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8-K - FORM 8-K - Sylios Corp | form8k.htm |
ASSET
PURCHASE AGREEMENT
THIS
ASSET PURCHASE AGREEMENT
(this “Agreement”) is made as of the 5th day of November, 2009 (the “Effective
Date”) by and among KYTX Oil & Gas, LLC, (“KYTX”) a Kentucky limited
liability company (the “Seller”) and Adventure Energy, Inc., (“Adventure”) a
Florida for profit corporation (the “Buyer”).
RECITALS
A. KYTX,
LLC, a Kentucky limited liability company (“KYTX”) is the owner of (i) certain
leases located in the counties of Adair, Russell, and Green in Kentucky (ii)
certain wells on said leases (iii) and certain fixtures on wells, field
equipment, and field house supplies; and
B.
Adventure Energy, Inc., a Florida corporation (“Adventure”) is in the business
of exploration and production for oil and natural gas and has operations in the
state of Kentucky.
AGREEMENT
NOW,
THEREFORE, for and in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
ARTICLE
I
THE
PURCHASE AND SALE
1.1 Agreement to Purchase and
Sell. The Sellers agree to sell and transfer to the Buyer, and the Buyer
agrees to purchase and accept from Sellers pursuant to the terms and conditions
set forth in this Agreement the following assets (the “Purchased Assets”) of
Sellers:
A. The
Wells as further described in Exhibit A
B. The
Leases as further described in Exhibit B;
C. All of
the equipment and supplies owned by Sellers and located in or at the individual
wells, on the leases, and at the Field House, as further described as Exhibit
D
(Collectively,
the “Personal Property”);
D.
The mobile #25 pump jack and trailer;
and
E.
the Buyers shall assume the Field House lease dated February 1, 2009 by and
between KYTX and the Garrison representatives and located in Adair County,
Kentucky;
The
assets and property described in paragraphs A through E (the "Assets") shall be
transferred by Sellers to the Buyer, and Sellers have not knowingly
allowed any liens, claims or encumbrances.
Notwithstanding
the foregoing, the transfer of the Assets pursuant to this Agreement shall not
include the assumption of any liability, outside of any liabilities defined in
the leases, related to the Assets or any other liabilities of
Sellers
1.2 Consideration. In
exchange for the sale and transfer by the Sellers of the Purchased Assets to the
Buyer, the Buyer agrees, subject to the terms of this Agreement, to pay to the
Sellers One Hundred and Twenty Thousand Dollars ($120,000) (the “Purchase
Price”). The Purchase Price shall be allocated as follows:
Leaseholds,
Production, Well Assignments/Transfers, On Field Equipment
|
$ | 50,000.00 | ||
Leaseholds,
Production, Well Assignments/Transfers, On Field Equipment
|
50,000.00 | |||
Field
Equipment and Field House Equipment
|
15,000.00 | |||
#25
Mobile Pump Jack
|
5,000.00 | |||
TOTAL
|
$ | 120,000 |
A. Upon
the execution of the Agreement and within 24 hours of closing, the sum of
Seventy Thousand Dollars ($70,000.00) will be paid by Buyer to Sellers in cash
or by wire transfer of funds immediately available to Seller. Said amount shall
be credited towards all equipment purchases and the first of two (2) $50,000
payments to be credited towards the leaseholds, production, and well
assignments/transfers.
B. On or
before 90 days after the closing of this transaction, the Buyers shall pay to
the Sellers the final $50,000 in cash or by wire transfer of funds immediately
available to Seller.
1.3 Adjustments, Assumptions and
Payments.
A.
Seller shall receive an overriding royalty interest of three percent (3%) of the
gross proceeds from any currently producing wells or any successful rework
wells, and any new wells drilled on the real property covered by the
leases.
B.
Sellers shall not be entitled to solicit future revenue generation from
production of oil and gas on the real properties covered by the
leases
C. Buyer
shall be responsible for the payment and filing of all assignments, each form
#ED-13 well transfer, any county, state, or federal registration, this
agreement, and any other collateral documents with the appropriate governmental
agencies.
2
1.4 Closing Deliveries.
Closing shall be set for November 6, 2009. At the Closing:
(a) KYTX
as applicable will deliver to Buyer:
(i)
an #ED-13 well transfer form for each well being transferred from
KYTX to Adventure;
(ii) a
bill of sale conveying to Buyer the Personal Property free and clear of all
liens, claims and encumbrances;
(iii) an
assignment of each lease noted in Exhibit B. Seller shall prepare all
assignments utilizing Exhibit C;
(iv) such
other assignments, certificates of title, registrations, transfer tax
declarations or certificates and other instruments of transfer and conveyance as
may reasonably be requested by Buyer, each in form and substance satisfactory to
Buyer and its legal counsel and executed by KYTX, as the case may
be;
(v) a
copy of all division orders for any wells whereby KYTX has commercially sold
oil;
(vi) any
original maps of leases, e-logs, down-hole camera videos, or any additional
documentation pertaining to the individual wells, leases, or operations in
general; and
(vii) a
list of all wells plugged prior to the closing
(b)
Buyer will deliver to Seller:
(i) the
Purchase Price by wire transfer to an account specified by the Seller in a
writing delivered to Buyer at least one business days before the Closing
Date.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES
2.1 Representations by
Buyer. The Buyer hereby represents and warrants unto the Sellers that the
following statements are true, correct, and complete as of the date of this
Agreement and will be true, correct, and complete as of the Closing
Date:
(a) Organization and
Power. The Buyer is duly organized, validly existing, and in good
standing under the laws of the State of Florida and has full right, power, and
authority to enter into this Agreement and to assume and perform all of its
obligations under this Agreement; and, the execution and delivery of this
Agreement and the performance by the Buyer of its obligations hereunder have
been duly authorized by all requisite action of the Buyer and require no further
action or approval of the Buyer’s members or of any other individuals or
entities is necessary in order to constitute this Agreement as a binding and
enforceable obligation of the Buyer. This Agreement constitutes the legal, valid
and binding obligation of the Buyer, enforceable against such entity in
accordance with its terms. Buyer is qualified to do business in Kentucky at the
time of this agreement.
3
(b) Noncontravention.
Neither the entry into nor the performance of, or compliance with, this
Agreement by the Buyer has resulted, or will result, in any violation of, or
default under, or result in the acceleration of, any obligation under the
Buyer’s organizational documents, mortgage, indenture, lien agreement, note,
contract, permit, judgment, decree, order, restrictive covenant, statute, rule,
or regulation applicable to the Buyer.
(c) Litigation. There is
no action, suit, or proceeding, pending or known to be threatened, against or
affecting the Buyer in any court or before any arbitrator or before any federal,
state, municipal, or other governmental department, commission, board, bureau,
agency or instrumentality which (i) in any manner raises any question affecting
the validity or enforceability of this Agreement, or (ii) could materially and
adversely affect the ability of the Buyer to perform its obligations hereunder,
or under any document to be delivered pursuant hereto.
(d) Consents. Except as
may otherwise be set forth in Schedule 2.1(d) hereof, each consent, approval,
authorization, order, license, certificate, permit, registration, designation,
or filing by or with any governmental agency or body necessary for the
execution, delivery, and performance of this Agreement or the transactions
contemplated hereby by the Buyer has been obtained or will be obtained on or
before the Closing Date.
(e) Brokerage Commission.
The Buyer has not engaged the services of any real estate agent, broker, finder
or any other person or entity for any brokerage or finder’s fee, commission or
other amount with respect to the transactions described herein on account of any
action by the Buyer.
2.2 Representations by
Sellers. Each Seller, jointly and severally, hereby represents and
warrants unto the Buyer that each and every one of the following statements is
true, correct and complete as of the date of this Agreement and will be true,
correct and complete as of the Closing Date:
(a) Organization and
Power. KYTX is duly organized, validly existing, and in good standing
under the laws of the state of its organization. Seller has full right, power,
and authority to enter into this Agreement and to assume and perform all of its
obligations under this Agreement; and the execution and delivery of this
Agreement and the performance by the Seller of its obligations hereunder have
been duly authorized by all requisite action of Seller and require no further
action or approval of Seller’s members or managers or directors or shareholders,
as the case may be, or of any other individuals or entities in order to
constitute this Agreement as a binding and enforceable obligation of the Seller.
This Agreement constitutes the legal, valid and binding obligation of each
Seller, enforceable against such entity in accordance with its
terms.
4
(b) Noncontravention.
Neither the entry into nor the performance of, or compliance with, this
Agreement by KYTX has resulted, or will result, in any violation of, or default
under, or result in the acceleration of, any obligation under the their
organizational documents, or any regulations, mortgage, indenture, lien
agreement, note, contract, permit, judgment, decree, order, restrictive
covenant, statute, rule, or regulation applicable to it.
(c) Litigation. There is
no action, suit, or proceeding, pending or known to be threatened, against or
affecting KYTX in any court or before any arbitrator or before any federal,
state, municipal, or other governmental department, commission, board, bureau,
agency or instrumentality which (A) in any manner raises any question affecting
the validity or enforceability of this Agreement, (B) could materially adversely
affect the business, financial position, or results of operations (C) could
affect the ability of the Seller to perform its obligations hereunder, or under
any document to be delivered pursuant hereto, or (D) could create a lien on the
Property..
(d)
[Intentionally Omitted.]
(e) Operation. The
personal property, wells, structures, and equipment of the Seller are sold in
“as is” condition and after the Closing shall be in substantially the same
manner as conducted prior to the Closing.
(f)
[Intentionally Omitted.]
(g)
[Intentionally Omitted.]
(h)
[Intentionally Omitted.]
(i) Leases. Exhibit B
attached hereto is a true, correct and complete schedule of all mineral rights
leases.
(j) Personal Property.
The Personal Property consists of all supplies, equipment, fixtures, and all
personal property located in or at individual wells, on the leases, and at the
field house, all of which is owned by KYTX. Each item of personal property
is sold "as is".
(k) Environmental
Matters. To the best of Sellers’ knowledge: (A) KYTX is, and at all times
has been, in full compliance with, and has not been and is not in violation of
or liable under, any environmental law. There is no basis for and no pending or
threatened order, notice, or communication from (i) any governmental body or
private citizen acting in the public interest, or (ii) the current or prior
owner or operator of any facilities, of any actual or potential violation or
failure to comply with any environmental law, or any actual or threatened
obligation to undertake or bear the cost of any environmental, health, and
safety liabilities with respect to any of the leases or any other properties or
assets (whether real, personal, or mixed) in which KYTX has had an interest, or
with respect to any property or facility at or to which hazardous materials were
generated, manufactured, refined, transferred, imported, used, or processed by
KYTX or any other person for whose conduct they are or may be held responsible,
or from which hazardous materials have been transported, treated, stored,
handled, transferred, disposed, recycled, or received.
5
(B) There are no
pending or, to the knowledge of KYTX, threatened claims, encumbrances, or other
restrictions of any nature, resulting from any environmental, health and safety
liabilities or arising under or pursuant to any environment law, with respect to
or affecting the leases or any other properties and assets (whether real,
personal, or mixed) in which KYTX or the Sellers has or had an
interest.
(C) There is no basis
for any other person for whose conduct they are or may be held responsible,
received, any citation, directive, inquiry, notice, order, summons, warning, or
other communication that relates to hazardous activity, hazardous materials, or
any alleged, actual, or potential violation or failure to comply with any
environmental law, or of any alleged, actual, or potential obligation to
undertake or bear the cost of any environmental, health, or safety liability
with respect to the leases or any other properties or assets (whether real,
personal, or mixed) in which KYTX had an interest, or with respect to any
property or facility to which hazardous materials generated, manufactured,
refined, transferred, imported, used, or processed by KYTX, or any other person
for whose conduct they are or may be held responsible, have been transported,
treated, stored, handled, transferred, disposed, recycled, or
received.
(l) Assets. KYTX owns and
has good marketable title to the Assets and Property, in each case free and
clear and has not knowingly permitted any liens, claims and
encumbrances
(m) Brokerage Commission.
The Seller has not engaged the services of, any real estate agent, broker,
finder or any other person or entity for any brokerage or finder’s fee,
commission or other amount with respect to the transactions described herein on
account of any action by the Seller. The Seller hereby agrees to indemnify and
hold the Buyer and its employees, directors, members, partners, affiliates and
agents harmless against any claims, liabilities, damages or expenses arising out
of a breach of the foregoing paragraph. This indemnification shall survive
Closing or any termination of this Agreement.
6
ARTICLE
III
COVENANTS
OF SELLERS
BEFORE
CLOSING
3.1.
Access and
Investigation. Between the date of this Agreement and the Closing Date
and upon reasonable advance notice from Buyer, KYTX will (a) afford Buyer and
its representatives and prospective lenders and their representatives full and
free access to the personnel, properties (including subsurface testing),
contracts, books and records, and other documents and data of KYTX, (b) furnish
such persons with copies of all such contracts, books and records, and other
documents and data relating to the business as Buyer may reasonably request, and
(c) furnish such persons with such additional financial, operating and other
data and information relating to the business as Buyer may reasonably
request.
3.2.
Operation of the
Business. Between the date of this Agreement and the Closing Date, KYTX
will (a) conduct the business only in the ordinary course of business, (b) use
its best efforts to preserve intact the current business organization, keep
available the services of its current employees and agents, and maintain
relations and goodwill with its suppliers, customers, landlords, lessors,
employees, agents and others having business relationships with KYTX as relates
to the pending agreement.,
3.3 Negative Covenant.
Except as otherwise expressly permitted by this Agreement, between the date of
this Agreement and the Closing Date, KYTX will not (a) make any modifications to
any material contract or any governmental authorization or (b) remove any
Equipment, except for Equipment that becomes obsolete or unusable which may be
disposed of or replaced in the ordinary course of business, (c) attempt to
generate revenue from any production.
3.4 Required Approvals.
As promptly as practicable after the date of this Agreement, Buyer will make all
filings that are required by law to make to consummate the contemplated
transactions. Between the date of this Agreement and the Closing Date, KYTX will
(a) cooperate with Buyer with respect to all filings that Buyer elects to make
or that Buyer is required by law to make in connection with the contemplated
transactions.
3.5 Notification. Between
the date of this Agreement and the Closing Date, the Sellers will promptly
notify Buyer in writing if KYTX becomes aware of (a) any fact or condition that
causes or constitutes a breach of any of Sellers’ representations and warranties
as of the date of this Agreement, (b) the occurrence after the date of this
Agreement of any fact or condition that would cause or constitute a breach of
any such representation or warranty had that representation or warranty been
made as of the time of the occurrence or discovery of such fact or condition,
(c) any material development affecting the leases or Property and the operations
and results of operations related to the leases or Property; or (d) any material
development affecting the ability of such party to consummate the transactions
contemplated by this Agreement.
7
3.6 Covenant to Remedy
Breaches. Without limiting the obligations of Seller set forth in this
Agreement, Seller covenants to use all reasonable efforts within its control (i)
to prevent the breach of any representation or warranty of such Seller hereunder
and (ii) to satisfy all covenants of such Seller hereunder.
3.7 Damage or Destruction of
Assets. In the event of destruction or material damage, at or before the
moment of Closing, of any of the assets, then either Buyer of Seller shall have
the right to terminate this Agreement.
ARTICLE
IV
COVENANTS
OF BUYER PRIOR TO CLOSING
4.1 Required Approvals.
As promptly as practicable after the date of this Agreement, Buyer will make all
filings that it is required by law to make to consummate the contemplated
transactions. Between the date of this Agreement and the Closing Date, Buyer
will (a) cooperate with KYTX with respect to all filings that KYTX elect to make
or that it is required by law to make in connection with the contemplated
transactions.
4.2 Best Efforts. Buyer
will use its best efforts to cause the conditions in Article VI to be satisfied;
provided, however, that Buyer will not be required to make any material change
to its business, dispose of any material asset, expend material funds incur any
material burden or take actions that would result in a material adverse change
in the benefits to Buyer of this Agreement and the contemplated
transactions.
ARTICLE
V
INSPECTION
PERIOD
5.1 Inspection Period.
Buyer shall have a due diligence period (the “Inspection Period”) beginning on
the date this Agreement is executed by all parties and expiring at
closing.
5.2 Inspection. (a) At
any reasonable time and from time to time during the Inspection Period, Buyer
shall have the right to fully inspect the leases and Field House and to satisfy
itself that the Properties, as of the date of such inspection, are in good
operating condition and repair. Sellers shall use their best efforts to assure
that Buyer has access to the Properties during normal business hours, and
Sellers shall provide all available information concerning the Properties may
reasonably request to assist Buyer in making such determinations.
8
ARTICLE
VI
CONDITIONS
PRECEDENT TO BUYER’S OBLIGATION TO CLOSE
Buyer’s
obligation to purchase the Purchased Assets and to take the other actions
required to be taken by Buyer at the Closing is subject to the satisfaction, on
or before the Closing Date, of each of the following conditions (any of which
may be waived by Buyer, in whole or in part):
6.1 Accuracy of
Representations. (a) All the Sellers’ representations and warranties in
this Agreement (considered both collectively and individually) must have been
accurate as of the date of this Agreement, and must be accurate as of the
Closing Date as if then made.
(b) In
addition, each of the Sellers’ covenants and each of the Seller’s
representations and warranties in this Agreement that contain an express
materiality qualification, must have been accurate in all respects as of the
date of this Agreement, and must be accurate in all respects as of the Closing
Date as if then made.
6.2 Performance. (a) All
of the covenants and obligations that KYTX is required to perform or to comply
with under this Agreement on or before the Closing Date (considered both
collectively and individually) must have been duly performed and complied with
in all material respects.
6.3 No Proceedings. Since
the date of this Agreement, there must not have been commenced or threatened
against Buyer, or against any related person of Buyer, any proceeding (a)
involving any challenge to, or seeking damages or other relief in connection
with, any of the contemplated transactions, or (b) that may have the effect of
preventing, delaying, making illegal or otherwise interfering with any of the
contemplated transactions.
6.4 No Prohibition.
Neither the consummation nor the performance of any of the contemplated
transactions will, directly or indirectly (with or without notice or lapse of
time), contravene, or cause Buyer or any related person of Buyer to suffer any
Adverse Consequence under (a) any applicable law, order or governmental
authorization, or (b) any law or order that has been published, introduced or
otherwise proposed by or before any governmental body.
6.5.
Material Adverse
Change. There shall have been no material adverse change (or changes
which in the aggregate are materially adverse) since the date hereof in the
leases or property taken as a whole, whether by reason of change in government
regulation or action or otherwise.
6.6 Bankruptcy. KYTX
shall not have been the subject of a petition for reorganization or liquidation
under the Federal bankruptcy laws, or under state or foreign insolvency laws,
nor shall an assignment for the benefit of KYTX’s, or any of the Seller’s
creditors or any similar protective proceeding or act or event of bankruptcy
have occurred.
9
ARTICLE
VII
CONDITIONS
PRECEDENT TO SELLER’S OBLIGATION TO CLOSE
The
Seller’s obligation to sell the Purchased Assets and to take the other actions
required to be taken by them at the Closing is subject to the satisfaction, on
or before the Closing Date, of each of the following conditions (any of which
may be waived by the Seller Agent, in whole or in part):
7.1 Accuracy of
Representations. All of Buyer’s representations and warranties in this
Agreement (considered both collectively and individually) must have been
accurate in all material respects as of the date of this Agreement and must be
accurate in all material respects as of the Closing Date as if then
made.
7.2.
Buyer’s
Performance. All of the covenants and obligations that Buyer is required
to perform or to comply with under this Agreement on or before the Closing Date
(considered both collectively and individually) must have been performed and
complied with in all material respects.
7.3.
No Prohibition.
There must not be in effect any law or order that (a) prohibits the consummation
of the contemplated transactions and (b) has been adopted or issued, or has
otherwise become effective, since the date of this Agreement.
ARTICLE
VIII
TERMINATION
8.1 Termination Events.
Subject to Section 8.2, this Agreement may, by notice given before or at the
Closing, be terminated:
(a) by
the Seller if Buyer has committed a material breach of any provision of this
Agreement and Sellers have not waived such breach; including without limitation
the failure to pay the second $50,000 installment or any portion thereof as
required by section 1.2B;
(b) by
the Buyer if Seller has committed a material breach of any provision of this
Agreement and Buyers have not waived such breach
ARTICLE
IX
[INTENTIONALLY
OMITTED]
10
ARTICLE
X
MISCELLANEOUS
10.1
Notices. Any
notice provided for by this Agreement and any other notice, demand, or
communication required hereunder shall be in writing and either delivered in
person (including by confirmed facsimile transmission) or sent by hand delivered
against receipt or sent by recognized overnight delivery service or by certified
or registered mail, postage prepaid, with return receipt requested. All notices
shall be addressed as follows:
If
to Buyer:
|
Mr.
Wayne Anderson
|
|
Adventure
Energy, Inc.
|
||
33
6th
Street S., Suite 600
|
||
St.
Petersburg, FL 33701
|
||
With
a copy to:
|
Mr.
Patrick O’Connor
|
|
O’Connor
& Associates
|
||
1250
S Belcher
|
||
Largo,
FL 33771
|
||
If to Seller | Mr. Richard Derr | |
KYTX, LLC | ||
6423 KY 1232 | ||
P.O. Box 569 | ||
Gray, KY 40734 | ||
Any
address or name specified above may be changed by a notice given by the
addressee to the other party. Any notice, demand or other communication shall be
deemed given and effective as of the date of delivery in person or receipt set
forth on the return receipt. The inability to deliver because of changed address
of which no notice was given, or rejection or other refusal to accept any
notice, demand or other communication, shall be deemed to be receipt of the
notice, demand or other communication as of the date of such attempt to deliver
or rejection or refusal to accept.
10.2
Entire Agreement;
Modifications and Waivers; Cumulative Remedies. This Agreement supersedes
any existing letter of intent between the parties hereto, constitutes the entire
agreement among the parties hereto and may not be modified or amended except by
instrument in writing signed by the parties hereto, and no provisions or
conditions may be waived other than by a writing signed by the party waiving
such provisions or conditions. No delay or omission in the exercise of any right
or remedy accruing to the Seller or the Buyer upon any breach under this
Agreement shall impair such right or remedy or be construed as a waiver of any
such breach theretofore or thereafter occurring. The waiver by the Seller or the
Buyer of any breach of any term, covenant, or condition herein stated shall not
be deemed to be a waiver of any other breach, or of a subsequent breach of the
same or any other term, covenant, or condition herein contained.
11
10.3
Successors and
Assigns. Except as set forth in this Article, this Agreement may not be
assigned by the Buyer or the Sellers without the prior approval of the other
party hereto.
10.4
Article
Headings. Article headings and article and section numbers are inserted
herein only as a matter of convenience and in no way define, limit, or prescribe
the scope or intent of this Agreement or any part hereof and shall not be
considered in interpreting or construing this Agreement.
10.5
Time of
Essence. With regard to all dates and time periods set forth or referred
to in this Agreement, time is of the essence.
10.6
Governing Law.
This Agreement shall be construed and interpreted in accordance with the laws of
the State of Kentucky, without regard to conflicts of laws
principles.
10.7
Counterparts.
This Agreement may be executed in any number of counterparts and by any party
hereto on a separate counterpart, each of which when so executed and delivered
shall be deemed an original and all of which taken together shall constitute but
one and the same instrument.
10.8
Survival. All
covenants and agreements contained in the Agreement which contemplate
performance after the Closing Date (including, without limitation, those
covenants and agreements contained in Section 1.2 hereof) shall survive the
Closing.
10.9
Further Acts.
In addition to the acts, instruments and agreements recited herein and
contemplated to be performed, executed and delivered by the Buyer and the
Sellers, each of the Buyer and each Seller shall perform, execute, and deliver
or cause to be performed, executed, and delivered at the Closing or after the
Closing, any and all further acts, instruments, and agreements and provide such
further assurances as the other party hereto may reasonably require to
consummate the transaction contemplated hereunder.
10.10
Severability.
In case any one or more of the provisions contained in this Agreement shall for
any reason be held to be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any other provision
hereof, and this Agreement shall be construed as if such invalid, illegal, or
unenforceable provision had never been contained herein.
10.11
Expenses.
Except as otherwise expressly provided in this Agreement, each party to this
Agreement will bear its respective expenses incurred in connection with the
preparation, execution and performance of this Agreement and the contemplated
transactions, including all fees and expenses of its
representatives.
10.12
Confidentiality. The
Seller acknowledges that the matters relating to this Agreement, and the other
documents, terms, conditions and information related thereto (collectively, the
“Information”) are confidential in nature. Therefore, the Seller covenants and
agrees to keep the Information confidential and will not (except as required by
applicable law, regulation or legal process, and only after compliance with the
provisions of this Section 10.12), without the Buyer’s prior written consent,
disclose any Information in any manner whatsoever; provided, however, that the
Information may be revealed only to Sellers’ owners, Seller’s key employees,
legal counsel and financial advisors, each of whom shall be informed of the
confidential nature of the Information and shall agree to act in accordance with
the terms of this Section 10.12. In the event that a Seller or its key
employees, legal counsel or financial advisors (collectively, the “Information
Group”) are requested pursuant to, or required by, applicable law, regulation or
legal process to disclose any of the Information, the applicable member of the
Information Group will notify the Buyer promptly so that it may seek a
protective order or other appropriate remedy or, in its sole discretion, waive
compliance with the terms of this Section 10.12. In the event that no such
protective order or other remedy is obtained, or that the Buyer waives
compliance with the terms of this Section 10.12, the applicable member of the
Information Group may furnish only that portion of the Information which it is
advised by counsel is legally required and will exercise all reasonable efforts
to obtain reliable assurance that confidential treatment will be accorded the
Information.
12
The
parties hereto have executed and delivered this Agreement as of the date
indicated in the first sentence of this Agreement.
SELLERS:
|
||||||||||||||||||||||||||
KYTX,
LLC
|
||||||||||||||||||||||||||
November
6, 2009
|
By:
|
/s/ Richard
Derr
|
||||||||||||||||||||||||
Name:
|
Richard
Derr
|
|||||||||||||||||||||||||
Its:
|
Treasurer | |||||||||||||||||||||||||
KYTX,
LLC
|
||||||||||||||||||||||||||
November
6, 2009
|
By:
|
/s/ Leslie
Derr
|
||||||||||||||||||||||||
Name:
|
Leslie
Derr
|
|||||||||||||||||||||||||
Its:
|
Secretary
|
|||||||||||||||||||||||||
Adventure
Energy, Inc.
|
||||||||||||||||||||||||||
November 6, 2009 |
By:
|
/s/
Wayne
Anderson
|
||||||||||||||||||||||||
Name:
|
Wayne
Anderson
|
|||||||||||||||||||||||||
Its:
|
President
|
13
EXHIBIT
(A)
Wells
To Be Transferred to Adventure Energy
|
|
From
KYTX OIL and GAS, LLC.
|
|
WELL
NAME
|
PERMIT
NUMBER
|
J.C.
LASLEY NO. 1
|
104515
|
J.C.
LASLEY NO. 2
|
106128
|
J.C.
LASLEY NO. 3
|
105262
|
J.C.
LASLEY NO. 4
|
105219
|
J.C.
LASLEY NO. 5
|
106097
|
RANDY
HATCHER NO. 1
|
104634
|
JASON
CAMFIELD NO. 1
|
98728
|
ERNEST
HAMMOND ET.AL. NO. 1
|
105364
|
ROBERT
CALDWELL NO. 1
|
105616
|
EUGENE
ANTLE NO. 1
|
105787
|
EUGENE
ANTLE NO. 3
|
106006
|
JAMES
BRUMMETT NO. 1
|
105853
|
JAMES
BRUMMETT NO. 2
|
105833
|
COLBY
SMITH NO. 1
|
106098
|
AMOS
DEVELOPMENT NO. 2
|
104233
|
14
EXHIBIT
(B)
LEASE
NAME
|
ACERAGE
|
RECORDING
DATA
|
COUNTY
|
DATE
|
DAVID
M. BOWLES
|
102
ACRES
|
OIL
& GAS BK 84 PG 370
|
ADAIR
|
14-Nov-08
|
GREGORY
A. NELSON
|
18.57
ACRES
|
OIL
& GAS BK 84 PG 382
|
ADAIR
|
29-Nov-08
|
ZADA
SNEED
|
152
ACRES
|
OIL
& GAS BK 84 PG 358
|
ADAIR
|
8-Nov-08
|
C.K.
WALKUP
|
31.47
ACRES
|
OIL
& GAS BK 84 PG 384
|
ADAIR
|
29-Nov-08
|
ERNEST
HAMMONDS
|
12
ACRES
|
LEASE
BK 43 PG 762
|
RUSSELL
|
8-Dec-08
|
PORTER
STOTTS JR.
|
71
ACRES
|
OIL
& GAS BK 84 PG 428
|
ADAIR
|
27-Jan-09
|
JAMES
BRUMMETT
|
19
ACRES
|
OIL
& GAS BK 84 PG 636
|
ADAIR
|
9-Jun-09
|
J.C.
& CRAIG LASLEY
|
40
ACRES
|
OIL
& GAS BK 84 PG 372
|
ADAIR
|
12-Nov-08
|
EUGENE
ANTLE
|
150
ACRES
|
LEASE
BK 43 PG 758
|
RUSSELL
|
7-Apr-09
|
WILLIAM
R. HILL
|
1.5
ACRES
|
LEASE
BK 43 PG 765
|
RUSSELL
|
17-Feb-09
|
RANDY
HATCHER
|
8.73
ACRES
|
OIL
& GAS BK 84 PG 230
|
ADAIR
|
21-Aug-08
|
JASON
CAMFIELD
|
63.27
ACRES
|
OIL
& GAS BK 84 PG 389
|
ADAIR
|
10-Dec-08
|
ROBERT
CALDWELL
|
51
ACRES
|
OIL
& GAS BK 84 PG 354
|
ADAIR
|
6-Nov-08
|
J.C.
& BONITA LASLEY
|
152
ACRES
|
OIL
& GAS BK 84 PG 228
|
ADAIR
|
27-Aug-08
|
BONNIE
D. LOY
|
75
ACRES
|
OIL
& GAS BK 84 PG 755
|
ADAIR
|
17-Aug-09
|
STL
ENERGY
|
780
ACRES
|
OIL
& GAS BK 84 PG 757
|
ADAIR/GREEN
|
8-Jul-09
|
NOTE: THE
STL ENERGY LEASE COVERS THE MELVIN BROWN, OLLEN JANES, AND COLBY SMITH
LEASES
|
15
EXHIBIT
(C)
THIS
ASSIGNMENT, made and entered into this ___ day of October 2009 by and between
KYTX Oil & Gas, LLC,
6423 KY 1232, P.O. Box 569, Gray, KY 40734 hereinafter referred to as Assignor,
and ADVENTURE ENERGY,
INC., 33 6th Street S., Suite 600, St. Petersburg, FL 33701, hereinafter
referred to as Assignee.
WITNESSETH,
that for an in consideration of the sum of One Dollar ($1.00) and other good and
valuable consideration, all of which is hereby acknowledged, Assignor does by
these presents assign, convey, transfer, and set over unto Assignee, with
covenant of special warranty, all of its rights, title, and interest in the
mineral rights lease designated as__________________,as set forth in lease dated
_____________ and recorded in Oil & Gas Book ____ at page _____ in the
office of the County Clerk of Adair County, Kentucky (the “Lease”).
Assignor
hereby RESERVES and EXCEPTS, from this Assignment an overriding royalty interest
of three percent (3%) of the gross proceeds from any currently producing wells
or any successful rework wells, and any new wells drilled on the real
property covered by the Lease.
IN
WITNESS WHEREOF, the Assignor has executed this assignment on the day and year
first above written.
___________________________________
KYTX Oil
& Gas, LLC
)
|
||
)
|
:SS
|
|
COUNTY
OF __________________
|
)
|
On the
_____ day of _________, 2009 before me personally appeared ________________, who
executed the foregoing instrument, and acknowledged that he executed the same as
his free act and deed for the purpose herein contained.
WITNESS
my hand and seal this _____ day of _______, 2009.
NOTARY
PUBLIC
THIS
INSTRUMENT PREPARED BY:
Adventure
Energy, Inc.
33 6th
Street, Suite 600
St.
Petersburg, FL 33701
By:
_________________________
16
EXHIBIT
D
KYTX
FIELD HOUSE INVENTORY
TOOLS
|
SIZE
|
QUANITY
|
||||||
CHAIN BINDER
|
N/A
|
1
|
||||||
WATER HOSE
|
100
FT.
|
1
|
||||||
GARDEN RAKE
|
N/A
|
1
|
||||||
FLOOR JACK | 3 1/2 TON | |||||||
PLASTIC GAS CAN
|
N/A
|
4
|
||||||
ELECTRIC PUMP
|
12
VOLT
|
1
|
||||||
STEEL
FENCE POST DRIVER
|
N/A
|
1
|
||||||
POST
HOLE DIGGER
|
N/A
|
1
|
||||||
SHOVEL
|
N/A
|
3
|
||||||
LADDER
|
17
FT.
|
2
|
||||||
PRESSURE WASHER
|
N/A
|
1
|
||||||
TOOL SET
|
N/A
|
1
|
||||||
A-FRAME HOIST
|
N/A
|
1
|
||||||
PIG MAT
|
N/A
|
100
|
||||||
OIL PAN
|
2
GAL.
|
1
|
||||||
SURVEYING YARD STICK
|
25
FT
|
1
|
||||||
FENCE POST INSULATORD
|
N/A
|
1
BAG
|
||||||
ELECTRIC FANS
|
N/A
|
2
|
||||||
AIR COMPRESSOR
|
N/A
|
1
|
||||||
HAND SAW
|
N/A
|
1
|
||||||
COPPER CUT
|
N/A
|
2
CANS
|
||||||
AIR HOSE
|
30
FT
|
1
|
||||||
STEEL LOG CHAIN
|
20
FT
|
1
|
||||||
LITHIUM GREASE
|
14
TUBES
|
|||||||
SULFURIC ACID CLEANER
|
40
GALS
|
|||||||
TREATMENT/ KNOCKOUT
|
3
GALS
|
|||||||
ANTICEEZ
|
2
BKTS
|
|||||||
INSULATION WRAP | 2 1/2' x 20' | |||||||
|
|
1
|
17
KTYX
FIELD HOUSE EQUIPMENT
|
||||||||
WELL
EQUIPMENT INVENTORY
|
SIZE
|
QUANITY
|
||||||
RODS
|
||||||||
STEEL
SUCKER RODS
|
25
FT
|
162
|
||||||
STEEL
PONY ROD SUB
|
10
FT
|
5
|
||||||
STEEL
PONY ROD SUB
|
5
FT
|
2
|
||||||
STEEL
PONY ROD SUB
|
1
FT
|
1
|
||||||
STEEL
PONY ROD SUB
|
4
FT
|
1
|
||||||
STEEL
PONY ROD SUB
|
8
FT
|
6
|
||||||
ANCHOR
RODS
|
N/A
|
5
|
||||||
STEEL
POLISH ROD
|
8
FT
|
3
|
||||||
STEEL
UPSET TUBING
|
||||||||
STEEL
TUBING
|
2
IN
|
179
JOINTS
|
||||||
TUBING
SUB (2 INCH )
|
2
FT
|
3
|
||||||
TUBING
SUB (2 INCH )
|
6
FT
|
2
|
||||||
TUBING
SUB (2 INCH )
|
8
FT
|
1
|
||||||
TUBING
SUB (2 INCH )
|
4
FT
|
2
|
||||||
NIPPLES
|
||||||||
STEEL
NIPPLE
|
2"
x 10"
|
45
|
||||||
STEEL
NIPPLE
|
1"
x 10"
|
1
|
||||||
STEEL
NIPPLE
|
1"
x 1"
|
2
|
||||||
STEEL
NIPPLE
|
2"
x 4"
|
14
|
||||||
STEEL
NIPPLE
|
1"
x 4"
|
5
|
||||||
STEEL
NIPPLE
|
2"
x 1"
|
11
|
||||||
PLASTIC
SHORT NIPPLE
|
2
IN
|
4
|
||||||
PLASTIC
NIPPLE
|
2"
x 6"
|
3
|
||||||
P.V.C
|
||||||||
PIPE
|
2
IN
|
45
FT
|
||||||
PIPE
FITTINGS
|
2
IN
|
12
|
||||||
ELBOWS
|
2
IN
|
10
|
||||||
COUPLERS
|
2
IN
|
6
|
18
TANK
PARTS
|
||||||||
PLASTIC
LOAD OUT
|
2
IN
|
7
|
||||||
PLASTIC
TEES
|
2
IN
|
3
|
||||||
UNION
VALVES
|
2
IN
|
6
|
||||||
PLASTIC
ELBOWS
|
2
IN
|
6
|
||||||
PLASTIC
COUPLINGS
|
2IN
|
13
|
||||||
STEEL
LOAD OUT
|
3
IN
|
3
|
||||||
STEEL
LADDER
|
100
TANK
|
1
|
||||||
STEEL
PLATFORM & RAIL
|
100
TANK
|
2
|
||||||
GAS
LINE FITTINGS
|
5
|
|||||||
PLUGS
AND VALVES
|
||||||||
STEEL
PLUG
|
3
IN
|
1
|
||||||
STEEL
PLUG
|
2
IN
|
3
|
||||||
SHUT
OFF VALVE (BRASS)
|
3
IN
|
2
|
||||||
SHUT
OFF VALVE (BRASS)
|
2
IN
|
1
|
||||||
SHUT
OFF VALVE (BRASS)
|
1
1/2"
|
1
|
||||||
CHANGE
OVERS
|
||||||||
3/4"
CHANGE OVER
|
2
IN
|
3
|
||||||
3/4"
x 3/4" CHANGE OVER
|
3
IN
|
2
|
||||||
3/4"
x 5/8" CHANGE OVER
|
3
IN
|
4
|
||||||
3/4"
x 3/4" CHANGE OVER
|
N/A
|
10
|
||||||
3/4"
x 3/4" CHANGE OVER
|
6
IN
|
5
|
||||||
1
1/2 x 1 1/2 CHANGE OVER
|
N/A
|
7
|
||||||
ELECTRICAL
|
||||||||
DIRECT
BURIAL WIRE
|
N/A
|
100
FT
|
||||||
ELECTRIC
FENCE WIRE
|
N/A
|
200
FT
|
||||||
PVC
CONDUIT
|
2
IN
|
8
FT
|
||||||
PVC
CONDUIT
|
1
1/2 IN
|
10
FT
|
||||||
PVC
CONDUIT
|
2
1/2 IN
|
6FT
|
||||||
STEEL
CASING
|
||||||||
CASING
|
7
IN
|
13
JOINTS
|
||||||
CASING
|
4
IN
|
1
30' JOINT
|
||||||
PUMPING
TEES, WELL HEADS ANDUNIONS
|
||||||||
WELL
HEAD STEEL
|
7
IN
|
1
|
||||||
STEEL
PUMPING TEE W/ CUPPS
|
N/A
|
3
|
||||||
HAMMER
UNION
|
2
IN
|
17
|
||||||
HAMMER
UNION
|
1
IN
|
12
|
||||||
MISL
|
||||||||
CATTLE
GATES
|
12
FT
|
17
|
||||||
STEEL
FENCE POSTS
|
6
FT
|
6
|
||||||
FILE
CABINETS
|
N/A
|
2
|
||||||
STRAW
|
N/A
|
1
BAIL
|
||||||
STEEL
ELBOWS
|
2
IN
|
2
|
||||||
PRESURE
GUAGE
|
600
PSI
|
2
|
||||||
PRESURE
GUAGE
|
2000
PSI
|
2
|
||||||
STEEL
ADAPTER
|
1
IN
|
7
|
||||||
GUTTER
LINE
|
4
IN
|
100
FT
|
||||||
TARP
|
6'
x 8'
|
1
|
||||||
U-BOLTS
|
N/A
|
2
|
||||||
RUBBER
PULLY BELTS
|
3
|
19