EX-10.6 9 savoypsa.htm SAVOY PURCHASE AND SALE AGREEMENT 100507 Savoy Purchase and Sale Agreement 100507
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-LA/947404.9 



 
1.1Definitions1
 
1.2Other Defined Terms2
 
ARTICLE IIPURCHASE AND SALE2
 
2.1Purchase and Sale of the Additional Partnership Interest2
 
2.2Consideration3
 
2.3Transactions to be Effected at the Closing3
 
2.4Closing Date3
 
ARTICLE IIIREPRESENTATIONS AND WARRANTIES OF SELLER3
 
3.1Organization3
 
3.2Authorization and Enforceability3
 
3.3No Conflicts; Authorization4
 
3.4No Brokers or Finders4
 
ARTICLE IVREPRESENTATIONS AND WARRANTIES OF PURCHASER4
 
4.1Organization4
 
4.2Authority and Enforceability4
 
4.3No Conflicts; Authorizations5
 
4.4Investment Representations5
 
4.5Brokers or Finders5
 
ARTICLE VCONDITIONS TO CLOSING5
 
5.1Conditions to Obligations of Purchaser5
 
5.2Conditions to Obligations of Seller6
 
ARTICLE VIPOST-CLOSING COVENANTS7
 
6.1Post-Closing Notifications7
 
6.2Certain Tax Matters7
 
6.3Further Assurances7
 
ARTICLE VIITERMINATION7
 
7.1Termination7
 
7.2Effect of Termination8
 
7.3Remedies8
 
ARTICLE VIIIINDEMNIFICATION9
 
8.1Survival9
 
8.2Indemnification9
 
8.3Notice and Opportunity to Defend9
 
8.4Contingent Claims10
 
8.5Tax Treatment of Indemnification Payments10
 
8.6Exclusive Remedy10
 
ARTICLE IXMISCELLANEOUS10
 
9.1Notices10
 
9.2Amendments and Waivers11
 
9.3Expenses12
 
9.4Successors and Assigns12
 
9.5Governing Law12
 
9.6Consent to Jurisdiction12
 
9.7Counterparts12
 
9.8Third Party Beneficiaries12
 
9.9Entire Agreement13
 
9.10Captions13
 
9.11Severability13
 
9.12Interpretation13
 


1-LA/947404.9 
    

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:
 
Acquisition
 
 2.1
 
Additional Partnership Interest
 
Recitals
 
Agreement
 
Preamble
 
Asserted Liability
 
8.3(a)
 
Closing
 
 2.4
 
Closing Date
 
 2.4
 
Indemnitee
 
8.3(a)
 
Indemnifying Party
 
8.3(a)
 
Partnership Agreement
 
3.1
 
Permitted Restrictions
 
2.1
 
Purchase Price
 
2.2
 
Purchaser
 
Preamble
 
Seller
 
Preamble
 
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) of Regulation D promulgated pursuant to the Act. The Additional Partnership Interest has not been offered or sold by means of any general advertising or general solicitation.
 
4.5  Brokers or Finders. Purchaser has not incurred and will not incur, directly or indirectly, any liability for any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement.
 
ARTICLE V  
 

 
CONDITIONS TO CLOSING
 
The obligations of Purchaser and Seller to effect the transactions contemplated hereby are subject to the satisfaction at or prior to the Closing of the following conditions:
 
5.1  Conditions to Obligations of Purchaser.
 
(a)  Representations and Warranties of Seller. The representations and warranties of Seller shall be true and correct as of the Closing Date.
 
(b)  Agreements and Covenants. Seller shall have performed and complied in all material respects with each agreement, covenant and obligation required by it pursuant to this Agreement to be so performed or complied with by Seller at or before the Closing.
 
(c)  Partnership Agreement. Seller shall deliver to Purchaser a copy of the Partnership Agreement, signed by each of the partners except Purchaser, the form of which is attached hereto as Exhibit A.
 
(d)  Officer’s Certificate. An authorized officer of Seller shall have delivered to Purchaser at the Closing a certificate stating that all approvals necessary to consummate the transactions contemplated by this Agreement have been obtained and attaching thereto: (i) a copy of the Certificate, certified by the Michigan Department of Labor and Economic Growth and certified by the general partner of Seller as the true and correct copy of the Certificate as of the Closing; (ii) a copy of the Second Amended and Restated Agreement of Limited Partnership (the “Second Partnership Agreement”), dated as of February 1, 2003, certified by the general partner of Seller as the true and correct copy of the Second Partnership Agreement as of the Closing; (iii) a copy of the consent of the Executive Committee of Seller, evidencing the approval of this Agreement and the transactions contemplated hereby; and (iv) a copy of the waiver by each of the Partners of Seller, waiving their respective preemptive rights to acquire the Additional Partnership Interest under the Partnership Agreement.
 
(e)  Legal opinion of Seller’s Counsel. Seller shall deliver, or shall cause to be delivered, a legal opinion from Barnes and Thornburg LLP, counsel to Seller, with respect to Section 3.1 of the Agreement, in form and substance acceptable to Purchaser in its reasonable discretion.
 
(f)  Third-Party Consents. Any and all consents or waivers required from third parties relating to the performance by Seller of its obligations hereunder shall have been obtained.
 
(g)  No Actions or Proceedings. No claim, action, suit, investigation or proceeding shall be pending or threatened before any court or governmental agency which presents a substantial risk of the restraint or prohibition of the transactions contemplated by this Agreement.
 
(h)  Management Incentive Plan. Seller shall have adopted a management equity incentive plan containing terms reasonably acceptable to Purchaser, substantially in the form of Exhibit B attached hereto.
 
5.2  Conditions to Obligations of Seller.
 
(a)  Representations, Warranties of Purchaser. The representations and warranties of Purchaser contained in this Agreement shall be true and correct as of the date hereof.
 
(b)  Agreements and Covenants. Purchaser shall have performed and complied in all material respects with each agreement, covenant and obligation required by this Agreement to be so performed or complied with by Purchaser at or before the Closing, including payment of the Purchase Price as specified in Section 2.2.
 
(c)  Partnership Agreement. Seller shall have received Purchaser’s signature to the Partnership Agreement, the form of which is attached hereto as Exhibit A.
 
(d)  Third-Party Consents. Any and all consents or waivers required from third parties relating to the performance by Purchaser of its obligations hereunder shall have been obtained.
 
(e)  No Actions or Proceedings. No claim, action, suit, investigation or proceeding shall be pending or threatened before any court or governmental agency which presents a substantial risk of the restraint or prohibition of the transactions contemplated by this Agreement.
 
(f)  Management Incentive Plan. Purchaser shall have approved a management equity incentive plan containing terms reasonably acceptable to Seller, substantially in the form of Exhibit B attached hereto.
 
ARTICLE VI  
 

 
POST-CLOSING COVENANTS
 
6.1  Post-Closing Notifications. Purchaser and Seller will, and each will cause their respective Affiliates to, comply with any post-Closing notification or other requirements, to the extent then applicable to such party, of any antitrust, trade competition, investment or control, export or other Law of any Governmental Entity having jurisdiction over Purchaser or Seller.
 
6.2  Certain Tax Matters. All sales, use, transfer, stamp, conveyance, value added or other similar taxes, duties, excises or governmental charges imposed by any Governmental Entity with taxing authority, domestic or foreign, and all recording or filing fees, notarial fees and other similar costs of Closing with respect to the transfer of the Additional Partnership Interest or otherwise on account of this Agreement or the transactions contemplated hereby will be borne in equal shares by Seller and Purchaser.
 
6.3  Further Assurances. Subject to the terms of this Agreement, each of Purchaser and Seller shall execute such documents and other instruments and take such further actions as may be reasonably required to carry out the provisions hereof and consummate the Acquisition.
 
ARTICLE VII  
 

 
TERMINATION
 
7.1  Termination.
 
(a)  This Agreement may be terminated and the Acquisition abandoned at any time prior to the Closing:
 
(i)  by mutual written consent of Purchaser and Seller; 
 
(ii)  by Purchaser or Seller if:
 
(A)  the Closing does not occur on or before October 5, 2007; provided that the right to terminate this Agreement under this clause (ii)(A) shall not be available to any party whose breach of a representation, warranty, covenant or agreement under this Agreement has been the cause of or resulted in the failure of the Closing to occur on or before such date; or
 
(B)  a Governmental Entity shall have issued an Order or taken any other action, in any case having the effect of permanently restraining, enjoining or otherwise prohibiting the Acquisition, which Order or other action is final and non-appealable;
 
(iii)  by Purchaser if any condition to the obligations of Purchaser hereunder becomes incapable of fulfillment other than as a result of a breach by Purchaser of any covenant or agreement contained in this Agreement, and such condition is not waived by Purchaser; or
 
(iv)  by Seller if any condition to the obligations of Seller hereunder becomes incapable of fulfillment other than as a result of a breach by Seller of any covenant or agreement contained in this Agreement, and such condition is not waived by Seller.
 
(b)  The party desiring to terminate this Agreement pursuant to Section 7.1(a)(ii), (iii), or (iv) shall give written notice of such termination to the other party hereto in the manner provided in this Agreement.
 
7.2  Effect of Termination. In the event of termination of this Agreement as provided in Section 7.1, this Agreement shall immediately become null and void and there shall be no liability or obligation on the part of any party hereto or their respective officers, directors, stockholders, members or Affiliates, except as set forth in Section 7.3; provided that the provisions of Section 7.3 and Article VIII of this Agreement shall remain in full force and effect and survive any termination of this Agreement.
 
7.3  Remedies. Any party terminating this Agreement pursuant to Section 7.1 shall have the right to recover damages sustained by such party as a result of any breach by the other party of any representation, warranty, covenant or agreement contained in this Agreement or fraud or willful misrepresentation; provided, however, that the party seeking relief is not in breach of any representation, warranty, covenant or agreement contained in this Agreement under circumstances which would have permitted the other party to terminate the Agreement under Section 7.1.
 
ARTICLE VIII  
 

 
INDEMNIFICATION
 
8.1  Survival. 
 
(a)  All representations and warranties contained in this Agreement, or in any schedule, certificate or other document delivered pursuant to this Agreement, shall terminate upon the Closing.
 
(b)  The covenants and agreements which by their terms do not contemplate performance after the Closing Date shall survive the Closing for a period of two (2) years. The covenants and agreements which by their terms contemplate performance after the Closing Date shall survive the Closing in accordance with their terms until sixty (60) days following the expiration of any applicable statute of limitations.
 
8.2  Indemnification.
 
(a)  Seller shall indemnify, defend and hold harmless Purchaser from and against any and all Losses based upon, arising out of, in connection with, or relating to any inaccuracy or breach of any representation, warranty, covenant or agreement of Seller contained in this Agreement or other documents delivered by Seller pursuant to this Agreement.
 
(b)  Purchaser shall indemnify, defend and hold harmless Seller from and against any and all Losses based upon, arising out of, in connection with, or relating to any inaccuracy or breach of any representation, warranty, covenant or agreement of Purchaser contained in this Agreement or other documents delivered by Purchaser pursuant to this Agreement.
 
8.3  Notice and Opportunity to Defend.
 
(a)  Promptly after receipt by any party hereto (the “Indemnitee”) of notice of any demand, claim or circumstances which gives rise or might give rise to a claim or the commencement (or threatened commencement) of any action, proceeding or investigation (an “Asserted Liability”) that may result in Losses, the Indemnitee shall give notice thereof to the party obligated to provide indemnification pursuant to Section 8.2 (the “Indemnifying Party”). Such notice shall describe the Asserted Liability in reasonable detail, and shall indicate the amount (estimated, if necessary) of the Losses that have been or may be suffered by the Indemnitee.
 
(b)  The Indemnifying Party may elect to compromise or defend, at its own expense and by its own counsel, any Asserted Liability. If the Indemnifying Party elects to compromise or defend such Asserted Liability, it shall within thirty (30) days (or sooner, if the nature of the Asserted Liability so requires) notify the Indemnitee of its intent to do so, and the Indemnitee shall cooperate, at the expense of the Indemnifying Party, in the compromise of, or defense against, such Asserted Liability. If the Indemnifying Party elects not to compromise or defend the Asserted Liability, fails to notify the Indemnitee of its election as herein provided, or contests its obligation to indemnify under this Agreement, the Indemnitee may pay, compromise or defend such Asserted Liability. Notwithstanding the foregoing, neither the Indemnifying Party nor the Indemnitee may settle or compromise any claim over the objection of the other; provided, however, that consent to settlement or compromise shall not be unreasonably withheld, conditioned or delayed. In any event, the Indemnitee and the Indemnifying Party may participate at their own expense in the defense of such Asserted Liability. Each party shall make available to the other party choosing to defend such Asserted Liability any books, records or other documents within its control that are necessary or appropriate for such defense.
 
8.4  Contingent Claims. Nothing herein shall be deemed to prevent an Indemnitee from making a claim hereunder for potential or contingent claims or demands; provided that any notice of Asserted Liability sets forth the specific basis for any such contingent claim to the extent then feasible and the Indemnitee has reasonable grounds to believe that such a claim may be made.
 
8.5  Tax Treatment of Indemnification Payments. Except as otherwise required by applicable Law, the parties shall treat any indemnification payment made hereunder as an adjustment to Purchase Price.
 
8.6  Exclusive Remedy. The indemnification rights of the parties under this Article VIII shall be the sole and exclusive remedy for any misrepresentation, breach of warranty or failure to fulfill any agreement or covenant hereunder on the part of any party hereto.
 
ARTICLE IX  
 

 
MISCELLANEOUS
 
9.1  Notices. Any notice, request, demand, waiver, consent, approval or other communication which is required or permitted hereunder shall be in writing and shall be deemed given (a) on the date the same has been delivered personally, (b) on the date delivered by a private courier as established by the sender by evidence obtained from the courier, (c) on the date sent by facsimile, with confirmation of transmission, if sent during normal business hours of the recipient, if not, then on the next Business Day, or (d) on the fifth (5th) day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications, to be valid, must be addressed as follows:
 
If to Purchaser, to:
 
Hallador Petroleum Company
 
1660 Lincoln Street, Suite 2700
 
Denver, Colorado 80264
 
Attn: Victor Stabio
 
Facsimile: 303.832.3013
 
With a copy to:
 
Morgan, Lewis & Bockius LLP
 
300 S. Grand Avenue, Suite 2200
 
Los Angeles, California 90071
 
Attn: Ingrid A. Myers, Esq.
 
Facsimile: 213.612.2501
 
If to Seller, to:
 
Savoy Energy Limited Partnership
 
c/o Savoy Exploration, Inc.
 
148 East Front Street, Suite 301
 
Traverse City, Michigan 49684
 
Attn: Thomas C. Pangborn
 
Facsimile: 231.941.9885
 
With a copy to:
 
Barnes & Thornburg LLP
 
300 Ottawa Avenue N.W.
 
Grand Rapids, Michigan 49503
 
Attn: Robert R. Stead, Esq.
 
Facsimile: 616.742.3999
 
or to such other address or to the attention of such Person or Persons as the recipient party has specified by prior written notice to the sending party (or in the case of counsel, to such other readily ascertainable business address as such counsel may hereafter maintain). If more than one method for sending notice as set forth above is used, the earliest notice date established as set forth above shall control.
 
9.2  Amendments and Waivers.
 
(a)  Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement, or in the case of a waiver, by the party against whom the waiver is to be effective.
 
(b)  No failure or delay by any party in exercising any right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.
 
(c)  To the maximum extent permitted by Law, (i) no waiver that may be given by a party shall be applicable except in the specific instance for which it was given and (ii) no notice to or demand on one party shall be deemed to be a waiver of any obligation of such party or the right of the party giving such notice or demand to take further action without notice or demand.
 
9.3  Expenses. Each party shall bear its own costs and expenses in connection with this Agreement and the transactions contemplated by this Agreement, including all legal, accounting, financial advisory, consulting and all other fees and expenses of third parties, whether or not the Acquisition is consummated.
 
9.4  Successors and Assigns. This Agreement may not be assigned by either party hereto without the prior written consent of the other party. Subject to the foregoing, all of the terms and provisions of this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns.
 
9.5  Governing Law. This Agreement and the Exhibits and Schedules hereto shall be governed by and interpreted and enforced in accordance with the Laws of the State of Michigan, without giving effect to any choice of Law or conflict of Laws rules or provisions (whether of the State of Michigan or any other jurisdiction) that would cause the application of the Laws of any jurisdiction other than the State of Michigan.
 
9.6  Consent to Jurisdiction. Each party irrevocably submits to the exclusive jurisdiction of the United States District Court for the Western District of Michigan in connection with any action, suit or proceeding arising out of or relating to this Agreement or any breach thereof, or any transaction contemplated hereby, unless such court would not have subject matter jurisdiction thereof, in which event the parties consent to the exclusive jurisdiction of the courts of the State of Michigan, located in Grand Traverse County. Each party further agrees that service of any process, summons, notice or document by U.S. registered mail to such party’s respective address set forth above shall be effective service of process for any action, suit or proceeding. Each party irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the Acquisition and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF. 
 
9.7  Counterparts. This Agreement may be executed in counterparts, and either party hereto may execute any such counterpart, each of which when executed and delivered shall be deemed to be an original and both of which counterparts taken together shall constitute but one and the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other party hereto. The parties agree that the delivery of this Agreement may be effected by means of an exchange of facsimile signatures with original copies to follow by mail or courier service.
 
9.8  Third Party Beneficiaries. No provision of this Agreement is intended to confer upon any Person other than the parties hereto any rights or remedies hereunder; except that in the case of Article VIII hereof, the Indemnitees and their respective heirs, executors, administrators, legal representatives, successors and assigns, are intended third party beneficiaries of such sections and shall have the right to enforce such sections in their own names.
 
9.9  Entire Agreement. This Agreement and the documents, instruments and other agreements specifically referred to herein or delivered pursuant hereto set forth the entire understanding of the parties hereto with respect to the Acquisition. All schedules, exhibits and attachments referred to herein are intended to be and hereby are specifically made a part of this Agreement. Any and all previous agreements and understandings between or among the parties regarding the subject matter hereof, whether written or oral, are superseded by this Agreement.
 
9.10  Captions. All captions contained in this Agreement are for convenience of reference only, do not form a part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement.
 
9.11  Severability. Any provision of this Agreement which is invalid or unenforceable in any jurisdiction shall be ineffective to the extent of such invalidity or unenforceability without invalidating or rendering unenforceable the remaining provisions hereof, and any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
 
9.12  Interpretation.
 
(a)  The meaning assigned to each term defined herein shall be equally applicable to both the singular and the plural forms of such term and vice versa, and words denoting either gender shall include both genders as the context requires. Where a word or phrase is defined herein, each of its other grammatical forms shall have a corresponding meaning.
 
(b)  The terms “hereof”, “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement.
 
(c)  When a reference is made in this Agreement to an Article, Section, paragraph, Exhibit or Schedule, such reference is to an Article, Section, paragraph, Exhibit or Schedule to this Agreement unless otherwise specified.
 
(d)  The word “include”, “includes”, and “including” when used in this Agreement shall be deemed to be followed by the words “without limitation”, unless otherwise specified.
 
(e)  A reference to any party to this Agreement or any other agreement or document shall include such party’s predecessors, successors and permitted assigns.
 
(f)  Reference to any Law means such Law as amended, modified, codified, replaced or reenacted, and all rules and regulations promulgated thereunder.
 
(g)  The parties have participated jointly in the negotiation and drafting of this Agreement. Any rule of construction or interpretation otherwise requiring this Agreement to be construed or interpreted against any party by virtue of the authorship of this Agreement shall not apply to the construction and interpretation hereof.
 

1-LA/947404.9 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the date first above written.
 
PURCHASER:

HALLADOR PETROLEUM COMPANY

By:  /s/ Victor P. Stabio   
Name:  Victor P. Stabio   
Title:  Chief Executive Officer and President
SELLER:
 

 
SAVOY ENERGY LIMITED PARTNERSHIP
 
By:  Savoy Exploration, Inc.
 
Its: General Partner
 

 
By:   /s/ Thomas C. Pangborn
 
Name:   Thomas C. Pangborn
 
Title:   Chief Executive Officer