Document:

AGREEMENT FOR THE PURCHASE OF PARTIAL LEASEHOLDS

 

This Agreement for the Purchase of Partial Leaseholds ("Agreement") executed this March 1 2011, by and between Geronimo Holding Corporation ("Seller") and American Standard Energy, Corp. ("Buyer").

Seller desires to sell to Buyer and Buyer, exercising its first right of refusal with Seller dated January 27th, 2011, desires to purchase from Seller, certain mineral rights leaseholds held on properties located on approximately 10,147.65715 acres within multiple counties within North Dakota as described in EXHIBIT A:

NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties hereto agree as follows:

1. Sale.

Seller agrees to sell, transfer and convey to Buyer, and Buyer agrees to purchase the aforementioned partial leaseholds/Well as described in EXHIBIT A.

2.  Price.

Buyer shall pay Seller the sum of SEVEN MILLION FOUR HUNDRED EIGHTEEN THOUSAND THIRTY SIX DOLLARS AND TEN CENTS ($7,418,036.10) evidenced by THREE MILLION DOLLARS ($3,000,000) cash payable in immediately available funds and 883,607 shares of Company stock, valued as of January 27, 2011 – the date of Right of First Refusal which was $5.00 per share (OTCBB: ASEN) at Close.

3.  Transfer of Title.

Title to and ownership of all rights to the Property shall pass from Seller to Buyer upon close of escrow with an effective date of February 28, 2011.  Prior to Close of Escrow Seller shall deliver to Buyer the following items as well as such other information and documents as Buyer may reasonably request during the Due Diligence Period:

	
  

	
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Copies of Original Leases

	
  

	
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Copies of any subsequent Leases

	
  

	
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Any Assignments made on the Property

	
  

	
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Title reports of the Property

	
  

	
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Division Orders (if available)

	
  

	
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Engineering Reports of the Property

	
  

	
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Full Legal Description of the Property

	
  

	
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Completion of the 2009 Financial Audit of Seller or carve out for specific properties

	
  

	
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Completion of the 2010 Engineering Report of Seller

	
  

	
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Joint Interest Billings

	
  

	
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API Number

	
  

	
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Well ID Number (if any)

	
  

	
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Production Report (if applicable)

4.  Representations and Warranties of Seller.

(a)         Seller warrants that the title to the Property shall be of marketable title free of undisclosed liens, mortgages, leases, or other rights in the Property.

(b)         Authority; Capacity to Sell.  The Seller has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby.  The execution, delivery and performance of this Agreement has been duly authorized by all necessary action on the part of the Seller, and constitutes a legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, except as such enforceability may be limited by: (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting the enforcement of creditors' rights
generally; and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

  

  

  

 

(c)         No Violation of Law or Agreement.  The execution, delivery and performance by Seller of this Agreement, and the consummation of the transactions contemplated hereby, do not and will not: (a) conflict with or result in a violation or breach of, or default under, any provision of the certificate of incorporation, by-laws or other organizational documents of Seller; (b) conflict with or result in a violation or breach of any provision of any Law or governmental order applicable to Seller; (c) require the consent, notice or other action by any person under, conflict with, result in a violation or breach of, constitute a default or an event
that, with or without notice or lapse of time or both, would constitute a default under, result in the acceleration of or create in any party the right to accelerate, terminate, modify or cancel any contract to which the Seller is a party or by which the Seller is bound or to which any of their respective properties and assets are subject or any permit affecting the properties, assets or business of the Seller; or (d) result in the creation or imposition of any encumbrance on any properties or assets of the Company. No consent, approval, permit, governmental order, declaration or filing with, or notice to, any governmental authority is required by or with respect to the Seller in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby. For purposes hereof, “Law” means any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement or rule
of law of any Governmental Authority.

(d)         Consents.  All consents, approvals or authorizations of, or registrations, filings or declarations with, any governmental authority or any other person, if any, required in connection with the execution, delivery and performance by the Sellers of this Agreement or the transactions contemplated hereby have been or at the closing of this Agreement will have been obtained by the Seller and will be in full force and effect.

(e)         Full Disclosure.  No representation or warranty by Seller in this Agreement or any certificate or other document furnished or to be furnished to Buyer pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.

(f)          Contingencies.  Seller shall provide completed Title Report to Buyer.  Sales price shall be adjusted accordingly should the results of the Title Report indicate anything contrary to this Agreement.

(g)         Net Royalty Interest.  Seller affirms that the Seller conveys at least SEVENTY FIVE PERCENT (75%) Net Royalty Interest (NRI) of each Property, lease, or well to the Buyer.  If upon discovery of less than 75% NRI after close then Seller shall supplement additional property(ies) to cure any deficiency.

(h)         Royalties.  Seller shall credit/forward to Buyer any revenue or Royalties received by operators of the respective Properties with an effective date of February 28, 2011.  Any royalties received with an effective date of February 27, 2011 or earlier shall belong to Seller.  Any royalties received with an effective date of February 28, 2011 or later shall belong to Buyer.

(i)          Restrictions.   Seller acknowledges the shares received as part of this Agreement shall be restricted and such Shares shall bear the following legend:

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED.  THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MY NOT BE OFFERED, SOLD OR OTHERWISE TRANFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH REPECT TO THE SHARES OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SAID ACT THAT IS THEN APPLICALBE TO THE SHARES, AS TO WHICH A PRIOR OPINION OF COUNSEL MAY BE REQUIRED BY THE ISSUE OR THE TRANFER AGENT.  .

5.  Representations and Warranties of Buyer.

(a)         Authority; Capacity to Purchase.  Buyer is duly organized, validly existing and in good standing under the Laws of its jurisdiction of organization and has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby.  The execution, delivery and performance of this Agreement has been duly authorized by all necessary action on the part of the Buyer, and constitutes a legal, valid and binding obligation of such Buyer, enforceable against the Buyer in accordance with its terms, except as such enforceability may be limited by: (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar Laws affecting the enforcement of creditors' rights generally; and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

  

  

  

(b)         No Conflicts’ Consents.  The execution, delivery and performance by Buyer of this Agreement and the consummation of the transactions contemplated hereby, do not and will not: (a) conflict with or result in a violation or breach of, or default under, any provision of the certificate of incorporation, by-laws or other organizational documents of Buyer; (b) conflict with or result in a violation or breach of any provision of any Law or governmental order applicable to Buyer; or (c) require the consent, notice or other action by any person under any contract to which Buyer is a party. No consent, approval, permit, governmental order,
declaration or filing with, or notice to, any governmental authority is required by or with respect to Buyer in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby.

6. Limitation of Liability.

In no event shall Seller be liable for any special, indirect, incidental or consequential damages arising out of or connected with this Agreement or the Property, regardless of whether a claim is based on contract, tort, strict liability or otherwise, nor shall Buyer's damages exceed the amount of the purchase price of the Property.

7.  Notices.

Any notice required by this Agreement or given in connection with it, shall be in writing and shall be given to the appropriate party by personal delivery or by certified mail, postage prepaid, or recognized overnight delivery services.

If to Seller:

Geronimo Holding Corporation

P.O. Box 804

Midland, TX 79702

If to Buyer:

American Standard Energy, Corp.

4800 North Scottsdale Road

Suite 1400

Scottsdale, AZ 85251

8.  Governing Law.

This Agreement shall be construed and enforced in accordance with the laws of the state of Arizona.

9.  Final Agreement.

This Agreement terminates and supersedes all prior understandings or agreements on the subject matter hereof.  This Agreement may be modified only by a further writing that is duly executed by both parties.

10.  Severability.

If any term of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, then this Agreement, including all of the remaining terms, will remain in full force and effect as if such invalid or unenforceable term had never been included.

11.  Headings.

Headings used in this Agreement are provided for convenience only and shall not be used to construe meaning or intent.

 

THIS SECTION INTENTIONALLY LEFT BLANK – SIGNATURES ON FOLLOWING PAGE

 

  

  

  

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written.

	
Geronimo Holding Corporation

	  	
American Standard Energy, Corp.

	  	  	  
	
By:

	
/s/ Randall Capps

	  	  	
By:

	
/s/ Scott Feldhacker

	  
	
Randall Capps

	  	
Scott Feldhacker

	
President

	  	
Chief Executive Officer

 

  

  

  

EXHIBIT AUnassociated Document

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW, AND IT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR STATE LAW OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS; AND THE COMPANY MAY REQUIRE AN OPINION OF COUNSEL AS TO THE AVAILABILITY OF SUCH EXEMPTION.

	
 

$200,000

	  	
Kennedy Space Center, Florida

March 2, 2011

SANSWIRE CORP.

 12% SECURED PROMISSORY NOTE DUE MARCH 2, 2012

FOR VALUE RECEIVED, Sanswire Corp., a Delaware corporation (the “Company”), with offices at State Road 405, Building M6-306A, Room 1400, Kennedy Space Center, FL 32815, hereby promises to pay to the order of Joseph DiMauro (“Holder”), the principal amount of two hundred thousand dollars ($200,000) on March 2, 2012 (“Maturity Date”) or earlier as hereinafter provided.  Interest on the outstanding principal balance shall be paid at maturity at the rate of twelve percent (12%) per annum.  Accrued interest shall also be payable at such time as any payment of principal of this Note is made.  Interest shall be computed on the basis of a 365-day year, using the number of days actually elapsed.

The Company’s obligations under this Note are secured by a security interest in substantially all of the Company’s assets pursuant to a security agreement (the “Security Agreement”) dated March 2, 2011 by and among the Company and the Holder.

 

 

ARTICLE 1.

Events of Default and Acceleration

(a)      Events of Default Defined.  The entire unpaid principal amount of this Note, together with interest thereon shall forthwith become and be due and payable if any one or more of the following events (“Events of Default”) shall have occurred (for any reason whatsoever and whether such happening shall be voluntary or involuntary or be affected or come about by operation of law pursuant to or in compliance with any judgment, decree, or order of any court or any order, rule or regulation of any administrative or governmental body) and be continuing.  An Event of Default shall occur:

(i)                     if failure shall be made in the payment of the principal of this Note when and as the same shall become due and such failure shall continue for a period of fifteen (15) days after such payment is due; or

(ii)                     if failure shall be made in the payment of any installment of interest on this Note when and as the same shall become due and payable whether at maturity or otherwise and such failure shall continue for fifteen (15) days after receipt of notice that such payment has not been made; or

(iii)                     if the Company shall consent to the appointment of a receiver, trustee or liquidator of itself or of a substantial part of its property, or shall make a general assignment for the benefit of creditors, or shall file a voluntary petition in bankruptcy, or an answer seeking reorganization in a proceeding under any bankruptcy law (as now or hereafter in effect) or an answer admitting the material allegations of a petition filed against the Company in any such proceeding, or shall by voluntary petition, answer or consent, seek relief under the provisions of any other now existing or future bankruptcy or other similar law providing for the reorganization or winding up of
corporations,  or shall, in a petition in bankruptcy filed against it or them be adjudicated a bankrupt, or the Company or its directors or a majority of its stockholders shall vote to dissolve or liquidate the Company; or

 

  

  

  

(iv)                     if an involuntary petition shall be filed against the Company seeking relief against the Company under any now existing or future bankruptcy, insolvency or other similar law providing for the reorganization or winding up of corporations, and such petition shall not be stayed or vacated or set aside within ninety (90) days from the filing thereof; or

(v)                     if a court of competent jurisdiction shall enter an order, judgment or decree appointing, without consent of the Company, a receiver, trustee or liquidator of the Company or of all or any substantial part of the property of the Company, or approving a petition filed against the Company seeking a reorganization or arrangement of the Company under the Federal bankruptcy laws or any other applicable law or statute of the United States of America or any State thereof; and such order, judgment or decree shall not be stayed or vacated or set aside within ninety (90) days from the date of the entry thereof.

(b)      Rights of the Holder.  Nothing in this Note shall be construed to modify, amend or limit in any way the right of the Holder to bring an action against the Company.

ARTICLE 2.

Miscellaneous

(a)      Prepayments and Partial Payments.  The Company may prepay this Note in whole or in part at anytime without penalty or premium; provided, that any partial payment of principal shall be accompanied by payment of accrued interest to the date of prepayment.

(b)      Transferability.  This Note shall not be transferred except in a transaction exempt from registration pursuant to the Securities Act and applicable state securities law.  The Company shall treat as the owner of this Note the person shown as the owner on its books and records.  The term “Holder” shall include the initial holder named on the first page of this Note and any subsequent holder of this Note. Should Holder transfer this Note, a 5-day notice of such transfer shall be promptly given to Company, and Company shall record said transfer on its books and in its records. For the purpose of this Agreement, “Notice” shall mean by prepaid certified or
registered mail, return receipt requested, or by an overnight courier service.

(c)      WAIVER OF TRIAL BY JURY.  IN ANY LEGAL PROCEEDING TO ENFORCE PAYMENT OF THIS NOTE, THE COMPANY WAIVES TRIAL BY JURY.

 

(d)      Usury Saving Provision.  All payment obligations arising under this Note are subject to the express condition that at no time shall the Company be obligated or required to pay interest at a rate which could subject the holder of this Note to either civil or criminal liability as a result of being in excess of the maximum rate which the Company is permitted by law to contract or agree to pay.  If by the terms of this Note, the Company is at any time required or obligated to pay interest at a rate in excess of such maximum rate, the applicable rate of interest shall be deemed to be immediately reduced to such maximum rate, and interest thus payable shall be computed at such maximum rate, and

the portion of all prior interest payments in excess of such maximum rate shall be applied and shall be deemed to have been payments in reduction of principal.

 

  

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(e)      Notice to Company.  Notice to the Company shall be given to the Company at its principal executive offices, presently located at State Road 405, Building M6-306A, Room 1400, Kennedy Space Center, FL 32815, or mailing address: Mail Code: SWC, Kennedy Space Center, FL 32899, telecopier 321-452-8965 attention of General Counsel, or to such other address or person as the Company may, from time to time, advise the holder of this Note, or to the holder of this Note at the address set forth on the Company’s records.  Notice shall be given by hand delivery, certified or registered mail, return receipt requested, overnight courier service which provides evidence of delivery, or by telecopier
if confirmation of receipt is given or of confirmation of transmission is sent as herein provided.

(f)      Governing Law.  This Note shall be governed by the laws of the State of Florida applicable to agreements executed and to be performed wholly within such State.  The Company hereby (i) consents to the non-exclusive jurisdiction of the United States District Court and Supreme Court of the State of Florida in Brevard County in any action relating to or arising out of this Note, (ii) agrees that any process in any such action may be served upon it, in addition to any other method of service permitted by law, by certified or registered mail, return receipt requested, or by an overnight courier service which obtains evidence of delivery, with the same full force and effect as if personally served

upon it in Brevard County, Florida, and (iii) waives any claim that the jurisdiction of any such tribunal is not a convenient forum for any such action and any defense of lack of in personam jurisdiction with respect thereto.

(g)      Expenses.  In the event that the Holder commences a legal proceeding in order to enforce its rights under this Note, the Company shall pay all reasonable legal fees and expenses incurred by the Holder with respect thereto, if the Holder is successful in enforcing such action.

(h)      Modification. This Note may not be changed, modified or terminated unless in writing  signed by the Company and the Holder.

IN WITNESS WHEREOF, the Company has executed this Note as of the date and year first aforesaid.

 

	 	SANSWIRE CORP.	 
	 	 	 
	
 

	
By: 

	/s/ Glenn D. Estrella	 
	 	Name: 	 Glenn D. Estrella	 
	 	Title: 	 President and CEO	 
	 	 	 	 

 

  

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