EXHIBIT 10.5
AMENDMENT TO RESTATED TECHNOLOGY AGREEMENT
This Amendment to Restated Technology Agreement (the "Agreement"), dated as
of April 3, 1998, is entered into by and between Pinnacle Oil Inc., a Nevada
corporation ("Pinnacle Oil"), whose principal executive office is located at
Xxxxx 000 Xxxxxxx Xxxxx, 000 0xx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx Xxxxxx X0X 0X0;
Pinnacle Oil International, Inc., a Nevada corporation ("Pinnacle
International"), whose principal executive office is located at Xxxxx 000
Xxxxxxx Xxxxx, 000 0xx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx Xxxxxx X0X 0X0; Momentum
Resources Corporation, a Bahamas corporation ("Momentum"), whose principal
executive office is located c/o Ansbacher (Bahamas) Limited, P.O. Box N-7768,
Bank Lane, Nassau, Bahamas; Xxxxxx Xxxxxxxxx ("Liszicasz"), an individual whose
principal office is located at Xxxxx 000 Xxxxxxx Xxxxx, 000 0xx Xxxxxx, X.X.,
Xxxxxxx, Xxxxxxx Xxxxxx X0X 0X0; and R. Xxxx Xxxxxxx ("Xxxxxxx"), an individual
whose principal office is located at Xxxxx 000 Xxxxxxx Xxxxx, 000 0xx Xxxxxx,
X.X., Xxxxxxx, Xxxxxxx Xxxxxx X0X 0X0; with reference to the following facts:
RECITALS:
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WHEREAS, the parties previously entered into a Restated Technology
Agreement dated as of August 1, 1996 (the "Prior Agreement"), in order to (i)
restate the relationships among the parties, and (ii) clarify certain matters
not fully addressed or clarified in the prior agreements between the parties
relating to the Stress Field Detector, the SFD Technology and the SFD Data (each
as defined in the Prior Agreement); and
WHEREAS, the parties wish to amend and supersede section 5(a) of the Prior
Agreement with regard to the provisions regarding the SFD Data Fee as set forth
below; and
WHEREAS, it is the intent of the parties that this Agreement amend and
supersede the Prior Agreement to the extent provided for herein, but that the
remainder of the Prior Agreement remain in full force and effect;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, and for valuable consideration, the receipt and sufficiency of
which are hereby mutually acknowledged, the parties to this Restated Technology
Agreement (collectively "parties" and individually a "party") agree as follows:
AGREEMENT:
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1. DEFINITIONS
Except for capitalized terms specifically defined in this Agreement,
capitalized terms shall have the meanings ascribed to them in the Prior
Agreement.
2. AMENDMENT REGARDING PAYMENT OF SFD DATA FEE TO MOMENTUM
In furtherance of the recitals set forth above, the parties agree that
the following provisions shall replace and supersede section 5(a) of the Prior
Agreement in its entirety:
" (a) Payment of Fee to Momentum for Provision of SFD Data. In
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consideration of Momentum providing SFD Data to Pinnacle International for its
exclusive worldwide use for the identification and exploitation of Hydrocarbons
in accordance with the terms of this Agreement, Pinnacle International shall pay
to Momentum a fee (the "SFD Data Fee") equal to: (i) one percent (1%) of the
"Prospect Profits" (as such term is defined below) earned by Pinnacle
International and/or
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its Subsidiaries with respect to the commercial exploitation of each Prospect
for which SFD Data is provided by Momentum to Pinnacle International
on or before December 31, 2000, and (ii) five percent (5%) of the Prospect
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Profits earned by Pinnacle International and/or its Subsidiaries with respect to
the commercial exploitation of each Prospect for which SFD Data is provided by
Momentum to Pinnacle International after December 31, 2000.
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The term "Prospect Profits" means "Prospect Revenues" (as
such term is defined below), less all project expenses actually paid by Pinnacle
International and/or its Subsidiaries with respect to the commercial
exploitation of all Prospects ("Prospect Expenses").
The term "Prospect Revenues" means the aggregate of all
gross revenues actually received by Pinnacle International and/or its
Subsidiaries with respect to the commercial exploitation of all Prospects
calculated, by way of example and not limitation, as follows:
(i) If Pinnacle International and/or its Subsidiaries
indirectly acquire the legal rights for the further exploration, development and
production of Hydrocarbons with respect to a Prospect through joint-ventures
and/or other arrangements with third parties, then the Prospect Revenues from
such Prospect will be the cash flows received by Pinnacle International and/or
its Subsidiaries from such joint venture and/or third party, whether from the
sale of Hydrocarbons or the sale by the joint venture and/or third party of its
interest in such Prospect.
(ii) If Pinnacle International and/or its Subsidiaries
sell or transfer the legal rights for (or "leads" relating to) a Prospect, then
the Prospect Revenues from such Prospect will be the gross consideration
received by Pinnacle International and/or its Subsidiaries as a result of such
sale or transfer.
(iii) If Pinnacle International and/or its Subsidiaries
directly acquire the legal rights for the further exploration, development and
production of Hydrocarbons with respect to a Prospect, and independently extract
and sell Hydrocarbons from such Prospect, then the Prospect Revenues from such
Prospect will be the gross cash flows received by Pinnacle International and/or
its Subsidiaries from the sale of such Hydrocarbons.
Momentum acknowledges and agrees that the foregoing
definition will permit Pinnacle International and/or its Subsidiaries to deduct
expenses, costs, capital or equity investment and/or loan costs paid in
connection with the generation of Prospect Revenues prior to payments to
Momentum (such as acquisition, development, extraction, marketing and/or
distribution costs which would be incurred should Pinnacle International and/or
its Subsidiaries directly exploit the Prospect without joint venture partners).
In addition, Momentum understands and agrees that Prospect Revenues arising from
distributions from joint ventures and/or third party arrangements may, based
upon the terms and conditions of such joint venture, be made after the joint
venture has deducted costs, expenses and reserves, or repaid capital provided by
the joint venture and/or other third party, and Momentum further agrees that it
shall have no right to "gross up" the Prospect Revenues to reflect the pre-
distribution deduction by the joint venture or other third party of such costs,
expenses and reserves and/or repayment of capital.
The parties further acknowledge that the foregoing
examples set forth in clauses (i) through (iii) above are merely examples, and
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do not fully reflect many methods by which Pinnacle International may
commercially and economically exploit a Prospect, with and without the
participation of joint venture and/or other third parties. Accordingly, the
parties agree that the SFD Data Fee shall be liberally interpreted to apply to
each and every transaction by which Pinnacle International and/or any of its
Subsidiaries exploit the Prospect to ensure that Momentum receives such
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equitable portion of the total Prospect Profits earned by Pinnacle
International and/or its Subsidiaries as to enable Momentum to receive
the benefit of its bargain, subject to avoidance of duplicative payments
by Pinnacle International and its Subsidiaries. In order to avoid any
disputes or misunderstandings, Pinnacle International and Momentum agree
to use their best efforts, while Pinnacle International is formulating
its proposed method to exploit a Prospect, to outline in writing, prior
to committing to such method, the economics of the proposed method of
exploitation consistent with the terms of this Agreement. Should the
parties be unable to agree upon such economics, they agree that such
issue shall be resolved by arbitration (an "Arbitration Proceeding")
before the American Arbitration Association (the "Arbitration Authority")
located in Carson City, Nevada, according to the rules and practices of
the Arbitration Authority from time-to-time in force, unless the parties
mutually agree upon a different Arbitration Authority and/or different
location for such Arbitration Proceeding."
3. MISCELLANEOUS
(a) Cooperation. Each party agrees, without further consideration,
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to cooperate and diligently perform any further acts, deeds and things, and to
execute and deliver any documents that may be reasonably necessary or otherwise
reasonably required to consummate, evidence, confirm and/or carry out the intent
and provisions of this Agreement, all without undue delay or expense.
(b) Interpretation.
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(i) Survival. All representations and warranties made by any
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party in connection with any transaction contemplated by this Agreement shall,
irrespective of any investigation made by or on behalf of any other party
hereto, survive the execution and delivery of this Agreement, and the
performance or consummation of any transaction described in this Agreement.
(ii) Entire Agreement/No Collateral Representations. Each
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party expressly acknowledges and agrees that this Agreement and the Prior
Agreement, and the agreements and documents referenced herein and therein (1)
are the final, complete and exclusive statement of the agreement of the parties
with respect to the subject matter hereof; (2) supersede any prior or
contemporaneous agreements, memorandums, proposals, commitments, guaranties,
assurances, communications, discussions, promises, representations,
understandings, conduct, acts, courses of dealing, warranties, interpretations
or terms of any kind, whether oral or written, and that any such prior
agreements are of no force or effect except as expressly set forth herein; and
(3) may not be varied, supplemented or contradicted by evidence of prior
agreements, or by evidence of subsequent oral agreements. No prior drafts of
this Agreement, and no words or phrases from any prior drafts, shall be
admissible into evidence in any action or suit involving this Agreement.
(iii) Counterparts; Electronically Transmitted Documents. This
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Agreement may be executed in counterparts, each of which shall be deemed an
original, and all of which together shall constitute one and the same
instrument, binding on all parties hereto. Any signature page of this Agreement
may be detached from any counterpart of this Agreement and reattached to any
other counterpart of this Agreement identical in form hereto by having attached
to it one or more additional signature pages. If a copy or counterpart of this
Agreement is originally executed and such copy or counterpart is thereafter
transmitted electronically by facsimile or similar device, such facsimiled
document shall for all purposes be treated as if manually signed by the party
whose facsimile signature appears.
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WHEREFORE, the parties hereto have, for purposes of this Agreement, executed
this Agreement in the City of Calgary, Province of Alberta, Canada, as of the
date first hereinabove set forth.
PINNACLE OIL: PINNACLE OIL INC.,
a Nevada corporation
By: /s/ R. Xxxx Xxxxxxx
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R. Xxxx Xxxxxxx, President
PINNACLE INTERNATIONAL: PINNACLE OIL INTERNATIONAL, INC.,
a Nevada corporation
By: /s/ R. Xxxx Xxxxxxx
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R. Xxxx Xxxxxxx, President
MOMENTUM: MOMENTUM RESOURCES
CORPORATION,
a Bahamas corporation
By: /s/ R. Xxxx Xxxxxxx
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R. Xxxx Xxxxxxx, President
LISZICASZ: XXXXXX XXXXXXXXX
an individual
/s/ Xxxxxx Xxxxxxxxx
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XXXXXXX: R. XXXX XXXXXXX
an individual
/s/ R. Xxxx Xxxxxxx
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