Asset Purchase Agreement between Nova Leasing, LLC and Sun River Energy, Inc.

Summary

Nova Leasing, LLC (Seller) agrees to sell certain mineral lease interests in Wyoming to Sun River Energy, Inc. (Buyer) for $6.6 million, with $3.3 million paid via a promissory note and 880,000 shares of restricted common stock. The assets are transferred free of liens, except as specified, and are secured by a mortgage and security agreement. The agreement includes conditions such as drilling commitments and reverter clauses if development does not occur. Either party may terminate the agreement before closing if the other fails to meet its obligations.

EX-10.1 2 assetagrex101.txt ASSET PURCHASE AGREEMENT ASSET PURCHASE AGREEMENT ("Agreement"), dated as of September ___, 2006 between Nova Leasing, LLC ("Seller"), and Sun River Energy, Inc., a Colorado Corporation ("Buyer") RECITALS: WHEREAS, Seller holds certain mineral lease interests listed on Exhibit A for the exploration of minerals in Wyoming ("Assets") hereafter; WHEREAS, Seller desires to convey such assets to Buyer subject to certain conditions, and Buyer desires to acquire such assets, upon the terms and subject to the conditions herein set forth; and NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, Seller and Buyer agree as follows: ARTICLE 1 TERMS OF TRANSACTION 1.1 Assets to be Transferred. At the Closing, and on the terms and subject of the conditions set forth in this Agreement, Seller shall sell, assign, transfer, deliver and convey to Buyer, and Buyer shall purchase from Seller, the assets listed on Exhibit A. 1.2 Purchase Price and Payment. In consideration of the transfer by Seller to Buyer of the assets, Buyer shall provide to Seller the consideration as follows: $6,600,000; $3,300,000 in the form of a Promissory Note bearing interest at 7.5%, due in three payments: $1,100,000 March 15, 2007 at closing, $1,100,000 by November 30, 2007 and $1,100,000 by November 30, 2008, notes to be secured by assets listed on Exhibit A, and 880,000 shares of restricted common stock of Buyer with registration rights to be distributed pro-rata to holders of interests in Seller. ARTICLE 2 CLOSING 2.1 Closing; Closing Date. The closing of the transactions contemplated hereby (the "Closing") shall occur on or before October 15, 2006 At the Closing, each of the parties hereto shall make the following deliveries or such deliveries in substitution therefore as are satisfactory to the indicated recipient: 2.2 Deliveries by Seller. (1) Seller shall deliver to Buyer: Assignment of Leases to the assets as is appropriate. (2) The assignments shall contain reverter clauses in the event of non exploration and development as contained on Exhibit B hereto. 2.3 Deliveries by Buyer. (1) Buyer shall issue a Promissory Note payable to Seller in the amount of $3,300,00 as required herein and a Mortgage, Security and Pledge Agreement and UCC - 1 securing the note against the assets assigned and held by Buyer. ARTICLE 3 WARRANTIES OF SELLER Seller represents and warrants to Buyer that: 3.l Authority Relative to this Agreement. Seller has full power and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby. 3.2 Title to Assets. Seller is the owner of, and has good and indefeasible title to the fee minerals and valid leases on the mineral leases. 3.3 Seller's. Seller has no knowledge of any facts or circumstances the existence or absence of which are reasonably likely to cause assets to be valueless. 3.4 The assets will be delivered free and clear of liens and encumbrances except those required in this contract. ARTICLE 4 ADDITIONAL AGREEMENTS & WARRANTIES OF BUYER 4.1 Buyer agrees to the terms of Reverter Clauses as listed on Exhibit B. 4.2 Fees and expenses. Except as otherwise expressly provided in this Agreement, all fees and expenses, including fees and expenses of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fee or expense. ARTICLE 5 TERMINATION 5.1 Termination. This Agreement may be terminated and the transaction contemplated hereby abandoned at any time prior to the Closing in the following manner: (a) by Seller, if Buyer shall have failed to fulfill in any material respect any of its material obligations under this Agreement; or (b) by Buyer, if Seller shall have failed to fulfill in an material respect any of its material obligations under this Agreement. IN WITNESS WHEREOF, the parties have executed this Agreement, or caused this Agreement to be executed by their duly authorized representatives, all as of the day and year first above written. SELLER: Nova Leasing, LLC By: __________________________________ Title:_________________________________ Date: _________________________________ BUYER: Sun River Energy, Inc. By: ___________________________________ Title: __________________________________ Date: __________________________________ EXHIBIT A A conditional assignment of 80% NRI in and to the following described mineral leases (and seller shall receive and retain a 15% carried working interest in the wells through completion.): (to be inserted) Condition subject to a drilling and development commitment as follows: At least 4 wells shall be drilled on or before _______________________, or all undrilled acreage (each well holds 160 acres) shall revert to Seller. Thereafter at least 8 wells per year shall be drilled on the acreage in order to continue to hold. The leases for which the assignment is made, have specific limitations, and the assignment is made subject to those limitations.