Exhibit 10.1
SALE AND PURCHASE OF SHARES
in
ALPHA OIL & NATURAL GAS PTY LTD
SALE OF SHARES
THIS AGREEMENT is made on the 12th day of April 2006
BETWEEN NATURAL GAS CORPORATION PTY LTD (ACN 004 650 597)
BATAVIA OIL & GAS PTY LTD (ABN 36 084 043 907)
NATIONAL OIL & GAS PTY LTD (ABN 009 240 420)
AUSTRALIS FINANCE PTY LTD (ABN 22 004 857 498)
all of ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
(hereinafter collectively called "the Vendors") of the one
part
AND AUSTRALIAN OIL & GAS CORPORATION (incorporated in Delaware) of
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
(hereinafter called "the Purchaser") of the other part.
WHEREAS:
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1. ALPHA OIL & NATURAL GAS PTY LTD (ACN 088 272 726) of ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ (hereinafter called "the Company") is a
Company incorporated pursuant to the Corporation ▇▇▇ ▇▇▇▇ in Victoria.
2. The Company holds a 20% interest in the Browse Joint Venture and is the
holder of 20% interest in each of petroleum exploration permits WA-332-P,
WA-333-P and WA-342-P.
3. The Vendors hold or are entitled beneficially to an aggregate 800,000
Ordinary Shares each fully paid in the Company which are hereinafter
referred to as "the Shares"; as set out in Schedule 4 attached hereto.
4. The Purchaser has offered to purchase the Shares in return for the issue of
2,000,002 shares of Common Stock in the Purchaser and the payment of
AUD$100,000 (hereinafter called "the Consideration") and upon the terms and
conditions hereinafter appearing, such Common Stock to be allocated between
the Vendors as set out in Schedule 4.
4. The parties hereto submit to the laws of Victoria, Australia and any action
taken hereunder shall be taken in the appropriate court of such
jurisdiction.
5. It is a pre-condition of this agreement that an agreement of even date is
entered into by the Purchaser to acquire the remaining outstanding capital
of Nations Natural Gas Pty Ltd.
NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:
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1. Effective from the date hereof the Vendors shall sell to the Purchaser and
the Purchaser shall purchase from the Vendors, the Shares.
2. The Purchaser shall issue and deliver to the Vendors the Consideration on
the Settlement Date, such consideration to be made against delivery by the
Vendors to the Purchaser of executed registerable transfers of the Shares.
Settlement Date shall be 14 days from the date hereof or the completion of
audit of the Accounts as attached hereto, whichever is the later.
3. On the Settlement Date the Vendors will hand to the Purchaser
(i) the certificates in respect of the shares hereby agreed to be sold;
(ii) properly executed transfers to the Purchaser of the shares;
(iii) Balance Sheet of Alpha made up to 31 March 2006.
4. The parties hereto covenant each with the other or others of them that such
party will sign execute and do all such further documents acts matters and
things as shall be requisite or necessary for effectuating the provisions
of this agreement.
5. Upon the execution hereof by the parties hereto all (if any) other prior
contracts or agreements between the parties hereto in relation to or in any
way affecting the matters the subject hereof shall be and become absolutely
null and void and of no force or effect whatsoever.
6. The sale and purchase has taken place on the faith and basis of the
financial statements (Accounts) made up to 31 March 2006 attached hereto
and each of the Vendors HEREBY COVENANTS with the Purchaser that the said
Accounts are drawn up in accordance with the provisions of the Corporations
▇▇▇ ▇▇▇▇, other than comparative figures and that (without limiting the
generality of the foregoing) proper and adequate provision has been made in
the said Accounts for all liabilities whether present or contingent and
other commitments and obligations of the Company so as to give a true and
correct view of the state of affairs of the Company and that no material
change detrimental to the interest of the Purchaser has taken place or will
take place prior to the settlement date in the position of the Company as
disclosed by the said Accounts.
7. Each of the Vendors hereby covenants that it will indemnify and keep
indemnified the Purchaser against all or any losses, damages, claims,
demands arising out of a breach or breaches of the warranties contained in
Schedule 1 hereof and against all debts, liabilities and penalties incurred
by the Company up to and including the settlement date but not disclosed in
the said Accounts and each of the Vendors further agrees to be responsible
for the full amount of every such debt liability and/or penalty as and when
it shall become ascertained and proved payable including any costs lawfully
due in connection therewith.
8. The Purchaser provides the Vendors with the warranties contained in
Schedule 2 hereof.
9. Time shall in all respects be of the essence of this agreement.
10. In this agreement unless inconsistent with or repugnant to the context:
(a) The singular number shall include the plural number and vice versa;
(b) Reference to any particular gender shall include all other genders;
and
(c) The word "person" includes "company" and vice versa.
SCHEDULE 1
WARRANTIES BY THE VENDORS
A) Vendor's Warranties in Respect to the Company to the Purchaser
Each Vendor hereby represents, warrants to and covenants with the
Purchaser, with the intent that after the Settlement Date and completion of
the sale and purchase of the Shares the provisions of this Clause shall
remain in full force as warranties and be binding on the successors and
assigns and personal representatives (as the case may be) of the Vendor,
that:
1) that to the best of the Vendor's knowledge, information and belief
that the assets of the Company are in good standing and in full force
and effect and that the Company is not in default in the performance
of any of its material obligations under them other than as agreed or
approved by the Purchaser;
2) except as disclosed in this agreements or in the Disclosure Letter
annexed hereto as Schedule 3, the assets of the Company are free from
all overriding royalty interests, carried interests, net profit
interests, mortgages, charges, pledges, bills of sale, liens and any
other third party interests or encumbrances by whatever name called;
3) there are no material suits, actions, claims or demands pending or
threatening against the Company, or the assets of the Company and
there are no circumstances which exists which may give rise to a claim
against the Company or the assets of the Company;
4) all activities conducted by the Company pursuant to the Agreements
have been conducted in accordance with applicable laws, statutes,
regulations, by-laws, ordinance and orders in council (including,
without limitation, all environmental regulations) and that there is
no outstanding breach thereof; and
5) the financial and tax position of the Company is as disclosed to the
Purchaser in the Accounts;
6) the Accounts are drawn up in accordance with accepted Australian
Accounting Standards other than comparative figures and that (without
limiting the generality of the foregoing) proper and adequate
provisions has been made in the said Accounts for all liabilities
whether present or contingent and other commitments and obligations of
the Company so as to give a true and correct view of the state of
affairs of the Company and that no material change detrimental to the
interest of the Purchaser has taken place or will take place prior to
the Settlement Date in the position of the Company as disclosed by the
said Accounts other than as agreed or approved by the Purchaser;
7) there are no material contracts, agreements, arrangements,
acknowledgments, liabilities or obligations of any description
(whether actual or contingent) entered into or incurred by the Company
which have not been disclosed to the Purchaser in writing prior to the
date hereof and no such contracts, agreements, arrangements,
acknowledgments, liabilities or obligations will be entered into or
incurred prior to the Settlement Date, save and except that as
disclosed to the Purchaser in the Disclosure Letter annexed hereto as
Schedule 3.
8) No dividends will be declared or paid by the Company prior to the
Settlement Date;
9) the statutory books and books of account records of the Company were
at the 30 day of June 2005 and still are and will until the Settlement
Date continue to be written up to date in a proper manner;
10) there will not at the Settlement Date be any debentures or any
borrowings outstanding to any person firm or company;
11) the Company has cancelled all options previously granted and will not
issue or grant any option nor will it issue any further capital or
otherwise alter the structure of the share capital;
12) the Company has cancelled or met all previous agreements, other than
as disclosed there are no subsisting agreements or contracts exist
between the Company and any present or past members of the staff or
directors of the Company for employment by the Company or for services
to be provided for the Company;
13) all statutory returns particulars resolutions and other documents
require to be filed or delivered on behalf of the Company have been
correctly and properly made up and filed or delivered within the
appropriate periods prescribed;
14) the Company is not engaged in any litigation or arbitration
proceedings as plaintiff or defendant and that there are no such
proceedings pending or threatened either by or against the Company and
that there are no facts known to Vendor which are likely to give rise
to any litigation or arbitration not is there any dispute with any
taxation authority in relation to the affairs of the Company;
15) all payroll tax, receipt duty , sales tax, land tax, local authority,
and water rates due and payable or which may become due and payable up
to and including the Settlement Date have been paid or provided by the
Company and that Vendor will indemnify the Purchaser for and pay and
discharge any amount which the Company may be called upon to pay in
respect of any assessment, re-assessment, amended assessment, default
assessment, penalty, fine or other imposition now or hereafter raised
against inflicted or levied on the Company in respect of such
contributions rates or taxes;
16) all income tax and other returns required by all applicable laws have
been duly lodged by the Company and the Company has made to the
relevant taxation authorities a full and true disclosure of all the
material things required for the assessment of the Company;
17) no petitions for winding up the Company have been presented and no
orders have been made or effective resolutions passed for the winding
up of the Company nor proceedings instituted or a meeting called with
a view to obtaining any such orders or to pass any such resolutions;
18) no receiver of the undertakings or assets of the Company or any part
thereof has been appointed nor have any judgements been obtained
against the Company or any execution or process of any Court or other
authority sued out against or levied or enforced upon the Company or
its assets or any part thereof;
19) no person has any option to acquire any of the unissued shares of the
Company;
20) no person has any charge or other security over any of the unissued
shares in the Company;
21) the Shares will at the Settlement Date be entirely free and
unencumbered and will not be subject to any liens charges or other
encumbrances whatsoever or subject to any claim or right of any person
firm or Company whatsoever other than the registered holder;
22) there are no dividends or distributions declared in favour of any
shareholder and unpaid and that there are no emoluments or other
advantages granted in favour of any member or director of the Company
unpaid;
23) there are no wages holiday pay or long service leave entitlements due
and unpaid up to and including the Settlement Date and that no claim
with respect thereto will be made against the Company thereafter.
SCHEDULE 2
Purchaser's Warranties
1. Litigation and Outstanding Undertakings, Preservation of Rights
To the best of the Purchaser's knowledge, information and belief:
(1) the Purchaser in respect of its business and operations:
(a) has no unsatisfied fines, judgments or awards outstanding against it
and is not party to any undertaking or assurance given to any court,
arbitrator or government agency or tribunal which is still in force;
and
(b) is not engaged in or threatened with prosecution, litigation or
arbitration;
(2) there are no facts or circumstances which are likely to lead to
prosecution, litigation or arbitration involving the assets or business of
the Purchaser;
(3) the Purchaser in respect of its business and operations, is not involved in
any proceeding before or investigation by any governmental or statutory
appointee, agency, tribunal, committee or board of enquiry and no such
proceeding or investigation is pending or threatened;
(4) the Purchaser has full power and has obtained all necessary consents of all
persons and authorities to own, operate and lease it assets and to conduct
its business and operations;
(5) the Purchaser has the legal right and power without obtaining the consent
of any person or authority (other than as specifically referred to in this
Agreement) to enter into this Agreement;
(6) the beneficial ownership of the Shares will, on Settlement Date, vest in
the Purchaser free from all Encumbrances;
(7) the Purchaser is not an externally-administered body corporate under the
Corporations Law and steps have not been taken by any person towards making
the Purchaser an externally-administered body corporate;
(8) a controller (as defined in the Corporation Act) has not been appointed of
any of the property of the Purchaser or any steps taken for the appointment
of such a person; and
(9) the Purchaser has not been served with a demand under the Corporations Act
which it is taken.
2. Financial Matters
To the best of the Purchaser's knowledge, information and belief:
(1) the business records of the Purchaser have been properly and accurately
prepared in accordance with usual accounting concepts and practices;
(2) the most recent balance sheet and profit and loss account of the Purchaser
made up to 31 December 2005 (Balance Date) in all material respects:
(a) present a true and fair view of the profit or loss of the business and
operations of the Purchaser for the accounting period expiring on the
Balance Date and the state of affairs of the business and operations
of the Purchaser at the Balance Date;
(b) accurately disclose the assets and liabilities of the Purchaser in
respect of the business and operations of the Purchaser at the Balance
Date; and
(c) are not affected by any unusual or non-recurring item;
(3) no material change detrimental to the interests of the Vendor has taken
place in the financial position or business affairs of the Purchaser or the
business or operations of the Purchaser;
(4) the Purchaser has not, since the Balance Date, acquired any assets in
respect of the business or operations of the Purchaser other than in the
ordinary course of business; and
(5) the Purchaser does not in respect of its business and operations have any
debts or liabilities other than those debts and liabilities disclosed at
the Balance Date.
3. Statutory Returns
To the best of the Purchaser's knowledge, information and belief:
(1) the Purchaser has completed and lodged all returns and statements required
to be lodged by law with any agency, department, authority or commission
and the returns and statements so lodged were true and correct in every
respect; and
(2) the books, records and registers of the Purchaser in respect of its
business and operations have been kept in accordance with all statutory
requirements.
4. Employment
To the best of the Purchaser's knowledge, information and belief:
(1) there are no existing, pending or threatened industrial disputes, whether
between any trade union and the Purchaser or not, relevant to the conduct
of its business and operations and the Purchaser is not aware of any claims
or other facts or circumstances which may result in an industrial dispute
and the Purchaser has no undisclosed agreements with any trade union; and
(2) there are no claims for compensation or reinstatement as a consequence of
termination of employment.
5. Contracts
To the best of the Purchaser's knowledge, information and belief:
(1) the Purchaser has not received notice of termination, rescission, avoidance
or repudiation of any contract material to the business and operations of
the Purchaser;
(2) the Purchaser has the power and is entitled to accept Transfer of the
Shares to be transferred to the Purchaser under this Agreement; and
(3) there is no offer, tender or quotation given or made by the Purchaser in
respect of its business and operations, other than in the ordinary course
of business, and still outstanding capable of giving rise to a contract by
unilateral act of a third party.
6. General
To the best of the Purchaser's knowledge information and believe that:
(1) it has full power and authority to enter into this Agreement, and all
necessary corporate action required for it to enter into this Agreement and
to be bound by its terms and conditions has been effectively taken;
(2) entry into this Agreement will constitute a legal, valid and binding
agreement enforceable against Purchaser in accordance with its terms;
(3) subject to the terms of the Agreement, the entry into this Agreement and
performance of its terms and conditions by Purchaser does not contravene
any law applicable to it nor any judgement or contract binding on it;
(4) it is legally entitled to issue the Consideration.
SCHEDULE 3
VENDORS DISCLOSURE LETTER
Abbreviations used in this letter shall have the same meaning as given in the
Agreement to which this letter is attached.
TO THE DIRECTORS OF AUSTRALIAN OIL & GAS CORPORATION
Each of the Vendors are selling all of their holding of shares and options in
Alpha Oil & Natural Gas Pty Ltd ("Alpha") on the basis of the financial
statements annexed hereto. The acquisition of Alpha is to be completed on the
basis that all other net assets of Alpha, other than Permits and information and
knowledge associated with them being distributed as the directors of Alpha shall
have decided prior to this Agreement in satisfaction of certain pre-settlement
obligations of Alpha. Any non permit-associated liabilities are to be discharged
prior to settlement
It is understood that the acquisition of the remaining shares in Alpha is being
made by AOGC in order to cost effectively acquire a 20% interest in the
remaining permits of the Browse Joint Venture, being permits WA-332-P, WA-333-P
and WA-342-P (see below). All past and accumulated outstanding liabilities of
Alpha associated with tenement acquisition, exploration and maintenance of the
permits were to be assumed by AOGC, such that it has been specifically agreed
that the transferors of shares in Alpha or Alpha itself shall not be obliged to
discharge these liabilities. However, with the sale of Alpha's interest in
WA-341-P, all liabilities have been discharged, including project related
liabilities.
The Vendors, being the selling shareholders of Alpha (other than Nations Natural
Gas Pty Ltd and Hawkestone Oil Pty Ltd) shall, upon satisfaction of all
conditions, be entitled to receive a consideration to be satisfied by the issue
of 2,000,002 shares in AOGC and the payment of AUD$100,000.
Liabilities of Alpha other than those associated with the permits (see above),
such as trade creditors, and amounts owing to directors and officers, shall have
been dealt with by Alpha prior to this Agreement to the satisfaction of each of
AOGC, Alpha and such creditors/optionholders. Completion of this transaction
shall signify AOGC's complete satisfaction with all arrangements made and of the
amounts remaining outstanding to creditors by Alpha.
Securities (if any) held by Alpha as trustee shall either be transferred to the
beneficiaries or shall, at the election of the beneficiaries, continue to be
held by Alpha as trustee for the beneficiaries.
Since negotiations for the acquisition commenced, Alpha has entered into
negotiations with ConocoPhillips for the sale of WA-341-P to ConocoPhillips and,
with the approval of AOGC, has sold its 20% interest in WA-341-P for the sum of
US$1,240,000 an amount substantially in excess of book value, which has now been
received by Alpha. Having regard to the level of consideration received by Alpha
and the discharge of all liabilities, AOGC has agreed to pay an amount of
AUD$100,000 as part consideration for the acquisition.
SCHEDULE 4
VENDORS AND ALLOCATION OF CONSIDERATION
VENDOR NO. OF SHARES NO. OF SHARES $
IN ALPHA IN AOGC
------------------------------- ------------- ------------- --------
Natural Gas Corporation Pty Ltd 100,000 250,000 12,500
Batavia Oil & Gas Pty Ltd 100,000 250,000 12,500
National Oil & Gas Pty Ltd 500,000 1,250,002 62,500
Australis Finance Pty Ltd 100,000 250,000 12,500
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TOTAL 800,000 2,000,002 100,000
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SIGNED for and on behalf of AUSTRALIS FINANCE PTY LTD
by /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ its Managing Director and authorised officer in
the presence of:
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Witness
SIGNED for and on behalf of NATURAL GAS CORPORATION PTY LTD
by /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ its Managing Director and authorised officer in
the presence of:
/s/▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Witness
SIGNED for and on behalf of BATAVIA OIL & GAS PTY LTD
by /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ its Managing Director and authorised officer in
the presence of:
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Witness
SIGNED for and on behalf of NATIONAL OIL & GAS PTY LTD
by /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ its Managing Director and authorised officer in
the presence of:
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Witness
SIGNED for and on behalf of AUSTRALIAN OIL & GAS CORPORATION
by /s/ ▇▇▇▇ ▇ ▇▇▇▇▇▇ a Director and authorised officer in the presence of:
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Witness