DEFINITIVE AGREEMENT
This Definitive Agreement ("Definitive Agreement") is entered
into as of the 3rd day of January, 2006, by and among TRANS ENERGY, INC., a
Nevada corporation, with its principal place of business at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇. ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Seller"); PRIMA OIL COMPANY, INC., a Delaware
corporation, with their principal place of business at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Credit Facilitator"); ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, of P. ▇. ▇▇▇ ▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("Purchasers"); ▇▇▇▇▇▇▇ OILFIELD SERVICES, LLC, a West Virginia limited
liability company ("AOS"); and ARVILLA PIPELINE CONSTRUCTION CO., INC., a West
Virginia corporation whose stock is wholly owned by Purchasers ("APC").
W I T N E S S E T H:
WHEREAS, Purchasers are the holders of 1,042,821 shares of the
capital common stock of Seller (the "Purchasers' Shares") acquired in connection
with the merger of ▇▇▇▇▇▇▇, Inc., a Nevada corporation, with Trans Energy
Acquisitions, Inc., a Nevada corporation, on January 31, 2005 (the "Merger");
WHEREAS, as a result of the Merger, Seller became and remains the
sole stockholder of ▇▇▇▇▇▇▇, Inc., which is in turn the sole corporate member of
AOS;
WHEREAS, Purchaser desires to acquire 100% of the membership
interests in AOS from Seller; and
WHEREAS, Seller desires to reacquire fifty percent (50%) of the
Purchasers' Shares, or 521,411 shares (the "Reacquired Shares"), from Purchaser.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, together with other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
Article 1. Purchase and Sale
1.1 Purchase and Sale of All Membership Interests in AOS. Subject
to the terms and conditions of this Definitive Agreement, on the date hereof,
Seller agrees to cause its wholly owned subsidiary, ▇▇▇▇▇▇▇, Inc., to sell and
convey to Purchasers, free and clear of all encumbrances, and Purchasers agree
to purchase and accept from Seller one hundred percent (100%) of the outstanding
membership interests in AOS.
1.2 Purchase and Sale of Shares. Subject to the terms and
conditions of this Definitive Agreement, on the date hereof, Purchasers agree to
sell and convey to Seller, free and clear of all encumbrances, and Seller agrees
to purchase and accept from Purchasers the Reacquired Shares.
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1.3 Assignment of the Five ▇▇▇▇▇.
1.3.1 Subject to the terms and conditions of this Definitive
Agreement, on the date hereof, Purchasers agree to sell and convey to Seller,
free and clear of all encumbrances, except for Permitted Encumbrances, and
Seller agrees to purchase and accept from Purchasers all of Purchasers' interest
in and to those certain oil and gas ▇▇▇▇▇ located in Tyler County, West Virginia
and known as the ▇▇▇▇▇▇▇ #▇, ▇▇▇▇▇ #▇, ▇▇▇▇▇ #▇, ▇▇▇▇▇ #▇ and ▇▇▇▇▇ #5 ▇▇▇▇▇
(collectively, the "Five ▇▇▇▇▇"), all as more particularly set forth and
described in that certain assignment attached hereto and made a part hereof as
Exhibit 1.3.1 (the "Five ▇▇▇▇▇ Assignment").
1.3.2 Notwithstanding the foregoing, Purchasers shall
deposit the original executed Five ▇▇▇▇▇ Assignment in escrow pending Seller's
payment in full of the AOS Promissory Note and the APC Promissory Note, as such
terms are defined in paragraph 1.4 below. Until such time as the AOS Promissory
Note and the APC Promissory Note are satisfied in full, Purchasers shall retain
for their own account all of the income derived from the Five ▇▇▇▇▇, and shall
bear full and complete responsibility to make the debt service payments related
to said Five ▇▇▇▇▇. Upon Seller's full satisfaction of the AOS Promissory Note
and the APC Promissory Note, (a) the Five ▇▇▇▇▇ Assignment shall be released
from escrow to Trans Energy, (b) Trans Energy shall assume primary
responsibility for all outstanding debt secured by the Five ▇▇▇▇▇, and (c)
Purchasers shall be released from any responsibility for said outstanding debt.
1.4 Additional Consideration. In addition to the exchange of the
membership interests in AOS for the Reacquired Shares and the Five ▇▇▇▇▇
Assignment, the parties will also exchange the following as additional
consideration with respect to exchanges described in paragraphs 1.1, 1.2 and 1.3
hereof (the "Additional Consideration"). The deferred portion of the Additional
Consideration shall be represented by the promissory notes described in
subparagraphs 1.4.1 and 1.4.2 below, and shall be secured by a first lien
position in certain collateral owned by Credit Facilitator, as more particularly
described and set forth on Schedule 1.4.
1.4.1 Seller, together with any of its subsidiary
corporations or affiliated entities ("Seller's Affiliated Entities"), shall
execute a promissory note ("AOS Promissory Note") in favor of AOS in the
principal amount of Five Hundred Thousand Dollars and No Cents ($500,000.00),
bearing interest from January 1, 2006 at an annual stated rate of interest equal
to Wall Street Journal plus one percent (1%), adjusted monthly on the
twenty-eighth (28th) day of each calendar month; said AOS Promissory Note shall
be payable in equal monthly installments of Forty Thousand Dollars ($40,000.00)
plus ten percent (10%) of the gross proceeds from any capital raise conducted by
Trans Energy during the term thereof until such time as the entire outstanding
principal balance, together with all interest accrued thereon, is paid in full,
in substantially the same form as attached hereto as Exhibit 1.4.1.
1.4.2 Seller, together with any of its subsidiary
corporations or affiliated entities ("Seller's Affiliated Entities"), shall
execute a promissory note ("APC Promissory Note") in favor of APC, in the total
amount of Two Hundred Sixty-Three Thousand Dollars and No Cents ($263,000.00),
bearing interest from January 1, 2006 at an annual stated rate of interest equal
to Wall Street Journal plus one percent (1%), adjusted monthly on the
twenty-eighth (28th) day
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of each calendar month; said APC Promissory Note shall payable as follows: the
entire outstanding principal balance, together with all interest accrued
thereon, shall be paid in full on or before December 31, 2006, in substantially
the same form as is attached hereto as Exhibit 1.4.2.
1.4.3 The AOS Promissory Note and the APC Promissory Note
shall each be cross collateralized by a first priority Leasehold Deed of Trust,
Fixture Filing, Security Agreement and Financing Statement from the Credit
Facilitator, for the oil and gas lease of the ▇▇▇▇▇ property, together with the
oil and gas ▇▇▇▇▇ now or hereafter situate thereon, all as more particularly
described and set forth in that certain assignment attached hereto as Exhibit
1.4.3(B) (collectively, the "▇▇▇▇▇ Lease"), in the form attached hereto as
Exhibit 1.4.3(B) and made a part hereof (the "▇▇▇▇▇ Leasehold Deed of Trust").
1.4.4 In the event any payment due under the AOS Promissory
Note and the APC Promissory Note is not made when due, Purchasers may, at their
sole discretion, declare all of the remainder of the outstanding principal
balances, together with all interest accrued thereon the AOS Promissory Note and
the APC Promissory Note presently and immediately due and collectible. In
addition, Purchasers, AOS and APC may pursue any and all legal and equitable
remedies available to them, including enforcement of their rights under that
certain Escrow Agreement more particularly described and set forth in paragraph
1.5 below. Any failure to exercise this option shall not constitute a waiver of
the right to exercise the same at any time in the future.
1.4.5 Seller shall declare and pay, subject to applicable
withholdings for federal and state income taxes, FICA and Medicare Tax, a
one-time bonus to ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ equal to the annual compensation determined
by its auditors, H-J and Associates, CPAs, as reasonable compensation for his
services as its Chief Executive Officer. Notwithstanding the foregoing, the net
amount of such bonus shall be retained by Seller for its own account.
1.4.6 Seller shall cause AOS to declare and pay, subject to
applicable withholdings for federal and state income taxes, FICA and Medicare
Tax, a one-time bonus to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ equal to the annual compensation
determined by its auditors, H-J and Associates, CPAs, as reasonable compensation
for her services as its Chief Executive Officer. Notwithstanding the foregoing,
the net amount of such bonus shall be retained by Seller for its own account.
1.4.7 Upon closing the transactions contemplated by this
Definitive Agreement, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ shall resign as Chief Executive Officer
of Trans Energy, Inc. and shall deliver an executed letter of resignation in the
form attached hereto as Exhibit 1.4.6.
1.5 Escrow Agreement. Seller, the Credit Facilitators, the
Purchasers, AOS APC and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq., of ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (the "Escrow Agent") shall enter into an Escrow Agreement
for the purpose of delivering the AOS Promissory Note, the APC Promissory Note,
the ▇▇▇▇▇ Leasehold Deed of Trust, as well as all other agreements, instruments,
certificates, approvals and other documents necessary or convenient to
consummate the transactions contemplated herein (the "Transaction Documents") to
the Escrow Agent pending the receipt of a fairness opinion and the satisfaction
of certain other conditions set forth therein (the "Escrow Agreement").
Article 2. Representations and Warranties of Purchasers
2.1 Representations and Warranties of the Purchasers. The
Purchasers represent and warrant to Seller:
2.1.1 Title to Shares. Purchasers have good, indefeasible
and marketable title to the Reacquired Shares and own the same free and clear of
any encumbrance.
2.1.2 No Broker or Finder's Fee. Negotiations relative to
this Definitive Agreement and the transactions contemplated hereby have been
carried on by the parties hereto without the intervention of any person in such
manner as to give rise to any valid claim against any of the parties hereto for
a brokerage commission, finder's fee or any similar payments.
2.1.3 Definitive Agreement Will Not Cause Breach or
Violation. The execution, delivery and performance of this Definitive Agreement
by Purchasers will not violate the provisions of, or constitute a breach or
default whether upon lapse of time and/or the occurrence of any act or event or
otherwise under (a) any law, statute, rule or regulation to which Purchasers are
subject, or (b) any commitment, contract or agreement to which Purchasers, or
either of them, are a party, if, in each case, such a violation, breach or
default would be reasonably likely to prevent, or materially delay or materially
impair the ability of Purchasers to consummate the transactions contemplated by
this Definitive Agreement.
2.1.4 Closing Certificate. At the Closing the Purchasers
shall deliver a certificate executed by both of them to the effect that all of
the representations and warranties made herein are true as of the date of the
Closing.
Article 3. Representations and Warranties of Seller and Credit Facilitator
3.1 Representations and Warranties of the Seller and Credit
Facilitator. The Seller and the Credit Facilitator each represent and warrant to
Purchasers:
3.1.1 Organization, Standing and Qualification of Seller and
Credit Facilitator. Seller and Credit Facilitator are each duly organized,
validly existing, and in good standing under the laws of their respective States
or Commonwealths of incorporation, they are each qualified to do business in
each and every respective state or commonwealth in which they do business, and
they have all necessary powers to own their own respective properties and to
carry on their own respective businesses, and to execute, deliver and perform
this Definitive Agreement and consummate the transactions contemplated hereby.
3.1.2 Definitive Agreement Will Not Cause Breach or
Violation. The execution, delivery and performance of this Definitive Agreement
by Seller and Credit Facilitator will not violate the provisions of, or
constitute a breach or default whether upon lapse of time and/or the occurrence
of any act or event or otherwise under (a) the corporate charter or bylaws of
Seller or Credit Facilitator, (b) any law, statute, rule or regulation to which
Seller or Credit Facilitator is subject, or (c) any commitment, contract or
agreement to which Seller or Credit Facilitator are parties, if, in each case,
such a violation,
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breach or default would be reasonably likely to prevent, or materially delay or
materially impair the ability of Seller or Credit Facilitator to consummate the
transactions contemplated by this Definitive Agreement.
3.1.3 Authority and Consent. The execution, delivery and
performance of this Definitive Agreement by Seller and Credit Facilitator, and
all instruments and agreements to be executed by them at Closing, have been duly
and validly authorized by the boards of directors of Seller and Credit
Facilitator and by all other necessary corporate action on the part of Seller
and Credit Facilitator. This Definitive Agreement constitutes the legal, valid
and binding obligation of Seller and Credit Facilitator, enforceable against
Seller and Credit Facilitator in accordance with its terms except as such
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enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws and equitable principles relating to or
limiting creditors' rights generally.
3.1.4 Third Party Consents. As of the Escrow Closing, Seller
and Credit Facilitator will have obtained all consents, authorizations,
licenses, permits and/or regulatory approvals of any governmental entity or any
other person necessary for the consummation of the transactions contemplated
hereby, including any necessary consent, authorization or approval of any
creditors of Seller and Credit Facilitator whose consent is necessary.
3.1.5 Secretary's Certificate. At the Escrow Closing the
Seller and the Credit Facilitator shall deliver a certificate executed by their
respective corporate Secretary's to the effect that all of the representations
and warranties made herein are true as of the date of the Closing.
3.1.6 Title to Collateral. Credit Facilitator has good and
marketable title, free of all liens and encumbrances, to the ▇▇▇▇▇ Lease, except
for such permitted encumbrances as set forth and described on Schedule 3.1.6
hereof.
Article 4. Additional Definitive Agreements
4.1 Resignations. Upon the execution and delivery of this
Definitive Agreement, Purchasers agree to resign any and all positions they hold
as an employee, officer or director of any subsidiaries of Seller. Further,
Purchasers shall resign as members of the Board of Directors of Seller upon the
receipt of a fairness opinion of the transactions contemplated herein.
4.2 Purchasers Access to Books and Records. Until the AOS
Promissory Note and the APC Promissory Note are paid in full and all obligations
of Seller to Purchasers have been fully satisfied, Seller shall provide
Purchasers access to the all financial records of Seller and its Affiliated
Entities, together with any written financial statements prepared by Seller or
its accountants upon written request of Purchasers.
4.3 Covenant Not to Represent Association of Seller with
Purchasers. Following the Closing, neither Seller, Purchasers nor their
Affiliated Entities shall represent to any person, firm or corporation that
Purchasers are associated in any way with Seller.
4.4 Survival of Merger Agreement Provisions. The covenants of the
Merger Agreement shall continue to remain in full force and effect until all
conditions precedent to the Escrow Closing are satisfied.
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4.5 Consent of Huntington National Bank to Sale of AOS. Closing
of the transactions contemplated herein is expressly conditioned on the prior
written consent of Huntington National Bank to the sale of AOS to Purchasers in
accordance with the terms and conditions of the loan documents dated on or about
November 19, 2004 between Huntington National Bank, AOS, ▇▇▇▇▇▇▇▇ ▇. and ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇, together with the approval of all other lenders, if any, having the
right to call a loan on transfer of ownership of AOS.
4.6 Approval of Boards of Directors. Closing of the transactions
contemplated herein is expressly conditioned on the approval of the Boards of
Directors of each of the Seller and the Credit Facilitator.
4.7 Fairness Opinion. Closing of the transactions contemplated
herein is expressly conditioned on the receipt of a fairness opinion from a law
firm, certified public accounting firm, underwriter or broker-dealer possessing
qualifications and credentials necessary to offer such an opinion, addressed to
each of the parties, stating that the transactions contemplated herein are, in
toto, fair to Seller and its shareholders (the "Fairness Opinion"). In the event
it is impossible to obtain such a fairness opinion, then the parties shall enter
into an irrevocable option in favor of Purchasers to carry out the transaction
contemplated herein on the same terms and conditions as set forth in this
Definitive Agreement at such time as a fairness opinion can be obtained from a
law firm, broker-dealer or certified public accounting firm, with experience in
transactions similar in substance to those contemplated herein.
4.8 Use of Best Efforts. Each of the parties to the transactions
contemplated by this Definitive Agreement shall use their best efforts to
satisfy all conditions precedent to and to consummate said transactions,
including without limitation obtaining all necessary regulatory approvals,
approval of their respective Boards of Directors or Members, and the Fairness
Opinion.
4.9 Unaudited Financial Statements; Cooperation With Public
Filings. AOS will provide Trans Energy with its unaudited balance sheet as of
December 31, 2005 and its unaudited interim income statement for the eleven
month period from February 1, 2005 through December 31, 2005, as soon as it is
available, and shall furnish such unaudited statements each month thereafter
until Escrow Closing. Purchasers and AOS agree to cooperate fully in all manners
necessary to the timely filing of the December 31, 2005 10-KSB of Seller;
provided, however, the new Chief Executive Officer of Seller shall provide all
certifications necessary pursuant to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. At the Escrow
Closing or upon filing all necessary reports with the Securities Exchange
Commission relating to the operations of AOS while affiliated with Seller or
required in connection with the transactions contemplated herein, whichever is
the later to occur, Seller and its Affiliated Entities will remove all software
licensed to AOS or APC, including without limitation the I-Commander accounting
software, from its computer systems and shall not thereafter use same without
obtaining independent licenses.
4.10 Resignations from AOS. All persons on the payroll of AOS who
are not necessary to the operation of AOS, including without limitation ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, et al., will resign and be
transferred to the payroll and employee benefits of Seller or one of its
subsidiaries other than AOS or ▇▇▇▇▇▇▇, Inc.
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4.11 Purchasers' Salary. AOS shall immediately enter into an
employment contract with ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ to manage AOS at an annual salary
equal to the greater of Eighty-five Thousand Dollars ($85,000.00) or the amount
established by the CPA Firm auditing the financial statements of Seller as
reasonable compensation for said position. Said agreement shall not be
terminable by Seller, or any of its subsidiaries, as long as either ▇▇▇▇▇▇▇▇ or
▇▇▇▇▇▇▇ ▇▇▇▇▇ are personal guarantors of the promissory note dated on or about
November 19, 2004 due from AOS to Huntington National Bank, or any replacement
thereof, together with all other debt of AOS personally guaranteed by ▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇▇▇▇▇.
Article 5. Events of Default
5.1 Financial Events of Default. The following shall constitute a
"Financial Event of Default" under the terms of this Definitive Agreement.
5.1.1 The failure of Seller to pay the AOS Promissory Note
when due.
5.1.2 The failure of Seller to pay the APC Promissory Note
when due.
5.2 Non-Financial Events of Default. The failure of the breaching
party to cure a material breach of any non-financial covenant, promise or
obligation of a party to this Definitive Agreement within ten (10) days of
receipt of written notice of such breach from the non-breaching party shall
constitute a "Non-Financial Event of Default" hereunder. 5.3 Relationship to
Escrow Agreement. An Event of Default by Seller shall entitle the Purchasers to
the right to (a) foreclose on its first priority lien on the ▇▇▇▇▇ Lease, and
(b) to receive an immediate distribution of all the membership interests in AOS.
Upon Purchasers, AOS or APC becoming the record title holder of the ▇▇▇▇▇ Lease
by foreclosure, trustee's sale or deed in lieu of foreclosure, Seller shall be
entitled to receive a distribution of the Five ▇▇▇▇▇ Assignment and the
certificates to the Reacquired Shares.
Article 6. Indemnification and Mutual Release
6.1 Survival. All representations, warranties, covenants and
obligations in this Definitive Agreement, the certificates delivered pursuant to
Sections 2.1.4 and 3.1.5 and any other certificate or document delivered
pursuant to this Agreement shall survive the Closing and the consummation of the
transactions contemplated herein, subject to Section 6.4. The right to
indemnification, reimbursement or other remedy based upon such representations,
warranties, covenants and obligations shall not be affected by any investigation
conducted with respect to, or any knowledge acquired by a party (or capable of
being acquired) at any time, whether before or after the execution and delivery
of this Definitive Agreement or the Closing, with respect to the accuracy or
inaccuracy of or compliance with any such representation, warranty, covenant or
obligation. The waiver of any condition based upon the accuracy of any
representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification,
reimbursement or other remedy based upon such representations, warranties,
covenants and obligations.
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6.2 Indemnification and Reimbursement by Seller and Credit
Facilitator. Seller and the Credit Facilitator, jointly and severally, will
indemnify and hold harmless Purchasers, and their representatives, agents and
related persons (collectively, the "Purchasers Indemnified Persons"), and will
reimburse the Purchasers Indemnified Persons for any loss, liability, claim,
damage, expense (including costs of investigation and defense and reasonable
attorneys' fees and expenses) or diminution of value, whether or not involving a
Third-Party Claim (collectively, "Damages"), arising from or in connection with:
6.2.1 any Breach of any representation or warranty made by
Seller or Credit Facilitator in (i) this Definitive Agreement (ii) the
certificates delivered pursuant to Section 3.1.5 (for this purpose, each such
certificate will be deemed to have stated that Seller's and Credit Facilitator's
representations and warranties in this Agreement fulfill the requirements of
Section 3.1 as of the Closing Date as if made on the Closing Date, (iii) any
transfer instrument or (iv) any other certificate, document, writing or
instrument delivered by Seller or Credit Facilitator pursuant to this Agreement;
6.2.2 any Breach of any covenant or obligation of Seller or
Credit Facilitator in this Agreement or in any other certificate, document,
writing or instrument delivered by Seller or Credit Facilitator pursuant to this
Agreement;
6.2.3 any Damages resulting from or arising out of the
relationship of Purchasers to Seller, or its subsidiaries, except for those
damages solely attributable to the negligent or intentional acts or omissions of
the Purchasers;
6.2.4 any brokerage or finder's fees or commissions or
similar payments based upon any agreement or understanding made, or alleged to
have been made, by any Person with Seller or Credit Facilitator (or any person,
firm or corporation acting on their behalf) in connection with any of the
transactions contemplated herein;
6.2.5 any product or component thereof manufactured by or
shipped, or any services provided by, Seller, in whole or in part, prior to the
Closing; and
6.2.6 any noncompliance with fraudulent transfer law in
respect of the transactions contemplated herein.
6.3 Indemnification and Reimbursement by Purchasers. Purchasers
will indemnify and hold harmless Seller, and will reimburse Seller, for any
damages arising from or in connection with:
6.3.1 any Breach of any representation or warranty made by
Purchasers in this Agreement or in any certificate, document, writing or
instrument delivered by Purchasers pursuant to this Agreement;
6.3.2 any Breach of any covenant or obligation of Purchasers
in this Agreement or in any other certificate, document, writing or instrument
delivered by Purchasers pursuant to this Agreement;
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6.3.3 any claim by any person, firm or corporation for
brokerage or finder's fees or commissions or similar payments based upon any
agreement or understanding alleged to have been made by such person, firm or
corporation with Purchasers (or any person, firm or corporation acting on
Purchasers' behalf) in connection with any of the transactions contemplated
herein; and
6.3.4 any noncompliance with fraudulent transfer law in
respect of the transactions contemplated herein.
6.3A Indemnification and Reimbursement by AOS and APC.
6.3A.1 AOS will indemnify and hold harmless Seller, and will
reimburse Seller, for any damages arising from or in connection with: (a) any
product or component thereof manufactured by or shipped, or any services
provided by, AOS, in whole or in part, prior to the Closing; and (b) any
noncompliance with fraudulent transfer law in respect of the transactions
contemplated herein.
6.3A.2 APC will indemnify and hold harmless Seller, and will
reimburse Seller, for any damages arising from or in connection with: (a) any
product or component thereof manufactured by or shipped, or any services
provided by, APC, in whole or in part, prior to the Closing; and (b) any
noncompliance with fraudulent transfer law in respect of the transactions
contemplated herein.
6.4 Time Limitations.
6.4.1 If the Closing occurs, Seller and Credit Facilitator
will have liability (for indemnification or otherwise) with respect to any
Breach of (i) a covenant or obligation to be performed or complied with
subsequent to the Closing (other than those in Sections 4.3 and 4.4, as to which
a claim may be made at any time) or (ii) a representation or warranty (other
than those in Section 3.1.6, as to which a claim may be made at any time), only
if on or before December 31, 2007, Purchasers notify Seller or Credit
Facilitator of a claim specifying the factual basis of the claim in reasonable
detail to the extent then known by Purchasers.
6.4.2 If the Closing occurs, Purchasers will have liability
(for indemnification or otherwise) with respect to any Breach of (i) a covenant
or obligation to be performed or complied with prior to the Closing Date or (ii)
a representation or warranty (other than that set forth in Section 2.1.4, as to
which a claim may be made at any time), only if on or before December 31, 2007,
Seller or Credit Facilitator notify Purchasers of a claim specifying the factual
basis of the claim in reasonable detail to the extent then known by Seller or
Credit Facilitator.
6.5 [INTENTIONALLY OMITTED]
6.6 Third Party Claims. For purposes of this Section 6.6 the term
"Third Party Claim" shall mean any claim against any Indemnified Person by a
Third Party, whether or not involving a proceeding
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6.6.1 Promptly after receipt by a person, firm or
corporation entitled to indemnity under Section 6.2, 6.3, 6.3A (to the extent
provided in the Section 6.3.3) or 6.4 (an "Indemnified Person") of notice of the
assertion of a Third-Party Claim against it, such Indemnified Person shall give
notice to the person, firm or corporation obligated to indemnify under such
Section (an "Indemnifying Person") of the assertion of such Third-Party Claim,
provided that the failure to notify the Indemnifying Person will not relieve the
Indemnifying Person of any liability that it may have to any Indemnified Person,
except to the extent that the Indemnifying Person demonstrates that the defense
of such Third-Party Claim is prejudiced by the Indemnified Person's failure to
give such notice.
6.6.2 If an Indemnified Person gives notice to the
Indemnifying Person pursuant to Section 6.6.1 of the assertion of a Third-Party
Claim, the Indemnifying Person shall be entitled to participate in the defense
of such Third-Party Claim and, to the extent that it wishes (unless (i) the
Indemnifying Person is also a Person against whom the Third-Party Claim is made
and the Indemnified Person determines in good faith that joint representation
would be inappropriate or (ii) the Indemnifying Person fails to provide
reasonable assurance to the Indemnified Person of its financial capacity to
defend such Third-Party Claim and provide indemnification with respect to such
Third-Party Claim), to assume the defense of such Third-Party Claim with counsel
satisfactory to the Indemnified Person. After notice from the Indemnifying
Person to the Indemnified Person of its election to assume the defense of such
Third-Party Claim, the Indemnifying Person shall not, so long as it diligently
conducts such defense, be liable to the Indemnified Person under this Article 6
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
Person in connection with the defense of such Third-Party Claim, other than
reasonable costs of investigation. If the Indemnifying Person 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
Person without the Indemnified Person's Consent unless (A) there is no finding
or admission of any violation of a legal requirement or any violation of the
rights of any person, firm or corporation; (B) the sole relief provided is
monetary damages that are paid in full by the Indemnifying Person; and (C) the
Indemnified Person 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 Person of the assertion of any Third-Party Claim and
the Indemnifying Person does not, within ten (10) days after the Indemnified
Person's notice is given, give notice to the Indemnified Person of its election
to assume the defense of such Third-Party Claim, the Indemnifying Person will be
bound by any determination made in such Third-Party Claim or any compromise or
settlement effected by the Indemnified Person.
6.6.3 [INTENTIONALLY LEFT BLANK]
6.6.4 Notwithstanding the foregoing, if an Indemnified
Person determines in good faith that there is a reasonable probability that a
Third-Party Claim may adversely affect it or its related persons, firms or
corporations other than as a result of monetary damages for which it would be
entitled to indemnification under this Agreement, the Indemnified Person may, by
notice to the Indemnifying Person, assume the exclusive right to defend,
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compromise or settle such Third-Party Claim, but the Indemnifying Person will
not be bound by any determination of any Third-Party Claim so defended for the
purposes of this Agreement or any compromise or settlement effected without its
consent (which may not be unreasonably withheld).
6.6.5 Notwithstanding the provisions of any jurisdiction and
venue provision herein, Seller and each Credit Facilitator hereby consent to the
nonexclusive jurisdiction of any court in which a proceeding in respect of a
Third-Party Claim is brought against any Purchasers Indemnified Person for
purposes of any claim that a Purchasers Indemnified Person may have under this
Definitive Agreement with respect to such Proceeding or the matters alleged
therein and agree that process may be served on Seller and Credit Facilitators
with respect to such a claim anywhere in the world.
6.6.6 With respect to any Third-Party Claim subject to
indemnification under this Article 6: (i) both the Indemnified Person and the
Indemnifying Person, as the case may be, shall keep the other person, firm or
corporation fully informed of the status of such Third-Party Claim and any
related legal proceedings at all stages thereof where such person, firm or
corporation is not represented by its own counsel, and (ii) the parties agree
(each at its own expense) to render to each other such assistance as they may
reasonably require of each other and to cooperate in good faith with each other
in order to ensure the proper and adequate defense of any Third-Party Claim.
6.7 Other Claims. A claim for indemnification for any matter not
involving a Third-Party Claim may be asserted by notice to the party from whom
indemnification is sought and shall be paid promptly after such notice.
6.8 Mutual Releases. At the Escrow Closing, Seller, together with
all of its subsidiaries, and Purchasers will deliver to each other mutual
releases of all claims, however arising, up to the time of the Escrow Closing in
the form attached hereto as Exhibit 6.8.
Article 7. Other Provisions
7.1 Survival of Representations, Warranties and Covenants. All
representations and warranties made by the parties hereto shall survive the
transfer of shares of stock and the payment of consideration therefore.
7.2 Entirety. This Definitive Agreement embodies the entire
agreement among the parties with respect to the subject matter hereof, and all
prior agreements between the parties with respect thereto are hereby superceded
in their entirety.
7.3 Notices and Waivers. Any notice or waiver to be given to any
party hereto shall be in writing and shall be delivered by certified mail to the
addresses set forth above.
7.4 Captions. The captions contained in this Definitive Agreement
are solely for convenient reference and shall not be deemed to affect the
meaning or interpretation of any article, section or paragraph hereof.
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7.5 Successors and Assigns. This Definitive Agreement shall be
binding upon and shall inure to the benefit of and be enforceable by the
successors and assigns of the parties hereto.
7.6 Severability. If any term, provision, covenant or restriction
of this Definitive Agreement is held by a court of competent jurisdiction to be
invalid, void, or unenforceable, the remainder of the terms, provisions,
covenants and restrictions shall remain in full force and effect and shall in no
way be affected, impaired or invalidated.
7.7 Applicable Law. This Definitive Agreement shall be governed
by and construed and enforced in accordance with the applicable laws of the
State of West Virginia.
7.8 Closing. The transactions contemplated by this Definitive
Agreement will close in escrow on Tuesday, January 3, 2006 at the offices of AOS
at a mutually agreeable time (hereinabove referred to as the "Closing"). The
final closing shall be held in accordance with the terms of the Escrow Agreement
(hereinabove referred to as the "Escrow Closing").
IN WITNESS WHEREOF, the parties have executed this Definitive
Agreement:
PURCHASERS:
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
(▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇)
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
(▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇)
SELLER:
Trans Energy, Inc.
Attest: ___________________________ By: _____________________________
Its: Secretary Its: Vice President
CREDIT FACILITATOR:
Prima Oil Company, Inc.
Attest: ___________________________ By: _____________________________
Its: Secretary Its: President
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APC:
▇▇▇▇▇▇▇ Pipeline Construction Co., Inc.
Attest: ___________________________ By: _____________________________
Its: Secretary Its: President
AOS:
By: ▇▇▇▇▇▇▇, Inc.,
its sole corporate member
Attest: ___________________________ By: _____________________________
Its: Secretary Its: President
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