EXHIBIT 10.2
WORKING INTEREST PARTICIPATION AGREEMENT
WITH
TRANS-WESTERN PETROLEUM LTD. - COVENANT MONDO
TEREX ENERGY CORPORATION
▇▇▇ ▇▇▇▇ ▇▇. # ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
To: Trans-Western Petroleum, Inc.
Attn: ▇▇▇▇ ▇▇▇▇▇ September 30, 2014
Re: Covenant Mondo Prospect
Working Interest Changed from 10.0% to 14.0%
▇▇▇▇,
Please find included in this package two complete and executed Participation
Agreements for the Covenant Mondo Prospect.
By mutual agreement Terex has increased its participation to a 14.0% working
interest. Additionally, by mutual consent, the previously executed Participation
Agreement executed by Terex for a 10.0% working interest is null and void and of
no force or effect.
The resulting effect is that Terex Energy Corporation is participating for a net
14.0% working interest before the tanks.
The previously paid Cash Call of $327,394 for Terex's 6.95% working interest
will be applied to the new cash call amount of $659,498, leaving a balance due
of $332, 104 for the 14% working interest Terex is taking.
Please acknowledge the foregoing by signing below, and returning a copy along
with one executed original of the Participation Agreement.
Thank you.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇
----------------------------------- -------------------------------
Terex Energy Corporation Trans-Western Petroleum, Inc.
▇▇▇ ▇▇▇▇▇▇▇, CEO ▇▇▇▇ ▇▇▇▇▇ - President
TRANS-WESTERN PETROLEUM, LTD.
Covenant Mondo Prospect
WORKING INTEREST PARTICIPATION AGREEMENT (Non-Operator)
--------------------------------------------------------
THIS Working interest Participation Agreement ("Agreement") is made and
entered into effective as of March 1, 2014, by and between Trans-Western
Petroleum, LTD., a Wyoming corporation ("TWP") and Terex ("INVESTOR")
ARTICLE I
PURCHASE OF WORKING INTEREST
1.01 The INVESTOR hereby purchases 14.0% working interest ("Working Interest")
in the oil and gas leases, subject to the earning requirements herein, which
comprise the Covenant Mondo Prospect as described on Exhibit A ("Properties").
ARTICLE II
PROPERTIES SUBJECT TO AGREEMENT
2.01 DESCRIPTION OF PROPERTIES. The Properties subject to this Agreement are
listed on Exhibit A and made a part hereto as well as a lease ownership status
report prepared by Van Cott, ▇▇▇▇▇▇, Salt Lake City.
ARTICLE III
DELIVERIES AT EXECUTION
3.01 PAYMENTS AT EXECUTION. In connection with the INVESTOR's acquisition of the
Working Interest, the INVESTOR delivers herewith a check payable to
Trans-Western Petroleum, LTD. as scheduled in the first Cash Call in partial
payment of the total estimated amount of $12,600,000 proportionately reduced as
8.333% of working interest purchased bears to the whole, in payment of its
proportionate share of non-refundable Lease acquisition costs of $2,600,000 and
estimated drilling expense of $10,000,000 for the first of two Initial
Commitment ▇▇▇▇▇. The amount of the check from INVESTOR to TWP, in accordance
with the request of the first Cash Call herewith attached, shall be a total of
$659,498 . ($327,394 has previously been paid, leaving the unpaid balance of
$332,104)
ARTICLE IV
INITIAL COMMITMENT ▇▇▇▇▇
INVESTOR hereby accepts responsibility and agrees to pay 14.0% of all costs,
including drilling rig stand-by costs, of two ▇▇▇▇▇ on the Leases in accordance
with the provisions of this Agreement (each, an "Initial Commitment Well" and
collectively, the "Initial Commitment ▇▇▇▇▇"), drilled to the Objective Depth
and tested on a Drilling Unit and Completed either as a dry hole or
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fully equipped through the tanks and capable of producing and selling oil or
gas, or both. If INVESTOR drills an Initial Commitment Well to the Objective
Depth, but, based upon the logs and other data pertaining to the well, TWP
recommends plugging and abandoning the well, then Operator shall proceed to plug
and abandon the well and an Earning Event will be deemed to have occurred with
respect to such Initial Commitment Well.
4.2 Working Interest Conversion and NRI.
The Working Interest (WI) shall convert from 14.00% TO 11.666% after the
completion of the initial two earning ▇▇▇▇▇. The net revenue interest ("NRI")
shall be 77% of W.I. and therefore Net Revenue Interest shall be 8.9833%.
4.3 Payment for Test ▇▇▇▇▇.
The amount paid in 3.01 for estimated drilling and completion costs are only
estimates of the costs of drilling, completing and equipping the two Initial
Commitment ▇▇▇▇▇, and, as such, actual costs may be higher or lower than these
estimates. Any dry hole, bottom hole or other support monies that may be
received will be credited against the cost of drilling either Initial Commitment
▇▇▇▇▇. Any discounts allowed on drilling, completion and operational invoices
will be shared equally by the Working Interest owners charged for the expenses
benefitting from the discount. To the extent that the actual drilling and
completion costs are less than the amount paid for drilling and completion,
operator will refund the excess at the completion of the second Initial
Commitment Well. In the event that drilling or completion costs exceed the
amount paid in 3.01 for estimated drilling and completion costs and upon cash
call by operator for additional estimated costs, INVESTOR will promptly pay to
TWP, within 10 business days, the additional estimate by Operator.
4.4 Substitute ▇▇▇▇▇.
If an Initial Commitment Well encounters drilling conditions or reservoir
conditions in the drilling of the well which in the opinion of a prudent
operator would cause the operator to cease drilling and abandon the hole prior
to Completion, and Operator abandons the hole for such reasons, Operator shall
have the right to spud a substitute well (a "Substitute Well") at the closest
practicable location either, at Operator's election, (i) within 30 days
following the abandonment or (ii) within 30 days following Completion of the
second scheduled Initial Commitment Well. A Substitute Well, if drilled and paid
for in the same manner as required by this Agreement, shall constitute an
Initial Commitment Well. All of the costs of both the abandoned well and the
Substitute Well must be paid by INVESTOR in the manner required by Section 4.01
in order for an Earning Event to occur with respect to the applicable Drilling
Unit.
4.5 Information, Rights.
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(a) INVESTOR shall be entitled to all drilling reports, logs, drill stem test
data, and geological and geophysical maps as allowed by supplier and all
other relevant data as available from Operator. INVESTORs will be entitled,
at all reasonable times, at INVESTOR's sole risk and expense, to have
access to the rig floor and location of all such ▇▇▇▇▇ subject to
compliance with the terms of the access agreement with USG (Exhibit D) and
insurance provisions therein.
(b) INVESTOR will not disclose, publish, nor announce in any manner whatsoever
to any person not a party to this agreement any results or information from
any of the contemplated operations herein without the written consent of
TWP. Such consent shall not unreasonably be withheld.
4.6 Certain Defined Terms.
(a) The term "Completed," "Completing" or "Completion" means, with respect to
an Initial Commitment Well:
(i) Running production casing;
(ii) Procuring and installing flow lines, wellheads, tanks, water disposal
facilities and other production equipment required for producing and
selling oil or gas on a continuing daily basis.
(b) The term " 2nd Navajo Sandstone" means the correlative interval identified
as occurring between the depths of 8,312 df and 8,620 df as identified on
the Dual Induction log of the Wolverine Gas and Oil #1 ▇▇▇▇▇▇ Peak Federal
1-13 located in the ▇▇▇▇ ▇▇ ▇▇▇. ▇▇ ▇▇▇▇,▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇;
(c) The term "Objective Depth" means the lesser of:
(i) A total vertical depth of 9,600 (measured from the surface of the
earth); or
(ii) A depth at least 500 feet into the Navajo Sandstone Formation
whichever is the lesser
ARTICLE V
ASSIGNMENTS
5.01 Rights Earned By Drilling Unit.
(a) Upon each Earning Event with respect to a Drilling Unit, INVESTOR will earn
.83333% of 14.00% Working Interest (the "INVESTOR Earned Interest").
Notwithstanding the creation of a pooled unit larger than 160 acres with
respect to an Initial Commitment Well, INVESTOR will only earn a Drilling
Unit for each Initial Commitment Well drilled and Completed (or, upon the
mutual written consent of the Parties, plugged and abandoned) until the
occurrence of the Final
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Earning Event.
(b) The term "Drilling Unit" means, in relation to an Initial Commitment Well,
an acreage block of lands subject to the Leases consisting of 40 acres,
plus or minus 10%, which surrounds the Initial Commitment Well. TWP will
determine, in its sole discretion, the configuration of each Drilling Unit.
5.02 Interest to Be Assigned in Drilling Unit.
(a) Within 30 days of an Earning Event (as hereafter defined) with respect to a
Drilling Unit, TWP shall assign to INVESTOR, by assignment in similar form
to the draft assignment attached hereto as Exhibit F (the "Assignment"),
the INVESTOR Earned Interest. The Assignment shall deliver to INVESTOR the
Working interest and Revenue Interest defined in section 4.02. The
Assignment shall be made without warranty of title whatsoever except by,
through and under TWP, but to no further extent.
(b) The term "Earning Event" means the occurrence of all of (i), (ii) and
(iii), below:
(i) an Initial Commitment Well or, as the case may be, a Substitute Well,
has been drilled to the Objective Depth;
(ii) such well has been Completed (which Completion, upon the mutual
written consent of the Parties, may be at a depth shallower than the
Objective Depth) or, upon mutual written consent of the Parties,
plugged and abandoned with the drilling rig pursuant to Section 4.01
of this Agreement without attempting a Completion; and
(iii)INVESTOR has paid all costs and expenses attributable to such Initial
Commitment Well for which it is responsible for paying under this
Agreement.
5.03 FINAL EARNING EVENT. Within 30 days of the occurrence of the Earning Event
with respect to the second of the two Initial Commitment ▇▇▇▇▇ (the "Final
Earning Event"), TWP will assign to INVESTOR, in addition to INVESTOR's
proportionate share of the Drilling Unit associated with the second Initial
Commitment Well, the same proportionate share of the remaining Leases not yet
assigned to INVESTOR, subject to the reservation of an overriding royalty in the
amount defined in section 4.02. The Assignment shall be for all depths and will
be made without warranty of title whatsoever except by, through and under TWP,
but to no further extent. This Assignment shall be effected pursuant to a
document substantially in the same form attached hereto as Exhibit "F".
ARTICLE VI
JOA: DEVELOPMENT FOLLOWING INITIAL COMMITMENT ▇▇▇▇▇ EARNING PHASE
6.01 HEADS-UP OPERATIONS.
(a) Upon execution of this Agreement, the Parties hereby also acknowledge
and agree to the terms of the Operating Agreement attached hereto as
Exhibit G (the "JOA") covering the
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proposed Drilling Units with respect to the Initial Commitment ▇▇▇▇▇,
naming PNC as operator. Although the parties acknowledge the JOA
naming PNC as operator, the Parties also acknowledge that TWP has
succeeded PNC as operator and TWP is the current operator for the
Initial Commitment ▇▇▇▇▇, any Substitute ▇▇▇▇▇, and any Subsequent
▇▇▇▇▇ drilled under the JOA and for all the Leases.
(b) Leases earned by INVESTOR according to Section 5.03 hereof, will be
deemed to be added to Exhibit "A" of the JOA upon the occurrence of
the Final Earning Event.
(c) In the event of any conflict or inconsistency between the terms of
this Agreement and any JOA between the Parties, this Agreement shall
prevail to the extent of such conflict or inconsistency.
(d) Subject to the terms of this Agreement, after the Completion of the
two Initial Commitment ▇▇▇▇▇, the JOA will govern all operations on
such ▇▇▇▇▇ and all costs and expenses of operations with respect to
the Initial Commitment ▇▇▇▇▇ will be borne and paid by PNC and TWP and
INVESTORS according to their proportionate working interest in the
Leases, as defined after the Final Earning Event, subject to the
consent and non-consent provisions of the JOA and the terms and
conditions of the JOA relating to subsequent operations.
(e) No Party may propose the drilling of ▇▇▇▇▇ (other than an Initial
Commitment Well) in the AMI (as hereafter defined) until after the
Final Earning Event and only ▇▇▇▇▇ that constitute an economic and
orderly development of the AMI and which are commensurate with the
cash flow derived from the proceeds from production from existing
▇▇▇▇▇ located within the AMI may be proposed.
(f) The Parties shall cooperate to preserve any options or opportunities
to extend the term of any Leases not held by production and the
Operating Agreement.
(g) Operating Agreement. The INVESTOR agrees that TWP shall be the
operator of the Properties and the J.O.A. shall be updated to reflect
the change of Operator at the time the Schedule of Working Interest
Owners is updated.
(h) INVESTOR hereby acknowledges the preceding Participation Agreement by
and between Tellus/PNC and Trans-Western Petroleum, Inc. which is
Exhibit F (1) to this agreement.
ARTICLE VII
AMI
7.01 AREA OF MUTUAL INTEREST.
(a) There is hereby created an Area of Mutual Interest (the "AMI") which
shall consist of the lands within the boundary of the following
described lands:
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
All of Sections: 11, 12, 13, 14, 15, 21, 22, 23, 24, 25, 26, 27, 28,
29, 31, 32, 33, 34, 35, 36
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▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
All of Sections: 2, 3, 4, 5, 6
(b) If, during the period beginning February 23, 2014 and ending at
midnight on May 31, 2016 (the "Initial Term") and, as to any lands in
the AMI subject to the JOA as of the end of the Initial Term,
thereafter, for so long as the JOA remains in effect, either Party
acquires an oil, gas and mineral lease, mineral interest, overriding
royalty interest, royalty interest or any other interest in oil or gas
or any contractual right to acquire interests in oil and gas leases,
such as through farmin agreements (any of which is referred to herein
as an "Interest" or collectively as "Interests") within the AMI, the
acquiring Party shall, within sixty (60) days of finalizing the
acquisition, offer to the non-acquiring Party the right to purchase
the same percentage of such Interest as that owned in the Properties
(proportionately reduced) by the non-acquiring Party (the
"Non-acquiring Party's Percentage Interest") by paying the
Non-acquiring Party's Percentage Interest of the acquiring Party's
costs (such costs to include, but are not necessarily limited to, the
acquiring Party's land work with respect to the Interest, the lease
bonus, option payments, broker fees, filing fees and cost of third
party title examination). If an acquisition of Interests includes
Interests in lands both within the AMI as well as outside the AMI, the
acquisition will be considered to be entirely within the AMI. If two
or more Interests are included in a single notice, the non-acquiring
Party will have the right to make separate elections as to each of the
acquired Interests. Notwithstanding the foregoing, TWP will not offer
any Interests until the two Initial Commitment ▇▇▇▇▇ have been drilled
and completed as provided herein.
(c) An offer made pursuant to this AMI must be in writing and include
sufficient information for the non-acquiring Party to reasonably
evaluate the offer, including a complete description of the acquired
Interest and information specifying the number of gross and net lease
acres, existing overriding royalties or other burdens affecting the
Interest, the purchase price and the terms of the acquisition, as well
as the actual acquisition costs, the obligations required to earn such
interest, including bonus considerations or equivalent if other than
cash, broker's fees, recording fees, and rentals, and any other
information the acquiring Party deems relevant to the acquisition of
the Interest. The offer should be made in the manner for giving any
other notices under this Agreement. The Party receiving the offer
shall have 30 days (the "Acceptance Period") following receipt of such
notice in which to elect to participate in the acquisition and to
submit payment for its share.
(d) If the non-acquiring Party elects to participate, the acquinng Party
shall assign the applicable percentage interest in the Interest to the
non-acquiring Party within ten (10) business days of receiving the
non-acquiring Party's payment, free and clear of any burdens other
than the additional TWP Override as provided in this sub-paragraph
7.01(d) and those arising under the terms and provisions of the
applicable agreements and instruments giving rise to the Interest and
any intervening transfers thereof up to the time of acquisition by the
acquiring Party. In the event TWP is the non-acquiring Party, INVESTOR
shall assign to TWP the applicable percentage interest in the Interest
plus an additional TWP Override proportionately reduced in accordance
with the applicable interest in the acquired Interest. In the event
INVESTOR is the non-acquiring Party, TWP shall assign to INVESTOR the
applicable percentage interest in the Interest, reserving therefrom an
additional TWP Override proportionately reduced in accordance with the
applicable interest in the acquired Interest. Any
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Interest in which both Parties participate shall be subject to the
provisions of this Agreement and the JOA. Failure of the non-acquiring
Party to (i) respond in writing to an acquisition notice within the
Acceptance Period, or (ii) pay for its share of costs within the
Acceptance Period will be deemed an election not to acquire a share of
the Interest.
(e) If an Interest is to be earned by drilling ▇▇▇▇▇ or shooting seismic,
the non-acquiring Party must ratify all appropriate agreements within
the Acceptance Period and agree to participate in and pay for such
required operations. If the non-acquiring Party turns down any
Interest or fails to pay for its share of such Interest, the acquiring
Party shall hold such interest free and clear of any further
obligations under this Agreement and the JOA.
(f) Notwithstanding anything herein to the contrary, the provisions set
forth in this Article will not apply to any acquisitions which (i)
result from a merger, consolidation, reorganization with, by, or
between a Party and another party, (ii) result from a merger or
acquisition of the stock of another company or all of an entity or
partnership or an acquisition of all or substantially all of the
assets of an entity by the acquiring Party, whether by cash, like-kind
exchange, stock purchase or otherwise, or (iii) result from transfers
of ownership among the Parties or their affiliates, members, or
related parties of the Leases subject to this Agreement or an Interest
acquired pursuant to this Article.
(g) Each Party stipulates that it is not, and shall not become, a party to
any other area of common interest or similar agreement that is in
conflict with this AMI agreement.
(h) Nothing in this AMI Article VII shall provide any benefit to any
non-affiliate or third-party or entitle any non-affiliate or
third-party to any claim, cause of action, remedy, or right of any
kind, it being the intent of the Parties that this AMI provision shall
not be construed as a third-party beneficiary contract.
ARTICLE VIII
DEFAULTS AND REMEDIES
8.01 DEFAULTS.
(a) It will be a default under this Agreement (a "Default") if INVESTOR:
(i) fails to pay, when due, any of the costs and expenses of the
Initial Commitment ▇▇▇▇▇;
(b) INVESTOR may cure a Default if INVESTOR, after receiving written
notice from TWP demanding cure of such Default, (i) cures the Default
within 7 days following written notice; or (ii) if the cure requires
more than 7 days, immediately initiates steps which TWP deems in its
reasonable judgment to be sufficient to cure the Default and
thereafter continues and completes all reasonable steps sufficient to
produce compliance as soon as reasonably practicable. If INVESTOR
fails to cure a Default within the applicable grace period set forth
above, this Agreement will terminate in its entirety and:
(i) INVESTOR will have no further right to earn any Leases, other
than Leases included
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in Drilling Units, the Earning Event with respect to which
occurred prior to the termination under this Section 8.01; and
8.2 OTHER DEFAULTS. In the event of a Default or any other breach of this
Agreement by either Party, the non-breaching Party may pursue dispute resolution
as set forth in Article X.
8.3 GENERAL SURVIVAL. The termination of this Agreement shall not relieve any
Party from any expense, liability, or other obligation, or any remedy which has
accrued or attached or which is related to or attributable to the period prior
to such termination.
ARTICLE IX
REPRESENTATIONS AND WARRANTIES
9.1 MUTUAL REPRESENTATIONS. Each Party, with respect to itself only, hereby
represents and warrants to the other Party the following:
(a) it is duly organized, validly existing and in good standing under the
applicable laws of its state or nation of incorporation or formation,
and is qualified to do business and is in good standing in the State
of UTAH and in every other jurisdiction where the failure to so
qualify would have a material adverse effect on its ability to
execute, deliver and perform this Agreement and the other agreements
contemplated herein;
(b) it has all requisite power and authority to (i) own, lease or operate
its assets and properties and to carry on the business as now
conducted, and (ii) enter into and perform its obligations under this
Agreement and to carry out the transactions contemplated hereby;
(c) it has taken (or caused to be taken) all acts and other proceedings
required to be taken by such Party to authorize the execution,
delivery and performance by such Party of this Agreement and the other
agreements contemplated herein. This Agreement has been duly executed
and delivered by such Party and constitutes the valid and binding
obligation of such Party, enforceable against such Party in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, moratorium, reorganization or similar laws affecting the
rights of creditors generally and by principles of equity, whether
considered in a proceeding at law or in equity;
(d) there are no actions, suits or proceedings pending or, to such Party's
knowledge, threatened against such Party which if decided unfavorably
to such Party could have a material adverse effect on the ability of
such Party to execute, deliver or perform this Agreement or the other
agreements contemplated herein or have a material adverse effect on
the Properties;
(e) it has not incurred any obligation or liability, contingent or
otherwise, for any fee payable to a broker or finder with respect to
the matters provided for in this Agreement or the other agreements
contemplated herein which could be attributable to or charged to any
other Party. In this regard, each Party shall indemnify, defend and
hold harmless the other Party from any claims, damages, liabilities,
costs and expenses, including reasonable attorney's fees in the event
the prior sentence should be or become untrue as to such Party.
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9.2 INVESTOR REPRESENTATIONS. INVESTOR represents and warrants to TWP that it
has, as of the Effective Date, unencumbered assets or the unconditional right to
funds in an amount sufficient to satisfy its obligations under this Agreement.
9.03. THE INVESTOR'S REPRESENTATIONS AND WARRANTIES. To induce TWP to accept the
INVESTOR's purchase of the Working Interest, the INVESTOR acknowledges,
represents, warrants and agrees as follows, which shall survive the INVESTOR's
purchase of the Working Interest:
a. The INVESTOR is an experienced and knowledgeable INVESTOR in Oil and
Gas Ventures and represents that he has participated in many ventures
similar to the venture herein contemplated.
b. The INVESTOR recognizes that the Working Interest involves a high
degree of risk of loss, including those risks associated with oil and
gas exploration generally and those unique to the Utah Hingeline Area
in particular.
c. The INVESTOR (i) is a sophisticated INVESTOR having business,
financial and investment experience sufficient to enable him to
evaluate the merits and risks of the purchase of the Working Interest,
(ii) has adequate means of providing for his current needs and
possible personal contingencies, (iii) is able to bear the illiquidity
and substantial risk of the purchase of the Working Interest, (iv) at
the present time can afford a complete loss of such investment and (v)
does not have an overall commitment to investments which are not
readily marketable that is disproportionate to the INVESTOR's net
worth, and the INVESTOR's purchase of the Working Interest will not
cause such overall commitment to become excessive. In making this
investment decision, the INVESTOR has obtained such advice from
investment advisors, legal counsel and accountants as is deemed
necessary, and has not relied upon the advice of TWP or any of their
officers or managers.
d. The INVESTOR understands that the Working Interests have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any state securities laws, and are being offered
and sold in reliance upon applicable federal and state exemptions with
respect to transactions not involving any public offering. The
INVESTOR will not transfer the Working Interest unless the transfer is
exempt from registration under such laws. The INVESTOR is aware that
there is no market for the Working Interest and that no such market
will ever develop.
e. The INVESTOR will not sell, assign, transfer, encumber or otherwise
dispose of the Working Interest, or any portion thereof, in any manner
that would violate the Securities Act, the rules and regulations of
the Securities and Exchange Commission or the laws or regulations of
any state.
f. The Working Interest is being purchased solely for the INVESTOR's own
Account, for investment purposes only and not for the account of any
other person, and not for distribution
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assignment or resale to others, and no other person has a direct or
indirect beneficial interest in such Working Interest.
g. If the INVESTOR is a corporation, trust, foundation, partnership or
any other entity, such entity is authorized and otherwise duly
qualified and empowered to execute and deliver this Agreement and
thereupon shall become legally bound thereby. All necessary actions
have been taken to authorize and approve the purchase of the Working
Interest.
h. The representations provided to TWP by the INVESTOR herein are true
and correct in all respects as of the date hereof or, if there have
been any changes in such information since the date it was furnished,
the INVESTOR has advised TWP in writing of such changes.
i. The undersigned is an "accredited INVESTOR" as that term is defined in
Rule 501 promulgated under the Securities Act and, with respect
thereto, the INVESTOR reaffirms the representations regarding such
status.
9.4 INDEMNIFICATION. The undersigned agrees to indemnify and hold harmless TWP
the managers, officers, directors and affiliates from and against all damages,
losses, costs and expenses (including reasonable attorneys' fees) which they may
incur by reason of the failure of the INVESTOR to fulfill any of the terms or
conditions of this Agreement, or by reason of any breach of the representations
and warranties made by the INVESTOR herein or in the INVESTOR's Accredited
INVESTOR Status.
9.5 MISCELLANEOUS.
a. This Agreement, and the Operating Agreement attached hereto,
constitute the entire agreement among the parties hereto with respect
to the subject matter hereof and may be amended only by a writing
executed by all parties.
b. This Agreement shall be enforced, governed and construed in all
respects in accordance with the laws of the State of Utah.
c. The representations and warranties of the undersigned set forth herein
shall survive the sale of the Working Interest pursuant to this
Agreement.
d. All terms and words used in this Agreement, regardless of numbers and
genders in which they are used, shall be deemed to include the
singular or plural and all genders as the context or sense of this
Agreement, or any section or clause herein, may require.
9.6 NO OTHER REPRESENTATIONS. Other than the representations and warranties
expressly set forth in this Agreement and the Assignment, neither Party makes
any representations or warranties to the other concerning the subject matter of
this Agreement.
ARTICLE X
DISPUTE RESOLUTION
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10.1 DISPUTES. Any dispute under this Agreement must be submitted to the dispute
resolution procedures of this Article X and the resolution will be final and
binding upon the Parties. Any dispute may be submitted to these procedures upon
the written request of the Party seeking resolution.
10.2 ARBITRATION PANEL. The arbitration panel must consist of two members who
are familiar by training and experience with the operation of oil and gas ▇▇▇▇▇
and the business and land title issues common in the oil and gas industry
(individually, a "▇▇▇▇▇▇," collectively, the "Laymen"). The third member must be
an attorney whose practice deals with oil and gas issues (whether from a
regulatory, operational or business perspective). Each Party will choose one
▇▇▇▇▇▇, and the Laymen will choose the attorney member of the panel.
10.3 SUBMISSION TO ARBITRATION.
(a) Either Party may request arbitration by submitting a written request
to the other Party. The written request for arbitration must include
the requesting Party's choice of a ▇▇▇▇▇▇ to serve as arbitrator.
(b) The Party receiving the notice must respond to the requesting Party
within 15 days of the receipt of the notice. The response must include
its own choice of a ▇▇▇▇▇▇ to serve as arbitrator.
(c) The two Laymen must meet within 15 days of the date of the response
letter to choose an attorney to serve as the third arbitrator. The two
Laymen must use reasonable efforts to choose a third arbitrator who
will be impartial and independent of the Parties. The arbitration will
commence within 30 days after the third member of the arbitration
panel is selected.
(d) If the responding Party fails or refuses to appoint an arbitrator, or
the Laymen are unable to agree upon a third arbitrator, either Party
may request a Judge from the federal or state court of competent
jurisdiction in Salt Lake County, Utah or such other person designated
by such Judge to select an arbitrator or arbitrators, as the case may
be, as soon as possible. (e) Any arbitration hearing, if one is
desired by the arbitration panel, must be held in the State of Utah.
The arbitration panel may elect to conduct the proceeding by written
submissions from the Parties with exhibits, including interrogatories,
supplemented with appearances by the Parties as the arbitration panel
may desire. The arbitration proceeding, subject only to the terms
hereof, should be conducted informally and expeditiously and in such a
manner as to result in a good faith resolution as soon as reasonably
possible under the circumstances.
(f) The award, and any other decision by the arbitration panel, must be by
majority vote of the arbitrators. The decision of the arbitration
panel with respect to any disputed matters submitted to the
arbitration panel will be reduced to writing, signed by each
arbitrator and binding on the parties. Judgment upon the award(s)
rendered by the arbitration panel may be entered and execution had in
any court of competent jurisdiction, or application may be made to
such court for a judicial acceptance of the award and an order of
enforcement.
(g) Each Party will bear their own legal fees and other costs incurred in
presenting their
Page 11 of 21
respective cases, and the fees and expenses of the arbitrator
appointed by that Party. The charges and expenses of the third
arbitrator will be shared equally by the Parties.
10.4 PROCEDURE.
(a) In fulfilling its duties hereunder, the arbitration panel may consult
with and engage disinterested third parties to advise the arbitration
panel including, without limitation, engineers, attorneys, accountants
and consultants, and the fees and expenses of such third parties will
be considered to be charges and expenses of the arbitration panel.
(b) The arbitration panel may not award punitive, consequential , special
or incidental damages.
10.5 REPLACEMENT ARBITRATOR. Any replacement arbitrator, should one become
necessary, will be selected in the same manner as the original arbitrators were
selected.
10.6 EXCLUSIVITY. No lawsuit based on a dispute under this Agreement may be
instituted by either Party, other than to compel arbitration proceedings or
enforce the award of the arbitration panel.
10.7 PRIVILEGES. The arbitration proceedings and arbitration award shall be
maintained by the parties as strictly confidential, except as is otherwise
required by court order or as is necessary to confirm, vacate or enforce the
award and for disclosure in confidence to the parties' respective attorneys, tax
advisors and senior management.
ARTICLE XI MISCELLANEOUS
11.01 FORCE MAJEURE. If any Party is rendered unable, wholly or in part by force
majeure, to carry out its obligations under this Agreement, other than any
obligation to make any money payments (which obligation will never be extended
due to force majeure), such Party must give to the other Party prompt written
notice of the force majeure, with reasonably full particulars, and thereupon the
obligations of the Party giving the notice, so far as they are affected by the
act of force majeure, will be suspended, and the running of all time periods
within which certain actions affected by force majeure must be completed will be
tolled, during, but not longer, than the continuance of the force majeure, plus
such reasonable further period of time, if any, required to resume the suspended
operation. The affected Party must use all reasonable diligence to remove the
force majeure situation as quickly as practicable; provided, that it will not be
required to settle strikes, lockouts or other labor difficulty contrary to its
wishes. All such difficulties are to be handled entirely within the discretion
of the Party concerned. "Force majeure" means an act of nature, strike, lock-out
or other industrial disturbance, act of the public enemy, war, blockade, public
riot, lightning, fire, storm, flood or other adverse weather condition,
explosion, inability to obtain surface access, governmental action, governmental
inaction, restraint or delay, or any other cause, whether of the kind
specifically enumerated above or otherwise, which is not reasonably within the
control of the Party claiming force majeure, but not the unavailability of
drilling rigs or equipment.
Page 12 of 21
11.2 MONETARY AMOUNTS. All monetary amounts stated in this Agreement are cited
in, and must be paid in, United States dollars.
11.3 FURTHER ASSURANCES. As necessary, the Parties shall execute any other
documents including, but not limited to, any documents, forms, etc. required by
any governmental organization or authority, and take such other action necessary
to effectuate the terms and provisions of this Agreement and/or the JOA,
whichever is applicable including, but not limited to, designation of operator
forms and other similar matters.
11.04 TAX PARTNERSHIP. The rights, duties, obligations and liabilities of the
Parties shall be several, not joint or collective. It is not the purpose or
intention to create any mining partnership, joint venture, general partnership
or other partnership relation and none shall be inferred. Notwithstanding the
foregoing, the Parties agree that the undertakings herein will be treated as a
partnership for purposes of federal income taxation. Therefore, the Parties
agree to be governed, for federal income tax purposes only, by the tax
partnership provisions attached to the Operating Agreement as Exhibit G. For
every purpose other than the above described income tax purposes, however, and
notwithstanding any other provision of this Agreement to the contrary, the
Parties understand and agree that their relationship hereunder is not one of
partnership, association, trust, joint venture, mining partnership or entity of
any kind. . Nothing contained herein or in the Operating Agreement shall be
construed as creating a mining partnership or other partnership among the
parties hereto. The Investor agrees that an election shall be made for the
operations of the parties to be excluded from the provisions of Subchapter K of
Chapter I of Subtitle A of the Internal Revenue Code of 1986, as amended or
similar provisions of applicable state laws. TWP shall make available to the
Investor and the other Working Interest owners information relating to the
expenses and revenues of the Program at the times and in the manner specified in
the Operating Agreement. The Investor and the other Working Interest owners
shall be solely responsible for their own accounting, tax information and tax
filings. To the extent permitted by law, all deductions and credits, including,
but not limited to, intangible drilling and development costs, depreciation and
rental expenses, and depletion, shall be allocated to each Working Interest
owner in proportion to its percentage Working Interest for payment of the
expenditures giving rise to such deductions and credits and, to the extent
permitted by law, such parties shall be entitled to such deductions and credits
in computing taxable income or tax liabilities to the exclusion of any other
person.
11.5 TAXES AND RECORDING FEES. Any sales taxes, transfer taxes, documentary
taxes and recording fees relating to an assignment hereunder shall be paid by
the assignee. Subject to the terms of any JOA, each Party shall be responsible
for its own local, state and federal income tax reporting, recognition of gain
or loss, if any, severance taxes, oil and gas conservations fees, and the taxes,
if any, payable with respect to the transaction.
11.6 GOVERNING LAW. This Agreement shall be governed, construed, and enforced in
all respects, including validity, interpretation, and effect, according to the
laws of the State of Utah,
Page 13 of 21
excluding any conflicts of law rule or principle that might apply the law of
another jurisdiction. Subject to the Dispute Resolution provisions in Article X
hereof, in the event of a dispute hereunder, it is agreed that the exclusive
venue shall be in either a federal or state court of competent jurisdiction in
Salt Lake County, Utah, and the Parties hereto agree to submit to the
jurisdiction of such court.
11.7 WAIVER OF CONSEQUENTIAL DAMAGES. NOTWITHSTANDING ANYTHING TO THE CONTRARY
IN THIS AGREEMENT, THE PARTIES EXPRESSLY AGREE THAT NO PARTY SHALL BE LIABLE FOR
ANY EXEMPLARY, PUNITIVE, SPECIAL, INDIRECT, CONSEQUENTIAL, REMOTE, OR
SPECULATIVE DAMAGES SUFFERED BY THE OTHER PARTY IN CONNECTION WITH THIS
AGREEMENT.
11.8 INHERENT RISK. Each Party hereby acknowledges its understanding and
acceptance of the inherent risks associated with the exploration for oil and
gas.
11.9 CONFIDENTIALITY. Except as expressly set forth herein and except as
required by applicable laws or rules and regulations of any administrative or
governmental agency or entity, the Parties hereto acknowledge and agree that
this Agreement, their negotiations in connection herewith and all information
obtained by or provided to any of them in connection with the matters
contemplated herein or as it relates to the Properties will be maintained as
confidential, except for disclosures to representatives of the Parties, their
respective legal, geological and financial advisors, and as otherwise consented
to by the Parties, such consent not to be unreasonably withheld.
11.1O NOTICES.
(a) All notices required or permitted under this Agreement shall be in
writing and delivered in person, by overnight courier, by certified or
registered mail return receipt requested, by facsimile, or by
electronic transmission, delivered or addressed to the persons and at
the addresses as provided below. A notice shall be deemed given when
received by the Party to whom it is directed. When a response to the
other Party is required, each Party's response shall be in writing to
the other Party.
(b) A notice is deemed to have been received as follows:
(i) if a notice is delivered in person, upon receipt as indicated by
the date on the signed receipt;
(ii) if a notice is sent by Registered or Certified Mail, upon the
earlier of (1) receipt as indicated by the date on the signed
receipt or (2) five days after such notice is deposited in the
mail;
(iii)if a notice is sent by nationally recognized overnight courier,
upon receipt as indicated by the date on the signed receipt;
(iv) if a notice is sent by facsimile, upon receipt by the party
giving or making such notice of an acknowledgment or transmission
report generated by the machine from which the (i)
Page 14 of 21
facsimile was sent indicating that the facsimile was sent in its
entirety to the addressee's facsimile number;
(v) if a notice involving an item that causes a response period or
other time period set forth in this Agreement (a "time-sensitive
matter") to commence is sent by electronic transmission, upon the
notifying party's receipt of a response from the addressee by
electronic transmission or other written or facsimile recognition
of receipt of such electronic transmission; transmission, when
transmitted if transmitted prior to 9:00 a.m. on a business day,
and otherwise on the next business day following transmission;
and
(vii)if the addressee rejects or otherwise refuses to accept a
notice, or if the notice cannot be delivered because of a change
in address for which no notice was given to the Party attempting
to give or make such notice, then upon the rejection, refusal, or
inability to deliver.
(c) Notwithstanding the foregoing subsections (i) through (vii) above,
except as expressly provided to the contrary in subsection (vi) above,
if a notice is received after 5:00 P.M. on a business day where the
addressee is located, or on a day that is not a business day where the
addressee is located , such notice is deemed received at 9:00 A.M. on
the next business day where the addressee is located.
ADDRESSES
OPERATOR: TRANS-WESTERN PETROLEUM, INC.
▇▇▇▇ lsern, President
P. 0. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇ ▇▇▇ ▇▇▇ ▇▇▇▇
INVESTOR:
TEREX ENERGY CORPORATION
▇▇▇ ▇▇▇▇ ▇▇., #▇▇▇
▇▇▇▇▇▇▇▇▇▇,▇▇ ▇▇▇▇▇
11.11 HEADINGS FOR CONVENIENCE. All captions, numbering sequences, and headings
used in this Agreement are inserted for convenience only and shall in no way
define, limit or describe the scope or intent of this Agreement or any part
thereof, nor have any legal effect other than to aid a reasonable interpretation
of this Agreement. A reference to "Article" or "Section" is to an Article or
Section of this Agreement.
11.12 AMENDMENT. No provision of this Agreement shall be modified or amended
except by the written agreements of the parties except that TWP may extend and
amend any deadline contained herein at its sole discretion, provided that it is
in writing.
11.13 SEVERANCE OF INVALID PROVISIONS. In case of a conflict between the
provisions of this Agreement and the provisions of any applicable laws or
regulations, the provisions of the laws
Page 15 of 21
for regulations shall govern over the provisions of this Agreement. If, for any
reason and for so long as, any clause or provision of this Agreement is held by
a court of competent jurisdiction to be illegal, invalid, unenforceable or
unconscionable under any present or future law (or interpretation thereof), the
remainder of this Agreement shall not be affected by such illegality or
invalidity. Any such invalid provision shall be deemed severed from this
Agreement as if this Agreement had been executed with the invalid provisions
eliminated. The surviving provisions of this Agreement shall remain in full
force and effect unless the removal of the invalid provisions destroys the
legitimate purposes of this Agreement; in which event this Agreement shall no
longer be of any force or effect. The Parties shall negotiate in good faith for
any required modifications to this Agreement required as a result of this
provision. The provisions of this Participation Agreement shall control if there
are any conflictions or contradictions with the J.O.A. attached and a part
hereof as Exhibit "G".
11.11 BINDING EFFECT. This Agreement shall extend to, inure to the benefit of,
and be binding upon the Parties and each of their respective heirs, successors
and assigns and shall constitute a covenant running with the Properties. Any
Party may assign this Agreement, provided, however, that no such assignment will
relieve the assigning Party of its obligations hereunder without the express
written consent of the other Party.
11.12 ENTIRE AGREEMENT. This Agreement and the documents referred to herein and
to be delivered pursuant hereto constitute the entire agreement between the
Parties pertaining to the subject matter hereof, and supersede all prior and
contemporaneous agreements, understandings, negotiations and discussions of the
Parties, whether oral or written, and there are no warranties, representations
or other agreements between the Parties in connection with the subject matter
hereof, except as specifically set forth herein or therein.
11.13 COUNTERPARTS: FACSIMIL E SIGNATURE. The Parties may execute this Agreement
in any number of duplicate originals, each of which constitutes an original, and
all of which, collectively, constitute only one Agreement. The Parties may
execute this Agreement in counterparts, each of which constitutes an original,
and all of which, collectively, constitute only one Agreement. Delivery of an
executed counterpart signature page by facsimile is as effective as executing
and delivering this Agreement in the presence of the other Party hereto. This
Agreement is effective upon delivery of one executed counterpart from each Party
to the other Party. In proving this Agreement, a Party must produce or account
only for the executed counterpart of the Party to the other Party.
11.14 CAPITALIZED TERMS. Capitalized terms used herein have the meaning given to
such terms as in their first use herein.
LIST OF EXHIBITS:
Exhibit A The Properties (Attached)
Exhibit B Van Cott Lease Status Report (Delivered Electronically)
Exhibit C Statement of Interest (Attached)
Exhibit D Operations (Access) Agreement with USG (Delivered Electronically)
Exhibit E Commitment Well Locations (Attached)
Exhibit F (1) Tellus/PNC Participation Agreement (Delivered Electronically)
Page 16 of 21
Exhibit F Form of Assignment
Exhibit G J.O.A. dated December 1, 2013 (Delivered Electronically)
Exhibit H Exhibits to J.0.A (Delivered Electronically)
Exhibit I Amended and Restated Tellus/PNC Participation Agreement April 1
EXHIBIT A
Properties
l. American Gypsum Oil and Gas Lease, dated June 30, 2011, 3 year Term with
options for extension to 10 years. Recorded Book 0660 pages 0866-0874
Land Description:
PARCEL 1: ▇▇▇▇▇ 121 Placer Mining Claim, amended Sigurd Quarry #24 Placer Mining
Claim and ▇▇▇▇▇▇▇▇ #4 Placer Mining Claim, comprising the South Half of the
Southwest Quarter of the Southeast Quarter (S/2SW/4SE/4), and the South Half of
the Southeast Quarter of the Southeast Quarter (S/2SE/4SE/4) of Section 28, and
the Northeast Quarter (NE/4) of Section 33, All in Township 22 South, Range 1
West, Salt Lake Meridian, as described in United States Patent #1128755 issued
April 19, 1950, and containing 200 acres of land, more or less.
PARCEL 2: Keenes #2 Placer Mining Claim, (also known as ▇▇▇▇▇ #2), comprising
Lots 5, 6, 11 and 12 of Section ▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ 1 West, Salt Lake
Meridian, as described in United States Patent #1128083, issued January 30,
1950, and containing 160 acres of land, more or less.
PARCEL 3: ▇▇▇▇▇ #s 22 to 25 inclusive Placer Mining Claims, amended to include
▇▇▇▇▇ #s 53 to 60, inclusive, and Sigurd Quarry Is 23 and 43, comprising ▇▇▇▇ ▇,
▇, ▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ of the South Half of the Southeast Quarter
(N/2S/2SE/4), and the North Half of the Southeast Quarter (N/2SE/4) of ▇▇▇▇▇▇▇
▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ 1 West, Salt Lake Meridian, as described in United
States Patent #1128764 issued April 20, 1950, and containing 280 acres of land,
more or less.
PARCEL 4: ▇▇▇▇▇▇▇▇ #s 1 and 3, and the West Half (W/2) of ▇▇▇▇▇▇▇▇ #2 Placer
Mining Claims, comprising the Northeast Quarter (NE/4) the West Half of the
Southeast Quarter (W/2SE/4), and the Southwest Quarter (SW/4) of Section 27,
Township 22 South, Range 1 Nest, Salt Lake Meridian, as described in United
States Patent #1128084, issued January 30, 1950, and containing 400 acres of
land, more or less.
PARCEL 5: Mammoth Gypsum Placer Mining Claim (also known as the East Half (E/2)
of Jumbo Gypsum #23 Placer Mining Claim), comprising the East Half of the
Northwest Quarter (E/2NW/4) of Section ▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ 1 West, Salt
Lake Meridian, as described in United States Patent #1128085 issued on January
30, 1950, and containing 80 acres or land, more or less.
PARCEL 6: ▇▇▇▇▇▇▇▇ #s 5, 6, and 7 Consolidated Placer Mining Claims, comprising
the
Page 17 of ▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (SE/4) of Section 33, and the Southwest Quarter (SW/4), and
the Northwest Quarter (NW/4) of Section ▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ 1 West,
Salt Lake Meridian, as described in United States Patent #1160422, dated June 7,
1956, and containing 480 acres, more or less.
PARCEL 7: Sigurd Quarry #s 9, 13, 14, 15, 16, 17, 18 and 19, and ▇▇▇▇▇ #64
(Amended) comprising ▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (▇▇/▇) of
Section ▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ 1 West, Salt Lake Meridian, as described in
United States Patent #1161546, dated July 12, 1956, and containing 180 acres,
more or less.
PARCEL 8: Sigurd Quarry Is 6, 7, 8, 10, 11, 12, 31 and 32 Consolidated Placer
Mining Claims, comprising the South Half of the Southeast Quarter of the
Southwest Quarter (S/2SE/4SW/4), and the South Half of the Southeast Quarter
(S/2SE/4) of Section 21, and ▇▇▇▇ ▇, ▇ ▇▇▇ ▇ ▇▇ ▇▇▇▇▇▇▇ 28, Township 22 South,
Range 1 West, Salt Lake Meridian, as described in United States Patent 11160730,
dated/2June 19, 1956, and containing 137.77 acres, more or less.
PARCEL 9: The East Half (E/2) of ▇▇▇▇▇▇▇▇ #2 Placer Mining Claim, comprising the
East Half of the Southeast Quarter (E/2SE/4) of ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇,
▇▇▇▇▇ 1 West, Salt Lake Meridian, as described in United States Patent No.
1128084, issued January 30, 1950, and containing 80 acres of land, more or less.
PARCEL 10; Township 23 South, Range 1West, Salt Lake Meridian Section 5: ▇▇▇ ▇
(▇▇▇▇▇▇ ▇▇▇▇▇▇ #▇▇ ▇▇▇▇▇▇ Mining Claim) Section 5: ▇▇▇▇▇▇ #1 Placer Mining
Claim, comprising of Lots 3 and 4, and the South Half of the Northwest Quarter
(S/2NW/4) Sections 4 and 5: Sigurd Quarry #s 34, 35, 36, 37 and 38 Placer Mining
Claims, comprising of ▇▇▇▇ ▇, ▇, ▇ ▇▇ ▇▇▇▇▇▇▇ 4 and lots 5 and 6 of Section 5
Containing 267.71 acres, more or less. CONTAINING IN ALL 2,265.48 ACRES, MORE OR
LESS.
2. U.S. Gypsum Oil and Gas Lease dated August 17,2004.
Ratification and Extension dated December 17th, 2009 extending the primary
term to December 11, 2014. Recorded in Book 502, Pages 15-17
Land Description:
PARCEL 1: Jumbo Gypsum Nos. 22 and 23 Placer Mining Claims, Comprising the
Southwest Quarter (SW/4) of Section 28, the West Half of the Northwest Quarter
(W/2NW/4) of ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ 1 West, Salt Lake Meridian, as
described in United States Patent #1102914 Issued on May 26, 1939, and
containing 240 acre, of land, more or less.
PARCEL 2: Jumbo Gypsum Nos. 24, 25, 26 and 27 Placer Mining Claims, comprising
the Northeast Quarter (NE/4) and the Southeast Quarter (SE/4) of section 32; the
Southwest Quarter (SW/4) of Section 33;and the Southeast Quarter (SE/4) of
Section 29, All in Township
Page 18 of 21
22 South, Range 1 West, Salt Lake Meridian, as described in United States Patent
#1120497 issued on January 18, 1946, and containing 640 acres of land, more or
less.
PARCEL 3: Jumbo Gypsum Nos.33 and 34 Placer Mining Claims, comprising the East
Half of the Northeast Quarter of the Northwest Quarter (E/2NE/4NW/4), and the
East Half of the Southeast Quarter of the Northwest Quarter (E/2SE/4NW/4) of
▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇ 1 West, Salt Lake Meridian, as described in
United States Patent #1120498 issued on January 19, 1946, and containing 40
acres of land, more or less.
PARCEL 4: United Nos. 2, 3, and 4 Placer Mining Claims, comprising the West Half
(W/2) of Section 15, and the Northwest Quarter (NW/4) of Section ▇▇, ▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇, ▇▇▇▇▇ 1 West, Salt Lake Meridian, as described in United States Patent
#1158715 issued on April 6, 1956, and containing 480 acres of land, more or
less.
PARCEL 5: Family No. 1 and Nos. 6 Placer Mining Claims, comprising ▇▇▇▇ ▇, ▇, ▇,
▇, ▇, ▇▇, ▇▇, and 12 of Section 23, Township 22 South, Range 1 West , Salt Lake
Meridian, as described in United States Patent #1153012 issued on July 18, 1955,
and containing 320 acres of land, more or less.
Containing a total of 1,720 acres, more or less
EXHIBIT "C"
Statement of Interest In the Properties
Before Final Earning Event After Final Earning Event
---------------------------- ----------------------------
INVESTOR 14.0000% Working interest 11.6666% Working interest
8.9833% Net Revenue Interest 8.9833% Net RevenueInterest
EXHIBIT "E"
First Initial Commitment Well:
Bottom Hole Location within the following described lands:
A legal location at least 460 feet from the lease line within the S1/2N1/2 and
S1/2 of lot 6, SECTION 23,T22S,R1W
Second Initial Commitment Well:
The Second Initial Commitment Well may be drilled at a location of TWP's
choosing in the N1/2 of section 23, T22S,R1W provided that the First Initial
Commitment Well has been completed as a commercially producing Oil Well.
If the First Initial Commitment Well is a dry hole and condemns the prospect
area drilled in the First Initial Commitment Well, then the Second Initial
Commitment Well shall be drilled at a location of TWP's choosing on lands in
Exhibit "A" within the W1/2SE and ▇▇/▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇.
Page 19 of 21
EXHIBIT F
Form of Assignment
ASSIGNMENT OF LEASES
STATE OF COLORADO )
)ss.
COUNTY OF JEFFERSON )
KNOW ALL MEN BY THESE PRESENTS: THAT
This Assignment of Leases, effective __________________ from
___________________, whose address is ___________________________,hereinafter
referred to herein as "Assignor", in favor of, whose address is (hereinafter
referred to herein as "Assignor", in favor of ______________________, whose
address is _________________________ (hereinafter referred to herein as
"Assignee"), is made pursuant to that Certain Participation Agreement executed
December 1, 2013 by and between Assignors and Assignee.
WHEREAS Assignor agreed to assign and convey ___________% working interest, as
determined pursuant to the Exhibit "C" after Final Earning Event interest of the
Participation Agreement dated December 1, 2013, in and to the oil and gas leases
insofar and only insofar as said oil and gas leases cover the lands described on
Exhibit "A" of the Participation Agreement dated December 1, 2013, Assignor
herein wishes now to convey that working interest subject to the net revenue
interest determined pursuant to Exhibit "C" of said Participation Agreement
("Subject Working Interest"). This assignment is made subject to the terms and
conditions of the Participation Agreement dated December 1, 2013.
NOW THEREFORE, for and in consideration of the sum of $10.00 and more cash in
U.S. currency and olher good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Assignors, each does hereby grant,
bargain, sell, assign and convey to Assignee, the Subject Working Interest and
subject to the terms and conditions of the Participation Agreement dated
December 1, 2013.
TO HAVE AND TO HOLD unto said Assignee, the successors and assigns, forever, in
accordance with the terms and provisions of said leases.
Assignor hereby specially warrants title against claims of persons claiming by,
through or under Assignors only, but not otherwise, and with no other warranty
of title, either express or implied.
The provisions hereof shall extend to and be binding upon the parties hereto,
their respective heirs, legal representatives, successors, and assigns.
Terms used herein which are defined in the Participation Agreement dated
December 1, 2013 have the same meaning.
Executed on the date set forth below. Trans-Western Petroleum, Inc.
_____________________________________ By:____________________________
Title:_________________________
ACKNOWLEDGEMENTS
STATE OF COLORADO )
)ss.
COUNTY OF DENVER }
The foregoing instrument was acknowledged before me this __________________ by
______________, ___________________ of ________________, a corporation, on
behalf of the company.
In witness whereof I have hereunto set my hand and seal this ________ day of
____________, A.D. 2001.
My Commission Expires: Notary Public
___________________________________ _______________________________
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SIGNATURE PAGE
IN WITNESS WHEREOF, this Agreement is executed and effective as of March 1,
2014.
INVESTOR:
Trans-Western Petroleum, LTD. Terex Energy Corporation
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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President CEO
Date: 10/7/14 Date: 10/7/14
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