Document:

ex48013111.htm

 

Exhibit 4.8

 

 

NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY APPLICABLE STATE, BUT HAVE BEEN ACQUIRED BY THE HOLDER HEREOF FOR PURPOSES OF INVESTMENT AND IN RELIANCE ON STATUTORY EXEMPTIONS UNDER THE SECURITIES ACT, AND UNDER ANY APPLICABLE STATE SECURITIES LAWS. ACCORDINGLY THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER PROVISIONS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT; AND IN THE CASE OF AN EXEMPTION, ONLY IF THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION.

 

WARRANT TO PURCHASE SHARES

OF

8% SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK

SUN RIVER ENERGY, INC.

THIS WARRANT TO PURCHASE SHARES OF 8% SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK (“WARRANT”) CERTIFIES THAT, for value received, ______________________________ (the “Holder”), is entitled to subscribe for and purchase from Sun River Energy, Inc. (the “Company”), a corporation organized and existing under the laws of the State of Colorado, at the Warrant Exercise Price specified below during the exercise period specified below to and including January 31, 2013 (the “Expiration Date”), an aggregate of _________________________(_____________) shares of 8% Series A Cumulative Convertible Preferred Stock, $0.01 par value per share, of the Company (the “Preferred Stock”).

This Warrant is subject to the following provisions, terms, and conditions:

	
  

	
1.

	
Exercise of Warrant.

	
  

	
(a)

	
The exercise price per share of this Warrant shall be Twenty Dollars ($20.00) (The “Warrant Exercise Price”).  These Warrants may not be transferred or assigned, in whole or in part, without the express written consent of the Company and only in accordance with the terms of this Warrant.

 

 

  

  

  

 

	
  

	
(b)

	
From time to time after the date hereof and until 5:00 p.m., Dallas, Texas time, on the Expiration Date, Holder may exercise this Warrant, on any business day, for all or any part (but not as to fractional shares) of the number of shares of Preferred Stock purchasable hereunder by the completion of the subscription form attached hereto and by the surrender of this Warrant (properly endorsed) at the office of the Company as it may designate by notice in writing to the Holder hereof at the address of the Holder appearing on the books of the Company, and by payment to the Company of the Warrant Exercise Price in cash or by certified or official bank check, for each share being purchased.  In the event of any exercise of the rights represented by this Warrant, a certificate or certificates for the shares so purchased, registered in the name of the Holder, or its nominee or other party designated in the purchase form by the Holder hereof, shall be delivered to the Holder as soon as is reasonably practicable after the date in which the rights represented by this Warrant shall have been so exercised; and, unless this Warrant has expired or has been exercised in full, a new Warrant representing the number of shares (except a remaining fractional share), if any, with respect to which this Warrant shall not then have been exercised shall also be issued to the Holder within such time.  The person in whose name any certificate for shares is issued upon exercise of this Warrant shall for all purposes be deemed to have become the Holder of record of such shares on the date on which this Warrant was surrendered and payment of the Warrant Exercise Price, except that, if the date of such surrender and payment is a date on which the stock transfer books of the Company are closed, such person shall be deemed to have become the Holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open.

 

	
  

	
2.

	
Representations and Warranties of Company. The Company represents and warrants that:

	
  

	
(a)

	
the Company has all requisite power and authority to execute, issue and perform this Warrant and to issue the Preferred Stock;

	
  

	
(b)

	
this Warrant has been duly authorized by all necessary corporate action, has been duly executed and delivered, and is a legal and binding obligation of the Company, except as such enforcement is limited (i) by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors’ rights generally and (ii) by laws relating to the availability of specific performance, injunctive relief or other equitable remedies;

	
  

	
(c)

	
all shares which may be issued upon the exercise of the rights represented by this Warrant according to the terms hereof or represented by the Preferred Stock will, when issued in accordance with the terms of the Warrants and for the consideration contemplated thereby, which is not less per share than the par value thereof, be duly authorized and issued, fully paid, and nonassessable; and

 

	
  

	
(d)

	

during the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and reserved for the purpose of issue or transfer upon exercise of the rights evidenced by this Warrant, a sufficient number of shares of its Preferred Stock to provide for the exercise of the rights represented by this Warrant.

 

  

  

  

 

 

3.         Representations and Warranties of Holder.  The Holder, by its acceptance hereof, represents and warrants to the Company as follows:

(a)     The Holder is acquiring the Warrant, and any securities issuable upon conversion or exercise thereof (collectively, the “Securities”) for investment for the Holder’s own account and not with a view to or for resale in connection with, any distribution thereof.  The Holder understands that the Securities have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws by reason of a specific exemption from the registration provisions of the Act and laws that depend upon, among other things, the bona fide nature of the investment intent as expressed herein.

 

(b)     The Holder is an accredited investor within the meaning of Regulation D prescribed by the Securities and Exchange Commission pursuant to the Securities Act and by virtue of the Holder’s experience in evaluating and investing in private placement transactions of securities in companies similar to Company, the Holder is capable of evaluating the merits and risks of the Holder’s investment in Company and has the capacity to protect the Holder’s own interests.

 

(c)      The Holder acknowledges that the Securities must be held indefinitely unless subsequently registered under the Securities Act and applicable state securities laws, or unless an exemption from such registration is available.  The Holder is aware of the provisions of Rule 144 and 144A promulgated under the Securities Act that permit limited resale of securities purchased in a private placement subject to the satisfaction of certain conditions.

 

(d)     The Holder has had an opportunity to discuss the Company’s business, management and financial affairs with directors, officers and the management of the Company and to review the Company’s operations and facilities.  Holder has obtained sufficient information from the Company to enable Holder to evaluate the risks and merits of making such elections.

 

4.         Adjustments.   The number of and kind of securities purchasable upon exercise of this Warrant and the Warrant Exercise Price shall be subject to adjustment from time to time as follows:

(a)                If the Company shall, while this Warrant, or any portion hereof, remains outstanding and unexpired, subdivide or combine its capital stock, or issue additional shares of its capital stock as a dividend with respect to any shares of its capital stock, the number of shares issuable on the exercise of this Warrant shall forthwith be proportionately increased in the case of a subdivision or stock dividend, or proportionately decreased in the ease of a combination; provided that no adjustment in the number of shares of Preferred Stock issuable upon exercise of this Warrant shall apply if the capital stock being split-up, combined or otherwise issued is common stock and results in an adjustment to be made to the number of shares of common stock into which the Preferred Stock is convertible pursuant to the designation of rights, preferences and privileges of such Preferred Stock. Appropriate adjustments shall also be made to the Warrant Exercise Price payable per share, but the aggregate Warrant Exercise Price payable for the total number of shares purchasable under this Warrant (as adjusted) shall remain the same. Any adjustment under this Section 4(a) shall become effective at the close of business on the date the subdivision or combination becomes effective, or as of the record date of such dividend, or in the event that no record date is fixed, upon the making of such dividend.

 

 

  

  

  

(b)           In case of any reclassification, capital reorganization, or change in the Preferred Stock of the Company (other than as a result of a subdivision, combination, or stock dividend provided for in Section 4(a) and other than an event or right provided for in the designation of rights, preferences and privileges of the Preferred Stock), while this Warrant, or any portion hereof, remains outstanding and unexpired, then, as a condition of such reclassification, reorganization, or change, lawful provision shall be made, and duly executed documents evidencing the same from the Company or its successor shall be delivered to the Holder, so that the Holder shall have the right at any time prior to the Expiration Date to purchase, at a total price equal to that payable upon due exercise of this Warrant, the kind and amount of shares of stock and other securities and property receivable in connection with such reclassification, reorganization, or change by a holder of the same number of shares of Preferred Stock as were purchasable by the Holder immediately prior to such reclassification, reorganization, or change. In any such case appropriate provisions shall be made with respect to the rights and interest of the Holder so that the provisions hereof shall thereafter be applicable with respect to the shares of stock or other securities and property deliverable upon exercise hereof and appropriate adjustments shall be made to the Warrant Exercise Price per share payable hereunder, provided the aggregate Warrant Exercise Price shall remain the same.

(c)           In case any time (i) any of the adjustments required by Section 4(a) or 4(b) occur; (ii) the Company shall make any extraordinary distribution (other than regular cash dividends, interest and returns) to the holders of its capital stock; (iii) the Company shall offer for subscription pro rata to the holders of its capital  stock any additional shares of stock of any class or other rights; or (iv)there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company; then, in any one or more of said cases, the Company shall give written notice, by first-class mail, postage prepaid, addressed to the registered holder of this Warrant at the address of such holder as shown on the books of the Company, of the date on which (x) the books of the Company shall close or a record shall be taken for such dividend, subdivision, combination, distribution, or subscription rights, or (y) such reorganization, reclassification, change, dissolution, liquidation or winding up shall take place, as the case may be.  Such notice shall also specify the date as of which the holders of capital stock of record shall participate in such dividend, distribution, combination  or subscription rights, or shall be entitled to exchange their capital stock for securities or other property deliverable upon such reorganization, reclassification, change, dissolution, liquidation or winding up, as the case may be. Such written notice shall be given at least ten (10) calendar days prior to the action in question and not less than ten (10) calendar days prior to the applicable record date specified, or promptly in the case of events for which there is no record date.

(d)           When any adjustment is required to be made in the number or kind of shares purchasable upon exercise of the Warrant, or in the Warrant Exercise Price, the Company shall promptly notify the Holder of such event and of the number of shares of Preferred Stock or other securities or property thereafter purchasable upon exercise of this Warrant.  In no event, during the term of this Warrant or upon the exercise of this Warrant, shall any adjustment be made in respect of cash dividends, interest or other returns on the Preferred Stock or other securities of the Company.

 

 

  

  

  

 

 

(e)            No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional shares the Company shall make a cash payment therefor on the basis of the Warrant Exercise Price then in effect.

	
5.

	
No Voting Rights. This Warrant shall not entitle the Holder hereof to any voting rights or other rights as a stockholder of the Company.

	
6.

	
Restrictions on Transfer. This Warrant and the shares of Preferred Stock (and the common stock issued upon conversion of the Preferred Stock) issued or issuable through the exercise of this Warrant are “restricted securities” under the Securities Act, and the rules and regulations promulgated thereunder and may not be sold, transferred, pledged, or hypothecated without such transaction being registered under the Securities Act and applicable state laws or the availability of an exemption therefrom that is established to the satisfaction of the Company; a legend substantially to this effect shall appear on this Warrant and, unless the issuance is a registered transaction, on all shares of Preferred Stock (and the common stock issued upon conversion of the Preferred Stock) issued upon the exercise hereof. The holder of this Warrant, by acceptance hereof, agrees to give written notice to the Company before transferring this Warrant or transferring any Preferred Stock issuable or issued upon the exercise hereof (and any common stock issued upon conversion of the Preferred Stock) of such holder’s intention to do so, describing briefly the manner of any proposed transfer of this Warrant or such holder’s intention as to the disposition to be made of shares of Preferred Stock issuable or issued upon the exercise hereof (or common stock). Such holder shall also provide the Company with an opinion of counsel satisfactory to the Company to the effect that the proposed transfer of this Warrant or disposition of shares may be effected without registration or qualification (under any federal or state law) of this Warrant or the shares of Preferred Stock issuable or issued upon the exercise hereof (or common stock). Upon receipt of such written notice and opinion by the Company, such holder shall be entitled to transfer this Warrant, or to exercise this Warrant in accordance with its terms and dispose of the shares received upon such exercise or to dispose of shares of Preferred Stock received upon the previous exercise of this Warrant, all in accordance with the terms of the notice delivered by such holder to the Company, provided that an appropriate legend respecting the aforesaid restrictions on transfer and disposition may be endorsed on this Warrant or the certificates for such shares.

	
7.

	
Transfer Procedures. Subject to the provisions of Section 6, this Warrant and all rights hereunder are transferable, in whole or in part, at the principal office of the Company by the holder hereof in person or by duly authorized attorney, upon surrender of this Warrant properly endorsed together with a completed assignment form attached hereto. Each taker and holder of this Warrant, by taking or holding the same, consents and agrees that the bearer of this Warrant, when endorsed, may be treated by the Company and all other persons dealing with this Warrant as the absolute owner hereof for any purpose and as the person entitled to exercise the rights represented by this Warrant, or to the transfer hereof on the books of the Company, any notice to the contrary notwithstanding; but until such transfer on such books, the Company may treat the registered holder hereof as the owner for all purposes.

 

 

  

  

  

 

	
8.

	
Miscellaneous.

	
  

	
(a)

	
Notices, Etc. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid, by facsimile transmission or electronic mail, or otherwise delivered by hand or by messenger, addressed

	 	
(i)  

	
if to a holder of this Warrant, at such holder’s address set forth on the books of the Company, or at such other address as such holder shall have furnished to the Company in writing; or

	
  

	
(ii)

	
if to the Company, one copy should be sent to the Company’s current address at 5950 Berkshire Lane, Suite 1650, Dallas, Texas 75225, or at such other address as the Company shall have designated by notice.

	
  

	
Each such notice or other communication shall for all purposes of this Agreement be treated as effective or having been given when delivered if delivered personally; if sent by first class, postage prepaid mail, at the earlier of its receipt or seventy-two (72) hours after the same has been deposited in a regularly maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid; or, if sent by facsimile transmission or electronic mail as of the date delivery is confirmed by the sender’s equipment.

 

	 	

(b)

	

Severability. If any provision of this Agreement shall be held to be illegal, invalid, or unenforceable, such illegality, invalidity, or unenforceability shall attach only to such provision and shall not in any manner affect or render illegal, invalid, or unenforceable any other provision of this Agreement, and this Agreement shall be carried out as if any such illegal, invalid, or unenforceable provision were not contained herein.

	 	 	 
	 	(c) 	

Governing Law. This Warrant will be governed in accordance with federal law to the extent applicable and by the internal law, not the law of conflicts, of the State of Texas.

	 	 	 
	 	

(d)

	Non-Survival.  The parties hereby agree that all the provisions of this Warrant shall terminate and be of no further force or effect on the earlier of the exercise in full of this Warrant and the Expiration Date. 
	 	 	 
	 	(e) 	

Counterparts.  This Warrant may be executed in any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. The signature on this Warrant may be delivered by telecopy, facsimile or other electronic transmission, with original signature page to be subsequently substituted therefor.

 

  

  

  

IN WITNESS WHEREOF, Sun River Energy, Inc. has caused this Warrant to be signed by its duly authorized officer and dated as of February __, 2011.

 

 

	 	

SUN RIVER ENERGY, INC.

	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	

Donal R. Schmidt, Jr.

	 
	 	 	Title: Chief Executive Officer and President	 
	 	 	 	 

AGREED AND ACCEPTED BY THE HOLDER HEREOF:

Signature:               __________________________

Name:                      __________________________

 

 

 

  

  

  

 

 

SUBSCRIPTION FORM

To be Executed by the Holder of this Warrant if such Holder

Desires to Exercise this Warrant in Whole or in Part:

To:           Sun River Energy, Inc. (the “Company”)

The undersigned ___________________________ (Social Security number _____________or taxpayer identification number of Subscriber: _________________________) hereby irrevocably elects to exercise the right of purchase represented by this Warrant for, and to purchase thereunder, ____________ shares of the 8% Series A Cumulative Convertible Preferred Stock (the “Preferred Stock”) of the Company provided for therein and tenders payment herewith to the order of the Company in the amount of $______________, such payment being made as provided in the Warrant.

The undersigned requests that certificates for such shares of Preferred Stock be issued as follows:

Name: _______________________________________________________________________

Address: _____________________________________________________________________

____________________________________________________________________________

Deliver to: ____________________________________________________________________

Address: _____________________________________________________________________

____________________________________________________________________________

and, if such number of shares of Preferred Stock shall not be all the shares of Preferred Stock purchasable hereunder, that a new Warrant for the balance remaining of the shares of Preferred Stock purchasable under this Warrant be registered in the name of, and delivered to, the undersigned at the address stated above.

Dated:           ______________________

 

 

 

	 	Signature ___________________________ 
	 	

Note:  

 

  

 

 

  

  

  

 

FORM OF ASSIGNMENT

(To Be Signed Only Upon Assignment)

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto this Warrant, and appoints _____________________________ to transfer this Warrant on the books of the Company with the full power of substitution in the premises.

Dated: _____________________

In the presence of:

________________________________________

 

 

	 	___________________________ 
	 	
(Signature must conform in all respects to the name of the holder as specified on the face of this Warrant without alteration, enlargement or any change whatsoever, and the signature must be guaranteed in the usual manner)ex106013111.htm

Exhibit 10.6

PURCHASE AND SALE AGREEMENT

(of Oil and Gas Properties and Related Assets)

Seller: Peccary Corp.

Buyer: Sun River Energy, Inc.

Seller and Buyer, named above, are entering into this Purchase and Sale Agreement (the "Agreement"), as evidence of Seller's agreement to sell, and Buyer's agreement to buy the properties described in and subject to this Agreement.

In consideration of the mutual covenants, conditions and considerations provided below, Buyer and Seller agree as follows:

1.           The Properties.  Seller shall assign and convey to Buyer all of Seller's interest in and to the following, all of which are collectively referred to in this Agreement as (the "Properties"):

a.           All of Seller's rights, title and interests (of whatever kind or character, whether legal or equitable, and whether vested or contingent) in and to the oil, gas and other minerals in and under and that may be produced from the lands described in Exhibit "A" including, without limitation, interests in oil, gas and/or mineral leases covering any part of the lands, overriding royalty interests, production payments, and net profits interests in any part of the lands or leases, fee royalty interests, fee mineral interests, and other interests in oil, gas and other minerals in any part of the lands, whether the lands are described in any of the descriptions set out in Exhibit "A" or by reference to another instrument for description, even though the Seller's interests may be incorrectly described in, or omitted from, Exhibit "A";

b.           All right, title, and interests of Seller in all presently existing and valid oil, gas and/or mineral unitization, pooling, and/or communitization agreements, declarations, and/or orders and the properties covered or included in the units (including, without limitation, units formed under orders, rules, regulations, or other official acts of any federal, state or other authority having jurisdiction, voluntary unitization agreements, designations, and/or declarations, and any "working interest units" (created under operating agreements or otherwise) which relate to any of the Properties described in subparagraph a. above;

c.           All rights, title and interests of Seller in all presently existing and valid production sales (and sales related) contracts, operating agreements, and other agreements and contracts which relate to any of the Properties described in subparagraphs a. and b. above, or which relate to the exploration, development, operation, or maintenance of the Properties or the treatment, storage, transportation, or marketing of production from or allocated to the Properties; and,

d.           All rights, title and interests of Seller in and to all materials, supplies, machinery, equipment, improvements, and other personal property and fixtures (including, but not limited to the Properties, all wells, wellhead equipment, pumping units, flow lines, tanks, buildings, injection facilities, salt water disposal facilities, compression facilities, gathering systems, and other equipment), all easements, rights-of-way, surface leases, and other surface rights, all permits and licenses, and all other appurtenances, used or held for use in connection with or related to the exploration, development, operation, or maintenance of any of the Properties described in subparagraphs a. and b. above, or the treatment, storage, transportation, or marketing of production from or allocated to the Properties.

 

 

  

  

  

2.           Purchase Price.  Buyer shall issue to Seller at Closing, 136,957 shares of Buyers’ restricted Common Stock (the "Purchase Price"), subject to the adjustment provided for below.

3.           Closing.  The sale and purchase of the Properties (the "Closing") shall be on December 15, 2010 at Buyer’s offices in Dallas, Texas, or such other place as Buyer and Seller shall mutually agree.  At the date of Closing (the "Closing Date"), Seller shall deliver to Buyer executed instruments of conveyance of the Properties in form similar to those attached as Exhibit "B" and Buyer shall deliver to Seller the Purchase Price provided in Section 2.

4.           Conveyance Effective Date, Proration of Production Expenses.  The conveyance by Seller shall be effective as of 7 a.m. local time, where the Properties are located, on November 10, 2010 (the "Effective Date").  All production from the Properties and all proceeds from the sale of production prior to the Effective Date shall be the property of Seller.  Seller shall be responsible for payment of all expenses attributable to the Properties prior to the Effective Date.  Buyer shall be responsible for payment of all expenses attributable to the Properties after the Effective Date.  An accounting for net proceeds from production less applicable expenses will be made according to a Settlement Agreement in form and substance similar to the Agreement in Exhibit "C."

5.           Taxes.  Seller shall be responsible for all taxes relating to the Properties prior to the Effective Date.  Buyer shall be responsible for all taxes (exclusive of federal, state or local income taxes due by Seller) relating to the Property from and after the Effective Date.

6.           Indemnity.  Seller shall indemnify and hold Buyer, its directors, officers, employees, and agents harmless from and against any and all liability, liens, demands, judgments, suits, and claims of any kind or character arising out of, in connection with, or resulting from Seller's ownership of the Properties, for all periods prior to the Effective Date.  Seller shall remain responsible for all claims relating to the drilling, operating, production, and sale of hydrocarbons from the Properties and the proper accounting and payment to parties for their interests and any retroactive payments, refunds, or penalties to any party or entity, insofar as any claims relate to periods of time prior to the Effective Date.

Buyer shall indemnify and hold Seller harmless from and against any and all liability, liens, demands, judgments, suits, and claims of any kind or character arising out of, in connection with, or resulting from Buyer's ownership of the Properties, for periods from and after the Effective Date.  Buyer shall be responsible for all claims relating to the drilling, operating, production, and sale of hydrocarbons from the Properties and the proper accounting and payment to parties for their interests, and any retroactive payments, refunds, or penalties to any party or entity as such claims relate to periods from and after the Effective Date.

Buyer and Seller shall have the right to participate in the defense of any suit in which one of them may be a party without relieving the other party of the obligation to defend the suit.

 

 

  

  

  

7.           Representations and Warranties of Seller.  Seller represents and warrants to Buyer as follows:

7.1.           Organization.  Seller is a corporation duly organized, validly existing, and in good standing under the laws of the State of Texas.  Seller is qualified to do business in and is in good standing under the laws of each state in which the Properties are located.

7.2.           Authority and Conflicts.  Seller has full corporate power and authority to carry on its business as presently conducted, to enter into this Agreement, and to perform its obligations under this Agreement.  The execution and delivery of this Agreement by Seller does not, and the consummation of the transactions contemplated by this Agreement shall not:  (a) violate, conflict with, or require the consent of any person or entity under any provision of Seller's Articles of Incorporation or bylaws or other governing documents; (b) conflict with, result in a breach of, constitute a default (or an event that with the lapse of time or notice or both would constitute a default) or require any consent, authorization, or approval under any agreement or instrument to which Seller is a party or to which any of the Properties or Seller is bound, except as disclosed in Exhibit "A"; (c) violate any provision of or require any consent, authorization, or approval under any judgment, decree, judicial or administrative order, award, writ, injunction, statute, rule, or regulation applicable to Seller; or, (d) result in the creation of any lien, charge, or encumbrance on any of the Properties.

7.3.           Authorization.  The execution and delivery of this Agreement has been, and the performance of this Agreement and the transactions contemplated by this Agreement shall be at the time required to be performed, duly and validly authorized by all requisite corporate action on the part of Seller.

7.4.           Enforceability.  This Agreement has been duly executed and delivered on behalf of Seller and constitutes the legal and binding obligation of Seller enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, reorganization, or moratorium statues, equitable principles, or other similar laws affecting the rights of creditors generally ("Equitable Limitations").  At Closing, all documents and instruments required to be executed and delivered by Seller shall be duly executed and delivered and shall constitute legal, valid, enforceable, and binding obligations of Seller, except as enforceability may be limited by Equitable Limitations.

7.5           Title.

7.5.1.  Seller has Marketable title to the Property.  For the purposes of this Agreement, "Marketable Title" means such title will enable Buyer, as Seller's successor in title, to receive from each of the Properties at least the "Net Revenue Interest" for the Wells identified on Exhibit "A" associated with each of the Properties, without reduction, suspension, or termination throughout the productive life of the Wells, except for any reduction, suspension, or termination: (a) caused by Buyer, any of its affiliates successors in title or assigns; (b) caused by orders of the appropriate regulatory agency having jurisdiction over a Property that are promulgated after the Effective Date and that concern pooling, unitization, communitization, or spacing matters affecting a Property; (c) caused by any Contract described in Exhibit "A" containing a sliding-scale royalty clause or other similar clause with respect to a production burden associated with a particular Property; or, (d) otherwise set out in Exhibit "A."  "Marketable Title" also means title as will obligate Buyer, as Seller's successor in title, to bear no greater "Working Interest" than the Working Interest for each of the Wells identified on Exhibit "A" as being associated with each of the Properties, without increase throughout the productive life of the Wells, except for any increase: (a) caused by Buyer, any of its affiliates, successors in title or assigns; (b) that also results in the Net Revenue Interest associated with the Well being proportionately increased; (c) caused by orders of the appropriate regulatory agency having jurisdiction over a Property that are promulgated after the Effective Date and that concern pooling, unitization, communitization, or spacing matters affecting a particular Property; or, (d) otherwise set forth in Exhibit "A."  "Marketable Title" means the Properties are free and clear of all encumbrances, liens, claims, easements, rights, agreements, instruments, obligations, burdens, or defects (collectively the "Liens"), except for Permitted Encumbrances.

 

 

  

  

  

7.5.2  For the purposes of this Agreement, "Permitted Encumbrances" means:  (a) liens for taxes not yet delinquent; (b) lessor's royalties, overriding royalties, reversionary interests, and similar burdens that do not operate to reduce the Net Revenue Interest of Seller in any of the Properties to less than the amount set forth on Exhibit "A"; (c) the consents and rights described in Exhibit "A" insofar as such contracts and agreements do not operate to increase the Working Interest of Seller or decrease the Net Revenue Interest of Seller, as set forth on Exhibit "A," for any of the Properties.

7.5.3  Seller has good and defensible title, subject to the Permitted Encumbrances, to all of the Properties.

7.6.           Contracts.  Exhibit "A" contains a complete list of all contracts, agreements, undertakings (whether written or oral), and instruments that are not described in any other Exhibit to this Agreement that constitute a part of the Properties or by which the Properties are bound or subject.

7.7           Litigation and Claims.  Except as is set forth on Exhibit "D," no claim, demand, filing, cause of action, administrative proceeding, lawsuit, or other litigation is pending, or to the best knowledge of Seller, threatened, that could now or later adversely affect the ownership or operation of any of the Properties, other than proceedings relating to the industry generally and to which Seller is not a named party.  No written or oral notice from any governmental agency or any other person has been received by Seller:  (a) claiming any violation or repudiation of all or any part of the Properties or any violation of any law or any environmental, conservation or other ordinance, code, rule or regulation; or, (b) require or calling attention to the need for any work, repairs, construction, alterations, or installations on or in connection with the Properties, with which Seller has not complied.

7.8.           Approvals and Preferential Rights.  Exhibit "E" contains a complete and accurate list of all approvals required to be obtained by Seller for the assignment of the Properties to Buyer and all preferential purchase rights that affect the Properties.

 

 

  

  

  

7.9.           Compliance with Law and Permits.  The Properties have been operated in compliance with the provision and requirements of the applicable oil and gas leases, and all laws, orders, regulations, rules, and ordinances issued or promulgated by all governmental authorities having jurisdiction with respect to the Properties.  All necessary governmental certificates, consents, permits, licenses, or other authorizations with regard to the ownership or operation of the Properties have been obtained and no violations exist or have been recorded in respect of such licenses, permits or authorizations.  None of the documents and materials filed with or furnished to any governmental authority with respect to the Properties contains any untrue statement of a material fact or omits any statement of a material fact necessary to make the statement not misleading.

7.10. Status of Contracts.  All of the Contracts and other obligations of Seller relating to the Properties are in full force and effect.  Seller and to the knowledge of Seller, any other party to the Contracts is in breach of or default, or with the lapse of time or the giving of notice, or both, would be in breach or default, with respect to any of its obligations to the extent that any breaches or defaults have an adverse impact on any of the Properties; has given or threatened to give notice of any default under or inquiry into any possible default under, or action to alter, terminate, rescind, or procure a judicial reformation of any Contract; and, Seller does not anticipate any other party to a Contract will be in breach of or default under or repudiate any of its obligations to the extent such breach or default will have an adverse impact on any of the Properties.

7.11. Production Burdens, Taxes, Expenses and Revenues.  All rentals, royalties, excess royalty, overriding royalty interests, and other payments due under or with respect to the Properties have been properly and timely paid.  All ad valorem, property, production, severance, and other taxes based on or measured by the ownership of the Properties or the production from the Properties have been properly and timely paid.  All expenses payable under the terms of the contracts identified in Exhibit "A" have been properly and timely paid except for expenses currently paid, prior to delinquency, in the ordinary course of business.  All proceeds from the sale of production are being properly and timely paid to Seller by the purchasers of production, without suspense.

7.12. Pricing.  The prices being received for production do not violate any contract, law or regulation.  Where applicable, all of the wells and production from the wells have been properly classified under appropriate governmental regulations.

7.13. Gas Regulatory Matters.  (If any of the Properties produce natural gas, applicable representations and warranties should be inserted by the Parties.)

7.14. Production Balances.  Except as described in Schedule 7.14., none of the purchasers under any production sales contracts are entitled to "makeup" or otherwise receive deliveries of oil or gas at any time after the Effective Date without paying, at such time, the full contract price for oil or gas.  No person is entitled to receive any portion of the interest of Seller in any oil or gas, or to receive cash or other payments to "balance" any disproportionate allocation of oil or gas under any operating agreement, gas balancing and storage agreement, gas processing or dehydration agreement, or other similar agreements.

 

 

  

  

  

7.15. Adverse Changes.  Since November 10, 2010 the Properties, viewed as a whole, have not experienced any material reduction in the rate of production, other than changes in the ordinary course of operations, changes that result from depletion in the ordinary course of operations, and changes that result from variances in markets for oil and gas production.  None of the Properties have suffered any material destruction, damage or loss.

7.16. Well Status.  There are no Wells located on the Properties that:  (a) Seller is currently obligated by law or contract to plug and abandon; (b) Seller will not be obligated by law or contract to plug or abandon with the lapse of time or notice or both because the Well is not currently capable of producing in commercial quantities; (c) are subject to exceptions to a requirement to plug and abandon issued by a regulatory authority having jurisdiction over the Properties; or, (d) to the best knowledge of Seller, have been plugged and abandoned but have not been plugged in accordance with all applicable requirements of each regulatory authority having jurisdiction over the Properties.

7.17. Equipment.  The equipment constituting a part of the Properties is in good repair, working order, and operating condition, and is adequate for the operation of the Properties.

7.18. Current Commitments.  Exhibit "F" contains a true and complete list of:  (a) all authorities for expenditure ("AFEs") and other oral or written commitments to drill or rework wells on the Properties or for capital expenditures pursuant to any contracts, that have been proposed by any person on or after the Effective Date, whether or not accepted by Seller or any other person; and, (b) all AFEs and oral or written commitments to drill or rework wells or for other capital expenditures pursuant to any contracts, for which all of the activities anticipated in AFEs or commitments have not been completed by the date of this Agreement.

7.19. Accuracy of Representation.  No representation or warranty by Seller in this Agreement or any agreement or document delivered by Seller pursuant to this Agreement contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements contained in any representation or warranty, in light of the circumstances under which it was made, not misleading.  There is no fact known to Seller that materially and adversely affects, or may materially and adversely affect the operation, prospects or condition of any portion of the Properties that has not been identified in this Agreement.

8.           Representations by Buyer.  Buyer represents to Seller that the following statements are true and correct:

a.           Organization.  Buyer is a Colorado corporation duly organized, in good standing, and qualified to carry on its business in each state in which the Properties are located, and has the power and authority to carry on its business as presently conducted, to own and hold the Properties, and to perform all obligations required by this Agreement.

b.           Authority.  Pursuant to its bylaws and certificate of incorporation, Buyer has the power and authority to acquire, own, and hold the Properties and to perform the obligations required by this Agreement.

 

 

  

  

  

9.           Title and Other Examinations and Curative.

a.  Prior to Closing, Buyer shall examine title to the Properties at its own expense.  However, Seller shall make available to Buyer all of Seller's title opinions, certificates of title, abstracts of title, title data, records and files relating to the Properties (including without limitation all well files and well logs) and information relating to the Properties as soon as possible after the execution of this Agreement.  Seller will, at Seller's expense, use Seller's best efforts to promptly cure all title defects discovered by Buyer and obtain all consents and waivers of preferential or other rights to purchase from third parties and governmental authorities as in the opinion of Buyer may  be desirable or necessary to the conveyance, assignment, and transfer to Buyer of the Properties.  In the event title to the Properties is not satisfactory, or if the Properties are otherwise not as represented, Buyer may, at its option, either terminate this Agreement at any time on or before Closing, or reduce the Purchase Price by an amount agreeable to both parties.  Seller shall promptly furnish Buyer a copy of all gas contracts, gas transportation and treating agreements, operating agreements and all amendments to each, and provide a schedule showing the status of any gas balancing, take or pay, or other similar arrangements.

b.           If Buyer's review and appraisal of the data, contracts and agreements reflects such data, contracts, or agreements are materially different, and that such difference results in a material difference in the value of the Properties, from those assumed by Buyer at the time of its September 28, 2010 offer, Buyer shall have the option to either terminate this Agreement without penalty or request renegotiations of the Purchase Price to reflect the adverse changes.  Except for title matters, Buyer must exercise this option, if applicable, on or before December 15, 2010, or any material differences shall be deemed waived, but without prejudice to Buyer's other rights under this Agreement.

10.           Conditions.  The consummation of the sale and purchase contemplated by this Agreement will be subject to the following conditions:

a.           The representations and warranties by Seller set forth in Section 7 shall be true and correct in all material respects as of the date when made and as of the Closing.

b.           There shall have been no material adverse change in the condition of the Properties except depletion through normal production within authorized allowables and rates of production, depreciation of equipment through ordinary wear and tear, and other transactions permitted under this Agreement or approved in writing by Buyer between the date of this Agreement and Closing.

c.           All requirements made by Buyer with regard to title to the Properties shall have been fully satisfied or waived by Buyer.  All consents, approvals and authorizations of assignments, and waivers of preferential rights to purchase required by Buyer shall have been submitted to and approved by Buyer.

 

 

  

  

  

d.           Seller and Buyer understand and agree that if: (1) title to the Properties is not satisfactory to Buyer; (2) Seller's actual interests in the Properties is different than as represented by Seller and the difference causes a diminution in Seller's net revenue interest of more than 10% of that which Seller represents to own; (3) contracts, claims or litigation to which Buyer takes exception are material; or, (4) Seller fails to comply with any of the conditions set forth in this Agreement; Buyer may, at its option, either terminate this Agreement at any time on or before Closing, or reduce the Purchase Price by an amount agreeable to both parties.  However, any reduction in Seller's net revenue interests below that which is represented in Exhibit "A" shall result in an automatic reduction in the Purchase Price commensurate with the reduction in such net revenue interest.

e.           The parties shall have performed or complied with all agreements and covenants required by this Agreement of which performance or compliance is required prior to or at Closing.

f.           All legal matters in connection with and the consummation of the transactions contemplated by this Agreement shall be approved by counsel for Buyer and there shall have been furnished by Seller such records and information as Buyer's counsel may reasonably request for that purpose.

g.           Notwithstanding anything to the contrary in this Agreement, at Buyer's option, Buyer shall have the unilateral right to terminate this Agreement not later than December 15, 2010 if Buyer determines it does not have the rights to obtain and maintain the rights to be Operator of the Properties pursuant to existing Operating Agreements at Closing.  Operations shall be transferred from Seller to Buyer at Closing.

11.           Transfer, Documentary Taxes, and Commission, Brokerage Fees.  Seller shall pay and bear all documentary or transfer taxes resulting from this transaction.  No commission or brokerage fees will be paid by Buyer in connection with this transaction.  Seller will indemnify and hold Buyer harmless from any claims of brokers or finders acting, or claiming to be have acted, on behalf of Seller.

12.           Further Assurances, Intent.  It is Seller's intent to convey to Buyer all of Seller's interests, legal, beneficial, or equitable in the Properties.  Seller agrees to execute and deliver to Buyer all instruments, conveyances, and other documents and to do such other acts not inconsistent with this Agreement as may be necessary or advisable to carry out Seller's intent.

13.           Notices.  At notices and communications required or permitted under this Agreement shall be in writing, delivered to or sent by U.S. Mail or Express Delivery, postage prepaid, or by prepaid telegram, or facsimile addressed as follows:

 

 

	 	Seller: 	Peccary Corp. 
	 	 	Dan Boone, President 
	 	 	1615 West Loop 289 
	 	 	Lubbock, TX 79416 
	 	 	Telephone: (806) 745-7783 
	 	 	 

 

 

 

  

  

  

 

	 	Buyer: 	Sun River Energy, Inc. 
	 	 	Donal R. Schmidt, President 
	 	 	5950 Berkshire Lane, Suite 1650 
	 	 	Dallas, TX 75225 
	 	 	Telephone: (214) 369-7300 

 

14.           Parties in Interest.  This Agreement shall inure to the benefit of and be binding upon Seller and Buyer and their respective successors and assigns.  However, no assignment by any party shall relieve any party of any duties or obligations under this Agreement.

15.           Complete Agreement.  This Agreement constitutes the complete agreement between the parties regarding the purchase and sale of the Properties.  Where applicable, all of the terms of this Agreement shall survive the Closing.

16.           Survival.  All representatives and warranties in this Agreement shall be deemed conditions to the Closing.  The representatives and warranties recited in Section 7. shall not survive the Closing.  All other terms of Agreement shall survive the Closing, including, but not limited to, the indemnification and hold harmless provisions contained in Section 6.

17.           Termination.  Should either party terminate this Agreement pursuant to a right granted in this Agreement to do so, the termination shall be without liability to the other party, and the nonterminating party shall have no liability to the terminating party.

IN WITNESS WHEREOF, this Agreement has been signed by each of the parties hereto on the date first above written.

 

	  	  	
SELLER:

 

PECCARY CORP.

   (A Texas Corporation)

 

By:/s/ Dan Boone

Name:  Dan Boone

Title:  President

 

 

PURCHASER:

 

SUN RIVER ENERGY, INC.

   (A Colorado Corporation)

 

 

By:/s/ Donal R. Schmidt, Jr.

Name:  Donal R. Schmidt, Jr.

Title:  Chief Executive Officer & President

 

 

 

 

  

  

  

 

EXHIBIT "A"

TO

PURCHASE AND SALE AGREEMENT

1.           Description of Properties.  A description of oil and gas leases, lands covered by oil and gas leases and the Seller's Working (cost bearing) and Net Revenue (income) Interest in each of the identified Properties.

10% working interest out of a 100% working interest, being a 7.5% NRI in the PC Operating LLC Stansberry #1 API#42-451-32661 wellbore, located 2700 ft. FNL and 1700 ft. FWL of H. & T.C. RR. Co. Survey 55, Bock 25, Tom Green County, Texas.

10% working interest out of a 100% working interest, being a 7.5% NRI in the PC Operating LLC Lora #1 API #42-451-32662 wellbore, located 1970 ft. FSL and 1881 ft. FEL of S.P. RR. Co. Survey 165, District 11, Tom Green County, Texas

2.           Contracts, Agreements, and instruments to which Seller is a party and which the Properties are bound or subject to.  (Sections 1(a), 7.2. and 7.6.)

Joint Operating Agreement between Peccary Corp. and PC Operating LLC dated December 9, 2009.

 

 

  

  

  

EXHIBIT "B"

TO

PURCHASE AND SALE AGREEMENT

Form of Instruments of Conveyance to be Delivered at Closing (an Assignment, Bill of Sale and Conveyance).  (Section 3.)

Assignment of Oil, Gas, and Mineral Lease and Bill of Sale

 

 

	STATE OF TEXAS  	§	 
	 	§	KNOW ALL MEN BY THESE PRESENTS 
	COUNTY OF TOM GREEN   	§	 

WHEREAS, Peccary Corp. (hereinafter referred to as "Assignor") 1615 W. Loop 289, Lubbock, Texas 79416, Dallas County, Texas, is the current owner of a portion of the Working Interest in wellbores in and on the oil, gas and mineral leases (the "Leases") listed on Exhibit "A", attached hereto and incorporated herein by reference; and

 

WHEREAS, it is the desire of Assignor to assign all of its right, title and interest in and to said Leases, and all amendments thereto, including but not limited any and all accoutrements thereon subject to the reservations herein, unto Sun River Energy, Inc. whose address is 5950 Berkshire Lane, Suite 1650, Dallas, Texas 75225 (hereinafter referred to as "Assignee"), insofar and only insofar as said Leases cover the rights in the leases described on Exhibit "A";

 

NOW, THEREFORE, for and in consideration of the sum of Ten Dollars ($10.00) and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Assignor, subject to the reservations herein and provisions hereof, does hereby bargain, sell, assign, transfer and convey unto Assignee all of Assignor’s interest in and to the leases described on Exhibit "A" attached hereto.

 

	
1.  

	
This assignment shall inure to and be binding on the heirs, successors, and assigns of the Assignor and Assignee.

	
2.  

	
This Assignment is made without warranty of title, express, implied or statutory.

EFFECTIVE as of December 15, 2010 and EXECUTED as of the date set forth below.

	
Peccary Corp.

 

 

	
Sun River Energy, Inc.

	
___________________________

	
_____________________________

	
By:  Dan Boone

	
By:  Donal R. Schmidt

	
Its:  President

	
Its:  Managing Member

	
 

Date: ______________________

	
 

Date:_________________________

 

 

  

  

  

	STATE OF TEXAS  	§	 
	 	§	 
	COUNTY OF LUBBOCK   	§	 

 

This instrument was acknowledged before me on this _______ day of _____________, 2010 by Daniel Boone of Peccary Corp., a Texas Corporation, on behalf of said corporation, who personally appeared, is known to me to be the identical person who executed the within and foregoing instrument as president and on behalf of said and on behalf of said company and he acknowledge that he executed the same as his free and voluntary act and deed as the free and voluntary act and deed of the corporation for the purposes therein set forth.

________________________________

Notary Public In and for the

State of Texas

	STATE OF TEXAS  	§	 
	 	§	 
	COUNTY OF DALLAS  	§	 

 

This instrument was acknowledged before me on this _______ day of _____________, 2010 by Donal R. Schmidt, Jr. of Sun River Energy, Inc., a Colorado Company, on behalf of said company, who personally appeared, is known to me to be the identical person who executed the within and foregoing instrument as president and on behalf of said company and he acknowledge that he executed the same as his free and voluntary act and deed as the free and voluntary act and deed of the corporation for the purposes therein set forth.

________________________________

Notary Public In and for the

State of _______________________

 

 

 

  

  

  

 

Exhibit A

10% working interest out of a 100% working interest, being a 7.5% NRI in the PC Operating LLC Stansberry #1 API#42-451-32661 wellbore, located 2700 ft. FNL and 1700 ft. FWL of H. & T.C. RR. Co. Survey 55, Bock 25, Tom Green County, Texas.

10% working interest out of a 100% working interest, being a 7.5% NRI in the PC Operating LLC Lora #1 API #42-451-32662 wellbore, located 1970 ft. FSL and 1881 ft. FEL of S.P. RR. Co. Survey 165, District 11, Tom Green County, Texas

	
Oil and Gas Leases, Ratifications and Minerals

All recording references are to the Deed Records or Official Public Records of

Tom Green County, Texas

	  	
Lessor

	
Lessee

	
Lease Date

	
Recording Information

 

	
1.

	
Libby F. Holik as LT, Beverly Ann Holik Givens, Frank J. Holik III, Gary Gene Holik & Libby J. Holik Lane

	
Fairchild Petroleum Interests

	
November 27, 2007

	
File Number 645190

	
2.

	
Libby F. Holik Indvidually

	
Fairchild Petroleum Interests

	
November 27, 2007

	
File Number 644649

	
3.

	
Ruben W. Holik

	
Fairchild Petroleum Interests

	
November 27, 2007

	
File Number 644583

	
4.

	
Susan E. Holik Dreier

	
Fairchild Petroleum Interests

	
November 27, 2007

	
File Number 644588

	
5.

	
Stanley V. Holik, Jr.

	
Fairchild Petroleum Interests

	
November 27, 2007

	
File Number 644582

	
6.

	
David G. Holik

	
Fairchild Petroleum Interests

	
November 27, 2007

	
File Number 644586

	
7.

	
Janice C. Grizzle, Henry F. Grizzle and Betty Lavonne Stanberry Hedges

	
Patrick L. Fairchild

	
December 12, 2006

	
File Number 624834

 

 

  

  

  

 

EXHIBIT "C"

TO

PURCHASE AND SALE AGREEMENT

SETTLEMENT AGREEMENT

None

 

 

 

 

 

 

  

  

  

 

EXHIBIT "D"

TO

PURCHASE AND SALE AGREEMENT

List of Claims, Demands, Filings, Causes of Action, Administrative Proceedings, Lawsuits, Litigation (Section 7.7.)

None

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

 

EXHIBIT "E"

TO

PURCHASE AND SALE AGREEMENT

List of all approvals required to be obtained by Seller, and preferential purchase rights affecting the Properties (Section 7.8.).

None

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

 

 

SCHEDULE 7.14

TO

PURCHASE AND SALE AGREEMENT

(Schedule of Imbalances)

None

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

 

EXHIBIT "F"

TO

PURCHASE AND SALE AGREEMENT

List of all authorities for expenditures ("AFEs"), other commitments to drill/rework wells, or commitments to capital expenditures.  (Section 7.18.)

No current outstanding AFEs

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

EXHIBIT "G"

TO

PURCHASE AND SALE AGREEMENT

Certificate (Section 12.)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00186-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00186-of-00352.parquet"}]]