EXHIBIT 10.2
SKY PETROLEUM, INC
000 Xxxx Xxxxx Xxxx
Xxxxxx, Xxxxx 00000
May 17, 2005
Parasaevski Ltd.
X.X. Xxx 000
Xxxxxxx, X.X.X.
RE: Compensation Agreement for Sky Petroleum for assisting in the
negotiations of the terms and introduction for the Mubarek Concession (the
"Agreement")
Ladies and Gentlemen:
This letter agreement, when accepted by you in the manner set forth below, shall
identify the terms and conditions under which Parasakevi Ltd. ("PARA") will be
compensated for advisory services in connection with a participation agreement
between Buttes Gas and Oil Co. International Inc and Sky Petroleum, Inc.
("SKPF') (the "Participation Agreement").
In consideration of the services and assistance to SKPI, SKPI hereby agrees to
issue PARA shares of SKPI's common stock, $0.001 par value per share, upon the
following terms and conditions:
1. SKPI shall issue PARA Five Hundred Thousand (500,000) shares of SKPI's
restricted common stock upon the signing of the definitive
Participation agreement
2. In addition, SKPI shall issue PARA Five Hundred Thousand (500,000)
shares of SKPI's restricted common stock upon SKPI meeting the minimum
funding requirement of $12.5mm to Buttes Oil and Gas as per the
Participation Agreement
SKPI will instruct its transfer agent to issue stock certificates representing
the shares to be issued and delivered pursuant to 1 and 2 above the "Common
Stock") within two (2) business days of meeting the milestones above and use its
reasonable best efforts to have such certificates delivered to Parasakevi Ltd.
within ten (10) business days.
PARA warrants that
A. It (i) has its place of business at the address set forth in
information supplied to SKPI and has no current intention of becoming
domiciled in any other state or jurisdiction prior to the expiration
of this Agreement; (ii) understands the Common Stock may not be
liquid; (iii) can bear the economic risk of its investment, including
the possibility of losing its entire investment; (iv) has such
knowledge and experience in business and financial matters, alone or
with its representatives,
that it is capable of evaluating the relative risks and merits of its
investment; and (v) understands the speculative nature and uncertainty
of the possible investment contemplated hereby.
B. It would be acquiring the Common Stock for its own account, for
investment purposes only and not with a view to resale or other
distribution thereof, although any decision to sell would be in
Parasakevi Ltd.'s sole discretion; and it acknowledges that the Common
Stock may be sold in the United States only if such Common Stock is
registered under the U.S. Securities Act of 1933, as amended, (the
"Act") or an exemption from such registration is available.
C. It (i) has reviewed this Agreement and has been afforded the
opportunity to ask questions of and receive answers from SKPI
concerning the terms and conditions of this Agreement and the business
of SKPI and to obtain any additional information which SKPI possesses
or could acquire without unreasonable effort or expense that is
necessary to verify the accuracy of information contained herein; (ii)
desires no additional information from SKPI; and (iii) has had the
opportunity to consult with such legal, accounting and other
professional advisors as it has deemed appropriate, and all such
advisors have been given access to information to their satisfaction.
D. It is (i) through its representatives and advisers, familiar with the
definition of "Accredited Investor" as that term is defined in Rule
501 (a) under the Act and, in light of such definition, is an
"Accredited Investor" and (ii) has such knowledge and experience in
financial and business matters that it is capable of evaluating the
risks and merits of the intended purchase/receipt of the Common Stock.
E. It fully understands and agrees that (i) the Common has not been
registered under the Act, or the securities laws of any state, and
therefore, cannot be sold, pledged, assigned or otherwise disposed of
unless subsequently registered under the Act and/or qualified under
applicable state securities laws or an exemption from such
registration and/or qualification is available, (ii) it will sell,
pledge, transfer or otherwise dispose of the Common Stock, in the
absence of (A) an effective registration statement for the Common
Stock under the Act and/or qualification under applicable state
securities laws or (B) an opinion of counsel to the effect that there
is an exemption available for sale of the Common Stock without such
registration and/or qualification, (iii) the information or conditions
necessary to permit sales of securities of SKPI under Rule 144 under
the Act may not be available in the future, and (iv) each of the
certificates representing the Common Stock pursuant hereto will bear
in substance the following legend:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. THEY MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER THAT ACT OR WITHOUT AN OPINION
OF COUNSEL REASONABLY SATISFACTORY TO THE SKPI THAT SUCH REGISTRATION
IS NOT REQUIRED."
SKPI warrants that:
A. It has been duly incorporated and is in good standing under the laws
of the State of Nevada.
B. It has full power under its constitutive documents and applicable law
and all authorizations, approvals, consents and licenses required by
it have been unconditionally obtained and are in full force and
effect, to permit it to enter into and perform this Agreement; and
this Agreement has been duly authorized, executed and delivered by it
and is a valid and binding agreement of it enforceable in accordance
with its terms;
C. The issuance and delivery of the Common Stock and the compliance by it
with all of the provisions of this Agreement, as well as the
consummation of the transactions herein contemplated, will not
conflict with or result in a breach or violation of (i) any of the
terms or provisions of, or constitute a default under any agreement or
instrument; or (ii) any applicable laws.
D. No person has any conflicting right, contingent or otherwise, to
purchase or to be offered any of the Common Stock; SKPI has valid
title to, and the legal right and the power to issue and transfer full
beneficial and legal interest in, the Common Stock, and issuance of
the Common Stock to PARA will pass title to such Common Stock to PARA
free and clear of all security interests, liens, encumbrances,
equities or other claims together with all rights and advantages now
and hereafter attaching to the Common Stock.
Neither SKPI nor PARA shall be able to assign their respective rights under this
Agreement at any time.
This Agreement and interpretation hereof shall be governed by the laws of the
State of Nevada, exclusive of the choice of law rules thereof, as if therein to
be wholly performed.
No prior stipulations, agreements or understanding by the parties or any of
their representatives shall be valid or enforceable unless embodied in this
Agreement or covered by its provisions or added by separate letter executed by
both parties or their agents.
This Agreement shall be binding and ensure to the benefits of the heirs,
successors and assigns of the parties hereto.
Very truly yours,
Sky Petroleum, Inc.
Xxxxxx Xxxxx,
President
AGREED TO AND ACCEPTED This
day of May, 2005
Paraskaevi
Ltd.
By:_____________________________________
Its:____________________________________
