NEXGEN PETROLEUM CORP. Las Vegas, Nevada 89102
0000
Xxxxx Xxxxxx
Xxx
Xxxxx, Xxxxxx 00000
August
25, 2009
Montello
Resources Ltd.
000,
000 – 00xx Xxxxxx
X.X.
Xxxxxxx,
Xxxxxxx X0X 0X0
Dear
Sirs/Mesdames:
Further
to our discussions, this binding letter agreement (“Letter Agreement”) is for the
purpose of evidencing our mutual agreement with respect to a 7.5% undivided
interest to be granted to Nexgen Petroleum Corp. (the “Company”) by Montello
Resources Ltd. (“Montello”), pursuant to the
terms of an equalization and joint operating agreement (the “EJO Agreement”) between
Montello and the Company, entered into by the parties on or about August 26,
2008. (Montello and the Company referred to separately as a “party” or collectively, as the
“parties”, as the
context requires).
This
binding Letter Agreement shall be effective as at April 1, 2009, and shall set
out the relationship between the parties and the respective rights, obligations
and responsibilities of each party hereto.
WHEREAS pursuant to the terms
of the EJO Agreement, the Company is entitled to earn a 15% undivided interest
in and to leases C through G set out in Schedule “A” to the EJO Agreement (the
“Leases”) upon incurring
an aggregate of $1,250,000 in Carried Amounts (as this term is defined in the
EJO Agreement);
AND WHEREAS the parties
acknowledge that as at April 1, 2009, the Company has incurred an aggregate of
$461,000 of the Carried Amount, and has transferred of an additional $200,000 by
the Company of the monies set aside by the Company for Montello’s Petrojet AFE
project to Montello’s current AFE project.
In
consideration of $10.00 (the receipt and sufficiency of which is hereby
acknowledged), the parties agree as follows:
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1.
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Montello
acknowledges and agrees that in consideration for an aggregate of $461,000
of the Carried Amount which has been incurred by the Company, and the
transfer of an additional $200,000 by the Company of the monies set aside
by the Company for Montello’s Petrojet AFE project to Montello’s current
AFE project, the Company has earned an undivided 7.5% interest in and to
the Leases, such interest to be transferred to the Company by
Montello.
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2.
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Montello
acknowledges that no further action is required on the part of the Company
for Montello to transfer the undivided interest in and to the Leases to
the Company.
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3.
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The
parties acknowledge and agree that the Company shall relinquish a 0.5% of
its 7.5% undivided interest to the Leases in exchange for, and upon,
Montello depositing to the Company’s account an aggregate of
$15,000.
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4.
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Montello
shall take all action necessary to deliver to the Company recordable
transfers of its 7.0% undivided interest to the
Leases.
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5.
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Montello
hereby provides the Company with the option to earn a further 7.5%
undivided interest in and to the Leases by paying to Montello an
additional $400,000 on or before September 30, 2009. All
partial payments of the $400,000 made by Company by or before September
30, 2009 shall entitled the Company to a pro-rated interest of the
additional 7.5% undivided interest in and to the
Leases.
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General
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1.
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The
parties hereto agree that no partnership is created by this Letter
Agreement. Nothing contained in this Letter Agreement shall or
shall be deemed to constitute the parties as partners, nor result in the
appointment of one party as the agent of the other, nor any other
relationship whereby either could be held liable for any act or omission
of the other.
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2.
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Neither
party shall have any authority to act for the other or to incur any
obligation on behalf of the other save as specifically provided by this
Letter Agreement. Each party covenants to indemnify the other
from all claims, losses, costs, charges, fees, expenses, damages,
obligations and responsibilities incurred by the other party by reason of
any action or omission of the other outside the scope of the authority
specifically provided by this Letter
Agreement.
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3.
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Each
of the parties hereby covenants and agrees that at any time upon the
request of the other party, do, execute, acknowledge and deliver or cause
to be done, executed, acknowledged and delivered all such further acts,
deeds and assurances as may be required for the better carrying out and
performance of all the terms of this Letter
Agreement.
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4.
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This
Letter Agreement will be governed by and be construed in accordance with
the laws of British Columbia.
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5.
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This
Letter Agreement will be binding upon and enure to the benefit of the
parties hereto and their respective heirs and executors and successors and
assigns as the case may be. This Letter Agreement may not be assigned
without the prior written consent of the other
party.
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6.
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This
Letter Agreement constitutes the entire agreement between the parties and
supersedes all prior letters of intent, agreements, representations,
warranties, statements, promises, information, arrangements and
understandings, whether oral or written, express or implied. The recitals
and any schedules form a part of and are incorporated by reference into
this Letter Agreement. No modification or amendment to this
Letter Agreement may be made unless agreed to by the parties thereto in
writing.
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7.
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In
the event any provision of this Letter Agreement will be deemed invalid or
void, in whole or in part, by any court of competent jurisdiction, the
remaining terms and provisions will remain in full force and
effect.
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8.
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Time
is of the essence.
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9.
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This
Letter Agreement may be executed in any number of counterparts with the
same effect as if all parties to this Letter Agreement had signed the same
document and all counterparts will be construed together and will
constitute one and the same instrument and any facsimile or pdf email
signature shall be taken as an
original.
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Yours
truly,
per:
/s/
Hsien Loong
Xxxx
Authorized
Signatory
Name:
Hsien Loong
Wong_________
If this
Letter Agreement accurately sets out your understanding of the terms of our
agreement then please sign in the place indicated below. Upon such
execution and return, this Letter Agreement shall constitute a binding agreement
upon the parties.
Acknowledged
and agreed to this 31st day of
August, 2009.
MONTELLO
RESOURCES LTD.
per:
/s/ Xxxxx
Xxxxx
Authorized
Signatory
Name:
Xxxxx Xxxxx
______________
