FARMOUNT AGREEMENT BY AND BETWEEN MOGUL ENERGY LTD. AND MOGUL ENERGY INTERNATIONAL, INC. DATED NOVEMBER 8, 2005
EXHIBIT
10.4
BY
AND BETWEEN
MOGUL
ENERGY LTD.
AND
DATED
NOVEMBER
8, 2005
1
TABLE
OF CONTENTS
|
ARTICLE
1 DEFINITIONS
|
4
|
|
ARTICLE
2 TRANSFER AND ASSIGNMENT OF INTEREST
|
5
|
|
ARTICLE
3 CONSIDERATION
|
6
|
|
ARTICLE
4 OBLIGATIONS UNDER THE DOCUMENTS
|
7
|
|
ARTICLE
5 REPRESENTATIONS AND WARRANTIES OF THE PARTIES
|
7
|
|
ARTICLE
6 TAX
|
10
|
|
ARTICLE
7 CONFIDENTIALITY
|
11
|
|
ARTICLE
8 NOTICES
|
13
|
|
ARTICLE
9 GENERAL PROVISIONS
|
14
|
Exhibits
|
A.
|
Saskatchewan
P&NG Lease PN 46794
|
|
B.
|
Lease
Option Agreement between Mogul Energy Ltd. and Avir Enterprises
Ltd.
|
|
C.
|
Transfer
Agreement of Lease to Mogul Energy Ltd. and Transpacific Petroleum
Corp.
|
|
D.
|
Binding
Agreement between Mogul Energy Ltd. and Transpacific Petroleum
Corp.
|
2
FARMOUT
AGREEMENT
This
Agreement is
entered into as of the 8th
day of
November, 2005 by and between Mogul Energy Ltd., a company existing under
the
laws of the Province of British Columbia, Canada ( “Mogul
Ltd.”)
and
Mogul Energy International, Inc. a company existing under the laws of the
State
of Delaware, United States of America ( “MEI”).
The
companies named above, and their respective successors and assignees (if
any),
may sometimes individually be referred to as “Party” and collectively as the
“Parties”.
WITNESSETH:
Whereas,
Mogul
Ltd. and Avir Enterprises Ltd. (“Avir”)
entered into an Option for Mogul Ltd. to Acquire P&NG Rights of Aivr’s
Saskatchewan P&NG Lease PN 46794 (the “Lease”),
dated
April 16, 2005 (the “Option”),
a
copy of the Lease is attached hereto as Exhibit
A ,
and a
copy of the Option is attached as Exhibit
B
hereto;
Whereas,
by
Transfer Agreement dated June 2, 2005 (the “Transfer
Agreement”),
a
copy of which is attached hereto as Exhibit
C,
Avir
transferred to Transpacific Petroleum Corp., a company existing under the
laws
of the Province of British Columbia, Canada (hereinafter referred to as
“Transpacific”)
as to
25% and Mogul Ltd. as to 75%, 100% of its interest in the Lease; and
Whereas,
Mogul
Ltd. and entered in a binding agreement dated April 14, 2005 (the “Binding
Agreement”),
a
copy of which is attached hereto as Exhibit
D,
for the
exploration, development and production of hydrocarbons in the area covered
by
the Lease (the “Contract
Area”)
and for
the acquisition of additional crown and free-hold lands in the proximity
of the
Contract Area; and
Whereas,
as of
the date of this Agreement, Mogul Ltd. holds a seventy-five (75%) working
interest, and Transpacific’s holds a twenty-five (25%) carried interest in the
Contract Area subject to the terms of the Lease and the Binding Agreement;
and
Whereas,
Mogul
Ltd. is willing to assign and transfer a certain undivided interest in
its
rights and obligations under the Lease and the Binding Agreement to MEI
in
accordance with the terms set forth herein and MEI wishes to acquire such
interest.
Now,
Therefore,
in
consideration of the premises and the mutual covenants and obligations
set out
below and to be performed, the Mogul Ltd. and MEI agree as
follows:
3
Article
1
Definitions
As
used
in this Agreement, the following capitalized words and terms shall have
the
meaning ascribed to them below. Any capitalized term used in this Agreement
and
not specifically defined in this Agreement shall have the same meaning
as in the
Binding Agreement or the Lease.
Agreement
means
this Farmout Agreement together with the Appendices, Exhibits, or Schedules
hereto, and any extension, renewal or amendment hereof agreed to in writing
by
the Parties.
Consideration
has the
meaning given in Article 3 hereof.
Documents
refers
collectively to this Agreement, the Binding Agreement, the Transfer Agreement,
the Option, and the JOA.
Effective
Date is
the
date set out in Article 6.
Exploration
Well
means
any well, the purpose of which at the time of the commencement of drilling
is to
explore for an accumulation of Hydrocarbons, which accumulation was at
that time
unproven by drilling.
Government
means
the government of Saskatchewan and any political subdivision, agency or
instrumentality thereof.
JOA
refers
to the Joint Operating Agreement to be negotiated by the parties hereto
and
Transpacific, pursuant to which Transpacific shall be named as the operator
with
respect to any drilling operations in the Contract Area.
Laws/Regulations
means
those laws, statutes, rules and regulations governing activities under
the
Documents.
Operator means
Transpacific which is the entity designated to conduct operations in the
Contract Area in accordance with the terms of the Binding
Agreement.
4
Participating
Interest
means as
to any party to the Contract, the undivided interest (whether a working
or
carried interest) of such party expressed as a percentage of the total
interest
of all parties in the rights and obligations derived from the
Lease.
Testing
means an
operation intended to evaluate the capacity of a Zone to produce Hydrocarbons.
"Test" and other derivatives shall be construed accordingly.
Zone
means a
stratum of earth containing or thought to contain an accumulation of
Hydrocarbons separately producible from any other accumulation of
hydrocarbons.
Article
2
Transfer
And Assignment Of Interest
|
2.1
|
Grant
|
Subject
to the satisfaction of the Conditions Precedent, and in exchange for the
Consideration, Mogul Ltd. hereby assigns and transfers to MEI, and MEI
hereby
accepts accept, a 50% Working Interest in the Contract Area subject to
the terms
and conditions set forth in the Documents. Mogul Ltd. shall retain a twenty-five
(25%) carried interest (without recovery).
|
2.2
|
Consideration
|
In
consideration of the assignment to it of a fifty (50%) working interest
in the
Lease and the Contract Area, MEI agrees that, except as set forth below,
MEI
will be responsible for the payment of one hundred (100%) percent of all
expenses, costs of drilling and completion of all exploratory and development
xxxxx, all production facilities, and field offices pertaining to the Contract
Area, and the costs of abandoning the well(s) if there is no discovery,
up to
the amounts specified in Section 3.1 hereof. Anything herein to the contrary
notwithstanding, upon the completion and equipping or abandonment of the
Fairlight exploratory well, the acquisition of the crown and freehold lands
and
seismic, MEI, Transpacific and Mogul will each be responsible for any further
investments in accordance with their respective Participation
Interests.
|
2.3
|
Joint
Operating Agreement
|
The
Parties agree to negotiate in good faith and execute the JOA. Anything
to the
contrary notwithstanding the JOA shall provide that Transpacific will be
presented by one member of a four member operating committee whereby, under
no
circumstances, any actions concerning the running of operations, any
expenditures, dilution, divesture of interests or acquisition will be valid
or
legal without the unanimous approval of such operating committee
members.
5
|
2.4
|
Binding
Effect
|
Mogul
Ltd. and MEI shall be bound by this Agreement as of the date hereof and
shall
fully perform all of their respective obligations under this
Agreement.
|
2.5
|
Ownership
|
After
given effect to the assignment to MEI hereunder, the Participating Interests
in the Lease and the Contract Area shall be:
|
Mogul
Ltd.:
|
25%
carried interest (not subject to recovery)
|
|
MEI:
|
50
% working interest
|
|
Transpacific:
|
25%
carried interest (not subject to recovery)
|
|
Total
|
100%
|
|
2.6
|
Effective
Date
|
Notwithstanding
the date of this Agreement or the date on which the Assignment is executed,
the
effective date of this Agreement as between the Parties (hereafter the
"Effective Date") shall be deemed to be November 8, 2005. The consideration
payable by MEI reflects this Effective Date.
Article
3
Consideration
|
3.1
|
Work
Program
|
In
consideration for receiving the assignment of the Participating Interest
hereunder, MEI agrees to perform or cause to be performed and pay all costs
under the JOA and the Binding Agreement in the Contract Area, which shall
include but not be limited to:
|
A.
|
Acquire
and process available 2D seismic; and,
|
|
B.
|
Drill,
log, test and complete or plug and abandon one Exploration Well
sufficient
to test 3 shallow and one deep Zone or to a depth of 2,000 meters,
whichever is first achieved in an area designated as Xxxxxxx
0-0-00-00
X0X. Each well shall be at location(s) mutually agreed by the
Parties. All
work set out in this Article 4.1 shall be undertaken by MEI or
Operator on
behalf of the Parties.
|
6
|
3.2
|
Conditions
|
The
work
obligations under this Article 3. shall be budgeted at approximately $520,000
or
a dry hole and $1,075,000 for a successful, completed and equipped well;
and,
shall be completed prior to April 1, 2006 and within the terms provided
by any
additional leases obtained in and around the Contract Area and pursuant
to the
Binding Agreement. If such work is not completed by April 1, 2006, the
parties
acknowledge that Mogul Ltd.’s rights under the lease shall terminate and
accordingly this Agreement shall terminate and the parties
shall have no further liabilities or obligations hereunder.
|
3.3
|
Discovery
or Insurmountable
Difficulties
|
An
obligation well(s) to be drilled under Article 3.1.B. above shall also
be deemed
satisfied if MEI encounters impenetrable substances, basement, commercial
quantities of oil or gas at a lesser depth or is forced to abandon a well
because of difficulties insurmountable by employing modern drilling technology
in conformity with sound, cost effective practices generally accepted in
the
international petroleum industry.
Article
4
Obligations
Under The
Documents
|
4.1
|
Acceptance
of Prior Terms
|
MEI
hereby ratifies, confirms and accepts the terms of the Lease and the Binding
Agreement and MEI agrees to abide by the terms of such agreements to the
extent
of its Participating Interest.
Article
5
Representations
And Warranties Of The Parties
|
5.1
|
Mogul
Ltd.’s Representations and
Warranties
|
Except
as
otherwise disclosed on the attached schedules, Mogul Ltd. makes the following
representations and warranties to MEI as of The Effective Date
hereof:
7
|
A.
|
Mogul
Ltd.'s Rights.
|
Mogul
Ltd. holds the rights to a 75% undivided Participating Interest in the
Lease,
subject to the Binding Agreement. The Lease is (and other Documents are)
in full
force and effect and no notice of default, termination, or breach under
the
Lease (or other Document) has been received by Mogul Ltd. nor, to the knowledge
of Mogul Ltd., any other party to the Documents.
|
B.
|
Documents.
|
Mogul
Ltd. has provided MEI with complete and correct copies of the Documents.
Where
Mogul Ltd. has provided any translation of a Document, Mogul Ltd. has done
so as
a courtesy to the MEI and Mogul Ltd. makes no representation or warranty
as to
the accuracy of the translation.
|
C.
|
Claims
and Litigation.
|
There
are
no material claims, demands, actions, suits, governmental inquiries, or
proceedings pending or to Mogul Ltd.'s knowledge threatened in connection
with
the Documents which would have an adverse effect upon the consummation
of the
transactions contemplated by this Agreement.
|
5.2
|
MEI’s
Representations and
Warranties
|
Except
as
otherwise disclosed in the attached schedules, MEI makes the following
representations and warranties to Mogul Ltd. as of the Effective Date hereof:
There are no material claims, demands, actions, suits, governmental inquiries,
or proceedings pending, or to MEI’s knowledge, threatened, against MEI which
would have an adverse effect upon the consummation of the transactions
contemplated by this Agreement.
|
5.3
|
Mutual
Representations and
Warranties
|
The
Parties make the following representations and warranties to each other
as of
the Effective Date:
|
A.
|
Corporate
Authority.
|
Each
Party is duly organized and validly existing under the laws of the country
where
it is organized. To the extent required, each Party is qualified to conduct
business in the jurisdiction as necessary to perform its obligations under
the
Documents. Each Party has all requisite corporate power and authority to
enter
into this Agreement, to perform its obligations hereunder, and to consummate
the
transactions contemplated hereby. This Agreement has been duly executed
and
delivered by each Party and constitutes a legal, valid and binding obligation
of
each Party, enforceable against each Party in accordance with its
terms.
8
|
B.
|
Payments.
|
Neither
Party nor its Affiliates have made, offered, or authorized and will not
make,
offer or authorize any payment, gift, promise or other advantage, in connection
with the matters which are the subject to this Agreement, whether directly
or
indirectly through any other person or entity, to or for the use or benefit
of
any public official (i.e., any person holding a legislative, administrative
or
judicial office, including any person employed by or acting on behalf of
a
public agency, a public enterprise or a public international organization)
or
any political party or political party official or candidate for office,
where
such payment, gift or promise would violate: (a) the applicable Laws of
the
country of operations; or (b) the laws of the country of formation of the
Party
or such Party's ultimate parent company (or its principal place of business).
|
C.
|
Other
Representations and
Warranties.
|
Except
as
disclosed in schedules attached to this Agreement, the execution, delivery,
and
performance of this Agreement by each Party, the consummation of the
transactions contemplated hereby, and the compliance with the provisions
hereof
will not, to the best of each Party's knowledge and belief:
|
(a)
|
violate
any applicable laws/regulations, judgment, decree or
award;
|
|
(b)
|
contravene
the organization documents of a Party;
or
|
|
(c)
|
result
in a violation of a term or provision, or constitute a default
or
accelerate the performance of an obligation under any contract
or
agreement executed by a Party
hereto.
|
|
5.4
|
Disclaimer
of Other Representations and
Warranties
|
Except
for the representations and warranties provided in this article, Mogul
Ltd. and
MEI make no, and disclaim any, warranty or representation of any kind,
either
express, implied, statutory, or otherwise, including, without limitation,
the
accuracy or completeness of any data, reports, records, projections,
information, or materials now, heretofore, or hereafter furnished or made
available to MEI in connection with this agreement.
9
Article
6
Tax
|
6.1
|
Tax
Obligations
|
Each
Party shall be responsible for reporting and discharging its own tax measured
by
the profit or income of the Party and the satisfaction of such Party’s share of
all contract obligations under the Contract and under this Agreement. Each
Party
shall protect, defend and indemnify each other Party from any and all loss,
cost
or liability arising from the indemnifying Party’s failure to report and
discharge such taxes or satisfy such obligations. The Parties intend that
all
income and all tax benefits (including deductions, depreciation, credits
and
capitalization) with respect to the expenditures made by the Parties hereunder
will be allocated by the government tax authorities to the Parties based
on the
share of each tax item actually received or borne by each Party. If such
allocation is not accomplished due to the application of the laws / regulations
or other government action, the Parties shall attempt to adopt mutually
agreeable arrangements that will allow the Parties to achieve the financial
results intended. Operator shall provide each Party, in a timely manner
and at
such Party’s sole expense, with such information with respect to Joint
Operations as such Party may reasonably request for preparation of its
tax
returns or responding to any audit or other tax proceeding.
|
6.2
|
United
States Tax Election
|
|
(A)
|
If,
for United States federal income tax purposes, this Agreement
and the
operations under this Agreement are regarded as a partnership
and if the
Parties have not agreed to form a tax partnership, each Party
elects to be
excluded from the application of all of the provisions of Subchapter
“K”,
Chapter 1, Subtitle “A” of the United States Internal Revenue Code of
1986, as amended (the “Code”), to the extent permitted and authorized by
Section 761(a) of the Code and the regulations promulgated under
the Code.
Operator, if it is a U.S. Party, is authorized and directed to
execute and
file for each Party such evidence of this election as may be
required by
the Internal Revenue Service, including all of the returns, statements,
and data required by United States Treasury Regulations Sections
1.761-2
and 1.6031(a)-1(b)(5) and shall provide a copy thereof to each
U.S. Party.
However, if Operator is not a U.S. Party, the Party who holds
the greatest
Participating Interest among the U.S. Parties shall fulfill the
obligations of Operator under this Article. Should there be any
requirement that any Party give further evidence of this election,
each
Party shall execute such documents and furnish such other evidence
as may
be required by the Internal Revenue Service or as may be necessary
to
evidence this election.
|
10
|
(B)
|
No
Party shall give any notice or take any other action inconsistent
with the
foregoing election. If any income tax laws of any state or other
political
subdivision of the United States or any future income tax laws
of the
United States or any such political subdivision contain provisions
similar
to those in Subchapter “K”, Chapter 1, Subtitle “A” of the Code, under
which an election similar to that provided by Section 761(a)
of the Code
is permitted, each Party shall make such election as may be permitted
or
required by such laws. In making the foregoing election or elections,
each
U.S. Party states that the income derived by it from operations
under this
Agreement can be adequately determined without the computation
of
partnership taxable income.
|
|
(C)
|
Unless
approved by every Non-U.S. Party, no activity shall be conducted
under
this Agreement that would cause any Non-U.S. Party to be deemed
to be
engaged in a trade or business within the United States under
United
States income tax laws and regulations.
|
Article
7
Confidentiality
|
7.1
|
Except
as otherwise provided in the Documents, each Party agrees that
all
information disclosed under this Agreement, except information
in the
public domain or lawfully in possession of a Party prior to the
Effective
Date, shall be considered confidential and shall not be disclosed
to any
other person or entity without the prior written consent of the
Party
which owns such confidential information, unless a Party is advised
by its
counsel that such disclosure is required by applicable law, rules
or
regulations. This obligation of confidentiality shall remain
in force
during the term of the Lease and for a period of one (_1_) year
thereafter. Notwithstanding the foregoing, confidential information
may be
disclosed without consent and without violating the obligations
contained
in this Article in the following
circumstances:
|
11
|
(1)
|
to
an Affiliate provided the Affiliate is bound to the provisions
of this
Article 7 and the Party disclosing is responsible for the violation
of an
Affiliate;
|
|
(2)
|
to
a governmental agency or other entity when required by the provisions
of
the Documents;
|
|
(3)
|
to
the extent such information is required to be furnished in compliance
with
the applicable laws, rules and regulations, or pursuant to any
legal
proceedings or because of any order of any court binding upon
a Party;
|
|
(4)
|
to
attorneys engaged, or proposed to be engaged, by any Party where
disclosure of such information is essential to such attorneys'
work for
such Party and such attorneys are bound by an obligation of
confidentiality;
|
|
(5)
|
to
contractors and consultants engaged, or proposed to be engaged,
by any
Party where disclosure of such information is essential to such
contractor’s or consultant’s work for such
Party;
|
|
(6)
|
to
a bona fide prospective transferee of a Party’s Participating Interest, or
portion thereof, to the extent appropriate in order to allow
the
assessment of such Participating Interest (including an entity
with whom a
Party and/or its Affiliates are conducting bona fide negotiations
directed
toward a merger, consolidation or the sale of a majority of its
or an
Affiliate's shares);
|
|
(7)
|
to
a bank or other financial institution to the extent appropriate
to a Party
arranging for funding;
|
|
(8)
|
to
the extent such information must be disclosed pursuant to any
rules or
requirements of any government or stock exchange having jurisdiction
over
such Party, or its Affiliates; provided that such Party shall
comply with
the requirements of Article 12.10
hereunder;
|
12
|
(9)
|
to
its respective employees, subject to each Party taking sufficient
precautions to ensure such information is kept confidential;
|
|
(10)
|
to
the extent any information which, through no fault of a Party,
becomes a
part of the public domain; and
|
|
(11)
|
to
the other parties to the Binding Agreement;
|
|
7.2
|
Disclosure
as pursuant to Articles 7.1(5), (6), (7) and (11) shall not be
made unless
prior to such disclosure the disclosing Party has obtained a
written
undertaking from the recipient party to keep the information
strictly
confidential for at least as long as the period set out above
and to use
the information for the sole purpose described in Articles 7.1(5),
(6),
(7), and (11), whichever is applicable, with respect to the disclosing
Party.
|
Article
8
Notices
All
notices authorized or required between the Parties by any of the provisions
of
this Agreement shall be in writing (in English) and delivered in person
or by
courier service or by any electronic means of transmitting written
communications which provides written confirmation of complete transmission,
and
properly addressed to the other Party. Verbal communication does not constitute
notice for purposes of this Agreement, and e-mail addresses and telephone
numbers for the Parties are listed below as a matter of convenience only.
A
notice given under any provision of this Agreement shall be deemed delivered
only when received by the Party to whom such notice is directed, and the
time
for such Party to deliver any notice in response to such originating notice
shall run from the date the originating notice is received. “Received”
for
purposes of this Article shall mean actual delivery of the notice to the
address
of the Party specified hereunder.
|
Name:
|
Mogul
Energy Ltd.
|
|
Address:
|
0000-000
Xxxx Xxxxxxxx Xxxxxx
|
|
Xxxxxxxxx,
Xxxxxxx Xxxxxxxx, Xxxxxx, X0X 0X0
|
|
|
Attention:
|
Xx.
Xxxxxx Tyab
|
|
Facsimile:
|
(000)
000-0000
|
|
Email:
|
xxxxxxxxxx@xxxx.xx
|
|
Telephone:
|
(000)
000-0000
|
|
Name:
|
|
|
Address:
|
000
Xxxx Xxxxx, Xxxxx 0000
|
|
Xxxxxxx,
Xxxxxxxxxx, XXX, 00000
|
|
|
Attention:
|
Xx.
Xxxxx Tyab
|
|
Facsimile:
|
(000)
000-0000
|
|
Email:
|
xxxxx@xxxx.xx
|
|
Telephone:
|
(000)
000-0000
|
13
ARTICLE
9
GENERAL
PROVISIONS
|
9.1
|
No
modification.
|
This
Agreement is the entire agreement between the parties and may not be modified
except in writing by agreement of the parties hereto. This agreement supersedes
all prior oral and written representations and agreements with respect
to the
Lease and the Contract Area and becomes effective only after all parties
have
signed this agreement, the non-refundable payment of $25,000 made and the
Letter
of Guarantee is delivered.
|
9.2
|
Reassignment.
|
In
the
event that MEI fails to perform its obligations hereunder Mogul shall have
the
option, exercisable at any time after 10 days from Mogul Ltd’s notice to MEI of
MEI's failure to timely fulfill its obligations hereunder, to require that
MEI
reassign MEI's working interest to Mogul Ltd. free of cost. In this event,
MEI
agrees to execute any and all such documents as are necessary for such
reassignment in the same form and manner as the original assignment to
MEI.
|
9.3
|
Relationship
of Parties.
|
The
rights, duties, obligations and liabilities of the Parties under this Agreement
shall be individual, not joint or collective. It is not the intention of
the
Parties to create, nor shall this Agreement be deemed or construed to create,
a
mining or other partnership, joint venture or association or (except as
explicitly provided in this Agreement) a trust. This Agreement shall not
be
deemed or construed to authorize any Party to act as an agent, servant
or
employee for any other Party for any purpose whatsoever except as explicitly
set
forth in this Agreement. In their relations with each other under this
Agreement, the Parties shall not be considered fiduciaries except as expressly
provided in this Agreement.
14
|
9.4
|
Further
Assurances.
|
Each
of
the Parties shall do all such acts and execute and deliver all such documents
as
shall be reasonably required in order to fully perform and carry out the
terms
of this Agreement.
|
9.5
|
Waiver.
|
No
waiver
by any Party of any one or more defaults by another Party in the performance
of
any provision of this Agreement shall operate or be construed as a waiver
of any
future default or defaults by the same Party whether of a like or of a
different
character. Except as expressly provided in this Agreement, no Party shall
be
deemed to have waived, released or modified any of its right under this
Agreement unless such Party has expressly stated, in writing, that it does
waive, release or modify such right.
|
9.6
|
Joint
Preparation.
|
Each
provision of this Agreement shall be construed as though all Parties
participated equally in the drafting of the same. Consequently, the Parties
acknowledge and agree that any rule of construction that a document is
to be
construed against the drafting party shall not be applicable to this
Agreement.
|
9.7
|
Severability
|
Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and the parties will attempt to agree upon a valid and
enforceable provision which shall be a reasonable substitute therefore,
and upon
so agreeing, shall incorporate such substitute provision in this Agreement.
Any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or
render unenforceable such provision in any other jurisdiction.
|
9.8
|
Modifications.
|
There
shall be no modification of this Agreement except by written consent of
all
Parties hereto.
|
9.9
|
Priority
of Agreement.
|
In
the
event of any conflict between the provisions of the main body of this Agreement
and its Appendices, Exhibits, or Schedules the provisions of the main body
of
the Agreement shall prevail. In the event of any conflict between this
Agreement
and the Documents, this Agreement shall prevail.
15
|
9.10
|
Counterparts.
|
This
Agreement may be executed in any number of counterparts, each of which
when so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement. In the event that any signature
is
delivered by facsimile transmission, such signature shall create a valid
binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile
signature
were the original thereof.
|
9.11
|
Public
Announcements.
|
No
public
announcement or statement regarding the terms or existence or this Agreement
shall be made without prior written consent of all Parties; provided that,
notwithstanding any failure to obtain such approval, no Party shall be
prohibited from issuing or making any such public announcement or statement
to
the extent it is necessary to do so in order to comply with the applicable
laws,
rules or regulations of any government, government agency, court, administrative
body, or stock exchange having jurisdiction over such Party or its
Affiliates.
|
9.12
|
Entire
Agreement.
|
This
Agreement, together with all the exhibits hereto, constitutes and contains
the
entire agreement and understanding of the parties with respect to the subject
matter hereof and supersedes any and all prior negotiations, correspondence,
agreements, understandings, duties or obligations between the parties respecting
the subject matter hereof.
|
9.13
|
Third
Parties.
|
Nothing
in this Agreement, express or implied, is intended to confer upon any person,
other than the parties hereto and their successors and assigns, any rights
or
remedies under or by reason of this Agreement.
|
9.14
|
Successors
and Assigns.
|
This
agreement shall inure to the benefit of and shall be binding upon the parties
hereto and their respective successors, heirs and approved assignors. Each
party
is free to re-assign all or portion of its interest in this agreement to
another
party, without the approval of any of the parties to this agreement, provided
that EGPC will approve such assignments.
|
9.15
|
Rules
of Construction.
|
This
Agreement shall be construed in accordance with the following rules of
construction:
|
(a)
|
Calculation
of Time Period.
|
When
calculating the period of time before which, within which or following
which any
act is to be done or step taken pursuant to this Agreement, the date that
is the
reference date in calculating such period shall be excluded. If the last
day of such period is a non-Business Day, the period in question shall
end on
the next succeeding Business Day.
16
|
(b)
|
Commercially
Reasonable Efforts.
|
The
obligation of a party to use commercially reasonable efforts to accomplish
an
objective does not require an unreasonable expenditure of funds or the
incurrence of an unreasonable liability on the part of the obligated
party.
|
(c)
|
Gender
and Number.
|
Any
reference in this Agreement to gender shall include all genders, and words
imparting the singular number only shall include the plural and vice
versa.
|
(d)
|
Headings.
|
The
headings herein are inserted for convenience only and do not constitute
a part
of this Agreement. Whenever the context requires, the gender of any word
used in
this Agreement includes the masculine, feminine or neuter, and the number
of any
word includes the singular or plural. Unless the context otherwise requires,
all
references to articles and sections refer to articles and sections of this
Agreement, and all references to schedules are to schedules attached hereto,
each of which is made a part hereof for all purposes. The descriptive headings
of the several articles and sections of this Agreement are inserted for
purposes
of reference only, and shall not affect the meaning or construction of
any of
the provisions hereof.
|
(e)
|
Herein.
|
The
words
such as “herein,”
“hereinafter,”
“hereof,”
and
“hereunder”
refer
to this Agreement as a whole and not merely to a subDivision in which such
words
appear unless the context otherwise requires.
|
(f)
|
Including.
|
The
word
“including”
or
any
variation thereof means “including,
without limitation”
and
shall not be construed to limit any general statement that it follows to
the
specific or similar items or matters immediately following it.
|
(g)
|
Knowledge.
|
The
word
“knowledge”
or
any
similar term shall mean with respect to any Person, the actual knowledge
of such
Person or such Person’s officers, directors and employees.
|
(h)
|
Payments
and Computations.
|
Except
for the payment of the Purchase Price (which shall be paid at the Closing),
each
party shall make each payment due to another party to this Agreement not
later
than 2:00 p.m. Pacific time on the day when due. All payments shall be
measured
and paid in U.S. dollars by wire transfer in immediately available funds
to the
account or accounts designated by the party receiving such payment. All
computations of interest shall be made on the basis of a year of 365 days,
in
each case for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest is payable.
Whenever any payment under this Agreement shall be due on a day other that
a
Business Day, such payment shall be made on the next succeeding Business
Day,
and such extension of time shall be included in the computation of payment
of
interest.
17
|
(i)
|
Schedules
and Exhibits.
|
Any
matter disclosed on any one Schedule or Exfhibit hereto shall be deemed
disclosed for purposes of all other Schedules to the extent that the relevance
of such matters to other Sections of this Agreement or other applicable
Schedules or Exhibits is reasonably apparent to a reader.
|
(j)
|
Interpretation
of Language.
|
The
language and words used in this Agreement will be deemed to be the language
and
words chosen by the parties to express their mutual intent and no rules
of
strict construction will be applied against any party.
|
9.16
|
Disputes.
|
|
(a)
|
Subject
to paragraph (b) of this Section 10.5, any dispute arising out
of or in
connection with this Agreement which cannot first be settled
amicably by
mutual consultation between the parties, shall be referred to
and finally
resolved by arbitration under the auspices of JAMS, in accordance
with its
rules (“Rules”). The arbitration shall take place in New York, New York,
unless the parties otherwise mutually agree. The rules of procedures
not
expressly provided by the Rules shall be determined in accordance
with the
laws of the State of New York, whether mandatory or not. An award
may be
confirmed and judgment on the award entered in the Supreme Court
of the
State of New York.
|
|
(b)
|
Nothing
in this Section 9.16 shall be deemed to preclude any Party from
commencing
an action for equitable or injunctive relief in any court having
jurisdiction over the matter.
|
18
|
9.17
|
Governing
Law.
|
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of
New
York, without giving effect to any choice of law or conflict of law provision
or
rule (whether of the State of New York or any other jurisdictions) that
would
cause the application of the laws of any jurisdictions other than the State
of
New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of
the state and federal courts sitting in the City of New York, for the
adjudication of any dispute hereunder or in connection herewith or therewith,
or
with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any
such
court, that such suit, action or proceeding is brought in an inconvenient
forum
or that the venue of such suit, action or proceeding is improper. Each
party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof
to
such party at the address for such notices to it under this Agreement and
agrees
that such service shall constitute good and sufficient service of process
and
notice thereof. Nothing contained herein shall be deemed to limit in any
way any
right to serve process in any manner permitted by law. EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR
IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
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In
Witness Whereof,
the
parties hereto caused this Agreement to be duly executed and accepted as
of the
dates set forth below.
| Mogul Energy Ltd. |
Dated:
November 8, 2005
|
||
|
By:
|
/s/
Xxxxxx Xxxx
|
||
| Xxxxxx Tyab, President | |||
| Mogul Energy International, Inc. |
Dated:
November 8, 2005
|
||
|
By:
|
/s/
Naeem Xxxx
|
||
| Xxxxx Tyab, President | |||
20
