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8-K - CURRENT REPORT - Uniontown Energy Inc.form8k.htm

AGREEMENT FOR ASSIGNMENT, PURCHASE AND SALE

     This Agreement is entered into this 15th day of November 2010, by and between JAYHAWK ENERGY, INC., a Colorado corporation, (“Seller”) and INTELBAHN, INC., a Nevada Corporation, or its assigns (“Buyer”), (together the “Parties”).

     1)      ASSIGNMENT, SALE AND PURCHASE: For and in consideration of the mutual benefits to be derived herefrom, the sufficiency of which is hereby acknowledged, and subject to the terms and conditions hereinafter set forth, Seller shall assign, sell, transfer, convey and deliver to Buyer at Closing, and Buyer shall accept assignment of, purchase and acquire at Closing all right, title and interest of Seller in, to and under the oil and gas leases (the “Leases”) and water disposal well (the “Well”) as set forth in Exhibit “A” attached hereto and incorporated herein by reference.

     2)      SELLER’S INTEREST: Seller covenants and warrants that it will assign and convey to Buyer its entire working interest in and to the Leases and the Well as set forth in Exhibit “A”. Seller will retain the right, for 8 years, to continue to dispose, into the Well for no additional charge and at its own expense, water produced from any other Kansas properties in which it has an interest.

     3)      PURCHASE PRICE: The purchase price for the above described Leases and Well shall be ONE HUNDRED TWENTY FIVE THOUSAND DOLLARS ($125,000.00) in U.S. Funds (the “Purchase Price”). The Parties agree to allocate the purchase price as set forth in Exhibit “B” attached hereto and incorporated herein by reference. At the time of signing of this Agreement, Buyer shall deposit $15,000.00 (the “Earnest Money”) to be held in the trust account of Rob Burnett, Attorney of the Firm; Parsons, Burnett, Bjordahl, Hume LLP of Spokane Washington.

     4)      CLOSING: The parties shall use their best efforts to close the transaction contemplated by this Agreement on or before December 15th, 2010 or such other date as may be agreed to by both Parties (the “Closing”). The Closing shall take place at a location and on a date and at a time to be mutually agreed upon by the Parties.

     5)      DUE DILIGENCE: Upon Seller’s written acceptance of this Agreement, Buyer and its attorneys, employees and consultants shall be entitled to examine and copy (at Buyer’s expense) Seller’s records pertaining to the Leases and Well, including but not limited to all lease files, operating agreements, deeds and documents of title and all other property records, all accounting, geological, geophysical and other records, and all other documents relating to the Leases and Well (collectively the “Records”). Buyer, at its sole risk and expense, shall also have access to the Well and the right to observe operations and to inspect any and all equipment, improvements and fixtures related to the Leases.

     6)      CONFIDENTIALITY: Buyer agrees that all information obtained from the examination of Seller’s files and records shall remain confidential and shall not be disclosed to any third party or used for any purposes not directly related to this Agreement without Seller’s prior written consent. In the event the transactions contemplated by this Agreement are not closed, Buyer will return to Seller, within five (5) business days of the termination of this Agreement, all copies of the Records and all other information relating to the Leases obtained pursuant to this Agreement, except as to that information obtained from records available to the public. It is further understood and agreed that money damages would not be a sufficient remedy for any breach of this Section 6 and that Seller shall be entitled to equitable relief without obligation to post bond, including injunction and specific performance, as a remedy for any such breach by Buyer. Such remedies shall not be deemed the exclusive remedies for a breach of this Section 6 or of this Agreement but shall be in addition to all other remedies available at law or equity to Seller.


     7)      TITLES: Buyer shall, at its sole expense, conduct such examination of title as it sees fit and shall notify Seller in writing, five days prior to closing, of any title defect which would cause Seller’s title to be unmerchantable. Failing such notice, Buyer will be deemed to have approved title. In the event Buyer notifies Seller of such defects, Seller may, within a reasonable amount of time given the nature of the defect, attempt to cure same. In the event of a material title defect which renders all or a portion of the Leases and/or Well unmerchantable and which Seller elects to not, or is not able to cure, the Parties shall use reasonable efforts to agree on an adjustment of the Purchase Price. In the event the Parties are unable to reach such an agreement, Buyer or Seller may terminate this Agreement, with no further obligation by either Party to perform, by giving written notice to the other Party on or before Closing. As used herein, “merchantable” shall mean the quiet and peaceful enjoyment of an interest in the Leases and/or Well that a reasonable and prudent operator engaged in the business of owning, exploring, developing, operating and producing oil and gas properties with knowledge of the facts and the legal effect thereof would accept. If this Agreement does not close as the result of defects in title, the Earnest Money shall be returned to Buyer.

     8)      ENVIRONMENTAL: If, as a result of Buyer’s inspection of the Well, lands and equipment, Buyer objects to the condition of the Leases and/or Well because of environmental concerns (“Environment Defects”), Buyer shall notify Seller of the same on or before five (5) days prior to Closing, or such Environmental Defects shall be deemed to have been waived. In the event Buyer notifies Seller of such Environmental Defects, Seller may attempt, within a reasonable time given the nature of the Environmental Defect(s), to cure the same. In the event Seller elects not to cure the same or in the event any such Environmental Defect is not curable, the Parties shall use reasonable efforts to reach an agreement to appropriately adjust the Purchase Price due to such Environmental Defects; in the event the Parties are unable to reach such an agreement, Buyer or Seller may terminate this Agreement by giving written notice to the other Party on or before Closing. If Buyer terminates this Agreement pursuant to this Section 8, the Earnest Money shall be returned to Buyer.

     9)      WARRANTIES: Buyer shall accept the Leases and Well in their “AS IS, WHERE IS” condition.  The Leases and Well shall be conveyed without warranty of title, either express or implied, except as to claims arising by, through or under Seller. At Closing, Seller will assign to Buyer all of its right, title and interest in and to the Leases and Well, reserving the right, for 8 years, to continue to dispose, at no additional charge and at its own expense, of water produced from any other Kansas properties in which Seller has an interest .

     10)      INDEMNIFICATION: Buyer shall protect, defend, indemnify and hold Seller harmless from the payment of any judgments, claims, costs, expenses and liabilities (“Damages”), whether direct, contingent or otherwise which are payable, by Seller, with respect to the ownership or operation of the Leases and/or Well from and after Closing. Seller shall protect, defend, indemnify and hold Buyer harmless from the payment of any and all Damages which are payable, by Buyer, with respect to the ownership or operation of the Leases and/or Well prior to Closing.

     11)      TAXES: Seller warrants that all taxes, including but not necessarily limited to income taxes, real estate taxes, sales/use taxes, personal property taxes (collectively “Taxes”), related to the Leases and/or Well and the production and/or operation thereof, for the year 2009 and all prior years has been paid. All Taxes based upon 2010 operation and production shall be prorated as of the date of Closing. If any such taxes are not due at closing, Buyer will thereafter be responsible for payment of same and will invoice Seller for its pro rata share, providing supporting documentation therefore, and such pro rata share shall be due upon receipt of such billing. Buyer will bear all applicable sales or similar taxes imposed by any state, county, municipal or other governmental entity as a result of this sale.

2


     12)      REPRESENTATIONS AND OTHER WARRANTIES: The Parties represent and warrant to each other as applicable that, as of the date of Closing:

     (a)      Buyer and Seller are each duly incorporated and each in good standing in all jurisdictions in which they each conduct business and each have the full authority and power to enter into this Agreement and carry out the transactions contemplated hereby.

     (b)      This Agreement constitutes a legal, valid and binding obligation of Buyer and Seller, enforceable against each in accordance with its terms.

     (c)      Seller, as lessee, owns the Leases and Well and has the full power and right to assign, sell and convey the same, and Buyer has the full power and right to acquire and operate the same, all pursuant to the terms and conditions of this Agreement.

     (d)      The Seller, as lessee, will at Closing have good and merchantable title, as set forth in Section 7 above, to those Leases and/or Well and to the best of Seller’s knowledge will assign and convey the same free and clear, except as set forth in the Leases, of all security interests, equities and claims and will have ensured that all operating costs and expenses incurred as of November 15th, 2010 have been timely paid.

     (d)      To the best of Seller’s knowledge, all rentals, royalties and other payments due under the Leases and/or Well as of November 15th, 2010 have been fully and promptly paid.

     (e)      To the best of Seller’s knowledge, there are no claims (including claims for Taxes), demands, suits, actions, arbitrations or governmental investigations or proceedings pending or threatened against either Seller or the Leases and/or the Well which would affect Buyer’s ownership or operation of the Leases and/or Well.

     (f)      To the best of Seller’s knowledge, all permits, licenses, orders and approvals of all federal, state and local governments or regulatory bodies required for the operation of the Leases and Well as presently conducted have been obtained; all such permits, licenses, orders and approvals are in full force and effect and no suspension or cancellation of any of them is threatened or pending; and none of such permits, licenses, orders or approvals will be affected by the consummation of this Agreement except as any of the same may need to be transferred to Buyer and/or Buyer may be required to obtain in its own name.

     (g)      Neither party has incurred any obligation or liability, contingent or otherwise, with respect to any broker’s or finder’s fee or commission related to this transaction for which the other party shall have any responsibility.

If, on or before Closing, it is discovered that either Party is in default under any of the above representations and warranties applicable to it, the defaulting Party shall use reasonable efforts to cure the same before Closing, but if it is unable to do so, then the Parties shall use reasonable efforts to adjust the Purchase Price on an equitable basis due such default. If the Parties are unable to agree as to such adjustment on or before Closing, then the Party not in default may terminate this Agreement by giving written notice to the other on or before the date of Closing.

     13)      SURVIVAL AND FURTHER ACTION: The terms and conditions of this Agreement and the representations and warranties contained herein (except those as to which a default may have been discovered prior to Closing and for which an adjustment in the Purchase Price has been made) shall survive the Closing. The Parties agree to execute such further documents or take such further actions after the Closing Date which may be necessary in order to effectuate the transactions contemplated hereunder.

3


     14)      ASSIGNMENT: Seller shall have the right to assign or direct payment as provided hereunder to a financial intermediary to facilitate a deferred exchange of like kind property pursuant to Section 1031 of the Internal Revenue Code.

     15)      CONSENTS AND APPROVALS: Unless specifically stated to the contrary in this (i.e., by stating that a Party’s consent or approval may be granted or withheld in its sole discretion), whenever any provision of this Agreement requires a Party to provide its consent or approval, such Party will not unreasonably condition, withhold or delay such consent or approval.

     16)      BINDING EFFECT: Upon execution hereof, this Agreement shall be binding on the Parties hereto, their respective heirs, devisees, personal representatives, successors and assigns.

     17)      COUNTERPARTS: This Agreement may be executed by Seller and Buyer in counterparts, each of which shall be deemed to be an original and all of which shall be deemed to constitute one Agreement.

     18)      DEFAULT: Time is of the essence of this Agreement. In the event either Party fails to comply with any of the terms of this Agreement, then this Agreement shall, at the option of the non-defaulting Party, be terminated. If the non-defaulting Party does not exercise the option to terminate this Agreement, the non-defaulting Party may require specific performance and also exercise any other legal rights and remedies available under Kansas law. If Buyer is the defaulting party and Seller elects to terminate this Agreement, Seller shall be entitled to retain the Earnest Money deposit as liquidated damages; if Seller is the defaulting party and Buyer elects to terminate this Agreement, Buyer shall be entitled to a full refund of the Earnest Money deposit.

     19)      NOTICES: Any notice or other communication under this Agreement shall be in writing and shall be considered given when delivered personally, via facsimile or email, or three (3) business days after mailing by registered mail, return receipt requested, to the parties at the following addresses or at such other address as a Party may specify by notice to the other.

  If to Intelbahn, Inc.: Terry Fields, CEO
    314-837 West Hastings Street
    Vancouver BC Canada V6C 3N6
    Fax: 250-745-8143
    Email: terryfields7@aol.com
     
     
     
  If to JayHawk Energy, Inc.: Lindsay E. Gorrill, CEO
    6240 E. Seltice Way, Suite C
    Post Falls, ID 83854
    Fax: 208-765-8520
    Email: lindsay333@mac.com
     
  With a copy to: Parsons/Burnett/Bjordahl/Hume, LLP
    Attn: Robert J. Burnett
    505 W. Riverside Avenue, Suite 500
    Spokane, WA. 99201
    Fax: 509-252-5066
    Email: rburnett@pblaw.biz

4


     20)      ENTIRE AGREEMENT; AMENDMENT: This Agreement shall supersede all other existing agreements between Buyer and Seller relating to the subject matter of this Agreement. This Agreement may not be amended except by a written agreement signed by the Parties.

     21)      WAIVER: The failure of a Party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver thereof or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

     22)      SEVERABILITY: If for any reason any provision of this Agreement is determined by a tribunal of competent jurisdiction to be legally invalid or unenforceable, the validity of the remainder of the Agreement will not be affected and such provision will be deemed modified to the minimum extent necessary to make such provision consistent with applicable law and, in its modified form, such provision will then be enforceable and enforced.

     23)      ATTORNEYS FEES & COSTS: If any legal action is brought to construe or enforce any provision of this Agreement, the prevailing Party shall be entitled to receive its reasonable attorneys' fees and court costs in addition to any other relief it may receive.

     24)      GOVERNING LAW: This Agreement shall be governed, construed and enforced under the laws of the State of Kansas.

     IN WITNESS WHEREOF, this Agreement for Assignment, Purchase and Sale has been executed this 15th day of November, 2010.

SELLER: BUYER:
   
JAYHAWK ENERGY, INC. INTELBAHN, INC.
   
   
   
By:_/s/ Signed___________________________ By:__/s/ Signed________________________
Print Name: _____________________________ Print Name: ___________________________
Title: __________________________________ Title: ________________________________

     BE IT REMEMBERED, that on this ______ day of ______________, 2010, before me, the undersigned, a Notary Public in and for the said county and state, came ________________, the ________________ of JayHawk Energy Inc., to me personally known to be the same person who executed the foregoing instrument, and he duly acknowledged the execution of the same.

     IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year last above written.

5


Notary Public

My appointment expires:

STATE OF _______________, COUNTY OF _________________, SS:

 

 

BE IT REMEMBERED, that on this ______day of _____________ , 2010, before me, the undersigned, a Notary Public in and for the said county and state, came __________________________ , Intelbahn Inc., to me personally known to be the same person who executed the foregoing instrument, and he duly acknowledged the execution of the same.

     IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year last above written.

   
  Notary Public

My appointment expires:

6


EXHIBIT “A”

LAND SCHEDULE

Attached to and forming part of a Purchase and Sale Agreement Dated November 15, 2010




Name
Address: All
Leases in
Bourbon County,
Kansas



Twp Range



Section



Acres


Combined
Acres


Renewed -
3yrs
Dunlop, Charles &
Cheri
P.O. Box 285,
Parker, KS 66072
23S 22E
24S 22E
36
1, 12
70
200

270

29/12/2007


Shepard, Stephen &
Deborah

P.O. Box 162,
Uniontown, KS
66779
23S 22E
24S 22E
25S 21E
25S 22E
24, 34 15,
22, 24, 25
35
8, 12
200
481
80
1134.61



1895.61



16/10/2007
Perry, Jimmy &
Rebecca new
owners


?


24S 21E


14


80


80


29/03/2008

Williams, Dennis &
Janet
6640 Brookwood
Dr SE, Eyota, MN
55934


24S 21E


25


160


160


06/01/2008

Fuhrman, Harley &
Beverly
333 Soldier Rd,
Bronson, KS
66716


24S 21E


24, 25


320


320


27/10/2007


Wilson, Sharon E.
10466 S. Salt Rd,
Lamont, FL
32336


24S 22E


2


75


75


07/07/2008


Price, James & Ellen
326 S Oakdale,
Salina, KS 67401-
3167


24S 22E


3


91.5


91.5


20/01/2008

Fuhrman, Harley &
Beverly
333 Soldier Rd,
Bronson, KS
66716


24S 22E


8


78


78


29/12/2007


Lamb, Robert & Lois
1989 75th St,
Bronson, KS
66716


24S 22E


14


80


80


16/11/2007


Highbaugh, Marland
2401 Hortonstapt
127, Fort Scott,
KS 66701


24S 22E


21


299


299


08/12/2007


McBee, David & Dana
4824 Larsen Lane,
Shawnee, KS
66203


24S 22E


21


80


80


29/12/2007

Williams, Steven &
Marcia
1335 125th St,
Redfield, KS
66769


24S 22E


22


160


160


15/10/2007


Lamb, Robert & Lois
1989 75th St,
Bronson, KS
66716


24S 22E


23


160


160


16/11/2007

Jones, Lee C
1903 95th St,
Uniontown, KS
66779

24S 22E

24

20

20

20/10/2007


7



Fuhrman, Harley &
Beverly Rife,
Melvin & Louise
333 Soldier Rd,
Bronson, KS
66716


24S 22E


30


374.7


374.7


27/10/2007
Fuhrman, George &
Luella
1631 3400 St,
Moran, KS 66755

24S 22E

30

232.6

232.6

16/11/2007

Daylong, Margaret E,
Trustee
425 Quail Rd,
Bronson, KS
66716


24S 22E


31


200


200


16/02/2008

Wilson, Michael &
Judy
2060 80th St,
Uniontown, KS
66779


24S 22E

10, 12, 13, 14,
15, 23


1270


1270


18/11/2007

Ripper, Tommy &
Lora
2098 60th St,
Bronson, KS
66716


24S 22E


16, 21


400


400


12/01/2008

Fuhrman, William &
Susan
1917 35th St,
Bronson, KS
66716


24S 22E


19, 31


175


175


27/10/2007
Mix, Carol N
Revocable Trust
c/o Sifer, Donna,
Trustee

670 Soldier Rd,
Bronson, KS
66716



24S 22E



22, 27



880



880



20/10/2007

Ranger, Wade &
Stephanie
7853 Cranberry
St, Anchorage,
AK 99502-4440


24S 22E


23, 24


200


200


13/11/2007

Bradbury, Thomas &
Myrna
857 Ridge Rd,
Uniontown, KS
66779


24S 22E


23, 24, 25, 26


515.3


515.3


13/10/2007

Holeman, Daisy
Bonita
591 Quail Rd,
Bronson, KS
66716


24S 22E


33, 34


800


800


04/11/2007


Shelton, Charles
LeRoy
1730 77th
Terrace,
Uniontown, KS
66779



24S 22E



34, 35



202



202



04/11/2007

Woodward, Richard &
Barbara
P.O. Box 51,
Bronson, KS
66716

25S 21E
25S 22E

26
5

80
546.41


626.41


03/11/2007

Daylong, Gary &
Rhonda
392 Quail Rd,
Bronson, KS
66716


25S 22E


6


80


80


06/12/2007

Stewart, Larry &
Linda
448 Quail Rd,
Bronson, KS
66716


25S 22E


6


160


160


06/01/2008

Blythe, Bud & Lee
Belle
475 Maple Rd,
Uniontown, KS
66779


25S 22E


7


152.1


152.1


09/02/2008
Shepard, Hazel, Co-
Trustee Holt,
Randall, Co-Trustee


?


25S 22E


13


320


320


30/03/2008


Gates, Norman
1317 85th St,
Uniontown, KS
66779


25S 22E


24


120


120


09/12/2007
Warren, Mark & Mary
Warren, Joseph & Shirley
644 Kansas Rd,
Uniontown, KS
66779

25S 22E

29

40

40

11/12/2007


8





Warren, George M
301 Hill St,
Uniontown, KS
66779


25S 22E


32


75


75


23/11/2007

Moore, Russell &
Ethel
877 Poplar Rd,
Uniontown, KS
66779


25S 22E


1, 2, 11, 12


143


143


14/01/2008


Underwood, Jake
913 Maple Rd,
Uniontown, KS
66779


25S 22E


24, 25


250


250


16/12/2007
McClenahan, Patricia
A, Trustee Patricia
A McClenahan Trust
McClenahan, Robert
E, Trustee Robert E
McClenahan Trust



1191 Hwy 3,
Uniontown, KS
66779





25S 22E





27, 34





233





233





23/02/2008
Shinn, Danny &
Wilma
P.O. Box 227,
Gas, KS 66742

25S 22E

3, 4, 5

299

299

11/01/2008

Blythe, Bud & Lee
Belle
475 Maple Rd,
Uniontown, KS
66779

25S 22E
25S 21E

19
24

27.7
532


559.7


09/02/2008

Geiger, Steven &
Barbara
1121 Hwy 3,
Uniontown, KS
66779

25S 22E
26S 22E

34, 35   2,
23

240
160


400


18/10/2007


Warren, George M
301 Hill St,
Uniontown, KS
66779

25S 22E
26S 22E

28, 32, 33
3,4

717
317.8


1034.8


23/11/2007

Svoboda, Patrick &
Kathleen
4791 W. 215th St,
Bucyrus, KS
66013

25S 22E
26S 22E


33   23

185
160


345


04/02/2008

Warren, Joseph &
Shirley
1161 50th St,
Uniontown, KS
66779

25S 22E
26S 22E

31, 32    5,
8


761.5


761.5


15/11/2007
Dawson, Jack &
Bernita
702 S Buckeye,
Iola, KS 66749

26S 21E

11

154

154

03/01/2008
Thompson, Leon &
Judith
1206 1000 St,
Iola, KS 66749

26S 21E

11

228

228

25/01/2008

Reed, Charles &
Kathryn
589 20th St,
Savonburg, KS
66772


26S 21E


36


480


480


14/07/2008

Dare, Charles &
Barbara
1037 85th St,
Uniontown, KS
66779


26S 22E


1


280


280


02/02/2008
Lavoie, Denise Luella ? 26S 22E 1 160 160 06/04/2008


Jefferis, James & Amy
1094 Hwy 3,
Uniontown, KS
66779


26S 22E


3


78.7


78.7


01/02/2008

Griffith, William &
Grace
P.O. Box 92,
Uniontown, KS
66779


26S 22E


11


80


80


30/03/2008

Ericson, Henry &
Doris, Trustee
1090 Eagle Rd,
Fort Scott, KS
66701


26S 22E


13


97


97


16/02/2008

Warren, Robert Duane
404 Sunset Rd,
Freeman, MO
64746

26S 22E

21

159

159

19/01/2008


9




Sampson, Richard &
Gloria
2714 Telequana
Dr, Anchorage,
AK 99517


26S 22E


23


64.9


64.9


04/01/2008


Dare, Mary K
10588 Hwy 7,
Mound City, KS
66056


26S 22E


1, 12


160


160


15/02/2008
Lickteig, James
Bures, Lloyd &
Marikay Feuerborn,
Clifford & Karen

3700 Butler Rd,
Richmond, KS
66080



26S 22E



2, 12, 13



480



480



04/01/2008




Aubel, William &
Joanna Typer,
Donald & Marjorie
Typer, James & Leigh
2906 Country
Lane, Hays, KS
67601 P.O.
Box 610, Hesston,
KS 67062
3321 S. Shartel,
Oklahoma City,
OK 73109







26S 22E







20, 21, 29







211.2







211.2







05/01/2008

Whisenhunt, Rick &
Mauriel
546 Indian Rd,
Uniontown, KS
66779


26S 22E


9, 16


80


80


12/01/2008

Geiger, Dewaine &
Beverly
759 Kansas Rd,
Uniontown, KS
66779

26S 22E
25S 22E

2, 4
35

312.75
160


472.75


25/10/2007
Bosley, Eddie &
Mildred
392 Hwy 39,
Walnut, KS 66780
26S 22E
27S 22E

32   7

160

160

17/06/2008
             
        TOTAL 17,963.77  


10


WATER DISPOSAL WELL

Location Well Number Lease County
       
 NENENE-26-26-1E  26-41-SWD  Lucille George Trust  Bourbon, KS
   API #15-011-23144    

 


EXHIBIT “B”

ALLOCATION

Allocated to and forming part of a Purchase and Sale Agreement Dated October  ___________

  PERCENTAGE OF PURCHASED ALLOCATION OF
ASSET ASSET PURCHASE PRICE
Lease Interests 90% $110,000
TANGIBLE Interests 9% $12,500
MISCELLANEOUS 1% $1,250
Interests    

11