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Exhibit 10.1
PARTNERSHIP INTEREST PURCHASE AGREEMENT
BY AND AMONG
NATURAL RESOURCE GROUP GATHERING, LLC,
A COLORADO LIMITED LIABILITY COMPANY,
AND
NEW FRONTIER ENERGY, INC.,
A COLORADO CORPORATION
DATED AS OF THE 26th DAY OF DECEMBER, 2007
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PARTNERSHIP INTEREST PURCHASE AGREEMENT
THIS PARTNERSHIP INTEREST PURCHASE AGREEMENT (this "Agreement")
is made and
entered into as of the 26th day of December, 2007, by and among
Natural Resource
Group Gathering, LLC, a Colorado limited liability company
("Seller"), and New
Frontier Energy, Inc., a Colorado corporation ("Buyer").
RECITALS:
WHEREAS, Seller is the general partner of Slater Dome Gathering,
LLLP, a
Colorado limited liability limited partnership ("SDG"), and owns
a twenty-five
percent (25%) General Partnership Interest (hereinafter defined)
in SDG.
WHEREAS, Buyer desires to acquire from Seller, and the Seller
desires to
sell to Buyer, its General Partnership Interest (hereinafter
defined) on the
terms and subject to the conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants
contained in this
Agreement and for other good and valuable consideration, the
receipt and
sufficiency of which are hereby acknowledged, the parties hereby
agree as
follows:
ARTICLE I
PURCHASE OF PARTNERSHIP INTEREST
1.1 Acquisition of General Partnership Interest. Upon the terms
and subject
to the conditions contained herein, Seller shall sell and
transfer to Buyer, and
Buyer shall purchase and acquire from Seller, at the Closing (as
hereinafter
defined), all of Seller's right, title and interest in, to, and
under Seller's
General Partnership Interest in SDG equal to twenty-five percent
(25%) of all
the partnership interests in SDG as of the date hereof (the
"General Partnership
Interest"), free and clear of all security interests, liens,
restrictions,
claims, encumbrances or charges of any kind, other than those
set forth in the
Partnership Agreement (as hereinafter defined) or restrictions
under any federal
or state securities laws (collectively, "Encumbrances").
ARTICLE II
PURCHASE PRICE
2.1 Purchase Price. In consideration for the General Partnership
Interest
to be sold and transferred to Buyer, and upon the terms and
conditions contained
herein, Buyer shall pay or cause to be paid to or for the
account of Seller (as
set forth in Section 2.2 below), One Million Seventy-Five
Thousand Dollars
($1,075,000.00) (the "Purchase Price").
2.2 Payment of Purchase Price. Buyer shall deliver the Purchase
Price to
the Seller as follows: (a) Two Hundred Sixty-Eight Thousand
Seven Hundred Fifty
Dollars ($268,750.00) at the Closing by wire transfer to an
account designated
by Seller or delivery of other immediately available funds; (b)
Eight Hundred
Six Thousand Two Hundred Fifty Dollars ($806,250.00) payable in
the form of a
promissory note. At the Closing, Buyer shall execute and deliver
the promissory
note, substantially in the form attached hereto as Exhibit B
(the "Note").
Page 2 of 17
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ARTICLE III
CLOSING; CLOSING DELIVERIES
3.1 Closing. The "Closing" means the time at which the Seller
consummates
the transactions contemplated by Section 1.1 hereby after the
satisfaction (or
receipt of a duly executed waiver) of each of the conditions
precedent to
Closing as hereinafter described. The Closing shall take place
at the offices of
Buyer, at 1789 Littleton Blvd, Littleton, CO 80120, or at
another date and
location as mutually agreed by the Parties in writing. The
Closing shall occur
at 10:00 a.m., Mountain Standard Time, on December 31, 2007. The
date on which
the Closing occurs is herein referred to as the "Closing Date".
Notwithstanding
the foregoing, the Buyer and Seller agree that the Closing shall
be deemed to be
effective as of 12:01a.m. on January 1, 2008.
3.2 Closing Deliveries of the Seller. At the Closing, in
addition to any
other documents specifically required to be delivered pursuant
to this
Agreement, the Seller shall, in form and substance reasonably
satisfactory to
Buyer and its counsel, deliver to Buyer the following:
(a) A bill of sale in the form attached hereto as Exhibit A (the
"Bill
of Sale"), duly executed by Seller, conveying all of Seller's
right, title and
interest in, to and under the General Partnership Interest to
Buyer;
(b) Such other instruments of sale, transfer, conveyance and
assignment as Buyer and its counsel may reasonably request to
effect the
transactions contemplated hereby, including, without limitation,
such documents
as are required by the Amended Limited Liability Limited
Partnership Agreement,
dated on or about April 15, 2005, among the partners of SDG (the
"Partnership
Agreement") to cause the sale and transfer of the General
Partnership Interest
as herein contemplated to be effective and to cause the
conveyance of the
General Partnership Interest to Buyer to be recognized by SDG
and accurately
reflected in the Partnership Agreement and in such other of its
records as
relate to the identity of its partners and the extent of their
partnership
interests or as otherwise required by applicable agreements;
and
(c) All other previously undelivered items required to be
delivered by
the Seller at or prior to Closing pursuant to this Agreement or
otherwise
required in connection herewith unless waived in writing by
Buyer.
3.3 Buyer's Closing Deliveries. At the Closing, in addition to
any other
documents specifically required to be delivered pursuant to this
Agreement,
Buyer shall, in form and substance reasonably satisfactory to
the Seller and its
counsel, deliver to the Seller the following:
(a) The Purchase Price;
(b) All other previously undelivered items required to be
delivered by
Buyer at or prior to Closing pursuant to this Agreement or
otherwise required in
connection herewith unless waived in writing by the Seller.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER
As an inducement to Buyer to enter into this Agreement and to
consummate
the transactions contemplated hereby, the Seller represents and
warrants to
Buyer, and Buyer in agreeing to pay the Purchase Price and to
otherwise
consummate the transactions contemplated by this Agreement has
relied upon such
representations and warranties as follows:
4.1 Representations and Warranties Concerning the Seller.
(a) Organization of Seller. Seller is a limited liability
company duly
organized and validly existing under the laws of the Colorado
and is qualified
to do business as a foreign corporation in good standing in each
other state
wherein the nature of its business or activities requires such
qualification.
(b) Authorization. Seller has full corporate power and authority
to
(i) execute and deliver this Agreement and to perform its
respective obligations
hereunder, and (ii) own and operate its respective assets,
properties and
business and carry on its respective business as presently
conducted. The
execution, delivery and performance of this Agreement have been
duly authorized
by all necessary company action on the part of the Seller,
including manager and
member (where required) authorization.
(c) Validity; Binding Effect. This Agreement has been duly and
validly
executed and delivered by the Seller and constitutes a valid and
legally binding
obligation of the Seller, enforceable against the Seller in
accordance with its
terms.
(d) Noncontravention. The execution, delivery and performance of
this
Agreement by the Seller, the consummation of the transactions
contemplated
hereby and the compliance with or fulfillment of the terms and
provisions hereof
or of any other agreement or instrument contemplated hereby, do
not and will not
(i) conflict with or result in a breach of any of the provisions
of the Articles
of Organization or Operating Agreement of the Seller, (ii)
contravene any Law
which affects or binds the Seller or any of its respective
properties, (iii)
conflict with, result in a breach of, constitute a default
under, or give rise
to a right of termination or acceleration under any material
contract,
agreement, note, deed of trust, mortgage, trust, lease,
Governmental (as
hereinafter defined) or other license, permit or other
authorization, or any
other material instrument or restriction to which the Seller is
a party or by
which any of its respective properties may be affected or bound,
or (iv) require
the Seller to obtain the approval, consent or authorization of,
or to make any
declaration, filing or registration with, any third party or any
Governmental
authority which has not been obtained in writing prior to the
date of this
Agreement.
(e) Title to Acquired Assets. Seller has, or will have at
Closing,
good and marketable title to the General Partnership Interest,
free and clear of
any and all Encumbrances.
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(f) Legal Compliance. Seller has complied in all material
respects
with all applicable Laws (including rules, regulation, codes,
plans,
injunctions, judgments, orders, decrees, rulings, and charges
thereunder) of
federal, state, local and foreign governments (and all agencies
thereof) and no
action, suit, proceeding, hearing, investigation, charge,
complaint, claim,
demand, or notice has been filed or commenced against Seller
alleging any
failure so to comply.
(g) Investment. Seller (i) understands that the Note has not
been and
will not be registered under the Securities Act of 1933, as
amended (the
"Securities Act"), or under any state securities laws, and are
being offered and
sold in reliance upon federal and state exemptions for
transactions not
involving any public offering, (ii) is acquiring the Note solely
for its own
account for investment purposes, and not with a view to the
distribution
thereof, (iii) is a sophisticated investor with knowledge and
experience in
business and financial matters, (iv) has received certain
information concerning
Buyer and has had the opportunity to obtain additional
information and ask
questions to its satisfaction in order to evaluate the merits
and the risks
inherent in holding the Note, and (v) is able to bear the
economic risk and lack
of liquidity in holding the Note. Further, Seller understand and
agrees that the
Note may not be sold, pledged, hypothecated, donated, or
otherwise transferred
(whether or not for consideration) by the Seller except upon or
pursuant to an
exemption from registration under the act and/or state acts, the
availability of
which is to be established to the satisfaction of the Buyer.
(h) Review of Agreement. Seller has thoroughly read this
Agreement and
has had the opportunity to review this Agreement with a
competent legal and/or
financial professional advisor of its choice.
(i) Possible Future Appreciation of Units. Seller understands
that by
transferring the General Partnership Interest to Buyer, Seller
may be foregoing
the possibility of substantial appreciation in the future with
regard to the
General Partnership Interest. Seller has determined, after
making the inquiries
referred to in this Agreement and after consideration of all
material and
significant facts relating to Buyer, that the purchase price
outlined above is
reasonable and fair. Seller acknowledges that this determination
of value is the
result of arms-length negotiations with Buyer.
4.2 Representations and Warranties Concerning SDG.
(a) Organization of SDG. SDG is a limited liability limited
partnership duly organized and validly existing under the laws
of the State of
Colorado and is qualified to do business as a foreign limited
partnership in
good standing in each other state wherein the nature of its
business or
activities requires such qualification.
(b) Outstanding Interests. To Seller's knowledge, there are
no
outstanding subscriptions, options, warrants, contracts,
commitments,
convertible securities or other agreements or arrangements of
any character or
nature whatsoever under which SDG or Seller is or may become
obligated to issue,
assign or transfer any ownership interest in SDG, except as
provided in the
Partnership Agreement.
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(c) Valuation. An independent valuation of SDG's principal
asset,
attached hereto as Exhibit C, was completed in September of
2007, and updated as
of the Closing Date (the "Valuation"). To Seller's best
knowledge, the Valuation
represents an opinion of the value a willing and disinterested
buyer would pay a
willing seller for SDG's principal asset after due diligence and
negotiations.
(d) Subsequent Events. Since the date of the Valuation, to
Seller's
knowledge there has not been any material adverse change in the
business,
financial condition, operations or result of operations of
SDG.
(e) Undisclosed Liabilities. To Seller's knowledge, SDG has
no
liability (and there is no basis for any present or future
action, suit,
proceeding, hearing, investigation, charge, complaint, claim or
demand against
it giving rise to any liability).
(f) Legal Compliance. To Seller's knowledge, SDG has complied in
all
material respects with all applicable Laws (including rules,
regulations, codes,
plans, injunctions, judgments, orders, decrees, rulings, and
charges thereunder)
of federal, state, local and foreign Governments (and all
agencies thereof) and
no action, suit, proceeding, hearing, investigation, charge,
complaint, demand,
or notice has been filed or commenced against SDG alleging any
failure so to
comply.
(g) Litigation. To Seller's knowledge, SDG (i) is not subject to
any
material outstanding injunction, judgment, order, decree, ruling
or charge, and
(ii) is not a party to or threatened to be made a party to any
action, suit,
proceeding, hearing or investigation of, in, or before any court
or
quasi-judicial or administrative agency of any federal, state,
local or foreign
jurisdiction.
(h) Environmental, Health and Safety Matters.
(i) To Seller's knowledge, SDG is in compliance with all
federal,
state, local and foreign statutes, regulations and ordinances
concerning public
health and safety, worker health and safety and pollution or
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