AMENDMENT NO. 1 TO ACQUISITION AGREEMENT
AMENDMENT
NO. 1 TO ACQUISITION AGREEMENT
Amendment
No. 1, dated as of June 30, 2008, to the Acquisition Agreement dated April
7,
1999 (the “Agreement”) by and among
B &
L Oil Company, Inc. (“B & L”), Xxxxxxx Petroleum Corp. (“Xxxxxxx”), and
Polystick U.S. Corporation (“Polystick”). Capitalized
terms not otherwise defined in this Amendment No. 1 shall have the meanings
assigned to such terms in the Agreement.
WHEREAS,
the Parties entered into the Agreement to facilitate the formation of Y2K
Energy, LLC, which name actually became Century Royalty, LLC (“Century”), and
the acquisition, operation and administration by Century of certain oil and
gas
properties.
WHEREAS,
on or about July 17, 2003 Polystick transferred its ownership interests in
Century to Polystick Oil & Gas, Inc. and then Polystick Oil & Gas, Inc.
merged with Cybershop, LLC, a New Jersey limited liability company, a wholly
owned subsidiary of GSV, Inc. (Cybershop, LLC & GSV, Inc. are referred to
herein as “GSV” and included as a member in the term Parties
above).
WHEREAS,
Polystick
funded the acquisition and purchase of the Benz Energy, Inc. and Texstar
Petroleum, Inc.’s interest in the HLM Project in Liberty and Xxxxxxxxxx
Counties, Texas, which included a license to the HLM 3-D data set (referred
to
herein as the “HLM Project”) on August 1, 1999 under the terms of the
Agreement.
WHEREAS,
Polystick funded the acquisition and participation of an undivided
1/12th
working
interest in the Southwestern Energy Company No. SL16625, Southwestern Energy
Company No. SL16625SWDW and the Southwestern Energy Company No. SL16626,
Assumptions Parish, Louisiana, (referred to herein as the “Xxxxxx Prospect”)
under the terms of the Agreement.
WHEREAS,
the Parties desire to (A) terminate the back-in after payout due B & L and
Xxxxxxx under Article VI of the Agreement and (B) agree that the Parties shall
have the right to participate in any prospect generated and proposed in the
HLM
Project (SAVE AND EXCEPT (1) the East Xxxxxx Prospect outlined and depicted
on
Exhibit A-1 and the Friendswood No. 2-RE well and (2) the Nickel Prospect
outlined and depicted on Exhibit A-2 and the Xxxxxxx Xxx No. 1 well), in the
following portions: B
&
L
an undivided 1/3rd
interest;
Xxxxxxx an undivided 1/3rd
interest;
and GSV an undivided 1/3rd
interest.
NOW
THEREFORE, for ten dollars and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Parties hereby
agree as follows:
1. This
Amendment No. 1 to Acquisition Agreement shall be effective as of June 30,
2008.
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2. All
references to Polystick U.S. Corporation and “Polystick” in the Agreement are
hereby deleted and replaced with “GSV”, which shall be deemed to refer
collectively to Cybershop, LLC, a New Jersey limited liability company, and
its
parent company, GSV, Inc., a Delaware corporation. All references to “HLM
Project” shall have the meaning set forth in the preambles to this Amendment No.
1.
3. The
text
of Article IV of the Agreement is hereby deleted in its entirety and replaced
with the following:
A. GSV
agrees to promptly evaluate the Recommended Prospect to determine whether the
LLC should make a good xxxxx xxxx fide offer to acquire the property and/or
interest. GSV shall have an exclusive option for a period of 30 days after
receiving such recommendation to independently evaluate the data submitted
by
B & L, ET AT and in which to request and obtain additional data
and collaborate with B & L, ET AL in determining the value of the
Property and the purchase price which should be offered. On or before the
expiration of 30 days from the date GSV first receives the original Prospect
Data, GSV shall notify B & L, ET AL whether it agrees that the LLC
should make a good xxxxx xxxx fide offer to acquire the Recommended Prospect.
If
GSV so notifies B & L ET AL within such 30 day period, GSV shall
have an additional ten, (10) days from the date of such notice to collaborate
with B & L, ET AL to reach a mutually acceptable good xxxxx xxxx
fide offer for the Recommended Prospect. In the event a valid counter offer,
of
an offer tendered by the LLC, is received from any prospective seller, the
Parties agree to work together to negotiate the terms of any mutually acceptable
acquisition. The Parties agree that any offer tendered to a prospective seller,
including all related negotiations, counter offers, evaluations, adjustments
and
other business related to the negotiations shall be concluded within a
reasonable time, and that a closing shall occur with regard to any such
acquisition no later than 90 days from the date the Recommended Prospect was
first submitted to GSV.
B. The
Parties agree to use best efforts to collaborate in an effort to reach a
mutually acceptable good xxxxx xxxx fide offer for a Recommended Prospect.
The
Parties furthermore agree that any mutually acceptable offer for a Recommended
Prospect shall be tendered by and in the name of the LLC. GSV,
B & L and Xxxxxxx shall each have the right, but not the
obligation to participate, through the LLC, in any Recommended Prospect in
the
following proportions:
|
B & L
|
- an undivided one-third interest |
|
Xxxxxxx
|
- an undivided one-third interest |
|
GSV
|
- an undivided one-third interest |
4. The
text
of Article V of the Agreement is hereby deleted in its entirety and replaced
with the word “Omitted.”
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5. Section
(A) of Article VI of the Agreement is hereby deleted in its entirety and
replaced with the following:
“(A) All
revenues, profits or other benefits generated by a Recommended Prospect or
other
interest acquired by the LLC shall be paid to the LLC, however the revenues
shall be directed and apportioned between the Members of the LLC in accordance
with the scheme of distribution set forth below.
(1) For
all
revenues, profits or other benefits generated from (a) the East Xxxxxx Prospect
outlined and depicted on Exhibit A-1 and the Friendswood No. 2-RE well and
(b)
the Nickel Prospect outlined and depicted on Exhibit A-2 and the Xxxxxxx Xxx
No.
1 well (collectively, the “Pending Prospects”), the distribution of revenues,
profits or other benefits shall be as follows:
BEFORE
PAYOUT
GSV-----------------------100%
AFTER
PAYOUT
GSV-----------------------100%
(2) For
all
revenues, profits or other benefits generated from properties or other interests
owned or acquired by the LLC (i) in the HLM Project other than the Pending
Prospects or (ii) outside the HLM Project, distribution of revenues, profits
or
other benefits shall be as follows:
BEFORE
PAYOUT
The
Parties who funded the acquisition shall be credited with 100% of the revenues,
profits and other benefits from the Recommended Prospect or other interests
acquired by the LLC, less each Party’s proportionate share of costs and expenses
related to monthly operations. The revenues, profits and any other benefits,
less the cost of monthly operations, shall be apportioned between the Parties
in
accordance with the percentage of the total acquisition that each respective
Party funded.
AFTER
PAYOUT
After
Payout is achieved the Parties who funded the acquisition shall be credited
with
100% of the revenues, profits and other benefits from the Recommended Prospect
or other interests acquired by the LLC. The revenues, profits and any other
benefits shall be apportioned between the parties in accordance with the
percentage of the total acquisition that each respective Party funded. After
Payout each Party shall pay its respective share of the cost of monthly
operations related to the interest acquired.
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6. Section
(B) of Article VI of the Agreement is hereby deleted in its entirety and
replaced with the word “Omitted.”
7. The
first
sentence of Section (B) of Article VII is hereby deleted in its entirety and
replaced with the following: When Payout occurs under the terms of this
Agreement, the interest of the Parties vested with a back-in after payout shall
vest and be converted and credited to such party on the 1st
day of
the month following the month in which Payout actually occurs.”
8. The
term
“Pay-Out” in Section (B) of Article IX is hereby deleted and replaced with the
term “Payout”.
9. Except
as
set forth above, the Agreement, as amended herein, shall remain in full force
and effect without further modification, unless altered or amended in accordance
with Section (G) of Article X thereof.
10. This
Amendment No. 1 to Acquisition Agreement may be executed in several counterparts
or by separate instruments, and all of such counterparts and instruments shall
constitute one agreement, binding on all of the parties hereto. Facsimile
signatures shall be deemed originals for all purposes hereunder.
[Remainder
of this page left blank intentionally. Signature page(s) to
follow.]
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IN
WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to
Acquisition Agreement to be duly executed as of the first date first above
written.
| B & L OIL COMPANY, INC. | ||
| BY: |
/s/
Xxxxxx X. Xxxxxxx
|
|
|
Xxxxxx
X. Xxxxxxx, President
|
||
| XXXXXXX PETROLEUM CORP. | ||
| BY: |
/s/
Xxxxx Xxxxxxxxxx
|
|
|
Xxxxx
Xxxxxxxxxx, President
|
||
| CYBERSHOP, LLC | ||
| BY: |
/s/
Gilad Gat
|
|
|
Gilad
Gat, President
|
||
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