PURCHASE AND SALE AGREEMENT
This Purchase and Sale Agreement (this "Agreement") dated as of the 15th
day of November 2005, is between AURORA ENERGY LTD., a Nevada corporation with
an address at 3760 N. XX 00 Xxxxx, X.X. Xxx 000, Xxxxxxxx Xxxx, Xxxxxxxx
00000-0000 ("Seller") and NEW ALBANY-INDIANA, LLC, a Delaware limited liability
company with an address at 0000 Xxxxxx Xxxx, Xxxxx Xxxxxxx, Xxxxxxxxxxxx 00000
("Buyer"). Seller and Buyer are also referred to herein individually as a
"Party" and collectively as the "Parties."
In consideration of the mutual promises contained herein, the benefits to
be derived by each Party hereunder and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Buyer and Seller
agree as follows:
ARTICLE 1
PURCHASE AND SALE
1.1 Purchase and Sale. Subject to the terms and conditions of this
Agreement, Seller agrees to sell and convey and Buyer agrees to purchase and pay
for all of Seller's right, title and interest in and to the Interests (as
hereinafter defined).
1.2 Interests. For purposes of this Agreement, the term "Interests" shall
be defined as an undivided 48.75% working interest (40.7063% net revenue
interest) in and to all of the following interests (of whatever kind or
character, whether legal or equitable and whether vested or unvested or
contingent), less and except for the Reserved Interests (as hereinafter
defined):
(a) All of Seller's right, title and interest in and to the oil, gas
and mineral leases located in Greene, Clay, Xxxx and Xxxxxxxx Counties, Indiana,
as more particularly described on Exhibit A attached hereto (collectively, the
"Wabash Leases");
(b) All of Seller's right, title and interest in and to that certain
Farmout and Participation Agreement dated effective July 19, 2005 between
Aurora, as Farmor, and Jet Ex, L.L.C., a Michigan limited liability company, as
Farmee, attached hereto as Exhibit B (the "Farmout Agreement").
(c) Originals or copies of all computer tapes and discs, files,
records, information, instruments, documents, agreements or data relating to the
Interests in the possession of Seller, including, without limitation, title
records (including abstracts of title, title opinions, certificate of title and
title curative documents), accounting records and files, contracts,
correspondence, regulatory reports, seismic and geophysical data, tapes and
records, and all related materials, INSOFAR AND ONLY INSOFAR as the foregoing
items constitute materials that may be lawfully conveyed to Buyer (i.e., the
materials are not subject to an agreement precluding their transfer to Buyer),
and, to the extent transferable, all other contract rights, intangible rights,
inchoate rights, choses in action, rights under warranties made by prior owners,
manufacturers, vendors or other third parties, and rights accruing under
applicable statutes of limitation or prescription, attributable to the
Interests.
1.3 Option to Purchase. At Closing, and in addition to the conveyance of
the Interests, Seller shall grant to Buyer an option, to be exercised at anytime
and from time to time within five hundred and forty (540) days following the
Closing, to acquire a fifty percent (50%) working interest in any and all
acreage leased or acquired by Seller or its affiliates within Lawrence, Jackson,
Washington and Orange Counties, Indiana (measured as of the date of the exercise
of the option) (the "Option Counties") for the net cost to Buyer of twenty five
($25.00) per acre (the "Option"). The acreage leased or acquired by Seller as of
November 1, 2005 within the Option Counties is attached hereto as Exhibit C.
1.4 Reserved Interests. Notwithstanding any provision of this Agreement to
the contrary, Seller shall retain following the Closing, a one-half percent
(.5%) overriding royalty interest attributable to, or associated with, the
Wabash Leases (the "Reserved Interests"), thus delivering an 83.5% to the 8/8ths
revenue interest to Buyer. The Reserve Interests shall bear its pro-rata share
of the costs and expenses of all transportation fees, Carbon Dioxide, Hydrogen
Sulfide, Nitrogen and any other contaminate removal treatments required for the
marketability of production, and production taxes. Buyer hereby acknowledges and
agrees that the Reserved Interests shall be retained by Seller following the
Closing and shall not be included in the Interests. Seller and Buyer acknowledge
and agree that the Reserved Interests shall be retained by Seller and transfer
by Seller from time to time to certain key persons as project and land
management incentives which may be conducted for the future benefit of both
Seller and Buyer.
1.5 Risk of Loss. If, after the execution of this Agreement and prior to
the Closing, any part of the Interests shall be destroyed or harmed by fire or
any other casualty or cause or shall be taken by condemnation or the exercise of
eminent domain, this Agreement may be terminated by Buyer, in its sole
discretion, if the amount of such damage or loss exceeds $1,000,000, and the
Deposits (as hereinafter defined) shall promptly be returned to Buyer. In the
event this Agreement is continued following the occurrence of the events
described above, this Agreement shall remain in full force and effect, and as to
each Interest affected, Seller shall, at its election, either collect (and when
collected promptly pay over to Buyer its proportionate share of such amount) or
assign to Buyer any and all insurance or other claims related to Buyer's
proportionate share of such damage or loss. In the event Buyer elects to
continue this Agreement, Buyer shall take title to the affected Interest without
reduction in the Purchase Price, provided that Seller fully complies with its
obligations arising under this Section.
ARTICLE 2
PURCHASE PRICE
2.1 Purchase Price. In consideration for the purchase of the Interests
(which shall include the purchase of the Option), Buyer shall pay to Seller at
Closing, to an account designated by Seller at least three (3) business days
prior to Closing, in cash or immediately available funds, the sum of Ten Million
Five Hundred Thousand Dollars ($10,500,000) (the "Purchase Price").
-2-
2.2 Deposits.
(a) Seller hereby acknowledges its prior receipt of a deposit in the
amount of $500,000 (the "Initial Deposit") paid to Seller by an affiliate of
Buyer, Xxx Energy Operating Corp. ("Xxx Energy") pursuant to that certain letter
of intent dated October 7, 2005 by and between Seller and Xxx Energy, as amended
by that certain letter agreement dated October 27, 2005 (the "Letter of
Intent"). Seller agrees to continue to hold the Initial Deposit in accordance
with the terms and conditions of the Letter of Intent and acknowledges and
agrees that the Initial Deposit is now being held for the benefit of Buyer.
(b) Upon the earlier of (i) December 1st, 2005, or (ii) completion
of Buyer's title investigation, Buyer shall promptly deposit, by wire transfer
to a bank account designated by Seller (which shall be the same bank account in
which the Initial Deposit was deposited), an additional deposit in an amount
equal to Three Million Dollars ($3,000,000.00) (the "Subsequent Deposit", and
collectively with the Initial Deposit, referred to herein as the "Deposits"). If
the Closing occurs, the Deposits and all interest accrued shall be applied to
reduce the Purchase Price. If Closing does not occur, the Deposits and all
accrued interest accrued shall be applied as provided in Section 12.2 of this
Agreement.
(c) Seller hereby agrees that it shall hold, invest and disburse the
Deposits only in accordance with the terms and conditions of this Agreement. The
account designated by Seller for the Deposits shall be an interest bearing
account held by a third party banking institution which is not in anyway
affiliated with Seller. Seller hereby agrees that the Deposits shall be held at
all times until disbursement in the account designated by Seller, and that
Seller shall at no time commingle any of its funds with the Deposits or withdraw
all or any portion of the Deposits except as provided under the terms and
conditions of this Agreement. Any and all accrued interest or gains shall be
deemed to be part of Deposits and will be paid to the party receiving the
Deposits as and when distribution is made therefrom, the parties specifically
acknowledging that in the event that the Closing of the transactions
contemplated by this Agreement occurs, any such accrued interest shall be
applied with the Deposits as a credit toward payment of the Purchase Price by
Buyer. Seller hereby agrees to provide Buyer with written notification of its
intention to withdraw all or any portion of the Deposits at least five (5)
business days before any such withdrawal.
(d) At all times prior to the Closing, the Deposits shall, without
any notice, demand, presentment or protest of any kind (each of which is waived
by Seller), automatically and immediately become due and payable to Buyer upon
the occurrence of any one or more of the following events: (i) Seller is
adjudicated as bankrupt, (ii) Seller commences or has commenced against it any
bankruptcy or insolvency proceeding under the federal bankruptcy code or
otherwise which is not rescinded within sixty (60) days, (iii) the making by
Seller of a general assignment for the benefit of creditors, or (iv) the
appointment of a receiver or trustee in bankruptcy of Seller or for any of the
Seller's assets which is not rescinded within sixty (60) days. Seller agrees to
immediately return the Deposits to Buyer upon the occurrence of any of the above
events.
-3-
(e) Seller shall indemnify and hold Buyer and its affiliates
harmless from and against any and all losses or damages suffered or incurred by
Buyer or its affiliates (including, without limitation, reasonable attorney's
fees and court costs) by reason of the breach of this Section 2.2 or the
non-fulfillment of any covenant or agreement of Seller contained in this Section
2.2. Seller further acknowledges and agrees that in the event of a breach or
threatened breach of any agreement by it contained in this Section 2.2 or in
Section 12.2 of this Agreement, Buyer shall be entitled, in addition to all
other applicable remedies, to seek specific performance of the terms of this
Section 2.2 and Section 12.2 of this Agreement, including immediate injunctive
relief in any court of competent jurisdiction enjoining Seller from any activity
constituting such breach or threatened breach. No right or remedy herein
conferred upon or reserved to Buyer is exclusive of any right or remedy herein
or permitted by law or equity, but each shall be cumulative of every other right
or remedy given hereunder or now or hereafter existing at law or in equity (or
by statute or otherwise), and may be enforced concurrently therewith or from
time to time and as often as may be deemed expedient or necessary by Buyer, in
its sole discretion. The covenants, agreements and obligations of Seller
pursuant to this Section 2.2 shall survive the Closing until fully discharged or
performed.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Seller. Seller represents and
warrants to Buyer the following:
(a) Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada. Seller is duly qualified to
carry on its business and is in good standing in the State of Indiana and in
each other state where the Interests are located.
(b) Seller has all requisite power and authority to carry on its
business as presently conducted, to enter into this Agreement, and to perform
its obligations hereunder. The execution and delivery of this Agreement by
Seller does not, and the consummation of the transactions contemplated by this
Agreement shall not: (i) violate, conflict with, or require the consent of any
person or entity under any provision of Seller's Articles or Certificate of
Incorporation, as the case may be, or Bylaws or other governing documents, (ii)
conflict with, result in a breach of, constitute a default (or an event that
with the lapse of time or notice or both would constitute a default) or require
any consent, authorization or approval under any agreement or instrument to
which Seller is a party, (iii) violate any provision of or require any consent,
authorization, or approval under any judgment, decree, judicial or
administrative order, award, writ, injunction, statute, rule, or regulation
applicable to Seller, or (iv) result in the creation of any lien, charge, or
encumbrances on any of the Interests.
(c) The execution and delivery of this Agreement has been, and the
performance of this Agreement and the transactions contemplated by this
Agreement shall be at the time required to be performed, duly and validly
authorized by all requisite corporate action on the part of Seller. The
transactions contemplated by this Agreement do not constitute the sale of all or
substantially all of the assets of Seller.
-4-
(d) This Agreement has been duly executed and delivered on behalf of
Seller and constitutes the legal and binding obligation of Seller enforceable in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, reorganization, or moratorium statues, equitable principles, or
other similar laws affecting the rights of creditors generally ("Equitable
Limitations"). At Closing, all documents and instruments required to be executed
and delivered by Seller shall be duly executed and delivered and shall
constitute legal, valid, enforceable, and binding obligations of Seller, except
as enforceability may be limited by Equitable Limitations.
(e) Seller has incurred no liability, contingent or otherwise, for
broker's or finder's fees or commissions relating to the transactions
contemplated by this Agreement for which Buyer shall have any responsibility
whatsoever.
(f) During the period of Seller's ownership of the Interests, Seller
has properly paid all ad valorem, property, production, severance, excise and
similar taxes and assessments based on or measured by the ownership of property
on the Interests that have become due and payable before the Closing Date.
(g) No suit, action or other proceeding is pending or, to the best
of Seller's Knowledge, threatened before any court, arbitration panel or
governmental agency which relates to the Interests and which might result in a
material loss of Seller's title to any portion of the Interests, or a material
diminution of the value of any of the Interests, or that might materially hinder
or impede the operation of the Interests. No written or oral notice from any
governmental agency or any other person has been received by Seller: (i)
claiming any violation or repudiation of all or any part of the Interests or any
violation of any law or any environmental, conservation or other ordinance,
code, rule or regulation or (ii) requiring or calling attention to the need for
any work, repairs, construction, alterations, or installations on or in
connection with the Interests, with which Seller has not complied.
(h) There is no investigation, proceeding, action, suit or other
legal proceeding pending, or to the Knowledge of Buyer, threatened to which
Seller or any affiliate of Seller is a party which seeks to prevent the
consummation by Seller of the transactions contemplated by this Agreement, or
which, individually or in the aggregate with other such actions, is reasonably
likely to materially impair Seller's ability to perform its obligations under
this Agreement.
(i) Seller has not provided any information to Buyer with respect to
the Interests that Seller knows to be false or inaccurate. To the best of
Seller's Knowledge, all information furnished to Buyer by Seller with respect to
the Interests has been and will be true and accurate in all material respects.
(j) The Interests are not subject to any agreement or arrangement
regarding the sale of the production of hydrocarbons from the Interests.
-5-
(k) To the Knowledge of Seller, the Interests are not subject to (i)
any preferential right to purchase, (ii) any requirement that consent to
assignment be obtained, or (iii) any farm-out agreement (other than the Farmout
Agreement).
(l) To the Knowledge of Seller, all royalties, overriding royalties
and other leasehold burdens, if any, have been paid by Seller or other parties
and will have been paid by Seller or other parties up to the Closing Date and
Seller has no Knowledge of any claims, demands or causes of action asserted by
any owners of royalty, overriding royalty or other leasehold burdens affecting
the Interests.
(m) There are no bankruptcy, reorganization or receivership
proceedings pending against, contemplated by, or, to the Knowledge of Seller,
threatened against Seller or any affiliate of Seller. Seller is not now
insolvent and will not be rendered insolvent by any of the transactions
contemplated by this Agreement. The term "insolvent" shall mean that the sum of
the debts and other probable liabilities of Seller exceeds the present saleable
value of the Seller's assets.
(n) No representation or warranty by Seller in this Agreement or any
agreement or document delivered by Seller pursuant to this Agreement contains an
untrue statement of a material fact or omits to state a material fact necessary
to make the statements contained in any representation or warranty, in light of
the circumstances under which it was made, not misleading.
3.2 Representations and Warranties of Buyer. Buyer represents and warrants
to Seller the following:
(a) Buyer is a limited liability company, duly organized, validly
existing and in good standing under the laws of the State of Delaware. Buyer is,
or will be prior to the Closing, duly qualified to carry on its business and is
in good standing in the State of Indiana.
(b) Buyer has all requisite power and authority to carry on its
business as presently conducted and has all requisite power and authority to
enter into this Agreement, and to purchase the Interests on the terms described
in this Agreement and perform its other obligations under this Agreement. The
execution and delivery of this Agreement by Buyer does not, and the consummation
of the transactions contemplated by this Agreement will not: (i) violate,
conflict with, or require the consent of any person or entity under any
provision of Buyer's Certificate of Formation, limited liability company
agreement or other governing documents, or (ii) violate any provision of or
require any consent, authorization or approval under any agreement, judgment,
judicial or administrative order, award, writ, injunction, statute, rule or
regulation applicable to Buyer.
(c) The execution and delivery of this Agreement has been, and the
performance of this Agreement and the transactions contemplated by this
Agreement shall be at the time required to be performed, duly and validly
authorized by all requisite company action on the part of Buyer.
-6-
(d) This Agreement has been duly executed and delivered on behalf of
Buyer and constitutes the legal and binding obligation of Buyer enforceable in
accordance with its terms, except as enforceability may be limited by Equitable
Limitations. At Closing, all documents and instruments required to be executed
and delivered by Buyer shall be duly executed and delivered and shall constitute
legal, valid, enforceable, and binding obligations of Buyer, except as
enforceability may be limited by Equitable Limitations.
(e) Buyer has incurred no liability, contingent or otherwise, for
broker's or finder's fees or commissions relating to the transactions
contemplated by this Agreement for which Seller shall have any responsibility
whatsoever.
(f) Buyer has sufficient funds, available lines of credit or other
sources of immediately available funds sufficient to enable the payment to
Seller, by wire transfer, of the Purchase Price at Closing and to otherwise
perform Buyer's obligations under this Agreement.
(g) There are no bankruptcy, reorganization or receivership
proceedings pending against, contemplated by, or, to the Knowledge of Buyer,
threatened against Buyer or any affiliate of Buyer.
(h) There is no investigation, proceeding, action, suit or other
legal proceeding pending, or to the Knowledge of Buyer, threatened to which
Buyer or any affiliate of Buyer is a party which seeks to prevent the
consummation by Buyer of the transactions contemplated by this Agreement, or
which, individually or in the aggregate with other such actions, is reasonably
likely to materially impair Buyer's ability to perform its obligations under
this Agreement.
(i) No representation or warranty by Buyer in this Agreement or any
agreement or document delivered by Buyer pursuant to this Agreement contains an
untrue statement of a material fact or omits to state a material fact necessary
to make the statements contained in any representation or warranty, in light of
the circumstances under which it was made, not misleading.
ARTICLE 4
CERTAIN AGREEMENTS OF SELLER
4.1 Cooperation. During the period between execution of this Agreement and
the Closing Date, Seller shall cooperate with Buyer to assist Buyer in carrying
out the agreements of Buyer hereunder.
4.2 Agreements Between Execution of Agreement and Closing. During the
period between the execution of this Agreement and the Closing Date, Seller
shall maintain the Interests in a commercially reasonable manner and shall not
without the prior written consent of Buyer, (i) sell, convey, assign, transfer
or encumber any of the Interests; (ii) drill any well on the Interests, or
permit any other party to drill any well on the Interests, (iii) sell oil, gas
or other minerals produced from the Interests; (iv) enter into any agreement
amending, modifying or terminating any of the Interests; or (v) take any other
action with respect to any of the Interests that would cause a material
diminution the value thereof or that would materially and adversely affect the
use and enjoyment thereof.
-7-
4.3 Notification of Additional Proceedings. During the period between
execution of this Agreement and the Closing Date, Seller shall promptly notify
Buyer in writing (i) of any new suits, actions or other proceedings threatened
or pending before any court, arbitrator or governmental agency which relate to
the Interests or (ii) any material change in the condition of the Interests
(financial or otherwise).
ARTICLE 5
CERTAIN AGREEMENTS OF BUYER
5.1 Cooperation. During the period between execution of this Agreement and
the Closing Date, Buyer shall cooperate with Seller to assist Seller in carrying
out the agreements of Seller hereunder.
5.2 Return of Records. Buyer agrees that if this Agreement is terminated
for any reason whatsoever, Buyer shall, at Seller's request, promptly return to
Seller all records, information and data furnished by or on behalf of Seller to
Buyer, its officers, employees and representatives in connection with this
Agreement or Buyer's investigation of the Interests, and Buyer shall deliver to
Seller all copies, extracts, or excerpts of such records, information and data
and all documents generated by Buyer that contain any portion of such records,
information, and data.
5.3 Confidentiality. Buyer agrees that if this Agreement is terminated for
any reason whatsoever, Buyer shall keep the terms and conditions of this
Agreement and all proprietary and confidential information provided to Buyer or
obtained by Buyer in connection with this Agreement confidential, and not
disclose the same to any third party without the prior written consent of Seller
for a period of one (1) year after such termination.
ARTICLE 6
BUYER'S CONDITIONS TO CLOSING
The obligations of Buyer to consummate the transactions provided for
herein are subject, at the option of Buyer, to the fulfillment on or prior to
Closing of each of the following conditions:
6.1 Representations. The representations and warranties by Seller set
forth in Section 3.1 above shall be true and correct in all material respects as
of the date of this Agreement and as of the Closing Date.
6.2 Performance. Seller shall have, in all material respects, timely
performed and complied with all agreements and covenants required by this
Agreement.
6.3 No Legal Proceedings. No suit, action or other proceeding shall be
pending or threatened before any court, arbitration panel or governmental agency
seeking to restrain, prohibit or declare illegal, or seeking substantial damages
-8-
in connection with the purchase and sale contemplated by this Agreement, or
which might result in a material loss of any portion of the Interests, a
material diminution in the value of any of the Interests, or materially
interfere with the use or enjoyment of the Interests.
6.4 No Encumbrances. Buyer shall have been provided with copies of
releases, in forms reasonably satisfactory to Buyer, of any encumbrances
affecting the Interests, except for Permitted Encumbrances.
6.5 Resolutions. Seller shall have furnished Buyer a certified copy of
resolutions of the Board of Directors of Seller authorizing the execution and
delivery of this Agreement and the delivery of all documents contemplated
herein.
6.6 Exploration Agreement. At or before Closing, Seller shall have
executed and delivered (or be ready, willing and able to execute and deliver)
the Exploration Agreement substantially in the form attached hereto as Exhibit D
(the "Exploration Agreement").
6.7 Joint Operating Agreement. At or before Closing, Seller shall have
executed and delivered (or be ready, willing and able to execute and deliver)
the Joint Operating Agreement substantially in the form attached hereto as
Exhibit E (the "Joint Operating Agreement").
6.8 Due Diligence. The results of Buyer's continuing due diligence review
shall not have revealed any material variance from the representations and
warranties of Seller set forth in this Agreement that would have a Material
Adverse Effect on the business, assets or condition of the Interests. "Material
Adverse Effect" shall mean any effect that is both material and adverse to the
operations or value of the Interests, taken as a whole and as currently
operated; provided, however, that none of the following shall be deemed to be a
Material Adverse Effect: (i) any effect resulting from entering into this
Agreement or the announcement of the transactions contemplated by this
Agreement; (ii) any effect resulting from changes in general market, economic,
financial or political conditions in Indiana, the United States or worldwide or
any outbreak of hostilities or war; and (iii) any effect that affects the
hydrocarbon exploration, production, processing, gathering or transportation
industry generally.
ARTICLE 7
SELLER'S CONDITIONS TO CLOSING
The obligations of Seller to consummate the transactions provided for
herein are subject, at the option of Seller, to the fulfillment on or prior to
Closing of each of the following conditions:
7.1 Representations. The representations and warranties by Buyer set forth
in Section 3.2 above shall be true and correct in all material respects as of
the date of this Agreement and as of the Closing Date.
7.2 Performance. Buyer shall have, in all material respects, timely
performed and complied with all agreements and covenants required by this
Agreement.
-9-
7.3 No Legal Proceedings. No suit or other proceeding shall be pending or
threatened before any court, arbitration panel or governmental agency seeking to
restrain prohibit or declare illegal, or seeking substantial damages in
connection with, the purchase and sale contemplated by this Agreement, except
matters with respect to which Seller has been adequately indemnified by Buyer.
7.4 Resolutions. Buyer shall have furnished Seller a certified copy of
resolutions of the Manager of Buyer authorizing the execution and delivery of
this Agreement and delivery of all documents contemplated herein.
7.5 Exploration Agreement. At or before Closing, Buyer shall have executed
and delivered (or be ready, willing and able to execute and deliver) the
Exploration Agreement substantially in the form of Exhibit D.
7.6 Joint Operating Agreement. At or before Closing, Buyer shall have
executed and delivered (or be ready, willing and able to execute and deliver)
the Joint Operating Agreement substantially in the form of Exhibit E.
7.7 Payment. Buyer shall have paid (or be ready, willing and able to
immediately pay) the Purchase Price (less the amount of the Deposits).
ARTICLE 8
CLOSING
8.1 Date of Closing. Subject to the conditions stated in this Agreement,
the purchase and sale of the Interests pursuant to this Agreement (the
"Closing") shall occur on or before February 1, 2005, at 10:00 a.m., Central
Standard Time, or on such other date and time as Buyer and Seller may agree in
writing (the "Closing Date").
8.2 Place of Closing. The Closing shall be held at a place to be mutually
agreed upon by Buyer and Seller, provided that in the event the parties can not
agree upon the place of the Closing, the Closing shall be held at the offices of
Seller.
8.3 Closing Obligations. At the Closing, the following documents shall be
delivered and the following events shall occur, each being deemed to have
occurred simultaneously with the others:
(a) Seller shall execute and deliver: (1) an Assignment and Xxxx of
Sale conveying the Interests to Buyer with covenants of special warranty of
title, and free and clear of all liens, security interests and other
encumbrances, other than the Permitted Encumbrances, in form and substance
reasonably satisfactory to Seller and Buyer (the "Assignment"); (2) an
Assignment conveying a 48.75% interest in the Farmout Agreement to Buyer, free
and clear of all liens, security interests and other encumbrances, in form and
substance reasonably satisfactory to Seller and Buyer, (3) an assignment and
grant of the Option to Buyer, in form and substance reasonably satisfactory to
Seller and Buyer, (4) such other instruments as may be required to fully convey
the Interests to Buyer and otherwise effectuate the transactions contemplated by
-10-
this Agreement, in form and substance reasonably satisfactory to Seller and
Buyer, (5) a certified copy of resolutions of the Board of Directors of Seller
authorizing the execution and delivery of this Agreement and the delivery of all
instruments or documents contemplated herein, (6) certified copies of good
standing certificates of the Seller, issued not earlier than ten (10) days prior
to the Closing Date, by the Secretary of State of Nevada and the Secretary of
State of Indiana, (7) an incumbency and specimen signature certificate with
respect to the officers of Seller executing this Agreement and any instruments
or documents contemplated hereby and (8) a closing certificate duly executed by
an authorized officer of Seller pursuant to which Seller represents and warrants
to Buyer that Seller's representations and warranties to Buyer are true and
correct in all material respects as of the Closing Date as if then originally
made, that all covenants required by the terms of this Agreement to be performed
by Seller on or before the Closing Date, to the extent not waived by Buyer in
writing, have been so performed, and that all documents to be executed and
delivered by Seller at Closing have been executed by duly authorized officers of
Seller.
(b) Buyer shall execute and deliver: (1) a certified copy of
resolutions of the Manager of Buyer authorizing the execution and delivery of
this Agreement and the delivery of all instruments or documents contemplated
herein, (2) certified copies of good standing certificates of the Buyer, issued
not earlier than ten (10) days prior to the Closing Date, by the Secretary of
State of Delaware and by the Secretary of State of Indiana, (3) an incumbency
and specimen signature certificate with respect to the officers of Buyer
executing this Agreement and any instruments or documents contemplated hereby
and (4) a closing certificate duly executed by an authorized officer of Buyer
pursuant to which Buyer represents and warrants to Seller that Buyer's
representations and warranties to Seller are true and correct in all material
respects as of the Closing Date as if then originally made, that all covenants
required by the terms of this Agreement to be performed by Buyer on or before
the Closing Date, to the extent not waived by Seller in writing, have been so
performed, and that all documents to be executed and delivered by Buyer at
Closing have been executed by duly authorized officers of Buyer.
(c) Buyer shall deliver to Seller or to Seller's account by wire
transfer the Purchase Price.
(d) Buyer and Seller shall execute and deliver the Exploration
Agreement and the Joint Operating Agreement.
8.4 Records. In addition to the obligations set forth under Section 8.3
above, Seller shall deliver at Closing to Buyer copies of land files in its
possession or to which it has access with respect to the Interests. Buyer shall
be entitled to copies of all original records affecting the Interests assigned
to Buyer pursuant to the terms of this Agreement. Seller shall be entitled to
keep the originals for its files.
-11-
ARTICLE 9
POST-CLOSING MATTERS
9.1 Further Assurances. After Closing, Seller and Buyer shall execute,
acknowledge and deliver or cause to be executed, acknowledged and delivered such
instruments and take such other action as may be necessary or advisable to carry
out their obligations under this Agreement and under any exhibit, document,
certificate or other instrument delivered pursuant hereto, and to fully transfer
the Interests to the Buyer.
ARTICLE 10
INVESTIGATION AND TITLE MATTERS
10.1 Investigation; Access to Title and Other Documents.
(a) During the period beginning on the date of this Agreement and
ending on the Closing Date, Buyer and each representative of Buyer may continue
to conduct a review of the Interests. In connection with such review, Buyer and
each representative of Buyer shall be granted full access to the Interests upon
reasonable notice, at Buyer's sole risk and during reasonable hours so as not to
unreasonably interfere with the operations of Seller. In connection with such
review, Seller agrees, and shall cause each representative of Seller, upon
reasonable notice, to (i) cooperate with Buyer and each representative of Buyer,
and (ii) provide all information, and all documents and other data relating to
such information, reasonably requested by Buyer or any representative of Buyer
with respect to the Interests.
(b) Immediately upon final execution hereof, Seller will make
available to Buyer and to its representatives (such representatives to include
employees, consultants, independent contractors, attorneys and other advisors of
Buyer) for Buyer's copying and/or inspection (at Buyer's cost and expense), at
Seller's offices during normal business hours such of the following documents as
are in Seller's possession or under its control (if any):
(i) All abstracts of title, title opinions,
title curative materials, ownership reports,
bills of sale, other documents evidencing
transfers of title, tax receipts, and
licenses and registrations pertaining to the
Interests.
(ii) All of the lease records, lease files,
leases, conveyances and assignments of
interest in the Interests; contracts; orders
of applicable regulatory authorities or
administrative agencies; mortgages, deeds of
trust, security agreements, and financing
statements; and all other contracts,
agreements and documents affecting the
Interests.
(iii) Instruments and documents concerning proper
payment of all general and special
assessments, ad valorem and property taxes,
and similar taxes and assessments based on
-12-
or measured by the ownership of the
Interests for 2005 and years prior for which
the applicable statute of limitations has
not expired.
(iv) All geological maps, geophysical surveys as
to which Seller has the right to show Buyer
and engineering studies, ownership maps,
reserve reports, logs, core studies, and
surveys relating to the Interests.
(v) All bonds, leases, permits, easements,
licenses, orders, saltwater disposal
agreements, agreements with pumpers and
other agreements in any way relating to the
Interests or the operation thereof.
(vi) All environmental reports, assessments and
studies relating to any of the Interests.
To the extent such has not already been furnished, after the date hereof
Seller shall use its reasonable efforts to obtain and submit to Buyer or its
representatives, as promptly as practicable, such abstracts, title reports,
status reports, certificates of title, certificates of fact and other evidence
of title covering the Interests as Buyer may reasonably request that are in the
possession of a third person to which Seller has access. In addition, Seller
shall authorize Buyer and its representatives to consult with attorneys,
abstract companies and other consultants or independent contractors of Seller
(whether utilized in the past or present) concerning title related matters.
Reliance on such information of such third parties shall be at the sole risk of
the Buyer, and Seller makes no guaranty or representation as to the accuracy or
completeness of such data.
10.2 Seller's Special Warranty of Title; The Assignment.
(a) Seller represents and warrants that Seller shall convey to Buyer
at Closing all of Seller's right, title and interest in and to the Interests,
free and clear of all liens, security interests and other encumbrances, subject
only to the Permitted Encumbrances. Seller hereby represents and warrants to
Buyer that it has done nothing to encumber title to the Interests and warrants
title as against all persons claiming by, through or under Seller, but not
otherwise, Seller further agreeing that Buyer shall have the benefit of all
prior warranties in the chain of title to the Interests. The Assignment shall
provide for a special warranty of title consistent with this Section 10.2.
(b) Seller will cooperate with Buyer in requesting approvals,
consents and waivers from governmental authorities or third parties having the
right to approve the assignment of any Interest covered hereby.
10.3 Permitted Encumbrances. As used in this Agreement, the term
"Permitted Encumbrances" shall mean the following, provided that the same shall
not operate to reduce the net revenue interest or increase the gross working
interest of an Interest beyond that shown on Exhibit A.
-13-
(a) Lessors' royalties, non-participating royalties, overriding
royalties, division orders, reversionary interests, and similar burdens.
(b) Liens for taxes or assessments not yet due or delinquent or, if
delinquent, that are being contested in good faith in the normal course of
business.
(c) All rights to consent by, required notices to, filing with, or
other actions by governmental entities in connection with the sale or conveyance
of oil and gas leases or interests therein, if the same are customarily obtained
subsequent to such sale or conveyance and neither Seller nor Buyer has reason to
believe they cannot be obtained.
(d) Rights reserved to or vested in any governmental authority.
(e) Easements, conditions, covenants, restrictions, servitudes,
permits, rights-of-way, surface leases and other rights in the Interests for the
purpose of surface operations, roads, alleys, highways, railways, pipelines,
transmission lines, transportation lines, distribution lines, power lines,
telephone lines, and removal of timber, grazing, logging operations, canals,
ditches, reservoirs and other like purposes, or for the joint or common use of
real estate, rights-of-way, facilities and equipment which do not materially
impair the rights held by Seller or the use and enjoyment of the Interests.
(f) Defects, irregularities and deficiencies in title to any
rights-of-way, easements, surface lease or other rights which in the aggregate
do not materially impair the use of such right-of-way, easements, surface leases
or other rights for the purpose of which such rights will be held by Buyer.
(g) Zoning, planning and environmental laws and ordinances and
municipal regulations.
(h) Vendors, carriers, warehousemen, repairmen, mechanics, workmen,
materialmen, construction or other like liens arising by operation of law in the
ordinary course of business or incident to the construction or improvement of
any property in respect of obligations which are not yet due, or which are being
contested in good faith by appropriate proceedings by or on behalf of Seller,
and not reasonably likely to materially reduce the value of the Interests and
for which Seller and Buyer agree at Closing to provide proper credits or escrow
of funds for any liability that might arise after Closing.
10.4 Notice of Title Defect. Except for Permitted Encumbrances, any lien,
encumbrance, or defect in title that would, in Buyer's reasonable opinion,
materially affect the value of the Interests, or materially diminish Buyer' use
or enjoyment of the Interests shall be a title defect ("Title Defect"). Not
later than December 1, 2005 at 5:00 p.m. Central Time (the "Claim Date"), Buyer
must notify Seller in writing of any matter that Buyer considers to be a Title
Defect ("Notice of Title Defect"), which notice shall include, (i) a specific
description of the matter or matters Buyer asserts as a Title Defect or Defects,
(ii) a specific description of the Interests or the portion of the Interest that
-14-
is affected by the Title Defect or Defects, (iii) Buyer's reasonable calculation
of the fair market value of the portion or portions of the Interests affected by
the Title Defect or Defects (the "Title Defect Amount"), (iv) appropriate
documentation supporting the Title Defect or Defects in the possession of Buyer,
not subject to the attorney-client privilege; provided, however, that Buyer
acknowledges and agrees that it may not submit a Notice of Title Defect unless
and until Buyer has reasonably determined that aggregate Title Defect Amount of
all Title Defects equals or exceeds an amount equal to five percent (5%) of the
Purchase Price. In the event that aggregate title Defect Amount of all Title
Defects equals or exceeds ten percent (10%) of the Purchase Price, Buyer may
immediately terminate this Agreement, and upon such termination, the Deposits
shall be promptly returned to Buyer.
10.5 Seller's Options and Opportunity to Cure. Upon receipt of a Notice of
Title Defect, as to each Title Defect, Seller may, at its option, (i) cure or
remove any Title Defect at Seller's sole cost and expense prior to Closing, (ii)
agree (but only with the consent of Buyer) to reduce the Purchase Price by the
applicable Title Defect Amount or by such other, lesser amount to which the
Parties may agree in writing, (iii) dispute that any item described in the
Notice of Title Defect actually constitutes a Title Defect and, after a twenty
(20) day period of good faith negotiation between Buyer and Seller in attempt to
resolve such dispute, submit the issue to arbitration as provided in Article 14
of this Agreement, or (iv) if the aggregate amount of all Title Defects equals
or exceeds ten percent (10%) of the Purchase Price, immediately terminate this
Agreement. In the event of such termination by Seller, the Deposits shall be
promptly returned to Buyer.
ARTICLE 11
INDEMNIFICATION
11.1 Definitions. The following terms contained in this Article 11 shall
have for purposes of this Agreement the meaning given to such terms as provided
below:
(a) "Claims Period" shall mean the period beginning on the Closing
Date and ending twelve (12) months following the Closing Date.
(b) "Losses" shall mean all losses, liabilities, deficiencies,
damages (including without limitation indirect or consequential damages),
encumbrances, fines, penalties, claims, costs and expenses (including, without
limitation all fines, penalties and other amounts paid pursuant to a judgment,
compromise or settlement), court costs and reasonable legal and accounting fees
and disbursements.
11.2 Survival of Representations, Warranties, Covenants and Agreements.
(a) All representations and warranties of Seller contained in this
Agreement shall survive the Closing Date for the duration of the Claims Period;
except that the representations and warranties in Section 10.2 (Title) shall
survive the Closing indefinitely. Any claim made by Buyer with respect to the
representations and warranties of Seller contained in this Agreement must be
initiated by Buyer during the Claims Period, except that there shall be no time
limit on when claims may be initiated with respect to the representations and
warranties in Section 10.2 (Title). All of the representations and warranties of
Seller contained in this Agreement shall in no respect be limited or diminished
-15-
by any past or future inspection, investigation, examination or possession on
the part of Buyer or its Representatives. All covenants and agreements made by
Seller contained in this Agreement shall survive the Closing Date until fully
performed or discharged.
(b) All representations and warranties of Buyer contained in this
Agreement shall survive the Closing Date for the duration of the Claims Period.
Any claim made by Seller with respect to the representations and warranties of
Buyer contained in this Agreement must be initiated during the Claims Period.
All of the representations and warranties of Buyer contained in this Agreement
shall in no respect be limited or diminished by any past or future inspection,
investigation, examination or possession on the part of Seller or its
Representatives. All covenants and agreements made by Buyer contained in this
Agreement shall survive the Closing Date until fully performed or discharged.
11.3 Indemnification by Seller. Except as otherwise specifically provided
in this Agreement, Seller shall indemnify and hold harmless Buyer and its
subsidiaries, affiliates, and parents, and its and their employees,
representatives, officers, directors, attorneys and agents from and against:
(a) any and all Losses suffered or incurred by any of them by reason
of any breached or untrue representation or warranty of Seller contained in this
Agreement;
(b) any and all Losses suffered or incurred by any of them by reason
of the non-fulfillment of any covenant or agreement by Seller contained in this
Agreement; and
(c) any and all Losses suffered or incurred by any of them resulting
from, related to, on account of, and proximately caused by Seller during its
ownership, management or control of the Interests prior to the Closing Date.
11.4 Indemnification by Buyer. Except as otherwise specifically provided
in this Agreement, Buyer shall indemnify and hold harmless Seller and its
subsidiaries, affiliates, and parents, and its and their employees,
representatives, officers, directors, attorneys and agents from and against:
(a) any and all Losses suffered or incurred by any of them by reason
of any breached or untrue representation or warranty of Buyer contained in this
Agreement; and
(b) any and all Losses suffered or incurred by any of them by reason
of the non-fulfillment of any covenant or agreement by Buyer contained in this
Agreement.
11.5 Notification and Defense of Claims or Actions.
(a) As used in this Article 11, any party seeking indemnification
pursuant to this Article 11 is referred to as an "indemnified party" and any
party from whom indemnification is sought pursuant to this Article 11 is
referred to as an "indemnifying party." An indemnified party which proposes to
assert the right to be indemnified under this Article 11 shall submit a written
demand for indemnification within fifteen (15) business days of becoming aware
-16-
of such potential claim setting forth in summary form the facts as then known
which form the basis for the claim for indemnification; provided, however, that
the failure to give such notice will not affect such claim of indemnification
except to the extent of actual prejudice to the indemnifying party. With respect
to claims based on actions by third parties, an indemnified party shall, within
fifteen (15) business days after the receipt of notice of the commencement of
any Proceeding against it in respect of which a claim for indemnification is to
be made against an indemnifying party, notify the indemnifying party in writing
of the commencement of such Proceeding, enclosing a copy of all papers served;
provided, however, that the failure to so notify the indemnifying party of any
such Proceeding shall not relieve the indemnifying party from any liability
which it may have to the indemnified party, except to the extent that the
indemnifying party is prejudiced thereby. Thereafter, the indemnified party
shall deliver to the indemnifying party, within fifteen (15) days after receipt
by the indemnified party, copies of all further notices relating to such claim.
(b) If an indemnified party gives notice to the indemnifying party
pursuant to Section 11.5(a) of the assertion of a third-party claim, the
indemnifying party shall be entitled to participate in the defense of such
third-party claim and, to the extent that it wishes, to assume the defense of
such third-party claim with counsel satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of its election to
assume the defense of such third-party claim, the indemnifying party shall not,
so long as it diligently conducts such defense, be liable to the indemnified
party under this Article 11 for any fees of other counsel or any other expenses
with respect to the defense of such third-party claim, in each case subsequently
incurred by the indemnified party in connection with the defense of such
third-party claim, other than reasonable costs of investigation. If the
indemnifying party assumes the defense of a third-party claim, (i) such
assumption will conclusively establish for purposes of this Agreement that the
claims made in that third-party claim are within the scope of and subject to
indemnification, and (ii) no compromise or settlement of such third-party claims
may be effected by the indemnifying party without the indemnified party's
consent unless (A) there is no finding or admission of any violation of law or
governmental rule or regulation or any violation of the rights of any person or
entity; (B) the sole relief provided is monetary damages that are paid in full
by the indemnifying party; and (C) the indemnified party shall have no liability
with respect to any compromise or settlement of such third-party claims effected
without its consent. If notice is given to an indemnifying party of the
assertion of any third-party claim and the indemnifying party does not, within
ten (10) days after the indemnified party's notice is given, give notice to the
indemnified party of its election to assume the defense of such third-party
claim, the indemnifying party will be bound by any determination made in such
third-party claim or any compromise or settlement effected by the indemnified
party. Any control of the defense of a third-party claim given to an
indemnifying party pursuant to this Section 11.5(b) shall, upon notice from the
indemnified party, be reversed and given back to the indemnified party if, at
any point during the course of such third-party claim the conditions necessary
to have been met to allow such indemnifying party to so control such defense are
no longer true whether because all unsatisfied claims increase in amount or
because any other factors arise.
(c) In the event that any claim for indemnification is made with
respect to any third-party claim pursuant to this Article 11, (i) the party
assuming primary responsibility for the defense of such claim shall at all times
-17-
keep the other party reasonably informed as to the status of such claim and (ii)
the party not primarily responsible for the defense of such claim shall
cooperate fully with the other party in connection with such defense.
11.6 Sole Remedy. The sole remedy of the Parties for any and all claims
against the other Party with respect to the transactions contemplated herein
shall be a claim for indemnification under this Article 11 on the terms and
subject to the conditions of this Agreement, except for claims of willful or
intentional misconduct or fraud.
11.7 General Liability Limitation. Notwithstanding anything contained in
this Agreement to the contrary, Seller shall not be required to indemnify or
otherwise compensate Buyer for aggregate Losses in excess of the Purchase Price;
provided, however, that such limitation of Seller's liability shall not apply to
claims resulting from Seller's gross negligence, willful misconduct or fraud.
ARTICLE 12
TERMINATION, DEFAULT AND REMEDIES
12.1 Right of Termination. The Agreement and the transactions contemplated
herein may be terminated at any time at or prior to Closing:
(i) By Seller, at Seller's option, in the event any of
the conditions set forth in Article 7 have not
been satisfied as provided therein as of the date
specified for the Closing, or if satisfaction of
such condition by such date is or becomes
impossible (other than through the failure of
Seller to comply with its obligations under this
Agreement), and Seller has not waived such
condition on or before such date;
(ii) By Buyer, at Buyer's option, in the event any of
the conditions set forth in Article 6 have not
been satisfied as provided therein as of the date
specified for the Closing, or if satisfaction of
such condition by such date is or becomes
impossible (other than through the failure of
Buyer to comply with its obligations under this
Agreement), and Buyer has not waived such
condition on or before such date;
(iii) At any time by the mutual written agreement of the
Parties;
(iv) By Buyer, at Buyer's option, as set forth in 10.4
of this Agreement;
(v) By Seller, at Seller's option, as set forth in
10.5 of this Agreement; or
(vi) By either Party in the event that that the Closing
has not occurred at or before 11:59 p.m. on
February 28th, 2006; provided, however, that the
right to terminate this Agreement under this
-18-
Section 12.1(vi) shall not be available to any
Party whose failure to fulfill any material
obligation under this Agreement has been the cause
of or resulted in the failure of the Closing to
occur on or prior to the aforesaid date.
12.2 Effect of Termination and Remedies Upon Default. Upon the termination
of this Agreement by Seller through no fault of Seller pursuant to Section
12.1(i) or 12.1(vi) of this Agreement, Seller shall be entitled to retain the
Deposits and all accrued interest thereon as its sole remedy. Upon such
termination of this Agreement through no fault of Seller, Seller shall be free
immediately to enjoy all rights of ownership of the Interests and to sell,
transfer, encumber, or otherwise dispose of the Interests to any party without
any restriction under this Agreement. Upon the failure of Seller to meet a
material condition to Closing, Buyer, at its sole option, may (i) enforce
whatever legal or equitable remedies may be appropriate and applicable, or (ii)
terminate this Agreement and immediately receive back the Deposits as its sole
remedy, thereby waiving all other remedies available to it. Upon termination of
this Agreement by Buyer through no fault of Buyer pursuant to either Section
12.1(ii),(iii), (iv), (v), or (vi), or as required elsewhere in this Agreement,
Seller shall, upon written demand, promptly return the Deposits to Buyer by wire
transfer to an account designed by Buyer. Except for the obligations set forth
in this Article 12 and in Sections 5.2, 5.3 and 11.2, upon termination of this
Agreement, the Parties shall have no further obligations to, nor rights against,
one another.
ARTICLE 13
MISCELLANEOUS
13.1 Fees and Taxes. Except as otherwise specifically provided, all fees,
costs and expense incurred by Buyer or Seller in negotiating this Agreement or
in consummating the transactions contemplated by this Agreement shall be paid by
the Party incurring the same, including, without limitation, legal and
accounting fees, costs and expenses. All required documentary, filing and
recording fees for the assignments, conveyance or other instruments required to
convey title to the Interests to Buyer shall be borne by Buyer. In addition, the
liability for any sales, use, transfer or similar tax associated with the sale
and/or transfer of the Interests shall be the liability of, and for the account
of, the Buyer and such liability shall not be subject to proration as provided
in Section 2.3.
13.2 Notices. Unless otherwise provided in this Agreement, any agreement,
notice, request, instruction or other communication to be given hereunder by any
Party to the other shall be in writing and (i) delivered personally (such
delivered notice to be effective on the date it is delivered), (ii) mailed by
certified mail, postage prepaid (such mailed notice to be effective four (4)
days after the date it is mailed), (iii) deposited with a reputable overnight
courier service (such couriered notice to be effective one (1) day after the
date it is mailed), or (iv) sent by facsimile transmission (such facsimile
notice to be effective on the date that confirmation of such facsimile
transmission is received), with a confirmation sent by way of one of the above
methods, as follows:
-19-
If to Seller addressed to:
Aurora Energy Ltd.
3760 N. XX 00 Xxxxx
X.X. Xxx 000
Xxxxxxxx Xxxx, XX 00000-0000
Attention: Xxxx Xxxxxx
If to Buyer, addressed to:
New Albany-Indiana, LLC
c/o Xxx Energy Operating Corp.
0000 Xxxxxx Xxxx
Xxxxx Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx
Telecopier: (000) 000-0000
Any Party may designate in a writing to any other Party any other address or
telecopier number to which, and any other person to whom or which, a copy of any
such notice, request, instruction or other communication should be sent.
13.3 Amendments. This Agreement may not be amended except by an instrument
in writing signed by Buyer and Seller.
13.4 Preparation of Agreement. Both Seller and Buyer and their respective
counsel participated in the preparation of this Agreement. In the event of any
ambiguity in this Agreement, no presumption shall arise based on the identity of
the draftsman of this Agreement.
13.5 Headings. The headings of the articles and sections of this Agreement
are for guidance and convenience of reference only and shall not limit or
otherwise affect any of the terms or provisions of this Agreement.
13.6 Counterparts; Facsimile Signature. This Agreement may be executed by
Buyer and Seller in any number of counterparts, each of which shall be deemed an
original instrument, but all of which together shall constitute but one and the
same instrument. Any Party may execute this Agreement by facsimile signature and
the other Party will be entitled to rely on such facsimile signature as evidence
that this Agreement has been duly executed by such Party. Any Party executing
this Agreement by facsimile signature will promptly forward to the other Party
an original signature page by overnight courier.
13.7 References. References made in this Agreement, including use of a
pronoun, shall be deemed to include, where applicable, masculine, feminine,
singular or plural, individuals or corporations. As used in this Agreement,
"person" shall mean any natural person, corporation, partnership, trust, estate
or other entity.
-20-
13.8 Governing Law. This Agreement and the transactions contemplated
hereby shall be construed in accordance with, and governed by, the laws of the
State of Indiana without giving effect to the conflicts of law rules thereof.
Any disputes concerning this Agreement or the subject matter hereof shall be
brought in the County of Xxxxxx, State of Indiana in a court of competent
jurisdiction.
13.9 Assignment. Neither this Agreement nor the rights and obligations
hereunder may be assigned or delegated by either Party without the prior written
consent of the other Party, which consent shall not be unreasonably withheld,
and any assignment or delegation made without such consent shall be void;
provided, however, Buyer shall have the right to assign this Agreement and to
delegate its obligations under this Agreement to any entity that (i) Buyer
controls, (ii) controls Buyer or (iii) is under common control with Buyer,
subject to the assumption of all obligations by any such entity. In the event of
any assignment, this Agreement shall be binding upon said party the same as if
it had been the original party hereto. Subject to the foregoing, the terms and
conditions of this Agreement shall be binding on the Parties' successors and
assigns.
13.10 Entire Agreement. This Agreement (including the Exhibits hereto)
constitutes the entire understanding between the Parties with respect to the
subject matter hereof, superseding all negotiations, prior discussions and prior
agreements and understanding relating to such subject matter.
13.11 Parties in Interest. This Agreement shall be binding upon, and shall
inure to the benefit of, the Parties and their respective successors and
assigns.
13.12 Further Cooperation. After the Closing, Buyer and Seller shall
execute and deliver, or shall caused to be executed and delivered from time to
time, such further instruments of conveyance and transfer and shall take such
other action as any Party may reasonably request to convey and deliver the
Interests to Buyer, to accomplish the orderly transfer of the Interests to
Buyer, or to otherwise effectuate the transactions contemplated by this
Agreement. If either Party hereto receives monies belonging to the other, such
amount shall immediately be paid over to the proper Party. If an invoice or
other evidence of an obligation is received by a Party, which is partially an
obligation of both Seller and Buyer, then the Parties shall consult with each
other and each shall promptly pay its portion of such obligation to the obligee.
13.13 Waiver. No failure of any Party to this Agreement to require, and no
delay by any Party to this Agreement in requiring, any other Party to comply
with any provision of this Agreement shall constitute a waiver of the right to
require such compliance. No failure of any Party to this Agreement to exercise,
and no delay by any Party to this Agreement in exercising, any right or remedy
under this Agreement shall constitute a waiver of such right or remedy. No
waiver by any Party to this Agreement of any right or remedy under this
Agreement shall be effective unless made in writing. Any waiver by any Party to
this Agreement of any right or remedy under this Agreement shall be limited to
the specific instance and shall not constitute a waiver of such right or remedy
in the future.
13.14 Press Release. Neither Party shall make any press release or other
announcement in connection with the execution of this Agreement or the Closing
-21-
without first consulting with the other Party. Following such consultation and
good faith attempt to make reasonable accommodations, either Party may make any
announcement or press release that it believes is either required by applicable
law or is advisable in connection with such Party's interest in providing public
disclosure regarding its activities. This provision shall not apply to any
filing with any governmental body or any stock exchange required by law, rule or
regulation.
13.15 Invalidity. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability will not affect any other provision of this
Agreement or any other such instrument.
13.16 Knowledge. For purposes of this Agreement, "knowledge",
"information" or "belief" shall mean (except as otherwise provided in this
sentence) the actual knowledge, information or belief, as appropriate to the
context of the statement in which the term is used, of any principal shareholder
or of any officer or director of the relevant Party, or the knowledge,
information or belief which such individual would have after (a) having made a
review of documents of a date not more than three (3) years old in files under
their immediate personal control and (b) having made reasonable inquiry of those
executive, management or supervisory employees under their direct supervision,
with respect to the matters which are relevant to the representation, warranty,
covenant or agreement being made or given.
ARTICLE 14
ARBITRATION
14.1 Selection of Arbitrators. Any controversy between the Parties hereto
arising under this Agreement, and not resolved by negotiation and agreement,
shall be determined by a board of arbitration upon notice of submission given by
either Party to the other, which notice shall name a qualified, independent
arbitrator. Within ten (10) days after the receipt of such notice, the other
Party shall name a qualified, independent arbitrator, or failing to do so, the
Party giving notice shall name the second. The two arbitrators so appointed
shall name the third qualified, independent arbitrator. Any board or arbitration
called pursuant to this section shall take place in Xxxxx County, State of
Indiana.
14.2 Determination. The arbitrators selected to act hereunder shall be
qualified by education and experience to pass on the particular question in
dispute. The arbitrators shall promptly hear and determine (after due notice of
hearing and giving the parties a reasonable opportunity to be heard) the
questions submitted, and shall render their decision within sixty (60) days
after appointment of the third arbitrator. If within said period a decision is
not rendered by the board, or majority thereof, new arbitrators may be named and
shall act hereunder at the election of either Buyer or Seller in like manner as
if none had been previously named.
14.3 Decision Binding. The decision of the arbitrators, or the majority
thereof, made in writing shall be final and binding upon the Parties hereto as
to the questions submitted, and Buyer and Seller will abide by and comply with
-22-
such decision. The prevailing Party shall be entitled to recoup all of the
expenses of arbitration, including reasonable compensation to the arbitrators,
expenses of counsel, witnesses, and employees.
[Remainder of page intentionally left blank. Signatures follow.]
-23-
IN WITNESS WHEREOF, each of the parties has executed this Agreement as of
the date first above written.
SELLER:
AURORA ENERGY LTD.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
BUYER:
NEW ALBANY-INDIANA, LLC
By: /s/ Xxxxxxxx X. Xxxxxxx
-----------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: President
