MASTER
ASSIGNMENT, ▇▇▇▇ OF SALE, AND CONVEYANCE
This ASSIGNMENT, ▇▇▇▇ OF SALE, AND CONVEYANCE ("Assignment") is
executed this 16th day of March, 2007 (the "Assignment Date") and is from NEW
ALBANY - INDIANA, LLC, a Delaware limited liability company having as its
address ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Assignor"), to
BASELINE OIL & GAS CORP., a Nevada corporation having as its address ▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("Assignee").
I.
GRANTING, RESERVATION, AND HABENDUM CLAUSES
1.1 Grant. For One Hundred Dollars ($100.00) and other good and valuable
consideration, the receipt and sufficiency of which Assignor hereby
acknowledges, Assignor has granted, transferred, conveyed, and assigned, and
does hereby grant, transfer, convey, and assign, to Assignee, effective as
provided herein as of March 16, 2007, at 7:00 a.m., Eastern Standard Time (the
"Effective Time"), the following properties and assets:
(a) an undivided 40.423% (the "Adjusted Economic Interest
Percentage") of the rights, titles, and interests of Assignor (including in each
case, without limitation, fee mineral interests, leasehold interests, royalty
interests, overriding royalty interests, production payments, net profits
interests, carried interests, reversionary interests, possibilities of reverter,
and conversion rights and options) in, to, under, or derived from (i) the oil
and gas leases described more particularly on Exhibit A and the leasehold
estates created thereby, as to all lands and depths covered thereby or the
applicable part or portion thereof if specifically limited in depth and/or areal
extent in Exhibit A (whether one or more, the "Leases"), (ii) the lands covered
by the Leases or otherwise described on Exhibit A, (iii) all units created by
the pooling, unitization, and communitization agreements in effect with respect
to the Leases and the lands covered thereby or otherwise described on Exhibit A,
and (iv) the oil and gas leases and lands included in any units with which the
Leases or the lands covered thereby or otherwise described on Exhibit A may have
been pooled, unitized, or communitized, and all other rights, interests,
privileges, benefits, and powers of any kind or character conferred upon
Assignor as the owner of any of such interests;
(b) an undivided interest, equal to the Adjusted Economic Interest
Percentage, in and to all of the rights, titles, and interests of Assignor in
and to the ▇▇▇▇▇ for the production of Hydrocarbons that are located on the
Leases or on other leases or lands with which the Leases or the lands covered
thereby or otherwise described on Exhibit A may have been pooled, unitized, or
communitized, also described more particularly on Exhibit_B (collectively, the
"▇▇▇▇▇");
(c) an undivided interest, equal to the Adjusted Economic Interest
Percentage, in and to all of the rights, titles, and interests of Assignor in
and to all crude oil, natural gas, condensate, distillate, natural gasoline,
natural gas liquids, other liquid or gaseous hydrocarbons, sulphur, and every
other mineral or substance, or any of them, the right to explore for which, or
an interest in which, is granted pursuant to the Leases or the other interests
described herein ("Hydrocarbons") (i) produced from or allocable to the
interests of Assignor described in clauses (a) and (b) of this Section 1.1 and
existing in pipelines, storage tanks, or other processing or storage facilities
upstream of the delivery points to the relevant purchasers as of the Effective
Time, and (ii) produced from or allocable to such interests of Assignor from and
after the Effective Time;
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(d) an undivided interest, equal to the Adjusted Economic Interest
Percentage, in and to all of the rights, titles, and interests of Assignor in
and to all fee surface interests in land, surface leases, easements,
rights-of-way, servitudes, licenses, franchises, road, railroad, and other
surface use permits or agreements, and similar rights and interests (if any)
located on the lands covered by the Leases or otherwise described on Exhibit A
or on any units with which the Leases or the lands covered thereby or otherwise
described on Exhibit A may have been pooled, unitized, or communitized, or that
otherwise relate to the interests of Assignor described in clauses (a) and (b)
of this Section 1.1, described more particularly on Exhibit C (collectively, the
"Real Property Interests");
(e) an undivided interest, equal to the Adjusted Economic Interest
Percentage, in and to all of the rights, titles, and interests of Assignor in
and to all equipment, machinery, fixtures, inventory, improvements, and other
personal, mixed, or movable property located on the lands covered by the Leases
or otherwise described on Exhibit A or with which the Leases or the lands
covered thereby or otherwise described on Exhibit A have been pooled, unitized,
or communitized, to the extent used in connection with or attributable to the
interests of Assignor described in clauses (a) and (b) of this Section 1.1
(except for any such personal property leased from third Persons), including,
without limitation: water ▇▇▇▇▇; saltwater disposal ▇▇▇▇▇ and facilities;
injection ▇▇▇▇▇ and facilities; well equipment; casing; rods; tanks and tank
batteries; boilers; tubing; pumps; pumping units and engines; platforms;
Christmas trees; production facilities; dehydration units and facilities;
heater-treaters; processing, fractionation, treatment, and separation plants and
facilities; testing and sampling equipment; sulfur recovery units and
facilities; valves; gauges; meters; generators; motors; gun barrels; flow lines;
water lines; gas lines; gathering lines, laterals and trunk lines, and other
pipe lines; gas systems (for gathering, treatment, and compression); chemicals;
solutions; water systems (for treatment, disposal, and injection); power plants;
poles; lines; transformers; starters and controllers; and any and all additions
or accessions to, substitutions for, and replacements of any of the foregoing,
together with all attachments, components, parts, equipment, and accessories
installed thereon or affixed thereto (collectively, the "Personal Property");
(f) an undivided interest, equal to the Adjusted Economic Interest
Percentage, in and to all of the rights, titles, and interests of Assignor in,
to, and under the contracts, agreements, options, leases, licenses, and other
rights owned by Assignor, in whole or in part, or to which Assignor is a party,
that are (i) appurtenant to or affect the properties and rights comprising the
items listed in this Section 1.1, or (ii) used or held for use in connection
with the use, ownership, or operation thereof, all as described more
particularly on Exhibit D (collectively, the "Contracts");
(g) all permits, licenses, authorizations, certificates,
registrations, or other approvals (other than permits and licenses constituting
Real Property Interests) granted by any Governmental Authority that pertain or
relate in any way to the items listed in this Section 1.1, and that are
transferable by Assignor to Assignee (the "Transferable Permits");
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(h) all intangible rights, inchoate rights, transferable rights
under warranties made by prior owners, manufacturers, vendors, and third
Persons, and rights accruing under applicable statutes of limitation or
prescription, insofar only as the foregoing rights and interests relate or are
attributable to the items listed in this Section 1.1, and do not constitute
Excluded Assets, but including, without limitation, an undivided interest, equal
to the Adjusted Economic Interest Percentage, in and to all underproduction
accounts or credits of Assignor pertaining to Imbalances in existence as of the
Effective Time; and
(i) all maps, logs, geological, geophysical, reserve engineering,
and other scientific and technical information, reports, and data (including,
without limitation, conventional and 3-D seismic data) that relate exclusively
to the items listed in this Section 1.1 (collectively, the "Data"), are owned by
Assignor, do not constitute Excluded Assets, and the disclosure and transfer of
which is not prohibited by confidentiality or other contractual arrangements in
existence on the Effective Time.
The interests of Assignor immediately prior to the Effective Time in and to the
property and rights comprising the items listed in this Section 1.1 shall be
referred to herein as the "Company Assets." The interests in the Company Assets
conveyed by Assignor to Assignee pursuant to this Assignment shall be referred
to herein as the "Assigned Interests."
1.2 Excluded Assets. There is expressly excluded from this Assignment, and
Assignor expressly excepts, reserves, and retains to itself, the following
properties and assets (collectively, the "Excluded Assets"):
(a) (i) an undivided 59.577% of the rights, titles, and interests
owned by Assignor immediately prior to the Effective Time in, to, under, or
derived from (A) the Leases, (B) the lands covered by the Leases or otherwise
described on Exhibit A, (C) all units created by the pooling, unitization, and
communitization agreements in effect with respect to the Leases and the lands
covered thereby or otherwise described on Exhibit A, and (D) the oil and gas
leases and lands included in any units with which the Leases or the lands
covered thereby or otherwise described on Exhibit A may have been pooled,
unitized, or communitized, and all other rights, interests, privileges,
benefits, and powers of any kind or character conferred upon Assignor as the
owner of such interests; (ii) an undivided 59.577% of the rights, titles, and
interests owned by Assignor immediately prior to the Effective Time in and to
the ▇▇▇▇▇; (iii) an undivided 59.577% of the rights, titles, and interests owned
by Assignor immediately prior to the Effective Time in and to all Hydrocarbons
produced from or allocable to the interests of Assignor described in clauses (i)
and (ii) of this Section 1.2(a); (iv) an undivided 59.577% of the rights,
titles, and interests owned by Assignor immediately prior to the Effective Time
in and to (A) the Real Property Interests, (B) the Personal Property, and (C)
the Contracts; and (v) all intangible rights, inchoate rights, transferable
rights under warranties made by prior owners, manufacturers, vendors, and third
Persons, and rights accruing under applicable statutes of limitation or
prescription, insofar only as the foregoing rights and interests relate or are
attributable to the items listed in this Section 1.2(a), including, without
limitation, an undivided 59.577% interest in and to all underproduction accounts
or credits pertaining to Imbalances to which Assignor was entitled as of the
Effective Time;
Page 3
(b) all corporate, financial, legal, and tax records of Assignor;
(c) all deposits, cash, checks in process of collection, cash
equivalents, and funds attributable to the Company Assets for the period prior
to the Effective Time;
(d) all Hydrocarbons produced from or allocable to the Company
Assets prior to the Effective Time, except for those Hydrocarbons described in
Section 1.1(c)(i);
(e) all fees, rentals, proceeds, payments, revenues, and other
rights and economic benefits of every kind and character accruing or payable to
the owner of the items listed in Section 1.2(a) prior to the Effective Time;
(f) all rights, interests, and Claims that Assignor may have under
any policy of insurance or indemnity, surety bond, or any insurance or
condemnation proceeds or recoveries from third Persons relating to property
damage or casualty loss affecting the Company Assets occurring prior to the
Effective Time;
(g) all Claims, whether in contract, in tort, or arising by
operation of law, and whether asserted or unasserted as of the Effective Time,
that Assignor may have against any Person arising out of acts, omissions, or
events, or injury to or death of Persons or loss or destruction of or damage to
property, relating in any way to the Company Assets that occurred prior to the
Effective Time; provided, however, that no such Claim may be settled,
compromised, or otherwise resolved in a manner that results in an obligation
borne by Assignee or the Assigned Interests from and after the Effective Time
without the prior written consent of Assignee;
(h) all exchange traded futures contracts and over-the-counter
derivative contracts of Assignor as to which Assignor has an open position as of
the Effective Time;
(i) any and all rights to use Assignor's name, marks, trade dress or
insignia, or to use the name, marks, trade dress or insignia of any Affiliate of
Assignor, and all of Assignor's intellectual property, including, without
limitation, proprietary or licensed computer software; patents; trade secrets;
copyrights; and Data that either (i) is subject to a confidentiality obligation
or restriction on transferability as to which Assignor is unable to obtain the
required waiver or consent or (ii) is licensed from a third Person from whom
Assignor and Assignee are unable to obtain an appropriate sub-license;
(j) all amounts due or payable to Assignor as adjustments to
insurance premiums related to the Company Assets for periods prior to the
Effective Time;
(k) all Claims of Assignor for refunds of or any loss carry-forwards
with respect to any taxes relating to the Company Assets for periods prior to
the Effective Time;
(l) all audit rights and all amounts due or payable to Assignor as
refunds, adjustments, or settlements of disputes arising under the Leases, the
Real Property Interests, or the Contracts for periods prior to the Effective
Time;
Page 4
(m) all trade credits and the proceeds of all accounts receivable,
notes receivable, instruments, general intangibles, and other receivables due or
payable to Assignor relating to the Company Assets that accrued prior to the
Effective Time; and
(n) all interests, rights, property, and assets of Assignor not
located on or used in connection with the Assigned Interests or otherwise
specifically included in the definition of the Assigned Interests.
1.3 Habendum. TO HAVE AND TO HOLD, subject to the terms, exceptions and
other provisions herein stated, the Assigned Interests unto Assignee and its
successors and assigns forever.
II.
WARRANTIES; DISCLAIMERS
2.1 Limited Warranty; Subrogation. Assignor agrees to warrant and forever
defend title to the Assigned Interests unto Assignee and its successors and
assigns against the Claims of all Persons claiming, or to claim the same, or any
part thereof, by, through, or under Assignor, but not otherwise, but subject to
the existence of the Permitted Encumbrances. Except as provided in the
immediately preceding sentence of this Section 2.1, this Assignment is made
without warranty of title, expressed, implied, or statutory, and without
recourse, even as to the return of the purchase price or other consideration,
but with full substitution and subrogation of Assignee, and all Persons claiming
by, through, and under Assignee, to the extent assignable, in and to all
covenants and warranties of all predecessors in title of Assignor and with full
subrogation of all rights accruing under the statutes of limitation or
prescription applicable to the Assigned Interests and all rights of action of
warranty against all former owners of the Assigned Interests.
2.2 Further Disclaimers. To the extent required by applicable law to be
operative, the disclaimers of certain warranties contained in this Section 2.2
are "conspicuous disclaimers" for the purposes of any applicable law. EXCEPT AS
OTHERWISE PROVIDED IN THIS ASSIGNMENT AND THE REDEMPTION AGREEMENT, ASSIGNEE
AGREES THAT ASSIGNOR IS CONVEYING THE ASSIGNED INTERESTS WITHOUT REPRESENTATION,
WARRANTY, OR INDEMNITY, EITHER EXPRESSED OR IMPLIED AT COMMON LAW, BY STATUTE,
OR OTHERWISE (ALL OF WHICH ASSIGNOR HEREBY DISCLAIMS), RELATING TO (i) TITLE,
(ii) MERCHANTABILITY, DESIGN, OR QUALITY, OR (iii) FITNESS FOR ANY PARTICULAR
PURPOSE.
III.
ADDITIONAL COVENANTS
3.1 Revenues and Benefits. Subject to the terms of this Assignment,
Assignee shall be entitled to all fees, rentals, payments, proceeds, revenues,
and other rights and economic benefits of every kind and character accruing or
payable to the owner of the Assigned Interests that are attributable to the
period from and after the Effective Time.
Page 5
3.2 Assumption of Liabilities. Subject to the terms of this Assignment,
Assignee assumes and agrees to pay, perform, and discharge the following duties,
obligations, and liabilities (collectively, the "Assumed Liabilities"): (a) the
performance of the terms, conditions, and covenants of, and the discharge of the
share attributable to the Assigned Interests of the duties, obligations, and
liabilities arising under the terms of, the Leases and the Contracts for the
period from and after the Effective Time, including, without limitation, the
share attributable to the Assigned Interests of the duties, obligations and
liabilities of Assignor arising under that certain Exploration Agreement dated
April 7, 2006, by and among Source Rock Resources, Inc., Aurora Energy, Ltd.,
and Assignor, and that certain Exploration Agreement dated January 27, 2006, but
effective November 1, 2005, by and between Aurora Energy, Ltd., and Assignor;
(b) subject to the terms of the Redemption Agreement, all obligations and
liabilities of Assignor for the payment of money with respect to the Assigned
Interests (including, without limitation, the payment of all costs and expenses
incurred in connection with the Assigned Interests and the payment of the share
attributable to the Assigned Interests of all royalties, overriding royalties,
and other similar burdens on production, as well as all rentals, shut-in well
payments, minimum royalties, and other lease maintenance payments under the
terms of the Leases) for the period from and after the Effective Time,
including, without limitation, all obligations and liabilities of Assignor for
the payment of money with respect to the Assigned Interests arising under that
certain Exploration Agreement dated April 7, 2006, by and among Source Rock
Resources, Inc., Aurora Energy, Ltd., and Assignor, and that certain Exploration
Agreement dated January 27, 2006, but effective November 1, 2005, by and between
Aurora Energy, Ltd., and Assignor; (c) the share attributable to the Assigned
Interests of all obligations regarding the plugging and abandonment of all ▇▇▇▇▇
and Personal Property and the performance of all related salvage, site
clearance, and surface restoration operations from and after the Effective Time;
(d) the share attributable to the Assigned Interests of all liabilities for
injury to or death of any person or other living thing, or loss or destruction
of or damage to property affecting or relating to the Leases, ▇▇▇▇▇, and
Personal Property to the extent that such liability, or the acts, omissions,
events, or conditions giving rise thereto, arise, occur, or exist at or after
the Effective Time; and (e) all other duties, obligations, liabilities, and
claims, whether in contract, in tort, or arising by operation of law, accruing
or resulting from, arising out of, or otherwise associated with the ownership,
operation, development, production, and maintenance of the Assigned Interests
and the marketing of Hydrocarbons produced therefrom or allocable thereto for
the period from and after the Effective Time.
3.3 Possession; Risk of Loss. As of the Effective Time, Assignor shall
deliver to Assignee exclusive possession and control of the Assigned Interests.
Assignor agrees to cooperate with Assignee to facilitate the transition of the
ownership of the Assigned Interests to Assignee. As between Assignor and
Assignee, Assignor shall assume and bear the risk of loss associated with the
Assigned Interests prior to 9:00 a.m., Eastern Standard Time, on the Effective
Time, and Assignee shall assume and bear all risk of loss associated with the
Assigned Interests from and after 9:00 a.m., Eastern Standard Time, on the
Effective Time.
3.4 Proration of Taxes. Assignee shall assume responsibility for, and
shall bear and pay, all state sales and use taxes and real estate transfer taxes
(including any applicable interest or penalties) incurred or imposed with
respect to the transfer of the Assigned Interests. Assignor shall assume
responsibility for, and shall bear and pay, all ad valorem, property, severance,
Btu or gas, transportation, excise or other taxes or governmental fees or
charges ("Property-Related Taxes"), including any applicable penalties and
interest, based upon or measured by the ownership of the Assigned Interests or
the receipt of proceeds therefrom, but exclusive of income taxes, and assessed
Page 6
against the Assigned Interests by any taxing authority for the period prior to
the Effective Time. Assignee shall be responsible for, and shall bear and pay,
all such Property-Related Taxes assessed against the Assigned Interests by any
taxing authority for any period that begins on or after the Effective Time. For
purposes of this Agreement, the foregoing proration of Property-Related Taxes
shall be accomplished pursuant to Section 3.5 and, in the case of ad valorem and
other property taxes, shall be based upon the ad valorem and other property
taxes actually assessed against the Assigned Interests for 2007, or, in the
absence of such assessments, the ad valorem and other property taxes actually
assessed against the Assigned Interests for 2006.
3.5 Accounting. As soon as is reasonably practicable after the Assignment
Date, but in no event more than one hundred and twenty (120) days thereafter,
Assignor and Assignee shall enter into an accounting for the purposes of
accomplishing the proration of Property-Related Taxes provided for in Section
3.4 and bringing into balance, in accordance with the terms of this Article III,
the amount of the proceeds from the sale of Hydrocarbons produced from or
attributable to the Assigned Interests received, and the amount of the costs and
expenses attributable to the Assigned Interests incurred and paid, in each case
during the periods prior to and after the Effective Time. No later than thirty
(30) days after the completion of such accounting, Assignor and Assignee shall
each pay to the other such amounts as are necessary to accomplish the purposes
of such accounting.
3.6 Further Assurances. Following the date of this Assignment, Assignor
and Assignee agree to execute, acknowledge, and deliver such further documents
and instruments, and take such other actions, as are necessary or useful in
carrying out the purposes of this Assignment. If, after the Effective Time,
either Assignor or Assignee receives monies belonging to the other party, such
amounts shall immediately be paid over to the proper party. If, after the
Effective Time, an invoice or other evidence of an obligation relating to the
Assigned Interests is received by either Assignor or Assignee, and such invoice
represents either an obligation of the other party or an obligation of both
Assignor and Assignee, Assignor and Assignee shall consult and cooperate with
each other to the end that such invoice is paid in a timely manner by the proper
party or parties.
IV.
MISCELLANEOUS
4.1 Additional Definitions. In addition to the terms defined elsewhere in
this Assignment, for purposes hereof, the following expressions and terms shall
have the meanings set forth in this Section 4.1, unless expressly stated
otherwise:
(a) "Claims" means any and all claims, demands, Liens, notices of
non-compliance or violation, notices of liability or potential liability,
investigations, actions (whether judicial, administrative, or arbitrational),
causes of action, suits, and controversies.
Page 7
(b) "Governmental Authority" means any governmental or quasi-governmental
federal, state, provincial, county, city, or other political subdivision of the
United States, any foreign country, or any department, bureau, agency,
commission, court, or other statutory or regulatory body or instrumentality
thereof.
(c) "Imbalance" means any imbalance between (i) the quantity of
Hydrocarbons produced from any Well and allocated to a Person from time to time
and the share of such production to which such Person is actually entitled by
virtue of its ownership interest in such Well, (ii) the quantity of Hydrocarbons
produced from or allocable to any Well delivered, and the quantity of such
Hydrocarbons received, in each case for gathering, transportation, or storage
for the account of a Person, (iii) the quantity of Hydrocarbons produced from or
allocable to any Well delivered for processing or refining, and the quantity of
products or residue Hydrocarbons redelivered, in each case for the account of a
Person, and (iv) other similar types of Hydrocarbon-related imbalances
attributable to the ▇▇▇▇▇.
(d) "Lien" means any mortgage, deed of trust, pledge, security interest,
encumbrance, lien, or charge of any kind (including any agreement to grant any
of the foregoing), any conditional sale or title retention agreement, any lease
in the nature thereof, or the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction.
(e) "Permitted Encumbrances" means: (i) preferential rights to purchase
any Asset (including, without limitation, any Contract), required
non-governmental, third Person consents to assignment, and similar agreements
with respect to which, prior to the Effective Time, (A) waivers or consents are
obtained from the appropriate Persons, or (B) the appropriate time period for
asserting such rights has expired without an exercise of such right; (ii)
required non-governmental, third Person consents to assignment if such consent
is of a type customarily obtained subsequent to a sale or conveyance; (iii)
Liens for taxes or assessments not yet delinquent or, if delinquent, those taxes
or assessments that are being contested in good faith by proceedings diligently
conducted in the normal course of business; (iv) all rights to consent by,
required notices to, filings with, or other actions by Governmental Authorities
in connection with the sale or conveyance of the Assigned Interests if the same
are customarily obtained, given, or made subsequent to such sale or conveyance;
(v) the Leases, the Contracts, and the Real Property Interests; (vi) all
easements, rights-of-way, servitudes, permits, licenses, surface leases, and
other rights to use the surface (in addition to the Real Property Interests)
affecting or pertaining to the Assigned Interests, but that are not included in
the Assigned Interests and do not interfere materially with the ownership,
operation, value, or use of the Assigned Interests; (vii) any operator's or
other inchoate or undetermined Lien or charge, whether statutory or contractual,
constituting or securing the payment of expenses which were or will be incurred
in the ordinary course of business and incidental to the maintenance,
development, production, or operation of any Assigned Interest, to the extent
the same secure amounts not yet due and payable or that are being contested in
good faith by proceedings diligently conducted in the normal course of business;
(viii) conventional rights of reassignment; and (ix) the rights reserved to,
vested in, or imposed by any Governmental Authority to control, regulate, or
monitor the Assigned Interests in any manner, and all applicable laws; and (x)
all other Liens, charges, encumbrances, contracts, agreements, instruments,
obligations, and irregularities affecting any Assigned Interest that in the
aggregate are not such as to interfere materially with the ownership, operation,
value, or use of such Assigned Interest for the purposes for which it is held.
Page 8
(f) "Person" means any individual, corporation, limited liability company,
partnership, trust, unincorporated organization, Governmental Authority, or any
other form of entity.
4.2 Redemption Agreement. This Assignment is expressly made subject to the
terms of that certain Membership Interest Redemption Agreement dated of even
date herewith, between Assignor and Assignee (the "Redemption Agreement"). The
delivery of this Assignment shall not affect, enlarge, diminish, or otherwise
impair any of the representations, warranties, covenants, indemnities, terms, or
provisions of the Redemption Agreement. The representations, warranties,
covenants, indemnities, terms, and provisions contained in the Redemption
Agreement shall not be merged with or into this Assignment but shall survive the
execution and delivery of this Assignment to the extent, and in the manner, set
forth in the Redemption Agreement.
4.3 Successors and Assigns. The provisions of this Assignment shall be
covenants running with the land, and this Assignment shall bind and inure to the
benefit of Assignor and Assignee and their respective successors and assigns.
4.4 GOVERNING LAW. THIS ASSIGNMENT AND THE LEGAL RELATIONS BETWEEN
ASSIGNOR AND ASSIGNEE HEREUNDER SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF INDIANA, EXCLUDING ANY CONFLICTS OF LAW RULE OR
PRINCIPLE THAT MIGHT REFER CONSTRUCTION OF SUCH PROVISIONS TO THE LAWS OF
ANOTHER JURISDICTION.
4.5 Exhibits. All exhibits attached hereto are hereby made a part hereof
and incorporated herein by this reference. References in such exhibits to
instruments on file in the public records are notice of such instruments for all
purposes. Unless provided otherwise, all recording references in such exhibits
are to the appropriate records of the counties in which the Assigned Interests
are located.
4.6 Captions. The captions and article and section numbers in this
Assignment are for convenience only and shall not be considered a part of or
affect the construction or interpretation of any provision of this Assignment.
References in this Assignment to articles, sections, and exhibits are to
articles, sections, and exhibits of this Assignment unless otherwise specified.
4.7 Counterparts. This Assignment may be executed in one or more
originals, but all of which together shall constitute one and the same
instrument.
Page 9
EXECUTED on the date set forth above, to be effective as provided
herein as of the Effective Time.
ASSIGNOR
NEW ALBANY - INDIANA, LLC
By: ▇▇▇ Energy Wabash, LLC,
its Managing Member
By:
--------------------------
Name:
------------------------
Title:
-----------------------
THE STATE OF _________ ss.
ss.
COUNTY OF ___________ ss.
This instrument was acknowledged before me on ___________ __, 2007,
by ___________________, of ▇▇▇ Energy Wabash, LLC, in its capacity as Managing
Member of New Albany - Indiana, LLC, a Delaware limited liability company, on
behalf of such limited liability company.
----------------------------------
Notary Public - State of
---------
Page 10
ASSIGNEE
BASELINE OIL & GAS CORP.,
a Nevada corporation
By:
-----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
THE STATE OF TEXAS ss.
ss.
COUNTY OF ▇▇▇▇▇▇ ▇▇.
This instrument was acknowledged before me on March __, 2007, by
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President of Baseline Oil & Gas Corp., a Nevada corporation,
on behalf of such corporation.
------------------------------
Notary Public - State of Texas
EXHIBITqS
Exhibit A - Leases
Exhibit B - ▇▇▇▇▇
Exhibit C - Real Property Interests
Exhibit D - Contracts
Page 11
EXHIBIT A
Attached to and made a part of Assignment, ▇▇▇▇ of Sale, and Conveyance
dated as of March 16, 2007, from New Albany-Indiana, LLC,
as Assignor, to Baseline Oil & Gas Corp., as Assignee
LEASES
The following spreadsheets contain the list of the Leases, as well as any
relevant amendments and ratifications, that are subject to this Agreement. In
most cases, the documents are described in a matrix or spreadsheet format. Each
row describes a separate document.
If there is a memorandum relating to a particular Lease, then the description of
the memorandum will appear in the row following the description of the Lease. If
a Lease has been amended or ratified, then the description of the Lease will be
as amended or ratified by the document identified as amending or ratifying the
Lease. If a Lease has been pooled, then the unit declaration forming the unit
will be described below the last Lease.
The undivided Working Interests and Net Revenue Interests shown for the Leases
are the undivided interests in the Leases owned by Assignor immediately prior to
this Assignment. Assignor makes no representation or warranty regarding such
interests, however, except to the extent provided in the Conveyance.
The lands covered by each Lease are all lands and subsurface intervals described
therein unless otherwise noted.
Exhibit A-Page 1
EXHIBIT B
Attached to and made a part of Assignment, ▇▇▇▇ of Sale, and Conveyance
dated as of March 16, 2007, from New Albany-Indiana, LLC,
as Assignor, to Baseline Oil & Gas Corp., as Assignee
▇▇▇▇▇; WORKING INTERESTS
AND NET REVENUE INTERESTS
1. ▇▇▇▇▇▇ ▇▇▇▇▇
WELL NAME SECTION TOWNSHIP RANGE COUNTY STATE
▇▇▇ D4-2 2 7N 7W ▇▇▇▇▇▇ IN
▇▇▇ D4-2 SWD 2 7N 7W ▇▇▇▇▇▇ IN
▇▇▇▇ ▇▇-▇▇▇ ▇ ▇▇ ▇▇ ▇▇▇▇▇▇ IN
▇▇▇▇ ▇▇-▇▇▇▇ ▇ ▇▇ ▇▇ ▇▇▇▇▇▇ IN
▇▇▇▇▇▇▇ A2-15 15 8N 6W ▇▇▇▇▇▇ IN
▇▇▇▇▇▇▇ ▇▇-▇▇ ▇▇▇ ▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇ IN
▇▇▇▇▇▇▇ B4-16HD 16 8N 6W ▇▇▇▇▇▇ IN
▇▇▇▇▇▇▇ B4-16AHD 16 8N 6W ▇▇▇▇▇▇ IN
▇▇▇▇▇▇ D4-16 16 8N 6W ▇▇▇▇▇▇ IN
▇▇▇▇▇▇ D4-16SWD 16 8N 6W ▇▇▇▇▇▇ IN
2. JetEx Farmout ▇▇▇▇▇
WELL NAME SECTION TOWNSHIP RANGE COUNTY STATE
▇▇▇▇▇ 1-30 30 10N 6W Clay IN
▇▇▇▇ 1-17 17 8N 6W ▇▇▇▇▇▇ IN
▇▇▇▇▇▇▇▇ 1 36 10N 7W Clay IN
▇▇▇▇▇▇ 1 10 8N 6W ▇▇▇▇▇▇ IN
3. El Paso Operating Agreement Well
WELL NAME SECTION TOWNSHIP RANGE COUNTY STATE
▇▇▇▇▇▇ 1-10H 10 6N 6W ▇▇▇▇▇▇ IN
Assignor's interest in the ▇▇▇▇▇▇ 1-10 Well is derived under the terms of the
joint operating agreement identified as item 8 on Exhibit D. Assignor will not
receive an assignment of interest of record with respect to this Well.
Exhibit B-Page 1
EXHIBIT C
Attached to and made a part of Assignment, ▇▇▇▇ of Sale, and Conveyance
dated as of March 16, 2007, from New Albany-Indiana, LLC,
as Assignor, to Baseline Oil & Gas Corp., as Assignee
REAL PROPERTY INTERESTS
None.
Exhibit C-Page 1
EXHIBIT D
Attached to and made a part of Assignment, ▇▇▇▇ of Sale, and Conveyance
dated as of March 16, 2007, from New Albany-Indiana, LLC,
as Assignor, to Baseline Oil & Gas Corp., as Assignee
CONTRACTS
1. Purchase and Sale Agreement dated November 15, 2006, by and between Aurora
Energy, Ltd., and New Albany-Indiana, LLC.
2. Purchase and Sale Agreement dated March 3, 2006, by and between Source Rock
Resources, Inc., and New Albany-Indiana, LLC.
3. Farmout and Participation Agreement dated as of July 19, 2005, between Aurora
Energy, Ltd., and Wabash Energy Partners, as Farmors, and JetEx LLC, as Farmee,
covering lands located in Green, Clay, and ▇▇▇▇▇ Counties, Indiana (the "JetEx
Farmout").
4. Assignment of Farmout and Participation Agreement dated January 31, 2006,
between Aurora Energy, Ltd., and New Albany-Indiana, LLC.
5. Exploration Agreement dated January 27, 2006, effective as of November 1,
2005, between Aurora Energy, Ltd., and New Albany - Indiana, LLC.
6. Exploration Agreement dated April 7, 2006, by and among Source Rock
Resources, Inc., New Albany-Indiana, LLC, and Aurora Energy, Ltd.
7. Grant of Option dated January 27, 2006, between Aurora Energy, Ltd., and New
Albany-Indiana, LLC.
8. Operating Agreement dated May 1, 2006, between El Paso Production Company, as
Operator, and Pogo Producing Company, Aurora Energy, Ltd., Aurora Operating,
L.L.C., and New Albany-Indiana, LLC, as Non-Operators, covering the South ▇▇▇▇▇
Prospect Area (Initial Test - ▇▇▇▇▇▇ 1-10H), ▇▇▇▇▇▇ County, Indiana, a
memorandum of which is recorded in Book 66, Page 840, Instrument Number
200600003777, Public Records of ▇▇▇▇▇▇ County, Indiana.
9. Operating Agreement dated effective as of April 1, 2006, among Aurora Energy,
Ltd., as Operator, and New Albany-Indiana, LLC, Venator Energy, LLC, and ▇▇▇▇▇
▇▇▇▇▇▇▇, as Non-Operators, relating to the Cardinal Unit, ▇▇▇▇▇▇ County,
Indiana.
10. Operating Agreement dated effective as of April 1, 2006, among Aurora
Energy, Ltd., as Operator, and New Albany - Indiana, LLC, Venator Energy, LLC,
and ▇▇▇▇▇ ▇▇▇▇▇▇▇, as Non-Operators, relating to the Eagle Unit, ▇▇▇▇▇▇ County,
Indiana.
Exhibit D-Page 1