Document:

Exhibit 10.8

 

PURCHASE AND SALE AGREEMENT

(Goliath
Project — North Dakota)

 

THIS
PURCHASE AND SALE AGREEMENT (the “Agreement”) is made as of April 10, 2006,
by and between American Oil & Gas, Inc. (“American”), a Nevada corporation whose address is 1050 Seventeenth Street, Suite 1850,
Denver, Colorado 80202,
as seller, and Teton Energy Corporation (“Teton”), a Delaware corporation whose
address is 410 Seventeenth Street, Suite 1850, Denver, Colorado 80202, as
buyer.

 

1.                                       Background. American believes that it owns an undivided
75% leasehold interest in undeveloped oil and gas leases covering approximately
45,000 mineral acres in Dunn, McKenzie, Mountrail, and Williams Counties, North
Dakota, and that Evertson Energy Partners, LLC (“Evertson”) owns the remaining
25%. American and Evertson are actively acquiring new leases in the area and
are discussing the possible adoption of a master form joint operating
agreement for use in the area. Teton wishes to purchase an undivided 25%
interest in these leases, to establish an area of mutual interest with American,
and to become a party to any agreement that may be reached concerning a master
form joint operating agreement, all on the terms and conditions set forth
in this Agreement.

 

2.                                       Definitions.

 

“Area of Mutual Interest” means the area identified
in Appendix 2.

 

“Lease Deadline” means 5:00 p.m. on Monday, April 24,
2006.

 

 “Leases” means
the leases identified in Appendix 1 and all new leases within the Area of
Mutual Interest in which American may acquire an interest, either legally
or beneficially, before the Lease Deadline.

 

“Mineral Acre” means the full fee oil and gas ownership
interest in one acre of land, so that, for example, a person may own one Mineral
Acre either by owning a 100% fee oil and gas interest in a single acre of land
or by owning an undivided 25% fee oil and gas interest in four acres of land.

 

“Net Leasehold Acre” means the full oil and gas leasehold
interest in one Mineral Acre, so that, for example, a person may have one Net
Leasehold Acre by owning the entire leasehold interest in an oil and gas lease
covering one Mineral Acre or by owning an undivided 25% leasehold interest in
an oil and gas lease covering four Mineral Acres.

 

“Operator” means the then-current operator of a well
under a joint operating agreement covering the lands comprising the drill site
for that well.

 

“Tahosa Acquisition Agreement” means the Purchase
and Sale Agreement dated for identification October 7, 2005, among
American, Tahosa Holdings, LLC, Mélange International, LLC, Evertson Energy
Partners, LLC, Rose Exploration, Inc., and Empire Oil Company, in
accordance with which American acquired its interest in many of the Leases.

 

 

“Title Defect” means a cloud, encumbrance or other
impediment rendering title to a Lease defective to a degree that a reasonably
prudent operator in the Rocky Mountains would not acquire the lease as part of
a very large exploratory acreage acquisition in which it was seeking leases at
an average 80% net revenue interest, unless and until appropriate curative work
had been performed to remove the cloud, encumbrance or other impediment. Teton
has full knowledge of the Tahosa Acquisition Agreement at the date hereof, and expressly
agrees that no term, condition or other provision of the Tahosa Acquisition
Agreement constitutes a Title Defect.

 

3.                                       Purchase and Sale.

 

3.1                                 Agreement. American shall sell and assign to Teton,
and Teton shall purchase and accept from American, a 25% leasehold interest in
the Leases on the terms and conditions contained in this Agreement.

 

3.2                                 Purchase Price. The purchase price for the Leases (the “Purchase
Price”) shall be $450 per Net Leasehold Acre assigned to Teton at Closing, payable
as follows:

 

(a)                                  40% of the Purchase Price by wire transfer to
American at Closing; and

 

(b)                                 60% of the Purchase Price by wire transfers to
the Operator in payment of amounts due from American in connection with drilling,
completing and equipping operations within the Area of Mutual Interest, when
and as such amounts become due to the Operator; provided, however, that if any
portion of this 60% share of the Purchase Price has not been paid to the
Operator on behalf of American by May 31, 2007, then the entire unpaid
portion shall be paid by Teton to American on June 1, 2007, thereby ending
Teton’s obligation to pay further amounts to the Operator on behalf of American.

 

The payment method in clause (b) is a method of
regulating the timing of the payment of the 60% share of the Purchase Price. Payments
to the Operator on behalf of American will begin when the first advance or
other payment is due from American in connection with the first well drilled
within the Area of Mutual Interest, and will continue as additional amounts
become due from American for that first well and for all subsequent wells
within the Area of Mutual Interest, until the full 60% share of the Purchase
Price has been paid. As long as a portion of the Purchase Price remains unpaid,
Teton must timely pay all amounts due from American to the Operator, unless
American provides Teton specific written instructions to the contrary before
Teton transmits such funds to the Operator. The unpaid portion of the 60% share
of the Purchase Price will not bear interest while awaiting expenditure, unless
a payment is not timely made to the Operator when due. If Teton fails timely to
pay a required amount to the Operator on behalf of American, then (i) Teton
will be solely responsible for any additional fees, interest or charges due the
Operator as a result of later payment (which fees, interest or charges will not
be taken from or otherwise reduce the unpaid portion of the Purchase Price) and
(ii) the entire remaining unpaid portion of the Purchase Price will, at
American’s option exercised by written notice to Teton, become immediately due
and payable to American and will bear interest at an annual rate of 18% from
the date the unpaid amount was due to the Operator until the date the entire
remaining unpaid portion of the Purchase Price is paid to American.

 

2

 

4.                                       Title Review.

 

4.1                                 Title Information. American will continue to make available to
Teton, at American’s office during reasonable business hours, all title
information in American’s possession pertaining to the Leases, although American
does not warrant the accuracy or completeness of such information.

 

4.2                                 No Subsequent Transfers.
American represents and warrants for the benefit of Teton that it has made no
assignments of leasehold interests or assignments of overriding royalties in
any Lease since it acquired such Lease, other than overriding royalty
assignments made pursuant to the area of mutual interest provision in the
Tahosa Acquisition Agreement. American further represents and warrants that it
has not mortgaged or otherwise encumbered for security purposes its interest in
any Lease. These representations and warranties are true at the date hereof,
and will continue to be true until the leasehold interest assignment is
delivered to Teton at Closing.

 

4.3                                 Notice of Title Defects. Until 5:00 p.m. on Monday, May 1,
2006, Teton will provide prompt notice to American whenever it concludes that
particular circumstances may give rise to a Title Defect. After receiving
each such notice, American may undertake curative work, may provide
Teton more information explaining the circumstances, or may simply take
the position that the circumstances do not constitute a Title Defect. If American
agrees at any time up to 5:00 p.m. on May 2, 2006 that a Lease
suffers from a Title Defect, then such lease will be excluded from the Leases,
no interest in that lease will be transferred at Closing, and the net acres
covered by that lease will not be considered in computing the purchase price
for the remaining Leases. If American has not agreed by 5:00 p.m. on May 2,
2006 that a Lease suffers from a Title Defect, then, unless Teton withdraws its
Title Defect claim by 5:00 p.m. on May 3, 2006, (i) closing will
proceed as scheduled, but the Leases suffering from putative Title Defects will
be temporarily removed from the Leases, no interest in such leases will be
transferred at Closing, and the net acres covered by such leases will not be
considered in computing the purchase price to be paid at Closing for the
remaining Leases and (ii) the existence of the putative Title Defects will
be finally determined in accordance with Section 4.5.

 

4.4                                 Net Leasehold Acre Determination. American and Teton will meet on Thursday, May 4, 2006, to agree
upon the total number of Net Leasehold Acres that will be assigned to Teton at
the Closing. If such agreed number of Net Leasehold Acres is less than 85% of
the number of Net Leasehold Acres that were included in the Leases at the Lease
Deadline, then Teton may, at its sole option exercised before 6:00 p.m. on
May 4, 2006, elect not to proceed with Closing under this Agreement and,
in that event, neither American nor Teton shall have any liability to the other
whatsoever; provided, however, that if American
disputes a sufficient number of Title Defects that, if American were correct,
the agreed number of Net Leasehold Acres would be more than 85% of the number
of Net Leasehold Acres included in the Leases at the Lease Deadline, then any
election by Teton not to proceed with Closing will be held in abeyance and the Closing
will be suspended until the actual number of Net Leasehold Acres has been
resolved under Section 4.5. If American and Teton cannot agree upon the
exact number of Net Leasehold Acres that will be assigned to Teton at the
Closing, but do agree that such number is more than 85% of the Net Leasehold
Acres at the Lease Deadline or, being less, Teton still wishes to proceed with
Closing, then the Closing will nonetheless occur as to such Leases and Net
Leasehold Acres as they are able to agree, with closing as to the remaining
Leases and Net Leasehold Acres suspended until the disputed Net Leasehold Acres
have been resolved under Section 4.5. The number of Net Leasehold Acres
assigned to Teton will conclusively be deemed correct upon the parties’
agreement or, if necessary, upon the arbitrator’s determination, and shall not
be challenged thereafter.

 

3

 

4.5                                 Title Defect Dispute.
American and Teton hereby agree that any dispute concerning the existence of a
Title Defect or the number of Net Leasehold Acres being assigned to Teton (a “Title
Dispute”) shall be resolved exclusively and solely by arbitration in accordance
with this Section 4.5. Specifically, the parties agree that such Title
Dispute shall be finally determined by an independent arbitrator knowledgeable
about the oil and gas industry and mutually acceptable to the Parties or, if no
such arbitrator has been agreed by May 10, 2006, then by a member of the
law firm of Fleck, Mather & Strutz, Ltd., Bismarck, North Dakota, acting
as arbitrator, in either case with the assistance of such independent landmen
and other consultants as the arbitrator deems necessary. No later than 21 days
after the arbitrator’s written agreement to serve, American and Teton shall
present their respective positions in writing to the arbitrator, together with
such evidence as each Party deems appropriate. The arbitrator shall be
instructed to resolve the dispute through a final binding decision within 21
days after such submission deadline and, when the arbitrator determines the
number of Net Leasehold Acres or finds that certain claimed Title Defects do
not exist, the arbitrator shall also set forth how and when the assignment of
such Leases to Teton and the payment of purchase price to American shall be
accomplished. The arbitrator may request oral presentations and shall
decide any other procedural matters presented by a party, which decisions shall
be final and binding upon the parties. Each party shall bear its own costs and
expenses of the arbitration, provided, however that the costs incurred in
employing the arbitrator (including not only the fees and costs of such
arbitrator, but also the fees and costs of landmen or other consultants engaged
by the arbitrator) shall be borne 50% by American and 50% by Teton. The
decision of the arbitrator may be filed in any court of competent
jurisdiction and may be enforced by any party as a final judgment of such
court.

 

5.                                       Tahosa Acquisition Agreement. Teton has carefully reviewed the full text
of the Tahosa Acquisition Agreement and knows that, among other things, the
Tahosa Acquisition Agreement (i) requires the drilling of two horizontal
wells by October 1, 2008, (ii) requires the assignment of certain
overriding royalties on leases acquired within a specified area of mutual
interest, and (iii) imposes certain notice and reassignment obligations
before leases expire or are surrendered,
abandoned or are released. Teton recognizes and agrees that it will be
proportionately subject to all continuing responsibilities of American imposed
by the Tahosa Acquisition Agreement, whether or not such responsibilities are mentioned
or accurately summarized in the preceding sentence. The assignment delivered by American at
Closing will contain specific language by which Teton assumes and agrees to perform such
responsibilities in accordance with their terms, just as surely as if Teton
itself had been an original party to the Tahosa Acquisition Agreement.

 

6.                                       Area of Mutual Interest.

 

6.1                                 Tahosa AMI Responsibilities. As noted in Section 5, American is already
subject to area of mutual interest responsibilities under the Tahosa
Acquisition Agreement. Teton recognizes that it as well will be burdened by
such responsibilities following Closing.

 

6.2                                 New AMI Responsibilities. If either American or Teton acquires leases
or rights to acquire leases within the Area of Mutual Interest during the
period beginning at 5:01 p.m. on Monday, April 24, 2006 and ending October 1,
2010 (excluding, of course, the interests in the Leases that are assigned by
American to Teton pursuant to this Agreement), then the acquiring party shall
offer an interest (50% of Teton’s interest in the case of an offer made by
Teton to American and 25% of American’s interest in the case of an offer made
by American to Teton) in such leases or rights to the other party. The party to
whom the offer is made will have a period of 21 calendar days following receipt
of the offer in which to elect to acquire the offered interest by paying its

 

4

 

proportionate share of
the offering party’s out-of-pocket acquisition costs for such leases or rights.
Failure of a party to respond within the 21-day period shall be an election not
to acquire the interest. If, pursuant to this Section 6.2, a party
acquires an interest in a farmin or other earning agreement but then elects not
to participate in the drilling of an earning well under that agreement, it
shall retain only those rights it previously earned by participating in past
drilling and will immediately assign its rights to participate in all future
drilling and earning to the other party.

 

7.                                       Joint Operating Agreement. American and Evertson have recently begun
discussing a master form of joint operating agreement, which, if mutually
agreed, would be used to prepare individual joint operating agreements as
needed in the Area of Mutual Interest, each of which would have as its contract
area the anticipated drilling unit for a particular well. Immediately after
execution of this Agreement, American will use its best efforts to secure
Evertson’s permission for Teton to participate in such discussions. If, despite
American’s best efforts, Evertson does not grant permission for Teton to
participate in these master form discussions, then American shall continue
its discussions with Evertson, keeping Teton informed of all material developments
in the discussions and carefully considering any requests, suggestions or
comments made by Teton in respect of the master form. In either event, if a master
form is unanimously agreed by American, Teton and Evertson before Closing,
then American and Evertson shall execute appropriate evidence of such agreement,
which Teton shall join, ratify and confirm at Closing. If the master form is
not unanimously agreed by American, Teton and Evertson before Closing, then either
Teton or American may independently elect, at any time before Closing
occurs, not to proceed with Closing under this Agreement and, in that event,
neither American nor Teton shall have any liability to the other whatsoever. In
any event, American will use reasonable efforts in the negotiations to ensure
that (i) Evertson is appointed Operator, (ii) the first individual joint
operating agreement provides in Article VI.A that the initial well shall
be commenced on or before June 30, 2006, and (iii) the second well shall,
if the first well is completed as a producer and subject to delay upon the occurrence
of an event of force majeure, be commenced within 120 days of release of the
drilling rig from the first well location.

 

8.                                       Closing.

 

8.1                                 Date and Time. Closing shall occur in American’s Denver
office at 10:30 a.m. on Friday, May 5, 2006, or at such other place
and time as may be agreed by the parties.

 

8.2                                 Closing Obligations. At Closing, the following
events shall occur, each being a condition precedent to the others and each
being deemed to have occurred simultaneously with the others:

 

(a)                                  American shall
execute, acknowledge and deliver to Teton (or a subsidiary of Teton if Teton so
desires), an assignment of the Leases, substantially in the form attached
as Appendix 3 and containing a special warranty of title by, through and under American,
but not otherwise;

 

(b)                                 Teton shall deliver 40% of the Purchase Price
by wire transfer to an account designated by American;

 

(c)                                  if American and Evertson have agreed upon a
master form of joint operating agreement, as explained in Section 7.3
above, then Teton will join, ratify and confirm that agreement as if it had
been an original party thereto; and

 

5

 

(d)                                 the Parties
shall take such other actions and deliver such other documents as may be
necessary or convenient to effect the purchase and sale contemplated herein.

 

9.                                      Miscellaneous.

 

9.1                                 Notices. Except as otherwise expressly provided in
this Agreement, all communications required or permitted under this Agreement
will be in writing and any such communication or delivery will be deemed to
have been duly given and received when actually delivered to the address set
forth below of the party to be notified personally (by a recognized commercial
courier or delivery service that provides a receipt) or by telecopier
(confirmed in writing by a personal delivery as set forth above), addressed as
follows:

 

	
   

  	
  If to American:

  	
  American Oil & Gas, Inc.

  
	
   

  	
   

  	
  1050 Seventeenth Street, Suite 1850

  
	
   

  	
   

  	
  Denver, Colorado 80265

  
	
   

  	
   

  	
  Attention:  Patrick D. O’Brien

  
	
   

  	
   

  	
  Telephone:  303.595.0125

  
	
   

  	
   

  	
  Facsimile:   303.595.0709

  
	
   

  	
   

  	
   

  
	
   

  	
  If to Teton:

  	
  Teton Energy Corporation

  
	
   

  	
   

  	
  410 Seventeenth Street, Suite 1850

  
	
   

  	
   

  	
  Denver, Colorado 80202

  
	
   

  	
   

  	
  Attention:  Karl F. Arleth,
  President and Chief Executive Officer

  
	
   

  	
   

  	
  Telephone:  303.565.4600

  
	
   

  	
   

  	
  Facsimile:  303.542.1817

  

 

Any party may, by written
notice so delivered to the other, change the address to which delivery will
thereafter be made.

 

9.2                                 Expenses. Each party will be solely responsible for
all costs that it incurs in connection with this Agreement and the activities
contemplated herein, with no right to recovery or contribution from any other party.

 

9.3                                 Entire Agreement. This Agreement embodies the entire
agreement between the Parties with respect to the subject matter of this
Agreement (superseding all prior agreements, arrangements, understandings and
solicitations of interest or offers related to the subject matter of this
Agreement, including the letter from Teton dated March 17, 2006), and may be
supplemented, altered, amended, modified or revoked by writing only, signed by
all of the Parties to this Agreement. The headings in this Agreement are for
convenience only and will have no significance in the interpretation of any
term or provision of this Agreement.

 

9.4                                 Governing Law. This Agreement will be governed and
construed and enforced in accordance with the laws of the State of Colorado,
without regard to rules concerning conflicts of laws.

 

9.5                                 Counterparts. This Agreement may be executed in any
number of counterparts, and each and every counterpart will be deemed for
all purposes one agreement.

 

6

 

9.6                                 Binding Effect; Assignment. All the terms, provisions, covenants,
representations and conditions of this Agreement will be binding upon and inure
to the benefit of and be enforceable by the Parties to this Agreement and their
respective successors and assigns, although this Agreement and the rights and
obligations hereunder will not be assignable or delegable by any party without
the prior written consent of the non-assigning or non-delegating party, which may be
withheld at the sole discretion of such party. Notwithstanding the foregoing,
Teton may assign all of its rights and obligations under this Agreement to
a wholly owned subsidiary, without the need for any consent by American.

 

9.7                                 Independent Analysis. In entering into this Agreement, Teton acknowledges
that it has relied solely upon its own independent analysis, evaluation and
investigation of, and judgment with respect to, the business, economic, legal,
tax or other consequences of the transaction contemplated herein, including its
own estimate, analysis and appraisal of the extent and value of the hydrocarbon
resources associated with the Leases, the future operation, maintenance and
development costs associated with the Leases, and the legal risks of owning and
operating the Leases.

 

9.8                                 Survival. All terms
and conditions of this Agreement will survive the Closing and delivery of the
assignment from American to Teton.

 

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

 

	
  AMERICAN OIL & GAS, INC.

  	
   

  	
  TETON ENERGY CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Patrick D. O’Brien

  	
   

  	
   

  	
  By:

  	
  /s/ Karl F. Arleth

  	
   

  
	
   

  	
  Patrick D. O’Brien, Chief
  Executive Officer

  	
   

  	
   

  	
  Karl F. Arleth, President
  and

  
	
   

  	
   

  	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Appendix 1:

  	
  The Leases

  	
   

  
	
  Appendix 2:

  	
  AMI

  	
   

  
	
  Appendix 3:

  	
  Assignment

  	
   

  
								

 

7

 

APPENDIX 2:  AMI

(Goliath
Project — North Dakota)

 

The
Area of Mutual Interest consists of the following lands:

 

Township 155 North, Range 97
West

Sections: 1-9

 

Township 155 North, Range 98
West

Sections: 1-12

 

Township 155 North, Range 99
West

Sections: 1, 2, 11, 12

 

Township 156 North, Range 96
West

Sections: 5, 6

 

Township 156 North, Range 97
West

Sections: All

 

Township 156 North, Range 98
West

Sections: All

 

Township 156 North, Range 99
West

Sections: 1-4, 9-15, 23-26, 35, 36

 

Township 157 North, Range 96
West

Sections: 4-9, 16-23, 26-35

 

Township 157 North, Range 97
West

Sections: All

 

Township 157 North, Range 98
West

Sections: 1-3, 10-15, 22-36EXHIBIT 4.3

 

	
  Number

  A-

  	
  Incorporated Under the Laws of the State of
  Delaware

  	
  Shares

  -0-

  Cusip No.

  53071M 10 4

  

 

LIBERTY MEDIA CORPORATION

 

Series A Liberty Interactive
Common Stock, par value $.01 per share

 

Specimen Certificate

 

This Certifies that                                                    
is the owner of                                                    
FULLY PAID AND NON-ASSESSABLE SHARES OF SERIES A LIBERTY INTERACTIVE COMMON
STOCK, PAR VALUE $0.01 PER SHARE, OF LIBERTY MEDIA CORPORATION (hereinafter
called the “Corporation”) transferable on the books of the Corporation by the
holder hereof in person or by duly authorized attorney upon surrender of the
Certificate properly endorsed. This Certificate is not valid unless
countersigned by the Transfer Agent and registered by the Registrar.

 

Witness, the seal of the Corporation and the signatures
of its duly authorized officers.

 

Dated:

 

	
   

  	
  Liberty
  Media Corporation

  [Corporate Seal]

  	
   

  
	
   

  	
   

  	
   

  
	
  President  

  	
   

  	
  Secretary

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00103-of-00352.parquet"}]]