Exhibit 10.01
JOINT VENTURE AGREEMENT
This Joint Venture Agreement ("JVA") dated February 10, 2010 is between Oxalis
Energy Group, Inc., a Nevada Corporation ("OXALIS") and Pepper Rock Resources
Corporation, a Nevada Corporation ("PEPPER ROCK"), known individually as "PARTY"
or collectively as the "PARTIES" supersedes any and all prior JVA between Oxalis
and Pepper Rock .
WHEREAS, Oxalis and Pepper Rock are still desirous in executing a JVA to develop
and produce natural gas within the Xxxxx - Xxxxxxx Ranch near Ozona, Texas
("Xxxxx'x Ranch"),
WHEREAS, Oxalis and Pepper Rock are desirous in Pepper Rock providing capital
investment funding for two specific natural gas developments in Section 124 of
Adam's Ranch known as Phase I of Oxalis or the "Adam's Ranch Development," as
noted below.
NOW THEREFORE, in consideration of the mutual agreements herein set forth, the
Parties hereto agree as follows:
AGREEMENT
PREAMBLE: Oxalis shall give Pepper Rock the EXCLUSIVE right to participate in
the Adam's Ranch Development as long as Pepper Rock meets its funding
obligations, as noted below, as determined by Pepper Rock as being a reasonable
time frame to fund the amounts indicated, which is acceptable by Oxalis.
Oxalis has relied on Pepper Rock's representations that they will fund the
amounts as noted below on the dates indicated and has therefore made its
commitments to others in connection with the Adam's Ranch Development. Failure
by Pepper Rock to meet its funding requirements on the dates indicated will
cause irrefutable harm to Oxalis.
If Pepper Rock performs on funding its Adam's Ranch Development as agreed,
Pepper Rock will have the Exclusive Option to continue with Oxalis I - Phase II
in developing Adam's Ranch.
TOTAL PEPPER ROCK INVESTMENT: Five Million Three Hundred Thousand Dollars
($5,300,000) as working capital (the "PEPPER ROCK INVESTMENT") in the Adam's
Ranch Development with set tranche amounts and due dates as also further defined
herein. The Pepper Rock Investment shall be allocated to the respective Adam's
Ranch Development as noted, unless jointly revised by the Parties:
* Xxxxx Xxxxxxx Ranch Field:
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* Drilling of Ten (10) new xxxxx with an ESTIMATED
AFE cost of Five Hundred Thousand Dollars
($500,000) per well, with an aggregate investment,
based on a Fifty/Fifty (50/50) allocation in each
well's working interest after Pepper Rock recoups
their AFE cost associated with the drilling of
each well, or "after payout" ("APO"): $5,000,000
Initial Investment of Three Hundred Thousand
Dollars ($300,000) for the completion and
re-activation of Two (2) natural gas xxxxx (Xxxxx
115-1 and 115-3) due by February 10, 2010, based
on a 50/50 allocation in each well's working
interest: $ 300,000
$5,300,000
Upon successful funding of its Pepper Rock Investment, as agreed to by funding
date and amount, Oxalis shall assign to Pepper Rock Fifty Percent (50%) of its
working interest in each of the Adam's Ranch Development to Pepper Rock after
payout ("APO") of Pepper Rock's drilling costs per well.
INITIAL INVESTMENT TRANCHE: Pepper Rock's initial investment is Three
Hundred Thousand Dollars ($300,000) ("INITIAL
PEPPER ROCK INVESTMENT"), the allocation of
which is noted above.
FINAL INVESTMENT TRANCHE: Pepper Rock will invest the balance of its
Pepper Rock Investment as follows:
* Development of One (1) new natural gas
well per month as follows:
* Five Hundred Thousand Dollars
($500,000) per month on a mutually
agreed upon "To Be Determined" date
and each succeeding month
thereafter for Nine (9) consecutive
months so that at the end of the
Nine (9) month period, Pepper Rock
would have invested in Twenty (10)
natural gas xxxxx at a cost not to
exceed Five Hundred Thousand
Dollars ($500,000) per natural gas
well.
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TRANCHE ALLOCATION: The Pepper Rock Investment shall be allocated
to the Adam's Ranch Development, as noted
above, unless a different allocation of the
Pepper Rock Investment is mutually agreed upon
between the Parties.
ADAM'S RANCH DEVELOPMENT
AND SCOPE: 1) XXXXX-XXXXXXX RANCH FIELD (THE "RANCH"),
XXXXXXXX COUNTY, TX -- DRILLING OF
TWENTY (10) NEW XXXXX IN TEN (10) WELL
TRANCHES
An investment in the drilling of ten
(10) natural gas xxxxx in the Adam's
Ranch Development through the assignment
of Fifty Percent (50%) of Oxalis'
working interest in ten (10)
Xxxxx-Xxxxxxx Term Assignments held by
Oxalis under the following terms and
conditions:
a. Oxalis shall assign to Pepper Rock
Fifty Percent (50%) of its working
interest APO in Ten (10)
Xxxxx-Xxxxxxx Term Assignments to
drill for natural gas under the
following terms and conditions
("Natural Gas Program"):
1. Each Xxxxx-Xxxxxxx Term Assignment
/ natural gas well development
carries a cost of Five Hundred
Thousand United States Dollars
($500,000 USD) for a proposed
aggregate cost of Five Million
United States Dollars ($5,000,000
USD);
2. Pepper Rock has agreed to invest in
the drilling of One (1) natural gas
well per month starting in April,
2010 at a cost of Five Hundred
Thousand United States Dollars
($500,000 USD) per natural gas well
and payable to Oxalis, as noted
below, until such time as the ten
(10) xxxxx tranche is completed;
3. If Pepper Rock fulfills its
obligation to drill One (1) natural
gas well per month with the payment
thereof, as noted herein, on the
first tranche of the ten (10)
Natural Gas Program, Oxalis shall
assign a second ten (10)
Xxxxx-Xxxxxxx Term Assignments to
Pepper Rock;
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b. If Pepper Rock does not fulfill its
obligation to drill at least One
(1) natural gas well per month at a
cost of Five Hundred Thousand
United States Dollars ($500,000
USD) per well [and the payment
thereof as noted herein], then:
1. Pepper Rock forfeits any further
claims, rights, interest, etc. in
the remaining first ten (10)
Natural Gas Program tranche and
Oxalis has no further obligation
whatsoever to assign any of the
remaining Natural Gas Program to
Pepper Rock and
2. Pepper Rock has no claims, rights,
interest, etc. in the second Ten
(10) Natural gas Program and Oxalis
has no further obligation
whatsoever to assign the second
(10) Natural Gas Program to Pepper
Rock.
PEPPER ROCK EXCLUSIVITY: Oxalis warrants that during the term of this JVA,
Pepper Rock has the exclusive right to participate with Oxalis in each of the
Adam's Ranch Development, subject to Pepper Rock funding its Pepper Rock
Investment in full.
PEPPER ROCK PERFORMANCE: If Pepper Rock does not make ANY of its Pepper Rock
Investment as defined herein and in the time period that it, Pepper Rock, has
determined to be achievable and accepted by Oxalis, then Pepper Rock shall
forfeit any and all interest in and to each of the Adam's Ranch Development.
OXALIS EXCLUSIVITY: Oxalis warrants and represents that it has an exclusive,
written and legally binding agreement with the Xxxxx Family for the development
of the Adam's Ranch Development as noted above (the "Adam's Exclusivity"). As
long as Oxalis complies with the terms of its Adam's Exclusivity, no other
Operator or entity has the right to the Adam's Ranch Development and that Oxalis
shall retain this exclusive agreement as long as the Parties comply with the
Adam's Exclusivity guidelines. Oxalis agrees to provide a copy of the
exclusivity agreement to Pepper Rock as part of its due diligence review.
OXALIS PERFORMANCE: Oxalis agrees to exercise prudent diligence time forward to
ensure that the Adam's Exclusivity remains in full force for the duration of the
defined scope of work as contemplated on the Xxxxx Ranch Development as noted
above.
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TAX BENEFITS: The allocation of tax benefits associated with all development
activity co-funded by the Parties pursuant to this JVA, shall be shared between
the Parties according to their prevailing working interest in connection with
the Adam's Ranch Development as noted above, under the premise that Pepper Rock
has funded in full its Pepper Rock Investment.
GOVERNING LAW / VENUE: All legal issues / litigation will be governed by the
laws of the State of California with the venue of the County of Los Angeles.
PREVAILING PARTY: If any legal action or other proceedings is brought for a
breach of this JVA or any of the warranties herein or therein, the prevailing
party shall be entitled to recover its reasonable attorneys' fees and other
costs incurred in bringing such action or proceeding, in addition to any other
relief to which such party may be entitled.
ARBITRATION: Any dispute arising out of or relating to this JVA, including the
breach, termination or validity thereof, shall be finally resolved by
arbitration administered by the American Arbitration Association in accordance
with its Commercial Arbitration Rules ("RULES") in effect at the time the
request for arbitration is filed. The number of arbitrators shall be three and
shall be appointed in accord with such Rules. The place of the arbitration shall
be in the County of Los Angeles, State of California. The governing law shall be
the substantive law of the state of State of California, without regard to its
choice of law rules.
Pre-hearing discovery shall be limited. The Parties shall produce documents that
support any claim or defense to be decided by the panel. Document requests may
be served if approved by the panel. The panel shall set the timing for any
production. Depositions shall not be allowed except upon showing of good cause
as determined by the panel. To the extent discovery shall be allowed, it shall
be subject to the Federal Rules of Civil Procedure and Federal Rules or
Evidence.
The Parties shall be limited in seeking interim or emergency relief to the
methods set forth in the Rules. The Parties shall not seek emergency relief from
any court, forum or tribunal in the State of California, any other state which
has jurisdiction over the Parties, or any federal court. Any award shall be
enforced in accordance with the Rules.
SEVERABILITY: If in any judicial or arbitral proceedings a court or arbitrator
shall refuse to enforce any provision of this JVA, then such unenforceable
provision shall be deemed eliminated from this JVA for the purpose of such
proceedings to the extent necessary to permit the remaining provisions to be
enforced. To the full extent, however, that the provisions of any applicable law
may be waived, they are hereby waived to the end that this JVA be deemed to be
valid and binding agreements enforceable in accordance with its terms, and in
the event that any provision hereof shall be found to be invalid or
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unenforceable, such provision shall be construed by limiting it so as to be
valid and enforceable to the maximum extent consistent with and possible under
applicable law.
COUNTERPARTS: This JVA may be executed in any number of counterparts and by each
of the Parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which together shall constitute one
and the same agreement.
HEADINGS: All descriptive headings in this JVA are inserted for convenience only
and shall be disregarded in construing or applying any provision of this JVA.
CONFIDENTIAL INFORMATION: Except as required in the performance of obligations
hereunder, or otherwise specifically required by law, or with the prior consent
of the Parties on a case-by-case basis, each Party shall forever hold
confidential and shall not in any manner disclose, use for personal benefit, or
directly or indirectly use for the benefit of any other person, Confidential
Information that has come or shall hereafter come into each other Parties
possession. The Parties recognize the importance of protecting its and the other
Party's Confidential Information and further recognizes that this restriction
shall continue in full force and effect for a period not to exceed Thirty-six
(36) months after termination of this JVA. No later than the end of the Term of
this JVA, the Parties shall return to one another, without making retaining
copies thereof, all documents, records, computer information, maps and charts
and other repositories containing Confidential Information.
ASSIGNMENT: Neither Party shall have the right to assign this JVA. The rights
and obligations of this JVA shall bind and benefit any successors or assigns of
the Parties.
AMENDMENTS & WAIVERS: No amendment or waiver of any term, provision or condition
of this JVA shall be effective, unless in writing and executed by the Parties.
No waiver on any one occasion shall extend to or effect or be construed as a
waiver of any right or remedy on any future occasion. No course of dealing of
any Person nor any delay or omission in exercising any right or remedy shall
constitute an amendment of this JVA or a waiver of any right or remedy of any
party hereto.
LIMITS OF PEPPER ROCK RESPONSIBILITY; INDEMNIFICATION: Oxalis will indemnify and
hold harmless Pepper Rock and its officers, directors, principals, partners,
members, employees, agents, representatives and affiliates (each being an
"Indemnified Party") from and against any and all losses, claims, actions,
damages and liabilities, joint or several, to which such Indemnified Party may
become subject under any applicable federal or state law, made by any third
party or otherwise, relating to or arising out of the Services or other matters
referred to in or contemplated by this JVA or the engagement of such Indemnified
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Party pursuant to, and the performance by such Indemnified Party, of the
Services or other matters referred to or contemplated by this JVA, and Oxalis
will reimburse Pepper Rock for all costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses) as they are incurred in
connection with the investigation of, preparation for or defense of any pending
or threatening claim, or any action or proceeding arising there from, if and
when Pepper Rock is a named party thereto.
Oxalis shall, to the full extent lawful, reimburse, indemnify and hold the
Indemnified Parties harmless of and from any and all expenses, losses, damages,
liabilities, demands, charges and claims of any nature whatsoever (including
attorneys' fees) in respect of or arising from any acts or omissions of such
Indemnified Party made in good faith in the performance of Pepper Rock's duties
under this JVA and not constituting such Indemnified Party's bad faith, willful
misconduct, gross negligence or reckless disregard of Pepper Rock's duties under
this JVA. Notwithstanding the foregoing provisions of this paragraph, Oxalis
shall not be obligated to reimburse, indemnify and hold any Indemnified Party
harmless if such indemnification would not be permitted under the terms and
provisions of this JVA.
The indemnifying Party's obligations under this Section are subject to:
i) the other Party giving prompt notice of such action, claim or threat
and all applicable information in the indemnifying party's possession
with respect thereto;
ii) the other party giving reasonable assistance at the indemnifying
party's expense in connection therewith; and,
iii) the indemnifying party having sole authority to control, defends, and
settles the matter.
LIMITS OF OXALIS RESPONSIBILITY; INDEMNIFICATION: Pepper Rock will indemnify and
hold harmless Oxalis and its officers, directors, principals, partners, members,
employees, agents, representatives and affiliates (each being an "Indemnified
Party") from and against any and all losses, claims, actions, damages and
liabilities, joint or several, to which such Indemnified Party may become
subject under any applicable federal or state law, made by any third party or
otherwise, relating to or arising out of the Services or other matters referred
to in or contemplated by this JVA or the engagement of such Indemnified Party
pursuant to, and the performance by such Indemnified Party, of the Services or
other matters referred to or contemplated by this JVA, and Pepper Rock will
reimburse Oxalis for all costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) as they are incurred in connection with
the investigation of, preparation for or defense of any pending or threatening
claim, or any action or proceeding arising there from, if and when Oxalis is a
named party thereto.
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Pepper Rock shall, to the full extent lawful, reimburse, indemnify and hold the
Indemnified Parties harmless of and from any and all expenses, losses, damages,
liabilities, demands, charges and claims of any nature whatsoever (including
attorneys' fees) in respect of or arising from any acts or omissions of such
Indemnified Party made in good faith in the performance of Oxalis' duties under
this JVA and not constituting such Indemnified Party's bad faith, willful
misconduct, gross negligence or reckless disregard of Oxalis' duties under this
JVA. Notwithstanding the foregoing provisions of this paragraph, Pepper Rock
shall not be obligated to reimburse, indemnify and hold any Indemnified Party
harmless if such indemnification would not be permitted under the terms and
provisions of this JVA.
The indemnifying Party's obligations under this Section are subject to:
i) the other Party giving prompt notice of such action, claim or threat
and all applicable information in the indemnifying party's possession
with respect thereto;
ii) the other party giving reasonable assistance at the indemnifying
party's expense in connection therewith; and,
iii) the indemnifying party having sole authority to control, defends, and
settles the matter.
NO CONFLICTS: Pepper Rock represents and warrants that performance of this JVA
does not and will not breach any other agreement to which Pepper Rock is a
party. Pepper Rock further represents and warrants that Pepper Rock has not
entered into and agrees not to enter into, any agreement, either oral or
written, in conflict with or in violation of this JVA.
Oxalis represents and warrants that performance of this JVA does not and will
not breach any other agreement to which Oxalis is a party. Oxalis further
represents and warrants that Oxalis has not entered into, and agrees not to
enter into, any agreement, either oral or written, in conflict with or in
violation of this JVA.
BINDING OBLIGATION: Upon its execution and delivery, this JVA shall constitute
the valid and binding obligation of a Party and the Parties, enforceable against
the Parties or a Party in accordance with its terms, except that such
enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to creditors' rights
and general principles of equity.
AUTHORITY: The Parties represent that they have the full power and authority to
enter into and perform this JVA and that the Parties have authorized the
execution, delivery, and performance of this JVA.
COMPLIANCE WITH LAWS: The Parties agree that in the course of fulfilling their
respective responsibilities under this JVA, the Parties shall not engage in any
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conduct, furnish any information or take any other action which would violate or
cause either Party to violate any United States law or lose any United States
federal tax benefits, including but not limited to any of the activities
described in or prohibited by The Foreign Corrupt Practices Act of 1977, Section
999 of The Internal Revenue Code of 1986, The Export Administration Act of 1984,
and all regulations promulgated hereunder.
Furthermore, the Parties agree that in during the Term of this JVA and
provisions set forth herein, the Parties will use all reasonable efforts to
comply with and avoid violation of any applicable laws of the United States of
America, any state as well as any other jurisdiction or political subdivision
thereof the Parties do business in, including regulations, rules and orders
promulgated under such laws and customs having the effect of law. Without
limiting the generality of the foregoing, the Parties will not make any offer,
payment, promise to pay or authorization of the payment of any money, or any
offer, gift, promise to give, or authorization of the giving of anything of
value, directly or indirectly, to any government official, political party,
party official, or candidate for public or political office to induce such
persons to use their influence with a government or instrumentality in order to
obtain an improper business advantage for the Parties.
EQUITABLE REMEDIES: The Parties acknowledge that irreparable injury will result
to the other Party from violation of any of the terms of this JVA. Therefore,
the Parties expressly agree that the other Party shall be entitled, in addition
to damages and any other remedies provided by law, to an injunction (without
notice and without the necessity of posting a bond) or other equitable remedy
respecting such violation or continued violation.
COUNSEL; INTERPRETATION: The Parties to this JVA acknowledges that such Party
has caused this JVA to be reviewed and/or had the opportunity to have it
approved by legal counsel of such party's own choice. The Parties have
negotiated the provisions of this JVA, and any presumption that an ambiguity
contained in this JVA shall be construed against the Party that caused this JVA
to be drafted shall not apply to the interpretation of this JVA.
ENTIRE AGREEMENT: This JVA contain the entire understanding of the Parties with
respect to the subject matter hereof and supersedes any prior communication or
agreement with respect thereto.
POST JVA PLAN: Upon execution of this JVA, Pepper Rock will immediately initiate
their due diligence and advise Oxalis if they desire to proceed under the terms
of this JVA within ten (10) days after execution of this JVA. However, it is
expressively agreed upon between the Parties that Pepper Rock may not make any
announcement regarding its proposed investment in any of the AMIs until such
time as Pepper Rock has completed its due diligence and has funded its Initial
Investment Tranche.
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If Pepper Rock decides, for whatever reason, not to proceed with its Pepper Rock
Investment in any or all of the AMIs at the end of its ten (10) day due
diligence period, then this JVA shall immediately become null and void.
NOTICES: Any notice or communication provided for or required by this JVA to be
in writing shall be:
a. Hand delivered
b. Sent by certified mail with full postage, or
c. Sent by overnight courier service with proof of delivery.
Any notice so sent shall be deemed received upon the earlier of an actual
receipt or Three (3) business days after proper posting.
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The addresses of the Parties shall be as indicated below, but the Parties may
change their notice addresses by giving written notice of such change to the
other Party at its current address.
OXALIS ENERGY GROUP, INC. PEPPER ROCK RESOURCES CORP.
0000 Xxx Xxxx Xxxx, Xxxxx 000 One Lincoln Center 00 Xxxx
Xxxxxxx, XX 00000 000 Xxxxxxxxxxx Xxxx, 00xx Xxxxx
(000) 000-0000 Xxxxxxxx Xxxxxxx,XX 00000
Fax: (000) 000-0000 Fax: (630) 613-787
Attn: Xxx Xxxxxxxx Attn: Xxxx Xxxxxx
Agreed on this 10TH day of February, 2010,
OXALIS ENERGY GROUP, INC. PEPPER ROCK RESOURCES CORP.
/s/ Xxxxxx Xxxxxxxx /s/ Xxxx Xxxxxx
-------------------------------- --------------------------------
Xxxxxx Xxxxxxxx Xxxx Xxxxxx
-------------------------------- --------------------------------
Title Title
END OF JVA
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