22762 Westheimer Parkway, Suite 515, Katy, Texas 77450 Tel: +1 832 437 0329 January 13, 2011
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January
13, 2011
IROQUOIS
MASTER FUND LTD.
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Attn:
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IROQUOIS
CAPITAL OPPORTUNITY FUND LP
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Attn:
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RE: Subscription
Agreement, dated as of February 25, 2010, by and between ▇▇▇▇ ▇▇▇▇ Petroleum
Corporation (the “Company”), and the subscribers
listed on Schedule
1 thereto (the “Subscribers” and the
“Agreement”).
Capitalized terms used herein and not herein otherwise defined shall have the
meanings ascribed to them in the Agreement.
Gentlemen:
Reference
is made to the provisions of Paragraph 13(j) of the Agreement. The purpose of
this letter is to confirm that you, as the Majority in Interest, agree to waive
any default, and otherwise forbear from any action permitted under the
Transaction Documents (including, without limitation, the provisions of
paragraph 7.2 of the Agreement) or otherwise, by reason of the Company’s
authorized Common Stock being only 20 million shares at this time (and at the
time that the Transaction Documents were executed and delivered), subject to the
following:
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a.
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within
10 days after the date hereof, the Company shall obtain the written
consent of the holders of a majority of the outstanding common stock to
amend the Articles of Incorporation of the Company to increase the
authorized Common Stock to not less than 125 million shares (and not more
than 150 million shares) and increase the authorized preferred stock to 5
million shares, and thereafter file a certificate of amendment to the
Company’s Articles of Incorporation with the Secretary of State of the
State of Delaware to effect such increases to the authorized common stock
and preferred stock of the Company so that such increases are effective no
later than 90 days after the date hereof;
and
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b.
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that
notwithstanding anything to the contrary contained in the Notes, the
interest rate payable by the Company as the Borrower, from and after
October 1, 2010 until the Maturity Date, accelerated or otherwise, when
the principal and remaining accrued but unpaid interest shall be due and
payable, or sooner, shall be fifteen percent (15%) per annum (the
“Prevailing Interest Rate”); and
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c.
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that
notwithstanding anything to the contrary contained in the Notes, for
interest payable under the Notes from and after the date hereof, the
Borrower may elect, as long as there shall not have occurred and be
continuing any Event of Default, to pay that portion of the accrued
interest on the Note that accrues at the rate in excess of 8% per annum by
delivery to Holder of an executed and completed Allonge, in the
form annexed thereto as Exhibit A (as therein
provided for payment by delivery of an Allonge), which shall increase the
Principal Amount of the Note;
and
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d.
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that
the proceeds (net of direct costs) of the Company’s currently contemplated
offering of securities (presently expected to be at least $2.1 million,
from the sale of convertible preferred stock and warrants) pursuant to
Regulation S (the “Reg S Offering”), shall be substantially employed by
the Company (i) to drill, case and complete up to 10
delineation/production ▇▇▇▇▇ to a depth below the Trinity Basal Sands
(approx. 275 meters) spaced widely across the leased acreage (the
“▇▇▇▇▇”), (ii) to evaluate cores, logs and oil samples from the ▇▇▇▇▇,
(iii) commission and publish a full resource evaluation, (iv) to finalize
a field-wide development plan, and (iv) for the working capital needs of
the Company; provided, however, that the working capital portion thereof
may not be used for accrued and unpaid officer and director salaries, nor
payment of financing related debt nor redemption of outstanding notes or
equity instruments of the Company nor non-trade payables outstanding on
the date hereof; and
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e.
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that
the net proceeds of the Reg S Offering, except for the cash portion of the
interest payments provided for in clauses “g” and “h” below, which
shall be paid to the Subscribers, shall be held in escrow by Sichenzia
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (the
“Escrow Agent”)
pursuant to the terms of an Escrow Agreement to be executed by the parties
substantially in the form attached hereto as Exhibit A (the “Escrow Agreement”);
and
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f.
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the
Reg S Offering shall have closed in the amount of not less than $2.1
million and funded to the Company no later than 3:00pm Eastern on January
21, 2011; and
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g.
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that
the interest payment due and payable under the Notes on December 31, 2010
is permitted to be paid on or before January 24, 2011;
and
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h.
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that
the cash portion of the interest payment due and payable under the Notes
on March 31, 2011 shall be paid on or before January 24, 2011;
and
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i.
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the
undersigned acknowledges that in connection with application of the
provisions of Section 12(a) of the Subscription Agreement to the closing
of the Offering, that the provisions of Section 12(a) do not provide any
anti-dilution rights that are in addition to those provided by the
provisions of the Notes and the Warrants, or trigger any other rights
regarding the securities to be issued to the investors in connection with
the closing of the Offering; and
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j.
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except
as provided above, the Transaction Documents remain in force and
effect.
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Sincerely,
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Chief
Executive Officer
WAIVER
The
undersigned Subscribers, being the Majority in Interest, hereby confirm the
waiver and forbearance described above, upon and subject to the terms thereof
set forth above, and represent and warrant to the Company that it is authorized
to entered into and grant the forgoing waiver and forbearance and agree, on
behalf of the Subscribers, to the terms thereof, including the provisions of “b”
that increase the interest rate under the Note, and “c” that allow the Borrower
the election to pay accrued interest by delivery of an Allonge which shall increase the Principal
Amount of the Note.
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Name of
Subscriber: IROQUOIS MASTER FUND LTD.
IROQUOIS
CAPITAL OPPORTUNITY FUND LP
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Authorized
Signatory:
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Authorized
Signatory:
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Name:
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Name:
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Title:
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Title:
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Dated:
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1.14.11
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Dated:
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1.14.11
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CC:
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Grushko
& ▇▇▇▇▇▇▇, P.C.
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facsimile:
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EXHIBIT
“A”
ESCROW
AGREEMENT
This Escrow Agreement is dated as of
the ___ day of
January, 2011 among ▇▇▇▇ Rose Petroleum Corporation, a Delaware corporation (the
“Company”), and Sichenzia ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP (the “Escrow
Agent”):
WITNESSETH:
WHEREAS, the Company, and IROQUOIS
MASTER FUND LTD. and IROQUOIS CAPITAL OPPORTUNITY FUND LP (collectively, the
Majority in Interest) are parties to a certain waiver agreement dated January
13, 2011 (the “Default Waiver”), respecting a default under the Subscription
Agreement, dated as of February 25, 2010, by and between ▇▇▇▇ Rose Petroleum
Corporation (the “Company”), and the subscribers
listed on Schedule
1 thereto (the “Subscribers” and, the “Agreement”) and the Notes.
Capitalized terms used herein and not herein otherwise defined shall have the
meanings ascribed to them in the Agreement or the Default Waiver;
and
WHEREAS,
the Majority in Interest require the Company to enter into and deliver this
Escrow Agreement as a condition to the delivery by them of the Default Waiver,
and that the net proceeds of the Reg S Offering be held in escrow and released
by the Escrow Agent in accordance with the terms and conditions of this Escrow
Agreement; and
WHEREAS,
the Escrow Agent is willing to serve as escrow agent pursuant to the terms and
conditions of this Escrow Agreement;
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NOW THEREFORE, the parties agree as
follows:
ARTICLE
I
INTERPRETATION
1.1. Definitions.
Capitalized terms used and not otherwise defined herein that are defined in the
Agreement or the Default Waiver shall have the meanings given to such terms in
therein. Whenever used in this Escrow Agreement, the following terms shall
have the following respective meanings:
§ “Closing
Date” shall mean the date(s) of closing of the Reg S Offering and receipt by the
Company of the proceeds thereof;
§ “Escrowed
Payment” means an aggregate cash payment of not less than $2,100,000, less
the direct costs of closing the Reg S Offering (in the amount of approximately
$150,000 for a closing of approximately $2.1 million or approximately
$264,000 for a closing of approximately $4 million, exclusive of attorneys’ fees
and expenses), and the cash portion of the interest payments to the Subscribers
for Q4 2010 and ▇▇ ▇▇▇▇;
1.2.
reserved.
1.3. Extended
Meanings. In this Escrow Agreement words importing the singular
number include the plural and vice versa; words importing the masculine gender
include the feminine and neuter genders. The word “person” includes an
individual, body corporate, partnership, trustee or trust or unincorporated
association, executor, administrator or legal representative.
1.4. Waivers and
Amendments. This Escrow Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by all parties, or, in the
case of a waiver, by the party waiving compliance. Except as expressly
stated herein, no delay on the part of any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof, nor shall any waiver
on the part of any party of any right, power or privilege hereunder preclude any
other or future exercise of any other right, power or privilege
hereunder.
1.5. Headings. The
division of this Escrow Agreement into articles, sections, subsections and
paragraphs and the insertion of headings are for convenience of reference only
and shall not affect the construction or interpretation of this Escrow
Agreement.
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1.6.
Law Governing this
Escrow
Agreement. This
Escrow Agreement shall be governed by and construed in accordance with the laws
of the State of New York without regard to conflicts of laws principles that
would result in the application of the substantive laws of another
jurisdiction. Any action brought by either party against the other
concerning the transactions contemplated by this Escrow Agreement shall be
brought only in the state courts of New York or in the federal courts located in
the state of New York. Both parties and the individuals executing this
Escrow Agreement and other agreements on behalf of the Company agree to submit
to the jurisdiction of such courts and waive trial by jury. The prevailing
party (which shall be the party which receives an award most closely resembling
the remedy or action sought) shall be entitled to recover from the other party
its reasonable attorney’s fees and costs. In the event that any provision
of this Escrow Agreement or any other agreement delivered in connection herewith
is invalid or unenforceable under any applicable statute or rule of law, then
such provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any such provision which may prove invalid or unenforceable under any
law shall not affect the validity or enforceability of any other provision of
any agreement.
1.7.
Specific Enforcement,
Consent to Jurisdiction. The Company and Subscribers acknowledge
and agree that irreparable damage would occur in the event that any of the
provisions of this Escrow Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that
the parties shall be entitled to an injuction or injunctions to prevent or cure
breaches of the provisions of this Escrow Agreement and to enforce specifically
the terms and provisions hereof or thereof, this being in addition to any other
remedy to which any of them may be entitled by law or equity. Subject to
Section 1.6
hereof, each of the Company and Subscribers hereby waives, and agrees not to
assert in any such suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of the suit,
action or proceeding is improper. Nothing in this Section shall affect or
limit any right to serve process in any other manner permitted by
law.
ARTICLE
II
DELIVERIES
TO THE ESCROW AGENT
2.1.
Company
Deliveries. On the Closing Date, the Company shall cause the
Escrowed Payment to be delivered by wire transfer to the Escrow
Agent.
ARTICLE
III
RELEASE
OF ESCROW
3.1.
Release of
Escrow. Subject to the provisions of Section 4.2, the Escrow Agent
shall release the Escrow as follows:
(a) On
the Closing Date, the Escrow Agent will simultaneously disburse the
following:
(i) legal
fees in the amount of $10,000 to the firm of Grushko & ▇▇▇▇▇▇▇, PC,
and
(ii) legal
fees in the amount of $65,000 to the firm of Sichenzia ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
LLP, and
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(iii) $1.5
million to the Company, to be used by the Company as indicated in the attached
Budget.
The
remaining funds will be retained in escrow pursuant to this Escrow Agreement and
released at the Company’s written request, for application consistent with the
attached Budget, promptly after receipt and pursuant to a certified resolution
of the Company’s board of directors which must include the affirmative approval
of the Nominated Director, which request may not be made more frequently than
one time each thirty days; provided, however, that the Majority in Interest
shall have received written notice of such request for disbursement, together
with a copy of the Company’s written request, and disbursement by the Escrow
Agent shall not be made to the Company earlier than 7 days after such notice of
request is delivered to the Majority in Interest, unless an earlier disbursement
is permitted in writing by the Majority in Interest. Any funds
retained in escrow after the first anniversary of the date of this Escrow
Agreement may be deposited by the Escrow Agent, in the Escrow Agent’s absolute
discretion with a court of competent jurisdiction in the State of New
York.
(b) Notwithstanding
the above, upon receipt by the Escrow Agent of joint written instructions
(“Joint Instructions”) signed by the Company and the Majority in Interest, it
shall deliver the funds in escrow in accordance with the terms of the Joint
Instructions.
(c) Anything
herein to the contrary notwithstanding, upon receipt by the Escrow Agent of a
final and non-appealable judgment, order, decree or award of a court of
competent jurisdiction (a “Court Order”), the Escrow Agent shall deliver the
funds in escrow in accordance with the Court Order. Any Court Order shall
be accompanied by an opinion of counsel for the party presenting the Court Order
to the Escrow Agent (which opinion shall be satisfactory to the Escrow Agent) to
the effect that the court issuing the Court Order has competent jurisdiction and
that the Court Order is final and non-appealable.
3.3.
Acknowledgement of Company
and Subscriber; Disputes. Any dispute with respect to the release
of the funds in escrow shall be resolved pursuant to Section 4.2 or by agreement
between the Company and Subscribers.
ARTICLE
IV
CONCERNING
THE ESCROW AGENT
4.1.
Duties and Responsibilities
of the Escrow Agent. The Escrow Agent’s duties and responsibilities
shall be subject to the following terms and conditions:
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(a) The
Escrow Agent (i) shall not be responsible for or bound by, and shall not be
required to inquire into whether Company or any other payee is entitled to
receipt of escrow funds pursuant to any other agreement or otherwise; (ii) shall
be obligated only for the performance of such duties as are specifically assumed
by the Escrow Agent pursuant to this Escrow Agreement; (iii)
may rely on and shall be protected in acting or refraining from acting upon any
written notice, instruction, instrument, statement, request or document
furnished to it hereunder and believed by the Escrow Agent in good faith to be
genuine and to have been signed or presented by the proper person or party,
without being required to determine the authenticity or correctness of any fact
stated therein or the propriety or validity or the service thereof; (iv) may
assume that any person believed by the Escrow Agent in good faith to be
authorized to give notice or make any statement or execute any document in
connection with the provisions hereof is so authorized; (v) shall not be under
any duty to give the property held by Escrow Agent hereunder any greater degree
of care than Escrow Agent gives its own similar property; and (vi) may consult
counsel satisfactory to Escrow Agent, the opinion of such counsel to be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by Escrow Agent hereunder in good faith and in accordance with the
opinion of such counsel.
(b) The
Escrow Agent is acting solely as a stakeholder at the request of the Company and
the Majority in Interest and that the Escrow Agent shall not be liable for any
action taken by Escrow Agent in good faith and believed by Escrow Agent to be
authorized or within the rights or powers conferred upon Escrow Agent by this
Escrow Agreement. The Company shall indemnify and hold harmless the Escrow
Agent and any of Escrow Agent’s partners, employees, agents and representatives
for any action taken or omitted to be taken by Escrow Agent or any of them
hereunder, including the fees of outside counsel and other costs and expenses of
defending itself against any claim or liability under this Escrow Agreement,
except in the case of gross negligence or willful misconduct on Escrow Agent’s
part committed in its capacity as Escrow Agent under this Escrow
Agreement.
(c) The
Company agrees to reimburse the Escrow Agent for outside counsel fees, to the
extent authorized hereunder and incurred in connection with the performance of
its duties and responsibilities hereunder.
(d) The
Escrow Agent may at any time resign as Escrow Agent hereunder by giving five (5)
days prior written notice of resignation to the Company and the Majority in
Interest. Prior to the effective date of the resignation as specified in
such notice, the Company may issue to the Escrow Agent an Instruction
authorizing delivery of the escrow funds to a substitute Escrow Agent selected
by the Company and approved in writing by the Majority in
Interest. If no successor Escrow Agent is so named and approved, the
Escrow Agent may apply to a court of competent jurisdiction in the State of New
York for appointment of a successor Escrow Agent, and to deposit the escrow
funds with the clerk of any such court.
(e) Other
than in connection with its legal fees, the Escrow Agent does not have and will
not have any interest in the escrow funds, but is serving only as escrow agent,
having only possession thereof. The Escrow Agent shall not be liable for
any loss resulting from the making or retention of any investment in accordance
with this Escrow Agreement.
(f) This
Escrow Agreement sets forth exclusively the duties of the Escrow Agent with
respect to any and all matters pertinent thereto and no implied duties or
obligations shall be read into this Escrow Agreement.
(g) The
Escrow Agent shall be permitted to act as counsel for the Company in any dispute
as to the disposition of the escrow funds, in any other dispute between the
Subscribers and the Company.
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(h) The
provisions of this Section 4.1 shall
survive the resignation of the Escrow Agent or the termination of this Escrow
Agreement.
4.2. Dispute Resolution:
Judgments. Resolution of disputes arising under this Escrow
Agreement shall be subject to the following terms and conditions:
(a) If
any dispute shall arise with respect to the escrow funds, or if the Escrow Agent
shall in good faith be uncertain as to its duties or rights hereunder, the
Escrow Agent shall be authorized, without liability to anyone, to (i) refrain
from taking any action other than to continue to hold the escrow funds pending
receipt of a Joint Instruction from the Subscribers and Company, or (ii) deposit
the escrow funds with any court of competent jurisdiction in the State of New
York, in which event the Escrow Agent shall give written notice thereof to the
Majority in Interest and the Company and shall thereupon be relieved and
discharged from all further obligations pursuant to this Escrow Agreement.
The Escrow Agent may, but shall be under no duty to, institute or defend any
legal proceedings which relate to the escrow funds. The Escrow Agent shall
have the right to retain counsel if it becomes involved in any disagreement,
dispute or litigation on account of this Escrow Agreement or otherwise
determines that it is necessary to consult counsel.
(b) The
Escrow Agent is hereby expressly authorized to comply with and obey any Court
Order. In case the Escrow Agent obeys or complies with a Court Order, the
Escrow Agent shall not be liable to the Company or to any other person, firm,
corporation or entity by reason of such compliance.
ARTICLE
V
GENERAL
MATTERS
5.1. Termination.
This escrow shall terminate upon the release of all of the funds in escrow or at
any time upon the agreement in writing of the Company and the Majority in
Interest.
5.2. Notices.
All notices, demands, requests, consents, approvals, and other
communications required or permitted hereunder shall be in writing and, unless
otherwise specified herein, shall be (i) personally served, (ii) deposited in
the mail, registered or certified, return receipt requested, postage prepaid,
(iii) delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, facsimile or email, addressed as set
forth below or to such other address as such party shall have specified most
recently by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, or by email with delivery confirmation, at the
address or number designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received) or (b) on the second
business day following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur. The addresses for such communications shall
be:
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(a) If to the
Company, to:
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▇▇▇▇ Petroleum Corporation
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Attn:
▇▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇, President
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Fax:
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Email:
▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
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With
a copy to:
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▇▇▇▇▇▇
▇. ▇▇▇▇▇, Esq.
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Sichenzia
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
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▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
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▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
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Fax:
▇▇▇-▇▇▇-▇▇▇▇
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Email:
▇▇▇▇▇▇@▇▇▇▇.▇▇▇
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(b) If to the Majority in Interest,
to:
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IROQUOIS
MASTER FUND LTD.
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▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
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▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
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Attn:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Fax:
▇▇▇-▇▇▇-▇▇▇▇
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Email:
▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
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IROQUOIS
CAPITAL OPPORTUNITY FUND LP
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▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
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▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
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Attn:
▇▇▇▇ ▇▇▇▇▇
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Fax:
▇▇▇-▇▇▇-▇▇▇▇
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Email:
▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
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With
a copy by facsimile only to:
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Grushko
& ▇▇▇▇▇▇▇, P.C.
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▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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Fax:
▇▇▇-▇▇▇-▇▇▇▇
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(c) If to the
Escrow Agent, to:
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Sichenzia
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
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▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
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▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
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Fax:
▇▇▇-▇▇▇-▇▇▇▇
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Email:
▇▇▇▇▇@▇▇▇▇.▇▇▇
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▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Tel: ▇▇
▇▇▇ ▇▇▇ ▇▇▇▇
or to
such other address as any of them shall give to the others by notice made
pursuant to this Section
5.2.
5.3.
Interest. The
escrow funds held pursuant to this Escrow Agreement shall not be held in an
interest bearing account nor will interest be payable in connection
therewith.
5.4.
Assignment; Binding
Agreement. Neither this Escrow Agreement nor any right or
obligation hereunder shall be assignable by any party without the prior written
consent of the other parties hereto. This Escrow Agreement shall enure to
the benefit of and be binding upon the parties hereto and their respective legal
representatives, successors and assigns.
5.5.
Invalidity. In
the event that any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal, or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be in any way impaired thereby, it being
intended that all of the rights and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.
5.6.
Counterparts/Execution.
This Escrow Agreement may be executed in any number of counterparts and by
different signatories hereto on separate counterparts, each of which, when so
executed, shall be deemed an original, but all such counterparts shall
constitute but one and the same instrument. This Escrow Agreement may be
executed by facsimile transmission and delivered by facsimile
transmission.
5.7.
Escrow Agreement. Each
of the undersigned states that he has read the foregoing Escrow Agreement and
understands and agrees to it.
IN WITNESS WHEREOF, the
undersigned have executed and delivered this Escrow Agreement, as of the date
first written above.
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“COMPANY”
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▇▇▇▇
ROSE PETROLEUM CORPORATION
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a
Delaware corporation
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By:
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▇▇▇▇▇▇
▇▇▇▇▇▇-▇▇▇▇▇▇▇
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President
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▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Tel: ▇▇
▇▇▇ ▇▇▇ ▇▇▇▇
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ESCROW
AGENT:
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SICHENZIA
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
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By:
|
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Name:
▇▇▇▇ ▇. ▇▇▇▇, Partner
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 |
13-Jan-11
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|||||||||||||||
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Pro Forma Budgets Q1 2011
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||||||||||||||||
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Forecast
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Forecast
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Forecast
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Financial Year End
(estimate)
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|||||||||||||
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Description
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January
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February
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March
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Totals
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||||||||||||
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Field
Personnel
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59,056 | 59,056 | 59,056 | 216,550 | ||||||||||||
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Field
Expenses
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104,335 | 79,056 | 91,131 | 316,208 | ||||||||||||
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Total
Field Operations
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163,391 | 138,112 | 150,187 | 532,758 | ||||||||||||
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Oil
Production Bbls
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3,300 | 5,700 | 5,700 | 17,400 | ||||||||||||
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Oil
Sales Bbls
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3,600 | 6,000 | 5,700 | 18,330 | ||||||||||||
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Total
Oil Receipts
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155,220 | 175,500 | 292,500 | 808,744 | ||||||||||||
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Net
Production Revenue
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(8,171 | ) | 37,388 | 142,313 | 275,986 | |||||||||||
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CapEx
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353,915 | 675,872 | 60,000 | 1,100,849 | ||||||||||||
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Head
Office & Regulatory
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255,486 | 176,736 | 181,343 | 728,381 | ||||||||||||
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Payment
of Exisiting A/P's
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202,357 | 115,000 | 0 | 317,357 | ||||||||||||
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Partial
Payment of Exisiting Legal
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25,000 | 25,000 | 25,000 | 75,000 | ||||||||||||
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Repayment
of Short Term Loans
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22,000 | 0 | 0 | 22,000 | ||||||||||||
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Note
Payments
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144,000 | 0 | 0 | 144,000 | ||||||||||||
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Monthly
Net Cash Flow
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(1,010,928 | ) | (955,220 | ) | (124,029 | ) | (2,090,177 | ) | ||||||||
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Opening
Cash Balance
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28,873 | 539,945 | 184,725 | 28,873 | ||||||||||||
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Inflow
of Funds
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||||||||||||||||
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Short
Term Loans - ▇. ▇▇▇▇▇▇▇
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22,000 | 0 | 0 | 22,000 | ||||||||||||
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Escrow
Draw Down
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1,500,000 | 600,000 | 0 | 2,100,000 | ||||||||||||
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Cum.
Net Cash Flow
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539,945 | 184,725 | 60,696 | 60,696 | ||||||||||||
*▇▇▇▇▇▇▇▇
Chalk have taken responsibiulity for the Authorized Share error and have agreed
to cover the costs - we have allocated $20,000 to legal