ROSA BLANCA CARRIED INTEREST AGREEMENT
Exhibit
10.5
▇▇▇▇
▇▇▇▇▇▇ CARRIED INTEREST AGREEMENT
THIS
CARRIED INTEREST AGREEMENT is
made
the 21st
day of
June, 2007 by and between
Gold
Oil Plc Sucursal Colombia, a
branch
of a foreign company dully incorporated in accordance to the laws of the
Republic of Colombia, and having its place of business at ▇▇▇▇▇▇▇
▇▇ ▇▇. ▇▇▇ - ▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇.▇.,
▇▇▇▇▇▇▇▇, hereinafter referred to as “Gold”,
And
Osage
Exploration and Development Inc.,
a
company organised under the Laws of Delawere and having its place of business
at
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇.▇.▇. hereinafter referred
to as “Osage”.
WHEREAS
| (A) |
Empresa
Petrolera de Servicios y Asesorías S.A., hereinafter referred to as
“Empesa”, and Gold entered into a Letter of Intent dated July
21st,
2006
under which the Parties agreed to cooperate in good faith for the
preparation and submission of the Rosablanca Block Proposal for an
Exploration and Production Contract to be awarded by the ▇▇▇ to
Gold.
|
| (B) |
Gold
and Empesa entered into certain Carried Interest Agreement and Joint
Operating Agreement dated September 19th,
2007.
|
| (B) |
Gold
agreed to apply to the ▇▇▇ for a Licence for the Rosablanca Prospect
for
the benefit of Gold and Empesa.
|
| (C) |
The
▇▇▇ awarded the Rosablanca Licence to Gold by means of letter
▇▇▇-12.002696-2007-S dated May 31st,
2007.
|
| (D) |
Osage
approached Gold with a view to farm into the Rosablanca Licence and
Gold
agreed to farmout 50% of the Licence interest to Osage and Osage agreed
to
farmin to 50% of the Licenced interest acting also as Operator under
the
existing Joint Operating Agreement, all on terms outlined
below.
|
| (E) |
The
Parties now wish to record the terms of such agreement as set out
below.
|
NOW
THEREFORE
in
consideration of the mutual covenants, agreements and obligations set out below
and to be performed the Parties agree as follows:
1. DEFINITIONS
AND INTERPRETATION
1.1 Unless
the context otherwise requires, the following words and phrases shall have
the
following meanings in this Agreement:
1
“▇▇▇”
means
the Colombian National Agency of Hydrocarbons, the Colombian government agency
with the authority to approve the Rosablanca Block Proposal and award the
Licence to Gold, .
"AFE"
means
an Authority for Expenditures as defined in the JOA.
"▇▇▇ Guarantee"
means
a
bank
guarantee, an irrevocable letter of credit or other instrument acceptable to
▇▇▇
securing the obligations of the Participating Interests in respect to the Phase
1 Exploration Programme which is required under the Licence;
"Assignment
Approval"
means
the consent by ▇▇▇ required under the Licence for the assignment fifty percent
(50%) of Gold´s Participating Interest to Osage and assignment of official
Operatorship of the Contract to Osage.
“Carried
Amount”
means an
amount in US Dollars to be paid to the Joint Account by Osage on behalf of
Gold
and Empesa exclusively to cover Gold and Empesa’s share of the costs incurred by
Operator in order to satisfy the Phase 1 Exploration Programme including any
costs incurred for a period of thirty (30) days from the commencement of any
testing operations on the first well to be drilled in the License area. For
the
avoidance of doubt, the first exploration well to be drilled under the License
will be drilled in the prospect marked on Annex “C”, attached hereto. For the
purposes of the JOA and any approvals required therein (including the well
AFE),
it is hereby agreed that the cost of the first exploration well will be whatever
is required to meet the Phase 1 Exploration Programme until the exploratory
commitment for such phase is declared fulfilled by the ▇▇▇.
“Contract
or Licence”
means
the Exploration and Production Contract to be entered between Gold and the
▇▇▇
covering the Rosablanca project area on or before July 3, 2007, in which Gold
is
appointed as Contractor Party and Operator of record.
“End
of the Carry Period”
means
thirty (30) days from
the
commencement of any testing operations on the first well to be drilled in the
License area in order to satisfy the Phase 1 Exploration Programme.
"Earned
Interest”
means
50% Participating Interest.
“Osage’s
payment Obligations"
has the
meaning given thereto in Section 3;
"Guarantee
Costs"
means
all costs and expenses to be incurred by Gold in obtaining and maintaining
the
▇▇▇ Guarantee (included any collateral thereto such as a Certificate of Deposit
for 120% of the ▇▇▇ guarantee value to be pledge to a bank) and to establish
and
maintain the Trust for Phase 1 Exploration Programme for all the time required
under the License.
|
“Joint
Operating Agreement”
or
“JOA”
means
the operating agreement entered into by Gold and Empesa dated September
19, 2007 in respect to operations under the
Licence.
|
|
"Liabilities"
means all liabilities and obligations, whether under common law,
in equity
or under other Applicable Law, under contract or otherwise, whether
tortious, contractual, statutory or otherwise, whether absolute or
contingent and whether based on fault, strict liability or
otherwise.
|
“Phase
1 Exploration Period”
means
the term established in letter ▇▇▇-12.002696-2007-S dated May 31st,
2007 for
fulfilling the exploratory commitment of the Phase 1 Exploration Programme.
“Phase
1 Exploration Programme”
means
the exploratory commitments acquired towards the ▇▇▇ for Phase 1 Exploration
Period as established in letter ▇▇▇-12.002696-2007-S dated May 31st,
2007,
which includes a well to be drilled in the License area.
“Operating
Costs”
means
any and all operating costs incurred in operating the facilities, transporting
production for sale and managerial and administrative and insurance costs as
defined in the JOA.
“Operator”
means
Osage for purposes of the JOA, being Gold the operator of record under the
license until the official date of the Assignment Approval.
“Participating
Interest” means
an
undivided beneficial and legal interest in and to the Licence and to any right,
data and joint property thereto which shall be expressed as a percentage of
the
total interests of all Parties therein. Osage’s interest shall become effective
towards the ▇▇▇ after the Assignment Approval.
|
“Party”
means Osage or Empesa or Gold and “Parties” means two or more of Osage,
Empesa and Gold.
|
"Petroleum
Operations"
means
all exploration, appraisal, development and production operations carried out
in
respect of the Licence under the Minimum Work Programme.
"Petroleum
Substances"
means
petroleum, natural gas, condensate, natural gas liquids and
all
other related hydrocarbons and all other substances produced in association
therewith,
including sulphur and its compounds, but only to the extent that rights therein
or
thereto are granted under the Licence.
|
“Royalty”
means the royalty due to the Colombian Government which at the time
of
this Agreement is eight percent (8%) of all gross production obtained
from
the Licence.
|
“Rosablanca
Block Proposal” means
the
Rosablanca proposal submitted by Gold to the ▇▇▇ which was dully accepted under
the specific terms and conditions set forth in letter ▇▇▇-12.002696-2007-S
dated
May 31st,
2007.
"Trust"
means
the administration and payment trust to be constituted and funded by Gold
previously to the execution of the Contract.
|
1.2
|
In
this Agreement a reference to a “Clause”, “Party” or “Schedule” is to a
clause of, or a party or schedule to this
Agreement.
|
| 1.3 |
Schedules
|
The
following schedules are attached to and made a part of this
Agreement:
Schedule
"A" -
Joint Operating Agreement
Schedule
"B" -
Rosablanca ▇▇▇ Contract (Draft)
Schedule
“C” - Prospect area for Phase 1 Work Programme
Schedule
“D”-
Letter ▇▇▇-12.002696-2007-S dated May 31st,
2007
Schedule
“E” -
Acknowledgement and Confirmation
Schedule
“F” -
Operations Trust Agreement.
| 1.3 |
Interpretation
|
The
insertion of headings into this Agreement within this Agreement are for
convenience of reference only and shall not affect the meaning, interpretation
or construction of any provision of this Agreement.
Any
reference to a monetary amount in this Agreement, including the use of the
term
"US Dollar" or the symbol "US$", shall mean the lawful currency of the United
States of America unless the contrary is specified or provided for elsewhere
in
this Agreement. Except as otherwise agreed by the Parties, any and all amounts
payable by Gold or Osage in US Dollars under this Agreement shall be paid in
Colombia in
Colombian Pesos at the TRM (Representative Market Rate) exchange applicable
to
the payment date.
The
parties acknowledge, accept and recognize that all the rights and obligations
of
Osage contained in this Agreement shall be automatically transferred to its
branch in Colombia to be constituted by Osage within the twenty (20) days after
signature of this Agreement.
Terms
and
expression that are not specifically defined in this Agreement, but which have
generally accepted meanings in the custom and usage of the international oil
and
gas industry as of the date of this Agreement, shall have such generally
accepted meanings when used in this Agreement unless the contrary is specified
or provided for elsewhere in this Agreement.
If
a
derivative of a term or expression that is specifically defined in this
Agreement is used in this Agreement, then such derivative shall have a meaning
that corresponds to the applicable defined term or expression.
Any
reference in this Agreement to another contract, agreement, instrument or other
document shall be deemed to refer to such contract, agreement, instrument or
other document as it has been amended, modified, replaced or supplemented from
time to time up to the applicable time.
If
a term
or provision contained in the main body of this Agreement conflicts or is
inconsistent with a term or provision contained in any Schedule, then the term
or provision in the main body of this Agreement shall prevail to the extent
of
such conflict or inconsistency.
| 2. |
PARTICIPATING
INTERESTS AND CARRIED
AMOUNT
|
|
2.1
|
Except
for what is provided herein regarding the Carried Amount of Osage
to Gold,
and subject to fulfillment of Osage´s Payment Obligations under this
Agreement the Parties shall own all rights, interests and benefits
hereunder, under the JOA and under the Licence (in the cases of Osage
and
Empesa subject to approval by ▇▇▇) and all oil and gas produced pursuant
thereto and shall assume and discharge all of the liabilities and
obligations set forth in the Licence according to the following
Participating Interests:
|
|
Party
|
Participating
Interest
|
|
Osage
|
50%
|
|
Gold
|
40%
|
|
Empesa
|
10%
|
|
TOTAL
|
100%
|
| 3. |
OSAGE
OBLIGATIONS
|
| 3.1 |
Osage´s
Payment Obligations
|
Osage
shall be responsible for performing and discharge the following obligations
and
make the following payments (collectively, the "Payment
Obligations"):
| (i) |
Within
twenty calendar (20) days following the execution of this Agreement,
Osage
(directly or trough its branch to be established in Colombia) shall
pay
and reimburse to Gold the exactly amount of Colombian Pesos transferred
by
Gold to the Trust for fulfilling the funding of the Trust for an amount
equal to USD$1,200,000, as required by the ▇▇▇. This amount shall be
reimbursed in Colombian Pesos by Osage by means of wire transfer to
Gold’s
designated account in Colombia.
|
| (ii) |
Within
eight (8) calendar days following the execution of this License, Osage
shall provide all the funds indicated by Gold (directly to Gold´s account
or to the bank indicated by Gold) as may be necessary for establishing
the
collateral required by the bank elected by Gold for the establishment
of
the ▇▇▇ Guarantee, consisting in approx.
USD$144,000.
|
| (iii) |
Osage
shall, from its own resources and at its own risk, finance and pay
all
costs incurred in Petroleum Operations towards the completion of Phase
1
Exploration Programme from the date of this Agreement to the extent
attributable to the Carried Amount.
|
Breach
by
Osage of any of the Payment Obligations contained herein shall constitute a
default under this Agreement which will be automatically terminated by written
notice of Gold without any reimbursement or indemnification whatsoever in favour
of Osage. (In such case all rights und duties pertaining to Osage under this
Agreement, the JOA and the Trust funds shall cease to exist)
| 3.4 |
Within
five (5) days after receiving Gold’s monthly requisition, Osage shall pay
in Colombian pesos (to Gold’s account or to the bank or trust entity
indicated by Gold) all Guarantee Costs monthly charged to Gold for
the
establishment and maintenance of the Trust and the ▇▇▇ Guarantee.
|
| 3.5 |
Osage
shall not mortgage, pledge, charge or otherwise encumber the Carried
Amount during the term of this Agreement without the prior written
consent
of Gold which consent shall not be unreasonably withheld or delayed.
Any
such mortgage, pledge, charge or encumbrance shall be expressly made
subject to the terms of this
Agreement.
|
|
3.6
|
Notwithstanding
any other provision of this Agreement Osage shall not be liable to
Gold
for any indirect or consequential loss caused by the performance
or
non-performance of this Agreement irrespective of the negligence
and/or
breach of duty (statutory or otherwise) of Osage. “Indirect or
consequential loss” shall include, but not be limited to loss of profit,
loss of use, loss of contract, loss of production, loss of revenue,
business interruption or increased cost of
working.
|
| 4. |
GOLD
OBLIGATIONS
|
|
4.1
|
Gold
shall execute any additional documents which Osage’s counsel deems
necessary as evidence of Osage’s interest in the Carried Amount for the
term of this Agreement provided that nothing therein shall derogate
from
the terms of this Agreement.
|
|
4.2
|
Subject
to the timely compliment of Osage’s Payment Obligation established in
Section 3.1, Gold will put all the funds existing in the Trust at
Osage’s
entire disposition for paying contractors engaged for developing
Phase 1
Exploration Programme, as per Osage’s reasonable instructions acting as
Operator.
|
|
4.3
|
Subject
to the timely compliment of the Osage’s Payment Obligation, Gold accepts
that until the End of the Carry Period Osage will have the unanimous
voting rights in the Operating Committee of the JOA acting reasonably
and
therefore shall maintain the direction of all operation and economic
matters for decision under the JOA in relation to the Phase 1 Exploration
Programme and to the extent of the End of the Carry
Period.
|
| 4.3 |
Gold
shall be liable to Osage and shall indemnify and hold harmless Osage,
its
affiliates, agents, employees and officers for any costs, expenses
and
Liabilities incurred by Gold incident to claims, demands, or causes
of
action of every kind and character brought about by or on behalf
of any
person or entity for damages to or loss of property or the environment,
or
for injury to, illness, or death of any person or entity, which damage,
loss, injury, illness, or death arises out of or is incident to any
act or
failure to act by Gold in the conduct of or in connection with the
performance of the Licence and/or the Joint Operating Agreement before
the
signature date of this Agreement.
|
|
4.4
|
Provided
that (i) Osage has fulfilled with its Payment Obligations and (ii)
Osage
completes the capacity and the minimum qualification requirements
established by ▇▇▇ for a official assignment of interest under the
Contract; at Osage’s discretion Gold shall take the legal steps to obtain
the Assignment Approval
and
shall execute and deliver to Osage all assignments, conveyances and
other
instruments necessary or advisable in order to evidence the transfer
and
assignment of the Earned Interest to Osage. Osage shall submit request
of
the Assignment Approval to the ▇▇▇ within 124 months after signature
of
this Agreement.
|
| 4.6 |
Until
such time as the transfer and assignment of Osage’s Participating
Interest is completed and Osage is
recognized as a party to the Licence, Gold shall hold the Osage
Participating Interest in trust for the sole benefit of Osage.
|
| 5. |
TERM
|
| 5.1 |
Except
for Gold’s termination based on Osages default in Osage’s Payment
Obligations, this Agreement and the Joint Operating Agreement shall
remain
in full force until the earlier of:
|
(i) The
End
of the Carry Period,
(ii) Termination
of the JOA in accordance with its terms and conditions, and
(iii) Termination
of the Licence in accordance with its terms, and
|
5.2
|
All
rights and obligations accrued to the Parties prior to termination
of this
Agreement shall survive the termination of this
Agreement.
|
| 6. |
REPRESENTATIONS
AND WARRANTIES
|
| 6.1 |
OSAGE’S
Representations and
Warranties
|
Osage
represents, warrants and covenants to and in favor of Gold that, as of the
date
of this Agreement (unless another date is specified):
| (i) |
Due
Formation:
It is
a company duly incorporated, organized and subsisting under the laws
of
the Republic of Delaware and will establish a branch in Colombia
withion
twenty (20) days after signature of this
Agreement.
|
| (ii) |
Power
and Capacity:
It has the power and capacity to enter into and deliver this Agreement
and
perform its obligations under this Agreement;
|
| (iii) |
Due
Authorization and No Violations:
The execution and delivery of this Agreement and the completion of
the
transactions contemplated by this Agreement have been duly authorized
by
all necessary action on the part of Osage and
do not and will not violate or conflict with any the corporative
documents
of Osage;
|
| (iv) |
Required
Approvals:
To Osage's knowledge there are no approvals required to be obtained
by
Osage in
respect of the execution and delivery of this Agreement or the completion
of the transactions contemplated by this Agreement other than the
Assignment Approval.
|
| 6.2 |
GOLD's
Representations and
Warranties
|
Gold
represents, warrants and covenants to and in favor of Osage that, as of the
date
of this Agreement (unless another date is specified):
| (i) |
Due
Formation:
Gold is a branch duly incorporated, organized and subsisting under
the
laws of the Republic of Colombia;
|
| (ii) |
Power
and Capacity:
It has the power and capacity to enter into and deliver this Agreement
and
perform its obligations under this
Agreement;
|
| (iii) |
Due
Authorization and No Violations:
The execution and delivery of this Agreement and the completion of
the
transactions contemplated by this Agreement have been duly authorized
by
all necessary action on the part of Gold and does not and will not
violate
or conflict with any the corporative documents of
Gold;
|
| (iv) |
Required
Approvals:
There are no other approvals required to be obtained by it in respect
of
the execution and delivery of this Agreement or the completion of
the
transactions contemplated by this Agreement other than the Assignment
Approval. Empesa’s approval was also dully obtained;
and
|
| (v) |
No
Finder's Fees:
Gold has
not incurred any obligation or liability, contingent or otherwise,
for
broker's or finder's fees in respect of the transactions contemplated
by
this Agreement for which Osage’s shall have any obligation or liability.
|
| 6.3 |
GOLD's
Representations and Warranties Re: Rosablanca
Licence
|
Gold
represents, warrants and covenants to and in favour of Osage that, as of the
date of this Agreement (i)
all
information in Gold’s possession or control related to the Licence and the
Rosablanca Block Proposal, has been made available for review and copy by Osage
its representatives, and, to Gold’s knowledge, all such information is true and
correct and is not misleading, and (ii) the
Rosablanca Block Proposal resulted from its own spontaneous evaluation of the
public available information of the block (or made available by Empesa) and
that
no exclusivity or confidentiality has been breached by Gold thereto.
| 7. |
GOVERNING
LAW
|
| 7.1 |
This
Agreement shall in all respects be subject to and be interpreted and
construed in accordance with the laws of the Republic
Colombia..
|
| 7.2 |
The
Parties hereto expressly waive the requirement of a court declaration
that
either one is in default when it has failed to perform its obligations
hereunder. Therefore, each Party hereto hereby expressly accepts that
another Party hereto may exercise its rights simply by a written notice
forwarded in the event of a default hereunder.
|
| 8. |
ARBITRATION
|
All
disputes between the Parties arising under or in connection with this Agreement,
including interpretation of any technical or financial issues, any purported
breach of, the validity or enforceability of, or the performance or
non-performance of any obligation under, this Agreement, shall be resolved
by
final and binding arbitration in Bogotá D.C., Colombia in accordance to the
rules of the arbitration and conciliation Center of the Chamber of Commerce
of
Bogotá, Colombia.
The
Arbitration Tribunal shall be integrated by three lawyers designated by mutual
agreement between the Parties. At least one of the arbitrators shall have an
experience on oil and gas matters for more than ten years in the Republic of
Colombia. Their judgement shall be rendered in law.
| 9. |
ASSIGNMENT
|
Each
Party acknowledges, accepts and recognizes that all the rights and obligations
contained in this Agreement may be partially or completely assigned or
transferred to a company elected by them with the prior written consent of
the
other Parties, which consent not to be unreasonably withheld or delayed. No
Party shall unreasonably refuse to consent to such assignment provided always
that such incoming assignee has sufficient financial strength to meet its
current and future obligations under this Agreement and the JOA.
| 10.1 |
GENERAL
|
| 10.1 |
Unless
specified otherwise, if there is any conflict or inconsistency between
the
terms of the
Licence, this Agreement, the JOA or any of them, then the terms of
the
agreement having
the higher priority shall govern (but, in each case of conflict or
inconsistency, only
to the extent of the conflict or inconsistency). The order of priority
of
these of agreements
(from highest to lowest priority) is as
follows:
|
| (i) |
the
Licence;
|
| (ii) |
this
Agreement; and
|
| (iii) |
the
Joint Operating
Agreement;
|
| 10.2 |
No
waiver by any Party of any one or more defaults by another Party
in the
performance of this Agreement shall operate or be construed as a
waiver of
any future default or defaults by same Party, whether of a like or
of a
different character. Except as expressly provided in this Agreement
no
Party shall be deemed to have waived, released or modified any of
its
rights under this Agreement unless such Party has expressly stated,
in
writing, that it does waive, release or modify such
right.
|
| 10.3 |
This
Agreement states the entire agreement between the Parties concerning
the
transactions
contemplated in this Agreement and supersedes all previous agreements
in
that regard.
The arrangements between the Parties are not intended to constitute
a
legal partnership between them and are not intended to infringe any
of the
provisions under the Licence.
|
| 10.4 |
This
Agreement may be executed in any number of counterparts, each of
which
will be deemed an original but which together shall constitute one
agreement, with the same effect as if the signatures on the counterparts
were upon a single engrossment of this
Agreement.
|
| 10.5 |
No
Press Releases or public announcement regarding the execution of
this
Agreement shall be done by Osage until completion of Osage’s Payment
Obligations under this Agreement.
|
| 10.6 |
Notices
under this Agreement shall be given to the following
addresses:
|
Gold
Atn:
▇▇▇▇
▇▇▇▇▇
Email:
▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
c.c.
▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
cc:
▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
Atn:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
▇▇ ▇▇. ▇▇▇ - ▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇.▇.,
▇▇▇▇▇▇▇▇
Osage
Atn:
▇▇▇
▇▇▇▇▇▇▇▇
c.c.
▇▇▇▇
▇▇▇▇▇▇▇▇
Email:
▇▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇▇
/
▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇.▇.▇.
Tel
(▇▇▇)
▇▇▇-▇▇▇▇ - Fax (▇▇▇) ▇▇▇-▇▇▇▇
| 11. |
OPERATOR
|
| 11.1 |
Gold
shall be the operator of record of the Licence until such time as
Osage is
capable of and is in fact qualified by the ▇▇▇ as being qualified
as
Operator of record for the Licence and the JOA. The generality of
day to
day relationships rules within Gold as operator of record of the
Contract
and Osage as Operator under the JOA is contained in the Operations
Trust
Agreement attached hereto as Schedule F.
|
|
11.2
|
Prior
to the Assignment Approval Gold shall act as operator towards the
government in name only with Osage performing the duties of operator
under
the JOA. Gold shall follow all reasonable instructions given to it
with
regard to any function being required to be performed by Gold as
operator
of record as set forth in the Operations Trust Agreement attached
hereto.
PROVIDED ALWAYS that such instructions given by Osage are in accordance
with the Operating Committee formed under the JOA. For the avoidance
of
doubt GOLD will be under no obligation to follow instructions given
by
Osage if such instructions will result or likely to result in any
interest
in Rosablanca Licence being diluted or another Operator in place
of Osage
being proposed or surrender of the Licence, or amendment to the JOA
that
will or likely to lower the value of Gold’S interest in the Rosablanca
Licence.
|
| 11.4 |
Osage
shall start all field activities necessary to fulfil the Phase 1
Exploration Programme within one (1) month following the signature
of this
Agreement, provided that the lack of activity of Osage towards the
execution of the Phase 1 Exploration Programme in accordance to accepted
oil & gas practices will result in loss of Osage’s capacity for giving
operation instructions to Gold.
|
| 11.5 |
In
case Gold elects to withdraw to the Contract as per Article 13 of
the JOA,
and the Assignment Approval is not obtained yet, Gold will continue
acting
as operator of record for a maximum term of six (6) months after
its
withdrawal notice, provided that immediately after Gold’s withdraws Osage
shall submit official request of Assignment Approval to the ▇▇▇ (in
its
favour or in favour of Osage’s designated company). Nothing contained
herein shall prevent Gold’s using its withdrawal rights under the JOA and
the License.
|
IN
WITNESS WHEREOF the
Parties have executed this Agreement on the date first written
above.
OSAGE
EXPLORATION AND DEVELOPMENT INC
By:
________________________________
Name:
▇▇▇
▇▇▇▇▇▇▇▇
Title:
________________________________
Approved
by:
By:
_______________________________
Name:
_______________________________
Title:
Director
By:
________________________________
Name:
________________________________
Title:
Director
GOLD
OIL PLC SUCURSAL COLOMBIA
By:
________________________________
Name:
________________________________
Title:
________________________________
Approved
by: GOLD OIL
PLC
By:
________________________________
Name:
▇▇▇▇
▇▇▇▇▇
Title:
Managing
Director
SCHEDULE
“A”
TO
CARRIED INTEREST AGREEMENT DATED JUNE 21, 2007 BETWEEN OSAGE EXPLORATION AND
DEVELOPMENT INC AND GOLD OIL PLC SUCURSAL COLOMBIA
“JOINT
OPERATING AGREEMENT”
SCHEDULE
“B”
TO
CARRIED INTEREST AGREEMENT DATED JUNE 21, 2007 BETWEEN OSAGE EXPLORATION AND
DEVELOPMENT INC AND GOLD OIL PLC SUCURSAL COLOMBIA
“ROSABLANCA
▇▇▇ CONTRACT (DRAFT)”
SCHEDULE
“D”
TO
CARRIED INTEREST AGREEMENT DATED JUNE 21, 2007 BETWEEN OSAGE EXPLORATION AND
DEVELOPMENT INC AND GOLD OIL PLC SUCURSAL COLOMBIA
“Letter
▇▇▇-12.002696-2007-S dated May 31st,
2007”
SCHEDULE
“E”
TO
CARRIED INTEREST AGREEMENT DATED JUNE 21, 2007 BETWEEN OSAGE EXPLORATION AND
DEVELOPMENT INC AND GOLD OIL PLC SUCURSAL COLOMBIA
“ACKNOWLEDGEMENT
AND CONFIRMATION”
This
acknowledgment and confirmation is dated as of the 21st
day
of
June, 2007,
BETWEEN:
Gold
Oil Plc Sucursal Colombia,
hereinafter referred to as “Gold”,
Empresa
Petrolera de Servicios y Asesorías S.A.,
hereinafter referred to as “Empesa”, and
Osage
Exploration and Development Inc.,
hereinafter referred to as “Osage”.
WHEREAS
Gold and
Empesa entered into a Letter of Intent dated July 21st,
2006
under which the Parties agreed to cooperate in good faith for the preparation
and submission of the Rosablanca Block Proposal for an Exploration and
Production Contract to be awarded by the ▇▇▇ to Gold. Gold agreed to apply
to
the ▇▇▇ for a Licence for the Rosablanca Prospect for the benefit of Gold and
Empesa.
WHEREAS
Gold and
Empesa entered into certain Carried Interest Agreement and Joint Operating
Agreement dated September 19th,
2007.
WHEREAS
the ▇▇▇
awarded the Rosablanca Licence to Gold by means of letter ▇▇▇-12.002696-2007-S
dated May 31st,
2007.
WHEREAS
Gold and
Osage entered into a Carried Interest Agreement dated June 21st,,
2007
whereby Gold agreed to farmout 50% of the Licence interest to Osage and Osage
agreed to farmin to 50% of the License interest acting also as Operator under
the existing Joint Operating Agreement.
NOW
THEREFORE
for good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Gold, Empesa and Osage, pursuant to the terms hereof, acknowledge
and consent to Osage becoming holder of 50% participating interest in the
Rosablanca Contract (under the terms of the Carried Interest Agreement among
Gold and Osage) and under the JOA, and Osage becoming Operator under the
existing JOA, as follows:
“Effective
from the date of signature of this document, Osage accepts to adheres and being
legally bounded to all the dispositions of the JOA, assuming all rights, duties
and liabilities of a signing party of the JOA having a 50% participating
interest under Article 3.2 of the JOA. Likewise effective from the date of
signature of this document, Osage shall be recognized as Operator and accepts
to
adhere and being legally bounded to all the dispositions of the JOA pertaining
to the rights, duties and liabilities of Operator under the precise terms and
conditions contained in the JOA.”
In
evidence of full acceptance by Gold, Empesa and Osage, this document is
subscribed by the parties in the city of Bogotá, D. C., to the 21st
day of
June 2007.
OSAGE
EXPLORATION AND DEVELOPMENT INC
By:
______________________________
Name:
______________________________
Title:
______________________________
GOLD
OIL PLC SUCURSAL COLOMBIA
By:
______________________________
Name:
______________________________
Title:
______________________________
SCHEDULE
“F”
TO
CARRIED INTEREST AGREEMENT DATED JUNE 21, 2007 BETWEEN OSAGE EXPLORATION AND
DEVELOPMENT INC AND GOLD OIL PLC SUCURSAL COLOMBIA
“OPERATIONS
TRUST AGREEMENT”
THIS
AGREEMENT made as of the 21st day
of
June, 2007.
BETWEEN:
Gold
Oil Plc Sucursal Colombia
(hereinafter referred to as “Trustee”)
-
and
-
Osage
Exploration and Development Inc.,
(hereinafter
referred to as (“Beneficiary”)
WHEREAS:
| A. |
Beneficiary
has acquired from Trustee the Beneficial Interests as established in
the
Carried Interest Agreement;
|
| B. |
The
Beneficial Interests consist of, amongst other items, a 50% right,
title,
estate and interest in and to the Rosablanca
Contract;
|
| C. |
Transfer
of registerable title to the Beneficial Interest is subject to obtaining
the Assignment Approval; and
|
| D. |
Trustee
shall hold and administer the Beneficial Interests in trust for
Beneficiary until the Assignment Approval is
obtained.
|
NOW
THEREFORE
in
consideration of the premises hereto and the covenants and agreements
hereinafter set forth and contained, the Parties hereto covenant and agree
as
follows:
ARTICLE
1
DEFINITIONS
| 1.1 |
Definitions
|
Capitalized
terms used herein and not defined shall have the meanings ascribed thereto
in
Carried Interst Agreement. In this Agreement, including the recitals, unless
the
context otherwise requires:
| (a) |
“Agreement”
means this agreement and the Schedules attached
hereto;
|
| (b) |
“▇▇▇”
means Agencia
Nacional de Hidrocarburos;
|
| (c) |
“Approval
Date”
means the
date upon which Assignment Approval is
obtained;
|
| (d) |
“Beneficial
Interests”
means 50% of the entire right, title, estate and interest of Beneficiary
in and to the License;
|
| (e) |
“Designated
Representative”
means the contact person so designated by Beneficiary for representing
the
Trustee towards ▇▇▇, any Government authority and third Parties in
connection to the Contract and the Material
Agreements;
|
| (f) |
“Losses
and Liabilities”
means all direct or indirect obligations, liabilities, losses, costs,
damages, expenses, penalties, fines, claims, demands, actions or damages
of any kind or nature whatsoever (including, without limitation, court
costs, legal costs on a solicitor and his own client basis and accounting
and other professional expenses);
|
| (g) |
“Party”
means Trustee or Beneficiary;
|
| (h) |
“Person”
means any individual or entity, including any partnership, body corporate,
trust, unincorporated organization, union, government and any department
or agency thereof and any heir, executor, administrator or other legal
representative on an individual;
|
| 1.2 |
References
and Headings
|
The
references “hereunder”, “herein” and “hereof” refer to the provisions of this
Agreement, and references to Articles and Sections herein refer to articles
or
sections of this Agreement. The headings of the Articles, Sections, Schedules
and any other headings, captions or indices herein are inserted for convenience
of reference only and shall not be used in any way in construing or interpreting
any provision hereof.
| 1.3 |
Singular/Plural;
Derivatives
|
Whenever
the singular or masculine or neuter is used in this Agreement or in the
Schedules, it shall be interpreted as meaning the plural or feminine or body
politic or corporate, and vice versa, as the context requires. Where a term
is
defined herein, a capitalized derivative of such term shall have a corresponding
meaning unless the context otherwise requires.
| 1.4 |
Statutory
References
|
Any
reference to a statute shall include and shall be deemed to be a reference
to
such statute and to the regulations made pursuant thereto, and all amendments
made thereto and enforced from time to time, and to any statute or regulation
that may be passed which has the effect of supplementing the statute so referred
to or the regulations made pursuant thereto.
| 1.5 |
Business
Day
|
Whenever
any payment to be made or action to be taken under this Agreement is required
to
be made or taken on a day other than a Business Day, such payment shall be
made
or action taken or the next Business Day following.
| 1.6 |
Monetary
Sums
|
All
references herein to dollar amounts or sums of money are to lawful funds of
the
United States of America.
| 1.7 |
Capitalized
Terms
|
Any
capitalized terms contained herein and not herein defined shall have the meaning
ascribed thereto in the Purchase and Sale Agreement.
ARTICLE
2
TRUST
DECLARATION
| 2.1 |
Acknowledgement
of Trust
|
Subject
to and in accordance with the provisions of this Agreement, Trustee acknowledges
and declares that shall hold and possess legal title to the Beneficial Interests
in trust for and on behalf of Beneficiary for the sole use, enjoyment and
benefit of Beneficiary, and Trustee further acknowledges that all proceeds,
benefits and advantages accruing in respect of the Beneficial Interests shall,
if and when received by Trustee if any, be received and held by Trustee in
trust
for and on behalf of Beneficiary.
As
part
of its commitments under this Agreement, Trustee accepts to sign and deliver
on
behalf of Beneficiary any and all letter, communication, offer, contracts
(including any Petroleum Substances sale contract with Ecopetrol S.A. or any
other purchaser elected by Beneficiary) and in general, any document reasonable
required by Beneficiary for exercising any of its rights, for all the time
necessary until obtaining the Assignment Approval.
| 2.2 |
Forwarding
of Benefits
|
If
Trustee receives direct benefits from the Contract for any reason whatsoever
(including any proceeds of mandate agreements and sale of Petroleum Substances
received under a Petroleum Substances Contract signed under instructions of
Beneficiary) Trustee shall deliver to Beneficiary, on a weekly basis, all
revenues, proceeds and other benefits received by Trustee, if any, respecting
the Beneficial Interests, together with all relevant statements and information
as may be required by Beneficiary.
| 2.3 |
Forwarding
of letters and notices
|
Trustee
shall have twenty four (24) hours to provide to Beneficiary original letters,
claims, requests and documentation received by Trustee from ▇▇▇ and any
Government Authority and any third party related with the Contract and the
Beneficial Interests, including (notices, mail ballots, specific information,
communications, invoices, ▇▇▇▇▇▇▇▇, correspondence and other documents), and
will only respond to such letters, notices, mail ballots, information and other
documents pursuant to the written direction of Beneficiary.
| 2.4 |
Responding
to Government and Third Parties
|
Trustee
shall deliver to Government authorities and Third Parties all such agreements,
letters, notices and other documents as Beneficiary may direct, provided
Beneficiary shall promptly respond to any Government requirement or shall
provide any information or letter required under the License in a timely
manner.
| 2.5 |
Designated
Representative
|
| (a) |
Trustee
shall provide Beneficiary in a timely manner with copies of all
correspondence received by Trustee related to operations or to the
Beneficial Interest or the Designated Representative, as the case may
be,
as per Section 2.3.
|
| 2.6 |
Consent
of Beneficiary
|
Trustee
shall not without the prior written consent of Beneficiary;
| (a) |
make
any commitment or propose, initiate or authorize any expenditure with
respect to the Beneficial Interest;
|
| (b) |
sell,
transfer, surrender, abandon, dispose of, mortgage, pledge or otherwise
encumber the Beneficial Interest;
|
| (c) |
amend
or terminate any agreement or document to which the Beneficial Interests
are subject, or enter into any new agreement or commitment relating
to the
Beneficial Interests; or
|
ARTICLE
3
ASSIGNMENTS
| 3.1 |
Assignments
|
| (a) |
No
party shall assign its interest in this Agreement without the prior
written consent of the other Party.
|
ARTICLE
4
RECORDS
AND AUDITS
| 4.1 |
Records
|
Trustee
shall provide Beneficiary and the Designated Representative with access, during
normal business hours, to all information, data, notices, records, books and
accounts in Trustee's custody or control, or to which Trustee has access,
respecting the Beneficial Interest.
| 4.2 |
Audits
|
Beneficiary
may inspect or have inspected the records, books and accounts of Trustee
concerning the Beneficial Interest at all reasonable times and may have the
same
audited once in each calendar year, at its own cost. Any claims of discrepancies
disclosed by such audit shall be made in writing to Trustee within six (6)
months of completion of the audit. A Trustee shall respond to Beneficiary in
writing to all claims of discrepancies within six (6) months of receipt of
such
claims. If a Trustee disagrees with such claim or discrepancy and such matter
cannot be settled, then the matter shall be settled in accordance as established
in this Agreement.
| 4.3 |
Confidentiality
|
Beneficiary
shall keep all information provided to it pursuant to this Agreement including,
without limitation, information made available to it in connection with the
audits, examinations and inspections conducted by it pursuant to the foregoing
provisions of this Article, strictly confidential, except for information which
is required by Applicable Law to be disclosed or becomes publicly available
through no act or omission of Beneficiary or which becomes available to
Beneficiary from a source other than a Trustee, without confidentiality
restrictions.
ARTICLE
5
ADDRESSES,
AND NOTICES
| 5.1 |
Addresses
|
The
addresses for service and the fax numbers of the Parties hereto shall be those
set forth in the Carried Interest Agreement:
| 5.2 |
Giving
and Deemed Receipt of Notices
|
All
notices, communications and statements required, permitted or contemplated
hereunder shall be in writing, and shall be delivered as follows:
| (a) |
by
personal service on a Party hereto at the address of such Party set
out
above, in which case the item so served shall be deemed to have been
received by that Party when personally
served;
|
| (b) |
by
facsimile transmission to a Party hereto to the fax number of such
Party
set out above, in which case the item so transmitted shall be deemed
to
have been received by that Party when actually received by it, if received
within normal business hours on any Business Day or at the beginning
of
the next Business Day following transmission if that notice is not
received during normal business hours; or
|
| (c) |
except
in the event of an actual or threatened postal strike or other labour
disruption that may affect mail service, by mailing first class registered
post, postage prepaid, to a Party hereto at the address of such Party
set
out above, in which case the item so mailed shall be deemed to have
been
received by that Party on the fifth day following the date of mailing
(the
date of mailing being the day immediately prior to the postmarked date
of
the envelope containing the notice, communication or statement or if
the
subject envelope has been lost or destroyed, the date of such notice,
communication or statement or if undated the date of the transmittal
letter accompanying the same).
|
| 5.3 |
Change
of Address
|
A
Party
hereto may from time to time change its address for service or its fax number
or
both by giving written notice of such change to the other Party
hereto.
ARTICLE
6
TERM
| 6.1 |
Term
|
| (a) |
This
Agreement shall remain in full force and effect from the date of this
Agreement until the Assignment Approval.
|
| (b) |
Notwithstanding
the termination of this Agreement, the provisions respecting liability
and
indemnification, audit rights, the settlement of accounts and the remedies
in respect thereof, shall remain in full force and effect to the extent
of
any liabilities which may have accrued prior to the termination of
this
Agreement.
|
ARTICLE
7-
LIABILITY AND INDEMNIFICATION
| 7.1 |
Trustee
Liability
|
Trustee
shall:
| (a) |
be
liable to Beneficiary for all Losses and Liabilities Beneficiary sustains,
pays or incurs; and
|
| (b) |
indemnify
and save Beneficiary harmless against all Losses and Liabilities
whatsoever that may be brought against or suffered by Beneficiary,
its
directors, officers, agents and employees or that Beneficiary, its
directors, officers, agents and employees sustain, pay or
incur;
|
as
a
result of a breach by Trustee of an express term or obligation of this Agreement
or the negligence of Trustee in the performance or non-performance of this
Agreement.
| 7.2 |
Beneficiary
Liability
|
Beneficiary
shall:
| (a) |
be
liable to Trustee for all Losses and Liabilities Trustee sustain, pay
or
incur; and
|
| (b) |
indemnify
and save Trustee harmless against all Losses and Liabilities brought
against or suffered by Trustee, its directors, officers, agents and
employees or that Trustee, its directors, officers, agents and employees
sustain, pay or incur;
|
as
a
result of a breach by Beneficiary of an express term of this Agreement or the
negligence of Beneficiary in the performance or non-performance of this
Agreement.
ARTICLE
8
MISCELLANEOUS
| 8.1 |
Further
Assurances
|
Each
Party hereto will, from time to time and at all times hereafter upon request,
without further consideration, do such further acts and deliver all such further
assurances, deeds and documents as shall be reasonably required in order to
fully perform and carry out the terms of this Agreement.
| 8.2 |
Enurement
|
This
Agreement shall be binding upon and shall enure to the benefit of each of the
Parties hereto and their respective administrators, trustees, receivers,
successors and permitted assigns.
| 8.3 |
Waivers
in Writing
|
No
waiver
by any Party of any breach (whether actual or anticipated) of any of the terms,
conditions, representations or warranties contained herein shall take effect
or
be binding upon that Party unless the waiver is expressed in writing under
the
authority of that Party. Any waiver so given shall extend only to the particular
breach so waived and shall not limit or affect any rights with respect to any
other or future breach.
| 8.4 |
Remedies
Generally
|
No
failure on the part of any Party in exercising any right or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise
of
any such right or remedy preclude any other or further exercise thereof or
the
exercise of any other right or remedy in law or in equity or by statute or
otherwise conferred.
| 8.5 |
Time
of Essence
|
Time
is
of the essence of this Agreement.
| 8.6 |
Invalidity
of Provisions
|
In
case
any of the provisions of this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality or enforceability of the
remaining, provisions contained herein shall not in any way be affected or
impaired thereby.
| 8.7 |
Entire
Agreement
|
This
Agreement supersedes all other agreements, documents, writings and verbal
understanding among the Parties relating to the subject matter hereof and
expresses the entire agreement of the Parties, in their own capacity with
respect to the subject matter hereof.
| 8.8 |
Amendments
|
No
amendment, alteration or variation of this Agreement or any of its terms or
conditions shall be binding upon the Parties unless made in writing and signed
by the duly authorized representatives of each of the Parties.
| 8.9 |
Counterparts
|
This
Agreement may be executed in counterparts, each of which when so executed shall
be deemed to be an original and such counterparts together shall constitute
one
and the same instrument.
IN
WITNESS WHEREOF the Parties hereto have executed this Agreement as of the date
first above written.
IN
WITNESS WHEREOF the
Parties have executed this Agreement on the date first written
above.
OSAGE
EXPLORATION AND DEVELOPMENT INC
By:
_________________________________
Name:
▇▇▇
▇▇▇▇▇▇▇▇
Title:
_________________________________
Approved
by:
By:
_________________________________
Name:
_________________________________
Title:
Director
By:
_________________________________
Name:
_________________________________
Title:
Director
GOLD
OIL PLC SUCURSAL COLOMBIA
By:
_________________________________
Name:
_________________________________
Title:
_________________________________
Approved
by: GOLD OIL
PLC
By:
_________________________________
Name:
▇▇▇▇
▇▇▇▇▇
Title:
Managing
Director