SALE OF ASSETS AGREEMENT
PARTIES
This Agreement made and entered this 1 day of June, 1998 between TRIAD ENERGY
CORP. OF WEST VIRGINIA, INC., a West Virginia corporation, of ▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇ ("BUYER") and American Rivers Oil Co., Inc. ("SELLER") of ▇▇▇ ▇. ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
SUMMARY OF TRANSACTION
The Seller desires to sell and Buyer desires to purchase from Seller all of
Seller's interest in an oil and gas well located in Sistersville, Tyler County,
West Virginia known as the Ohio River #1 as well as the sale of certain pipeline
right-of-ways, leases and equipment. The terms and conditions of said sale are
as follows.
ARTICLE I
Transfer of Assets
Section 1(a) Assets Being Sold ("Transferred Assets"). The Seller agrees to sell
and Buyer agrees to purchase at Closing, the following assets:
1(a)(i) Oil and Gas Leases. All of Seller's right, title and interest in the oil
and gas leases as set forth in Exhibit A, attached hereto and made a part
hereof.
1(a)(ii) Pipeline Right-of-Ways. All right, title and interest Seller may have
in certain pipeline right-of-way agreements which are set forth in Exhibit A1,
attached hereto and made a part hereof.
1(a)(iii) Machinery and Equipment. All right, title and interest that Seller may
have in the machinery and equipment as set forth in Exhibit B, attached hereto
and made a part hereof.
1(a)(iv) Books and Records. All books and records pertaining to the operation,
production and maintenance of the assets set forth in Exhibits A and B, to the
extent Seller shall have same.
Section 1(b) Determination of Fair Market Value. Exhibit C to this Agreement
("Fair Market Value") set forth the agreed upon fair market value of each of the
transferred assets. The parties agree to adhere to such Fair market Values for
the purposes of all federal and state tax returns filed by them subsequent to
the Closing, including the determination by the Seller of taxable gain or loss
in the sale of the Transferred Assets hereunder, and the determination by Buyer
of its tax basis with respect to the Transferred Assets.
Section 1(c) Assignment Documentation. Seller agrees to execute such assignments
as may be desired by Buyer to vest in all of Seller's right, title and interest
in and to the Transferred Assets. The assignment documents shall be approved in
writing by Buyer.
Section 1(d) Bond Transfer. Seller agrees to execute a well bond transfer on
such form or forms as may be prescribed by the State West Virginia. Seller
warrants that its present bond is in full force and effect. Buyer also
represents that its well bond is in full force and effect with the State of West
Virginia and that Buyer will execute a well bond transfer form as may be
prescribed by the State of West Virginia.
Section 1(e) Oil and Gas Production. All natural gas, propane and oil revenue
from the well set forth in Exhibit A shall be the sole and exclusive property of
Seller prior to the date of Closing. After closing, all natural gas, propane and
oil revenue shall be the sole and exclusive property of Buyer. It shall be
Seller's responsibility to have all oil or propane it desires to sell removed
from the wellsite, set forth in Exhibit A, prior to Closing or within reasonable
time thereafter as may be dictated by the oil or propane purchaser of Seller.
ARTICLE II
Warranty
Section 2(a) Warranty With Respect to Title. Seller does hereby warrant to the
extent of its interests, that it has free and clear title in the transferred
assets. Buyer acknowledges that it will perform its due diligence with respect
thereto and agrees to accept the Transferred Assets with warranty as to sellers
interest only. Seller hereby agrees to have released, at his expense at closing,
any mortgages or other lien interests against sellers interest.
Section 2(b) No Warranty With Respect of Equipment. Seller offers no warranty as
to the fitness for intended use or the merchantability of the assets set forth
in Exhibit B. Seller agrees that in shall maintain the assets set forth in
Exhibit B from the date of execution of this Agreement to date of Closing. Buyer
acknowledges that it, by and through its agents and employees, has examined the
assets set forth in Exhibit B and agrees to accept same in their present
condition.
Section 2(c) Representation in Good Standing. Seller acknowledges that it is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation and has the right to do business in the State
of West Virginia. It further acknowledges that it has corporate power and
authority to own and operate its property and assets and to conduct its business
in West Virginia and has full corporate power and authority to sell the
Transferred Assets as set forth herein. The execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of the
Seller.
Section 2(d) Representation of Buyer. Buyer acknowledges that it is a
corporation duly organized, validly existing and in good standing under the law
of the State of West Virginia has full corporate power and authority to own and
Operate the transferred assets. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have
received all necessary approval by the Board of Directors of Buyer.
ARTICLE III
Covenants of Parties
Seller expressly agrees that it shall not, between the time of execution hereof
and Closing, cause any lien or other encumbrance to be placed upon the property
which does not otherwise exist at the date of execution hereof.
Each of the parties further agrees to bear all its own expenses and cost
incurred in connection with this Agreement and the transactions contemplated
hereby with Buyer incurring the expense for filing of the assignments for the
Transferred Assets.
ARTICLE IV
Consideration
Section 4(a) Payment at Closing. In consideration of the transfer of the
Transferred Assets from Seller to Buyer, Buyer shall pay to Seller, the sum of
one hundred twenty five thousand ($125,000).
ARTICLE V
Closing
Section 5(a) Time and Place. The Closing hereunder shall take place on or before
June 15, 1998 at the offices of Triad Resources, Inc. of ▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇.
Section 5(b) Instruments of Transfer, Etc. At the Closing, Seller will deliver
to Buyer such bills of sale, instruments of assignment and other good and
sufficient instruments of transfer executed by Sellers and in a form reasonably
satisfactory to Buyer, as Buyer may reasonably require to vest in Buyer all of
the right, title and interest of the Seller in and to the Transferred Assets and
Buyer shall pay to Seller the amount and deliver to Seller the instruments
required of it at the Closing.
ARTICLE VI
Survival
All the representations, warranties and covenants set forth herein shall survive
the Closing. This agreement contains the entire agreement of the parties with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, whether verbal or written, between the parties with respect to
such subject matter and no amendment, modification or waiver of any provision
hereof will be binding unless in writing and signed by the parties.
ARTICLE VII
Confidentiality--Cooperation
In connection with the negotiations of this agreement and the preparation for
the consummation of the transactions contemplated herein, each party has access
the confidential information relating to the other party. Each party shall treat
as confidential, shall preserve the confidentiality of and shall not duplicated
or use such information except in connection with the transaction contemplated
hereby. In the event of the termination of this agreement for any reason
whatsoever, each party shall return to the other all documents, work papers and
other material obtained in connection with the transaction contemplated hereby
and will use all reasonable efforts, including instructing its employees and
agents who may have had access to such information, to keep it confidential and
not to use any such information, unless such information is now or hereafter
disclosed, through no act or omission of such party, in any manner, making it
available to the general public.
ARTICLE V
Closing
Section 5(a) Time and Place. The Closing hereunder shall take place on or before
Sept. 1, 1998 at the offices of Triad Resources, Inc. of ▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇.
Section 5(b) Instruments of Transfer, Etc. At the Closing, Seller will deliver
to Buyer such bills of sale, instruments of assignment and other good and
sufficient instruments of transfer executed by Sellers and in a form reasonably
satisfactory to Buyer, as Buyer may reasonably require to vest in Buyer all of
the right, title and interest of the Seller in and to the Transferred Assets and
Buyer shall pay to Seller the amount and deliver to Seller the instruments
required of it at the Closing.
ARTICLE VI
Survival
All the representations, warranties and covenants set forth herein shall survive
the Closing. This agreement contains the entire agreement of the parties with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, whether verbal or written, between the parties with respect to
such subject matter and no amendment, modification or waiver of any provision
hereof will be binding unless in writing and signed by the parties.
ARTICLE VII
Confidentiality--Cooperation
In connection with the negotiations of this agreement and the preparation for
the consummation of the transactions contemplated herein, each party has access
the confidential information relating to the other party. Each party shall treat
as confidential, shall preserve the confidentiality of and shall not duplicated
or use such information except in connection with the transaction contemplated
hereby. In the event of the termination of this agreement for any reason
whatsoever, each party shall return to the other all documents, work papers and
other material obtained in connection with the transaction contemplated hereby
and will use all reasonable efforts, including instructing its employees and
agents who may have had access to such information, to keep it confidential and
not to use any such information, unless such information is now or hereafter
disclosed, through no act or omission of such party, in any manner, making it
available to the general public.
This 1st day of June, 1998.
TRIAD ENERGY CORP. OF WVA, INC.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇, President
AMERICAN RIVERS OIL CO., INC.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, President
STATE OF OHIO)
)ss
COUNTY OF WASHINGTON)
Before me a Notary Public in and for said County and State personally appeared
▇▇▇▇ ▇. ▇▇▇▇▇▇, President of Triad Energy Corp. of Wva., Inc. who acknowledges
that he did sign the foregoing instrument and that the same is his free and
voluntary act and deed.
In testimony whereof, I have hereunto set my hand and affixed my official seal
this 1st day of June, 1998.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Notary Public
EXHIBIT A
OIL & GAS LEASE
WELL NAME LESSOR LESSEE VOL./PAGE COUNTY STATE
--------- ------ ------ --------- ------ -----
▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇ #▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ Karlton Terry Oil Co. 222/596 Tyler WVA
Note:
Buyer is purchasing 100% working interest and 80% NRI in the above described
leasehold from ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ to Mile Point ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇.
Revised - 8/11/98
Buyer is purchasing 100% WI and 85% NRI in the above described leasehold from
milepoint 133 to 144 and 84.5% NRI from milepoint 148 to 155.