EXHIBIT 10.1
AGREEMENT TO PURCHASE OIL AND GAS LEASES
THIS AGREEMENT ("the Agreement"), dated the 25th, of June, 2008, is
made by and
among James Fitzsimons, an individual (hereinafter "Fitzsimons" or "Seller"),
CH4 Energy, Inc., a Nevada corporation, (hereinafter "CH4") and CH4
Energy, LLC,
an Oklahoma limited liability company (hereinafter "Subsidiary"),
(collectively
hereinafter "the Parties").
WHEREAS, Fitzsimons is
the beneficial owner of certain oil and gas leases which
are particularly
described in Exhibit 1
attached hereto ("the Leases") located
in Section 13 Township 11 North, Range 11 East, Okfuskee County,
Oklahoma; and
Sections 2, 3, 4, 5,
6, 8, 9, 10, 11,
12, 15, 16, 17, 18,
19, 20, 21, 22, 26,
27, 28, 34 and 36 Township 11 North, Range 12 East, Okmulgee County, Oklahoma
(hereinafter referred to as "the Prospect"), and
WHEREAS, the
Leases are currently held in trust by Frontier Land, Inc.
("Frontier") for the benefit of Fitzsimons (the "Beneficial
Owner"); and
WHEREAS, Fitzsimons
wishes to convey 100%
of his right, title
and interest in
the Leases to CH4 Energy, LLC upon the terms and
conditions
set forth herein;
and
WHEREAS, CH4 Energy, LLC is a wholly owned subsidiary of CH4
Energy, Inc.; and
WHEREAS, CH4 Energy,
Inc. and CH4 Energy, LLC wish to purchase said leases upon
the terms and conditions set forth herein;
NOW THEREFORE in
consideration of the
mutual covenants
and other agreements
contained in this Agreement, the Parties hereby agree as
follows;
I) PURCHASE OF LEASE INTERESTS
Fitzsimons does hereby sell, assign, transfer, and convey to
Subsidiary all
of
Fitzsimons' right, title, and interest in the Leases.
II) CONSIDERATION
In
consideration
for the Leases,
CH4 and Subsidiary agree to reimburse
Fitzsimons the total
Prospect costs as charged by Frontier up to
May 31,
2008
in the sum of
$521,500 (the "Consideration") to be delivered to
Fitzsimons on or before June 25, 2008 ("the "Closing") as
follows:
A.
CH4 shall
issue to Fitzsimons 2,538,000 (post reverse split (1))
shares of CH4's common
stock, which shall have an agreed value of
$63,450; and
B.
CH4 shall
issue a note
payable to Fitzsimons in the amount of the
difference
between the
Consideration
and $63,450, such amount
currently estimated at
$458,050, payable upon demand and bearing
an
interest rate of 9.5% per annum as described fully in Promissory Note
1, attached hereto as Exhibit 2. Promissory Note 1 shall be secured
by
the Leases.
----------
1. On June 17,
2008, the Company's Directors approved a 1:25 reverse stock
split ("Reverse
Split") of the
Company's Common
Stock. A Majority of the
Stockholders approved the Reverse Stock Split by written consent in
lieu of
a
meeting on June 17, 2008 in accordance with the Nevada General
Corporation Law.
<PAGE>
III) SELLER'S REPRESENTATIONS AND WARRANTIES
Seller represents and warrants as follows:
A.
Seller
makes no warranty of
title with respect to the land covered by
the Prospect Leases.
B. The rights and interest
conveyed to the
Subsidiary by this instrument
are free and clear of all liens, charges, and encumbrances created
by
Seller;
C.
The Leases are
held in the name of Frontier as trustee for the benefit
of Seller.
D.
Seller has the
right to make the transfer and conveyance effectuated
by this instrument;
E.
No default or
defaults have been declared under the Leases; and
F.
The Leases are
in good standing and in full force and effect.
IV) CH4'S WARRANTIES
CH4
represents and warrants as follows:
A.
CH4 is a
corporation duly
organized and validly
existing and in good
standing under the
laws of the State of Nevada. It has all requisite
corporate power and
authority to carry on its business as now
being
conducted, to enter
into this Agreement
and to carry out and perform
the terms and provisions of this Agreement;
B.
The execution,
delivery and
performance of this Agreement by CH4 will
not (i) result in a violation of the CH4's Articles of Incorporation
or the By-laws or (ii)
conflict with or
constitute a default
(or an
event which
with notice or lapse of time or both would become a
default) under,
or give to others any rights of termination,
amendment,
acceleration or cancellation of, any agreement, indenture
or instrument to which the CH4 is a party;
C.
Mr. Larry Sostad
is the duly elected and serving President of CH4 and
has been duly empowered to execute this Agreement, and any amendments
and notifications hereby, by and on behalf of CH4.
D.
All corporate action required to be taken by CH4 to
enter into this
Agreement has been taken.
V) SUBSIDIARY'S WARRANTIES
CH4,
LLC represents and warrants as follows:
A.
CH4 Energy,
LLC is a limited
liability company duly organized and
validly existing and
in good standing under
the laws of the State of
Oklahoma. It has all
requisite corporate power and authority to carry
on its business as now being conducted, to enter into this Agreement
and to carry
out and perform the terms and provisions of this
Agreement;
B.
CH4 Energy, LLC
is a wholly owned subsidiary of CH4;
C.
The execution, delivery and performance of this Agreement by the
Subsidiary will not
(i) result in a
violation of the Subsidiary's
Articles of
Incorporation
or the By-laws or (ii)
conflict with or
constitute a default
(or an event which
with notice or lapse of time
or both would become a default) under, or give to others any rights
of
2
<PAGE>
termination,
amendment,
acceleration or
cancellation
of, any
agreement, indenture or instrument to which the Subsidiary is a
party;
D.
Mr. Larry Sostad is the duly elected and serving President of the
Subsidiary and has been duly empowered to execute this Agreement,
and
any amendments
and notifications hereby, by and on behalf of the
Subsidiary.
E.
All corporate
action required to be taken by the
Subsidiary to enter
into this Agreement has been taken.
VI) ONGOING OBLIGATIONS TO FRONTIER FOR ADDITIONAL LEASES
CH4
and the Subsidiary
undertake to pay all outstanding costs and fees of
Frontier and all
future costs and fees
of Frontier relating
both to the
Prospect and to the
acquisition of leases within the Prospect by Frontier.
To
assist finance this
obligation, Fitzsimons
is providing CH4 an interim
loan
of $116,000. CH4 shall
execute a Promissory Note for the repayment of
the
$116,000. The
Promissory Note shall be: secured by the Leases, payable
upon
demand and bear an interest rate of 9.5% per annum as described
fully
in
Promissory Note 2, attached hereto as Exhibit 3.
VII) FURTHER ASSURANCES
Each
party shall do and
perform, or cause to
be done and performed,
all
such
further acts and things, and shall execute and deliver all
such other
agreements, certificates, instruments and documents, as the other
party may
reasonably request
in order to carry out
the intent and
accomplish
the
purposes of
the Agreement and the consummation of the transactions
contemplated hereby.
VIII) NOTICES
All notices, consents, waivers, and other communications under this
Agreement must be in
writing and will be deemed to have been
duly given
when
(a) delivered by hand (with written confirmation of receipt),
or (b)
when
received by the addressee, if sent by a nationally recognized
overnight delivery
service (receipt requested), in each case to the
appropriate addresses
set forth below (or to such other
addresses as a
party may designate by notice to the other parties):
To
the Seller:
James Fitzsimons
Selnaustrasse 3
8001 Zurich
Switzerland
To
CH4 Energy, Inc:
CH4 Energy, Inc.
4370 La Jolla Village Drive, Ste 670
San Diego, CA
92122
604-904-2432
With
a Courtesy Copy to:
Karen Batcher
Batcher & Zarcone, LLP
4190 Bonita Rd., Suite 205
Bonita, California, 91902
619-475-7882
619-789-6262
To
CH4 Energy, LLC:
CH4 Energy, LLC
4370 La Jolla Village Drive, Ste 670
San Diego, CA
92122
604-904-2432
3
<PAGE>
With
a Courtesy Copy to:
Karen Batcher
Batcher & Zarcone, LLP
4190 Bonita Rd., Suite 205
Bonita, California, 91902
619-475-7882
619-789-6262
Any
Party may change its
address for the
purpose of this paragraph by
giving written
notice of that
change to the
other Party in the manner
provided in this paragraph.
IX) ATTORNEY'S FEES
Should any litigation
be commenced between
the parties to the
Agreement,
the
prevailing party in that litigation shall be entitled, in addition to
such
other relief as may be granted, to a reasonable sum as attorney's
fees
in
the litigation, which shall be determined by the court in the
litigation
or
in a separate action brought for that purpose.
X) BINDING ON HEIRS
All
of the terms and
provisions
of this instrument shall inure to the
benefit of and shall be binding on the heirs, executors, administrators,
representatives,
successors, and
assigns of each of the parties to the
Agreement.
XI) SOLE AND ONLY AGREEMENT
This
Agreement constitutes
the sole and only agreement between the Parties
respecting the sale and purchase of Seller's rights under the Leases,
and
correctly sets forth the obligations of the Parties to each other
as of its
date. Any agreements or representations respecting the Agreement not
expressly set forth in this instrument are null and void.
XII) SEVERABILITY
If
any provision of the Agreement is held invalid or unenforceable by any
court of competent jurisdiction, the other provisions of the
Agreement will
remain in full force
and effect.
Any provision of the Agreement held
invalid or
unenforceable only in
part or degree will remain in full force
and
effect to the extent not held invalid or unenforceable.
XIII) COUNTERPARTS AND FACSIMILE SIGNATURES
The
Agreement may be
executed in one or more counterparts, each of which
will
be deemed to be an original copy of the Agreement and all of which,
when
taken together, will be deemed to constitute one and the same
agreement.
Facsimile
signatures are
acceptable
and deemed original
signatures.
4
<PAGE>
IN WITNESS WHEREOF, the Parties have caused the Agreement to be
duly executed as
of the date first written above.
SELLER:
By: /s/ James Fitzsimons
-------------------------------------
James
Fitzsimons
CH4 ENERGY, INC.
By: /s/ Larry Sostad
-------------------------------------
Larry Sostad,
President
CH4 ENERGY, LLC
By: /s/ Larry Sostad
-------------------------------------
Larry Sostad,
President
5
<PAGE>
EXHIBIT 1
LEASES
PAGE 1 OF 24
Tract
Lease
Lessor
Number Date
Expires
Royalty
------
------ ----
-------
-------
011N-011E,13
LOVE FAMILY TRUST, HENRY THOM
1
9/10/07 9/10/10
3/16ths
CONNELL TRUST, BARBARA LYTAL
1
9/10/07 9/10/10
3/16ths
LOVE TRUST, JOHN F
1
9/10/07 9/10/10
3/16ths
<PAGE>
EXHIBIT 1, CONT.
LEASES
PAGE 2 OF 24
Tract
Lease
Lessor
Number Date
Expires
Royalty
------
------ ----
-------
-------
011N-012E,02
WYNNE TRUST, DIANE & JOHN
1.1
12/4/07 12/4/10
3/16ths
WYNNE TRUST, J.BRYCE
1.1
12/4/07 12/4/10
3/16ths
WYNNE TRUST, DIANE & JOHN
1.2
12/4/07 12/4/10
3/16ths
WYNNE TRUST, J.BRYCE
1.2
12/4/07 12/4/10
3/16ths
GRAY, HELEN LACKEY
2
12/15/07 12/15/10
3/16ths
HUNTER, OPAL R
2
12/13/07 12/13/10
3/16ths
LACKEY III, WILLIAM SANFORD
2
12/18/07 12/18/10
3/16ths
SAULS, CATHERINE LACKEY
2
12/15/07 12/15/10
3/16ths
DAVIS, MADALYN LACKEY
2
12/15/07 12/15/10
3/16ths
SMITH, BETTY SUE LACKEY
2
12/13/07 12/13/10
3/16ths
ANTHIS LAND COMPANY, LLC
3
02/13/08 02/13/11
3/16ths
BURNS FAMILY TRUST
3
02/12/08 02/12/11
3/16ths
HIGGS TRUST, LOUIS D. & JOAN 3
02/12/08 02/12/11
3/16ths
MAYNARD, BABRBARA
WRIGHT
3
12/23/07 12/23/10
3/16ths
RICHARDS, JACQUELYN CAYWOOD
5
04/11/08 04/11/11
3/16ths
AGEE, GEORGE F
11
01/04/08 01/04/11
3/16ths
<PAGE>
EXHIBIT 1, CONT.
LEASES
PAGE 3 OF 24
Tract
Lease
Lessor
Number Date
Expires
Royalty
------
------ ----
-------
-------
011N-012E,03
SARBER, PATRICIA ANN SANDFORD
1
08/23/07 08/23/10
3/16ths
SARBER, PATRICIA ANN SANDFORD
1
08/23/07 08/23/10
3/16ths
DAVIS, MADALYN LACKEY
2
08/23/07 08/23/10
3/16ths
GRAY, HELEN LACKEY
2
08/23/07 08/23/10
3/16ths
HAVERCAMP, RICHARD P
2
09/09/07 09/09/10
3/16ths
KIRK, TERRY E
2
08/31/07 08/31/10
3/16ths
SAULS, CATHERINE LACKEY
2
08/23/07 08/23/10
3/16ths
<PAGE>
EXHIBIT 1, CONT.
LEASES
PAGE 4 OF 24
Tract
Lease
Lessor
Number Date
Expires
Royalty
------
------ ----
-------
-------
011N-012E,04
CONNELL TRUST, BARBARA LYTAL
1
09/10/07 09/10/10
3/16ths
LOVE TRUST, JOHN F
1
09/10/07 0
