
television or radio; or (ii) to the knowledge of Seller, any seminar or meeting
whose attendees had been invited by any general solicitation or general
advertising.

       

       

      
        
          
          

        

        
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      (s) Seller
understands that Buyer’s determination that the exemption from the registration
provisions of the 1933 Act based upon non-public offerings applicable to the
offer and sale of the Shares, is based, in part, upon the representations,
warranties, and agreements made by Seller herein. Seller consents to the
disclosure of any such information, and any other information furnished to Buyer
or related to this transaction, to any governmental authority, self-regulatory
organization, or, to the extent required by law, to any other
person.

      

      (t) Seller is
an “accredited investor,” as that term is defined in SEC Rule 501.

      

      (u) Pending
Registration, the certificate evidencing the Shares will reflect a legend in
substantially the following form:

      

      THE
SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), OR
STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR DISPOSED OF UNLESS THE
TRANSACTION IS REGISTERED UNDER THE SECURITIES ACT AND REGISTERED OR QUALIFIED
FOR SALE UNDER APPLICABLE STATE SECURITIES LAWS, OR THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL THAT AN EXEMPTION FROM THE REGISTRATION OR QUALIFICATION
REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS
AVAILABLE.

      

      9. Buyer
hereby represents and warrants to Seller that the following representations and
warranties shall be true and correct at and as of Closing:

      

      (a) Buyer is
a Nevada 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 Wyoming and the State of Nebraska.

      

      (b) Buyer 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 Buyer’s articles of organization or
organizational documents, or 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.

      

      (c) This
Agreement has been duly executed and delivered on behalf of 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.

       

      
        
          
          

        

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

      

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

      

      10. The
purchase and sale of the Assets pursuant to this Agreement (the “Closing”) shall occur
at on or before March 25, 2010, by fax or electronically, or such other date as
Buyer and Seller may mutually agree in writing, electronically. At the Closing,
the following shall occur:

      

      (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
the Assets, substantially in the form of Exhibit D hereto, with sufficient
counterparts for filing in the appropriate governmental offices.

      

      (b) Buyer
shall deliver to Seller the Shares.

      

      (c) On or
before March 25, 2010, Buyer shall pay Seller the Cash by wire transfer to
Seller’s account in accordance with the terms and conditions
hereof.

      

      (d) Buyer and
Seller shall execute, acknowledge and deliver transfer orders or letters in lieu
of transfer orders directing all purchasers of production to make payment of
proceeds attributable to production from the Assets to Buyer after the Effective
Time.

      

      (e) Buyer
shall transfer operations of the Assets to Buyer, or Buyer’s contract
operator.

      

      (f) Seller
shall deliver to Buyer copies of the Records.

      

      
        	
                11.  

              	
                Assignor
      hereby agrees to warrant and defend the title to the Assets against all liens,
      encumbrances and defects of title arising by, through, or under
      Assignor, but not otherwise.  The Assets are free and clear of all
      mortgages, liens or other encumbrances.   EXCEPT AS EXPRESSLY
      STATED IN THIS AGREEMENT AND THE ASSIGNMENT, THIS AGREEMENT IS MADE
      WITHOUT ANY OTHER WARRANTIES OR COVENANTS, EXPRESSED OR IMPLIED IN FACT OR
      IN LAW, AS TO TITLE, MERCHANTABILITY, DURABILITY, USE, OPERATION, OR
      FITNESS FOR ANY PARTICULAR PURPOSE, AND 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 AND, EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT AND THE
      ASSIGNMENT, BUYER ACCEPTS THE SAME “AS IS, WHERE IS” AND “WITH ALL
      FAULTS.”

              

      

       

      
        
          
          

        

        
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      12. All
production, severance, excise, ad valorem, property, and other taxes (other than
income taxes) relating to ownership or production of oil, gas and condensate
attributable to the Assets prior to the Effective Time shall be paid by Seller,
and all such taxes relating to such production on or after the Effective Time
shall be paid by Buyer. Buyer shall be responsible for any and all state and
local taxes or fees imposed on the transfer of the Assets.

      

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

      

      14. 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 Assets.

      

      15. 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.

      

      16. 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.

      

      17. Any
notice required or permitted by this Agreement shall be given in writing by
personal service, overnight delivery service, e-mail, facsimile or by certified
mail, return receipt requested, postage prepaid, as follows:

       

       

      
        
          
          

        

        
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                If
      to Seller:

                Edward
      Mike Davis, LLC

                 

                Attention:  Edward
      Mike Davis

                Fax:

                E-Mail:

              	 
      
	
                 

                If
      to Buyer:

                Recovery
      Energy, Inc.

                1515
      Wynkoop, Suite 200

                Denver,
      Colorado 80202

                Attention:
      Jeffrey Beunier, President

                Fax:  (888)
      887-4449

                E-Mail:  jbeunier@recoveryenergyco.com

              	
                 

                With
      a copy to:

                Jeff
      Knetsch

                Brownstein
      Hyatt Farber Schreck, LLP

                410
      17th
      Street, Suite 2200

                Denver,
      Colorado 80202

                Fax:
      (303) 223-1111

                E-Mail:
      jknetsch@bhfs.com

                 

              

      

      

      (or such
other address as designated in writing by either Party to the other) and shall
be deemed to have been given as of the date of receipt by the intended
Party.

      

      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. The
Parties acknowledge that they and their respective counsel have negotiated and drafted
this Agreement jointly and agree that the rule of construction that ambiguities
are to be resolved against the drafting party shall not be employed in the
interpretation or construction of this Agreement.

      

      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 and electronic copies of
this Agreement shall be effective as originals.

      

      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:

                 

                Edward
      Mike Davis, L.L.C.

                 

                By:  /s/ Edward Mike
      Davis                             
      

                        Edward
      Mike Davis, Manager

                 

                Date:  March
      19 , 2010

              	
                BUYER:

                 

                Recovery
      Energy, Inc.

                 

                By:  /s/ Jeffrey
      Beunier                          
          

                        Jeffrey
      Beunier, President

                 

                Date:  March
      19 , 2010

              

      

       

       

      
        
          
          

        

        
          -10-

          
            

          

        

        
          
          

        

      

       

      
 

      EXHIBIT
A

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

      dated
effective April 1, 2010

      between
Edward Mike Davis, L.L.C. and Recovery Energy, Inc.

      

      EGLE and PALM (ALBIN WEST
FIELD) LEASES and LANDS:

      

      Township 17 North, Range 58
West, Banner County, Nebraska

      Section
17:  E/2SW/4 and SE/4

      Section
20:  ALL

      Section
21:  ALL

      

      

      EGLE and PALM (ALBIN WEST
FIELD) WELLS

      

      Well
Name:

      Located:

      API:           Working
Interest:  100.00%            Net
Revenue Interest: 80.00%

      Equipment
and Inventory:  consisting of a pumping unit, rods, tubing and
casing

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
 

      EXHIBIT
B

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

      dated
effective April 1, 2010

      between
Edward Mike Davis, L.L.C. and Recovery Energy, Inc.

      

      

      ALBIN AREA and TRACY
PROSPECT LANDS AND LEASES

      

      Township 17 North, Range 58
West, Banner County, Nebraska

      Section
18:  Lots 3, 4, E/2SE

      Section
19:  ALL

       

      Township 17 North, Range 60
West, Laramie County, Wyoming

      Section   3:  ALL

      Section   4:  N/2NE/4,
W/2, S/2SE/4

      Section   9:  All

      Section
10:  S/2

      Section
11:  All

      Section
14:  All

      Section
15:  E/2

      Section
15:  NW/4

      Section
22:  NE/4

      Section
23:  N/2

       

      Township 18 North, Range 60
West, Laramie County, Wyoming

      Section
28:  W/2NE/4, E/2W/2, SW/4NW/4, W/2SW/4, SE/4

      Section
29:  All East of Railroad ROW

      Section
32:  N/2NE East of Railroad ROW

       

      Township 14 North, Range 60
West, Laramie County, Wyoming

      Section   4:  ALL

      Section   5:  E/2SW/4

      Section   8:  All

      Section
17:  W/2

      Section
18:  NE/4, SE/4, E/2SW/4

      Section
19:  E/2, SW/4

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      EXHIBIT
C

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

      dated
effective April 1, 2010

      between
Edward Mike Davis, L.L.C. and Recovery Energy, Inc.

      

      

      VRTATKO AREA PROSPECT LANDS
AND LEASES

      

      Township 14 North, Range 54
West, 6th P.M.

      Section
29:  W/2, W/2SE/4

      Section
30:  ALL

      Section
31:  ALL

      Section
32:  ALL

      Section
33:  ALL

      

      Township 13 North, Range 54
West, 6th P.M.

      Section  5:  N/2,
SW/4

      Section  6:  ALL

      Section  7:  ALL

      Section
17: SE/4

      Section
22: ALL

      

      Township 13 North, Range 55
West, 6th P.M.

      Section  1:  ALL

      Section
11: ALL

      Section
12: ALL

      

      Township 15 North, Range 55
West, 6th P.M.

      Section
29:  A 3.627 acre tract in SW/4NW/4

      Section
32:  A tract in the S/2

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
 

      EXHIBIT
D

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

      dated
effective April 1, 2010

      between
Edward Mike Davis, L.L.C. and Recovery Energy, Inc.

      

      

      When
Recorded Return To:

      Recovery
Energy, Inc.

      1515
Wynkoop St., # 200

      Denver,
Colorado 80202

      Attn:  Jeffrey
Beunier, President

       

      ASSIGNMENT, CONVEYANCE AND
BILL OF SALE

       

      

      THIS ASSIGNMENT, CONVEYANCE AND BILL
OF SALE (this “Assignment”), dated effective as of December 1, 2009 at 7:00
a.m. Mountain Time (the “Effective Time”), is from EDWARD MIKE DAVIS, L.L.C., a
Nevada limited liability company (“Assignor”), 200 Rancho Circle, Las Vegas,
Nevada 89107, to RECOVERY ENERGY, INC., a Nevada corporation (“Assignee”), 1515
Wynkoop Street, Suite 200, Denver, Colorado 80202. Assignor and Assignee are
referred to herein, individually, as a “Party” and, collectively, as the
“Parties.”

      

      FOR TEN DOLLARS ($10.00), and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Assignor hereby sells, assigns, transfers and conveys unto
Assignee the following (collectively, the “Assets”):

      

      (a) ________________________________working
interest and being a ____________________________ net revenue interest in and to
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
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 __________________% royalty and overriding royalty (the “Royalty”) burden, so
that Assignee shall own an _______________________________________ working
interest and being a _______________________________ 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
hereby agrees to warrant and defend the title to the Assets against all liens,
encumbrances and defects of title arising by, through, or under Assignor, but
not otherwise.  The Assets are free and clear of all mortgages, liens
or other encumbrances. EXCEPT
AS EXPRESSLY STATED IN THIS ASSIGNMENT, THIS ASSIGNMENT IS MADE WITHOUT ANY
OTHER WARRANTIES OR COVENANTS, EXPRESSED OR IMPLIED IN FACT OR IN LAW, AS TO
TITLE, MERCHANTABILITY, DURABILITY, USE, OPERATION, OR FITNESS FOR ANY
PARTICULAR PURPOSE, AND THS ASSIGNMENT IS “AS IS, WHERE IS” AND “WITH ALL
FAULTS.”

       

      TO HAVE AND TO HOLD the
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:

                Edward
      Mike Davis, L.L.C.

                 

                By:_____________________________

                      Edward
      Mike Davis, Manager

                 

                Date:
      ________________

              	
                ASSIGNEE:

                Recovery
      Energy, Inc.

                 

                By:  ______________________________

                          Jeffrey
      Beunier, President

                 

                Date:
      ____________

              

      

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
 

      Acknowledgments

      

      
 

      STATE OF
NEVADA                               §

                                                           §           ss.

      COUNTY OF
CLARK                               §

      

      The foregoing instrument acknowledged
before me this ___ day of March, 2010, by Edward Mike Davis, as Manager of
Edward Mike Davis, L.L.C., a Nevada limited liability company, on behalf of said
company.

      

      My
commission expires:

      ____________________

      _______________________________________

      (Notary
Seal)                                                                        
Name:  Kevin Trujillo

      Notary Public in and for State of
Nevada

      

      

      

      

      

      

      

      

      STATE OF
COLORADO                          §

                                                            §           ss.

      CITY AND
COUNTY OF
DENVER         §

      

      The foregoing instrument was
acknowledged before me this ___ day of March, 2010, by Jeffrey Beunier,
President of Recovery Energy, Inc., a Nevada corporation, on behalf of said
corporation.

      

      My
commission expires:

      ____________________

      ________________________________

      Signature

      (Notary
Seal)                                                              
         ________________________________

      Name (Printed, Typed or
Stamped)

      Notary Public in and for

      State of Colorado

      

       

       

       

      
 

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      

      EXHIBIT
A

      Attached
to and made a part of that certain Assignment, Conveyance and

      Bill
of sale dated effective April 1, 2010

      between
Edward Mike Davis, L.L.C. and Recovery Energy, Inc.

       

      
 

       LEASES and
LANDS:

      

      WELLS

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