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EXHBIT
10.6
PURCHASE
AND SALE AGREEMENT
dated
effective as of October 5, 2007
between
Hallador
Petroleum Company,
as
Purchaser
and
Savoy
Energy Limited Partnership,
as
Seller
1.1
Definitions
1
1.2
Other
Defined Terms 2
ARTICLE II
PURCHASE
AND SALE 2
2.1
Purchase
and Sale of the Additional Partnership Interest
2
2.2
Consideration
3
2.3
Transactions
to be Effected at the Closing 3
2.4
Closing
Date 3
ARTICLE III
REPRESENTATIONS
AND WARRANTIES OF SELLER 3
3.1
Organization
3
3.2
Authorization
and Enforceability 3
3.3
No
Conflicts; Authorization 4
3.4
No
Brokers or Finders 4
ARTICLE IV
REPRESENTATIONS
AND WARRANTIES OF PURCHASER 4
4.1
Organization
4
4.2
Authority
and Enforceability 4
4.3
No
Conflicts; Authorizations 5
4.4
Investment
Representations 5
4.5
Brokers
or Finders 5
ARTICLE V
CONDITIONS
TO CLOSING 5
5.1
Conditions
to Obligations of Purchaser 5
5.2
Conditions
to Obligations of Seller 6
ARTICLE VI
POST-CLOSING
COVENANTS 7
6.1
Post-Closing
Notifications 7
6.2
Certain
Tax Matters 7
6.3
Further
Assurances 7
ARTICLE VII
TERMINATION
7
7.1
Termination
7
7.2
Effect
of Termination 8
7.3
Remedies
8
ARTICLE VIII
INDEMNIFICATION
9
8.1
Survival
9
8.2
Indemnification
9
8.3
Notice
and Opportunity to Defend 9
8.4
Contingent
Claims 10
8.5
Tax
Treatment of Indemnification Payments 10
8.6
Exclusive
Remedy 10
ARTICLE IX
MISCELLANEOUS
10
9.1
Notices
10
9.2
Amendments
and Waivers 11
9.3
Expenses
12
9.4
Successors
and Assigns 12
9.5
Governing
Law 12
9.6
Consent
to Jurisdiction 12
9.7
Counterparts
12
9.8
Third
Party Beneficiaries 12
9.9
Entire
Agreement 13
9.10
Captions
13
9.11
Severability
13
9.12
Interpretation
13
TABLE
OF CONTENTS
(continued)
Page
PURCHASE
AND SALE AGREEMENT
This
PURCHASE AND SALE AGREEMENT (this “ Agreement
”),
dated as of October 5, 2007, is entered into by and
between Hallador Petroleum Company, a Colorado corporation
(“ Purchaser
”),
and Savoy Energy Limited Partnership, a Michigan limited
partnership (“ Seller
”).
RECITALS:
A.
Purchaser
is a limited partner of Seller, and its chief executive
officer serves as one of three members of the Executive
Committee of Seller.
B.
As of
the date of this Agreement, Purchaser owns a 32.303328%
limited partnership interest in Seller.
C.
Upon
the terms and subject to the conditions set forth in this
Agreement, Purchaser wishes to purchase from Seller, and
Seller wishes to sell to Purchaser, a 13.102581% limited
partnership interest in Seller (the “ Additional
Partnership Interest ”).
Following such purchase and sale, Purchaser will hold a
45.405909% limited partnership interest in
Seller.
NOW,
THEREFORE, in consideration of the foregoing premises and the
respective representations and warranties, covenants and
agreements contained herein, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
1.1
Definitions . When used
in this Agreement, the following terms shall have the meanings
assigned to them in this Section
1.1
, or in the
applicable Section of this Agreement to which reference is made in
this Section
1.1
.
“
Affiliate
”
means, with respect to any specified Person, any other Person
directly or indirectly controlling, controlled by or under
common control with such specified Person.
“
Business
Day ”
means a day other than a Saturday, Sunday or other day on
which banks located in Detroit, Michigan are authorized or
required by Law to close.
“
Certificate
”
means the Certificate of Limited Partnership of Seller filed
with the Michigan Department of Labor and Economic Growth, as
the same may be amended from time to time.
“
Governmental
Entity ”
means any entity or body exercising executive, legislative,
judicial, regulatory or administrative functions of or
pertaining to United States federal, state, local, or
municipal government, foreign, international, multinational or
other government, including any department, commission, board,
agency, bureau, subdivision, instrumentality, official or
other regulatory, administrative or judicial authority
thereof.
“
Law
”
means any statute, law (including common law), treaty,
ordinance, code, order, decree, judgment, rule, regulation and
any other binding requirement or determination of any
Governmental Entity.
“
Lien
”
means, with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest, adverse claim or
other encumbrance in respect of such property or
asset.
“
Losses
”
means any and all losses, liabilities, claims, demands, fines,
judgments, orders, settlements, damages and any related
expenses (including, without limitation, reasonable legal,
accounting, consulting and investigation expenses and
litigation costs), but excluding consequential damages or any
damages based upon a multiple of damages or similar
theory.
“
Order
”
means any award,
injunction, judgment, decree, order, ruling, subpoena or
verdict or other decision issued,
promulgated or entered by or with any Governmental Entity of
competent jurisdiction.
“
Person
”
means an individual, a corporation, a partnership, a limited
liability company, a trust, an unincorporated association, a
Governmental Entity or any agency, instrumentality or
political subdivision of a Governmental Entity, or any other
entity or body.
1.2
Other Defined Terms . The
following terms have the meanings assigned to such terms in the
Sections of the Agreement set forth below:
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Acquisition
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2.1
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Additional
Partnership Interest
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Recitals
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|
Agreement
|
Preamble
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Asserted
Liability
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8.3(a)
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Closing
|
2.4
|
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Closing
Date
|
2.4
|
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Indemnitee
|
8.3(a)
|
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Indemnifying
Party
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8.3(a)
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Partnership
Agreement
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3.1
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Permitted
Restrictions
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2.1
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Purchase
Price
|
2.2
|
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Purchaser
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Preamble
|
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Seller
|
Preamble
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ARTICLE II
PURCHASE
AND SALE
2.1
Purchase and Sale of the Additional Partnership Interest
. Upon the
terms and subject to the conditions of this Agreement, at the
Closing, Seller shall sell to Purchaser, and Purchaser shall
purchase from Seller, the Additional Partnership Interest free and
clear of all Liens other than restrictions on transfer imposed
under the Certificate and the Partnership Agreement (the
“ Permitted
Restrictions ”).
The purchase and sale of the Additional Partnership Interest is
referred to in this Agreement as the “ Acquisition
.”
2.2
Consideration . At the
Closing, Purchaser shall pay to Seller an amount equal to U.S.
$6,000,000.00 (the “ Purchase
Price ”) by
wire transfer of immediately available funds to the bank account
set forth on Schedule
2.2
.
2.3
Transactions to be Effected at the Closing .
(a)
At
the Closing Purchaser shall deliver to Seller all documents,
instruments or certificates required to be delivered by Purchaser
to Seller at the Closing pursuant to this Agreement.
(b)
At
the Closing Seller shall deliver to Purchaser (i) all
certificates representing or evidencing the Additional Partnership
Interest, if any, (ii) all other documents and instruments
necessary to vest in Purchaser all of Seller’s right, title
and interest in and to the Additional Partnership Interest, free
and clear of all Liens (other than the Permitted Restrictions), and
(iii) all other documents, instruments or certificates
required to be delivered by Seller to Purchaser at the Closing
pursuant to this Agreement.
2.4
Closing Date . The
closing of the Acquisition (the “ Closing
”)
shall be coordinated by Morgan, Lewis & Bockius LLP and Barnes
& Thornburg LLP and shall take place on October 5, 2007,
unless another time, date or place is agreed to in writing by the
parties. The date upon which the Closing occurs is herein referred
to as the “ Closing
Date .”
ARTICLE III
REPRESENTATIONS
AND WARRANTIES OF SELLER
Seller
represents, warrants and covenants to Purchaser as of the date
hereof and as of the Closing Date that:
3.1
Organization . Seller is
a limited partnership existing in good standing under the Laws of
Michigan and has all requisite power and authority to own, lease,
and operate its assets and to carry on its business as presently
conducted. Seller is duly qualified or licensed to do business as a
foreign limited partnership and is in good standing in each
jurisdiction in which the activity of Seller in such jurisdiction
thereby makes such qualification necessary. Except for
the Third Amended and Restated Agreement of Limited Partnership of
Seller dated October 5, 2007 (the “ Partnership
Agreement ”),
there is no voting trust, proxy, or other agreement or
understanding between or among any Persons that affects or relates
to the voting or giving of written consent with respect to
Seller.
3.2
Authorization and Enforceability . Seller has
all requisite power and authority to execute and deliver this
Agreement, to perform Seller’s obligations hereunder and to
consummate the transactions contemplated hereby. Seller has the
full power to issue the Additional Partnership Interest to
Purchaser in accordance with the terms of this Agreement, free and
clear of all Liens (other than the Permitted Restrictions). The
execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly
authorized by Seller and no other proceedings by Seller or the
partners of Seller are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby. This Agreement has
been duly and validly executed and delivered by Seller, and
constitutes the valid and binding obligation of Seller enforceable
against Seller in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar Laws affecting or
relating to creditors’ rights generally, or general
principles of equity.
3.3
No Conflicts; Authorization . The
execution and delivery by Seller of this Agreement do not, and the
consummation of the Acquisition by Seller will not:
(a)
conflict
with or result in a violation or breach of any of the terms,
conditions or provisions of the Certificate, Partnership Agreement
or similar organization documents of Seller;
(b)
conflict
with or result in a material violation or breach of any Law or
Order applicable to Seller or any of Seller’s assets and
properties or require any consent or approval of or any notice or
filing with any Governmental Entity or other third party;
or
(c)
conflict
with or result in a breach or violation of, or default under, or
give rise to any right of acceleration or termination of, any of
the terms, conditions or provisions of, any note, bond, lease,
license, agreement or other instrument or obligation to which
Seller is a party or by which Seller’s assets or properties
are bound.
3.4
No Brokers or Finders . Seller has
not incurred and will not incur, directly or indirectly, as a
result of any action taken or permitted to be taken by or on behalf
of Seller, any liability for brokerage or finders’ fees or
agents’ commissions or similar charges in connection with the
execution and performance of the transactions contemplated by this
Agreement.
ARTICLE IV
REPRESENTATIONS
AND WARRANTIES OF PURCHASER
Purchaser
represents and warrants as of the date hereof and as of the
Closing Date:
4.1
Organization . Purchaser
is a corporation existing in good standing under the Laws of
Colorado and has all requisite power and authority to own, lease,
and operate its assets and to carry on its business as presently
conducted. Purchaser is duly qualified or licensed to do business
as a foreign corporation and is in good standing in each
jurisdiction in which the activity of Seller in such jurisdiction
thereby makes such qualification necessary.
4.2
Authority and Enforceability . Purchaser
has all requisite power and authority to execute and deliver this
Agreement, to perform Purchaser’s obligations hereunder and
to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly and validly
authorized by all necessary action on the part of Purchaser and no
other proceedings by Purchaser are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by
Purchaser and constitutes the valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
Laws affecting or relating to creditors’ rights generally, or
general principles of equity.
4.3
No Conflicts; Authorizations . The
execution and delivery of this Agreement by Purchaser does not, and
the consummation of the Acquisition by Purchaser will
not:
(a)
conflict
with or result in a violation or breach of any of the terms,
conditions or provisions of the charter, bylaws or similar
organization documents of Purchaser;
(b)
conflict
with or result in a material violation or breach of any Law or
Order applicable to Purchaser or any of Purchaser’s assets
and properties or require any consent or approval of or any notice
or filing with any Governmental Entity or other third party;
or
(c)
conflict
with or result in a breach or violation of, or default under, or
give rise to any right of acceleration or termination of, any of
the terms, conditions or provisions of, any note, bond, lease,
license, agreement or other instrument or obligation to which
Purchaser is a party or by which Purchaser’s assets or
properties are bound.
4.4
Investment Representations . The
Additional Partnership Interest is being acquired for
Purchaser’s own account for investment only and not with a
view to any sale or other distribution thereof. Purchaser
understands that the Partnership Agreement and applicable Law
prohibits Purchaser from offering to sell or otherwise dispose of,
or selling or otherwise disposing of, the Additional Partnership
Interest so acquired by it in violation of any Law, including, but
not limited to, the Securities Act of 1933, as amended (the
“ Act
”),
and applicable state securities laws. Purchaser acknowledges that
its designee is a member of Seller’s Executive Committee,
that it is familiar with Seller’s business operations and
prospects, and that it has had the opportunity to review all
information and to make all investigations that it desired
regarding Seller prior to making the Acquisition. Purchaser is an
“accredited investor” within the meaning of Rule
501(a
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