AREA OF MUTUAL INTEREST AGREEMENT
This Area of Mutual Interest Agreement ("Agreement"), dated October 27,
1997 ("Effective Date"), is entered into by and between Xxx Xxxxxxxx, an
individual ("Xxxxxxxx") and Beta Oil & Gas, Inc., a Nevada corporation ("Beta"),
concerning the parties' joint participation in acquiring and operating oil and
gas interests covering the lands hereinafter described.
RECITALS
A. WHEREAS, Xxxxxxxx is a petroleum engineer who is experienced in
identifying geological properties as viable candidates for oil and gas
exploration and/or development, which properties cover lands in areas within the
State of California generally known as the Sacramento Basin and the San Xxxxxxx
Basin (such geological properties sometimes referred to herein as "Prospects");
and
B. WHEREAS, Xxxxxxxx intends to identify Prospects for the purpose of
acquiring oil and gas interests thereon, and to caused to be drilled thereon one
or more exploratory and/or development xxxxx for oil and gas; and
C. WHEREAS, Xxxxxxxx may identify other geological properties as viable
candidates for oil and gas exploration and/or development, which properties are
outside the areas of mutual interest specifically set forth herein ("Outside
Prospects"), and/or he may identify other prospects which are inside or outside
such areas of mutual interest, and which are owned by others but available for
purchase ("Acquisitions"); and
D. WHEREAS, Beta is a Nevada corporation in good standing engaged in
the business of exploration for and the acquisition and development of oil and
gas properties, and desires the opportunity to participate in any of the
Prospects, Outside Prospects, and Acquisitions identified and/or acquired by
Xxxxxxxx; and
E. WHEREAS, Xxxxxxxx and Beta desire to enter into this Agreement (1)
to identify certain areas of mutual interest concerning the Prospects and to
acquire oil and gas interests thereon, (2) to identify and acquire oil and gas
interests in Outside Prospects, and (3) to identify Acquisitions, all with the
goal of providing the parties the opportunity to jointly participate therein as
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants, conditions
and restrictions hereinafter set forth, and the promises to be kept and
performed by the parties hereto, it is agreed as follows:
I. AREAS OF MUTUAL INTEREST. Two (2) areas of mutual interest are hereby
established under this Agreement, as follows:
A. Sacramento Basin Forbes 3-D Project Area. The Sacramento Basin
Forbes 3-D Project Area ("Sacramento AMI") is hereby established covering the
following described lands:
Township 21 North, Range 2 West: All
Township 21 North, Range 3 West: All
Township 21 North, Range 4 West: East Half
Township 22 North, Range 2 West: All
Township 22 North, Range 3 West: All
Township 22 North, Range 4 West: East Half
Township 23 North, Range 2 West: All
Township 23 North, Range 3 West: All
Township 23 North, Range 4 West: East Half
all in the Counties of Butte, Xxxxx and Tehama, State of California, MDB&M, and
as depicted on the map attached hereto as Exhibit "A" and by this reference made
a part hereof.
B. San Xxxxxxx Basin Pliocene 2-D Project Area. The San Xxxxxxx Basin
Pliocene 2-D Project Area ("San Xxxxxxx AMI") is hereby established covering the
following described lands:
Township 26 South, Range 22 East: East Half
Township 26 South, Range 23 East: All
Township 26 South, Range 24 East: All
Township 27 South, Range 22 East: East Half
Township 27 South, Range 23 East: All
Township 27 South, Range 24 East: All
Township 28 South, Range 22 East: East Half
Township 28 South, Range 23 East: All
Township 28 South, Range 24 East: All
all in Counties of Xxxx and Kings, State of California, MDB&M, and as depicted
on the map attached hereto as Exhibit "B" and by this reference made a part
hereof.
C. Sacramento AMI.
1. Identification of Prospects; Payment of Costs. Xxxxxxxx
will identify Prospects within the Sacramento AMI which he, in his sole
discretion, determines to exhibit reasonable seismic bright spot and amplitude
verses offset (AVO) characteristics. Beta shall pay 100% of the costs of: (a)
approximately 10 square miles of 3-D seismic shooting and proceesing, (b)
obtaining oil and gas interests and/or seismic options within such area, and (c)
drilling and completing three xxxxx thereon at locations selected by Xxxxxxxx.
Upon completion of the 3-D seismic shooting, the size of the Sacramento AMI will
be redefined to encompass only the area covered by the seismic shooting, or the
area covered by oil and gas interests, or the area covered by seismic options.
The phrase "oil and gas interest" and "oil and gas interests" as used in this
Agreement shall include, without limitation, mineral, royalty or leasehold
interests, or an option to acquire such interests.
2. Acquisition of Oil and Gas Interests; Assignment to Beta.
The terms of any acquisition of oil and gas interests shall be at the sole
discretion of Xxxxxxxx. Provided that the following principal terms are not
exceeded:
a. For Leases - 1/5 Royalty or less, 3 year term or
greater and $30/acre rent or less.
b. For Seismic Options - 1 year option term or
greater, $10/acre option payment or less and lease
terms as set forth in I.C.2a.
It is understood that all oil and gas interests shall be acquired in the name of
Xxxxxxxx or his duly authorized agent. Within thirty (30) days after acquiring
any oil and gas interests, Xxxxxxxx shall deliver to Beta a duly executed and
recordable assignment of an undivided 75% interest therein, reserving, only for
the benefit of independent geologist/geophysicist compensation, an overriding
royalty interest not to exceed 2% of 8/8ths. Any such assignment shall be
without warranty of title, express or implied, except as relates to the acts of
Xxxxxxxx.
3. Prospect Fee. In addition to other costs paid by Beta
hereunder, Beta shall pay Xxxxxxxx a prospect fee of $30,000.00 for each of the
first three (3) xxxxx drilled within the Sacramento AMI, each such payment to be
due upon the spudding of each such well.
4. Operating Agreement. Concurrent with the initial assignment
to Beta provided above, the parties hereto shall be deemed to have entered into
an Operating Agreement in substantially the same form as the Operating Agreement
attached hereto as Exhibit "C" and by this reference made a part hereof. Except
as otherwise expressly provided in this Agreement, the Operating Agreement shall
govern all operations on any Prospect within the Sacramento AMI. The Operating
Agreement shall designate Xxxxxxxx, or his duly authorized agent, as operator.
5. Cost of First Three Xxxxx. Notwithstanding anything to the
contrary contained herein or in the Operating Agreement, Beta shall be
responsible for 100% of the costs of drilling and completing (through the tanks,
if completed as a producer, and plugged and abandoned, if a dry hole) the first
three (3) xxxxx within the Sacramento AMI (regardless of whether such xxxxx, or
any of them, are exploratory or development in nature). Thereafter, all
operations on said three (3) xxxxx, if any, and all other operations within the
Sacramento AMI shall be governed by the Operating Agreement. It is understood
and agreed that Beta shall not be entitled to any form of reimbursement with
respect to its payment of a disproportionate share (i.e., 100% instead of 75%)
of the costs associated with the first three (3) xxxxx.
6. Other Xxxxx Within the Sacramento AMI. As to each well,
other than the first 3 xxxxx, within the Sacramento AMI identified by Xxxxxxxx,
Beta shall pay Xxxxxxxx a prospect fee $10,000.00, each such payment to be due
upon the spudding of each such well. All operations on each such Prospect, and
the parties' respective shares thereof, shall be governed by the Operating
Agreement.
D. San Xxxxxxx AMI.
1. Identification of Prospects; Payment of Costs. Xxxxxxxx
will identify Prospects within the San Xxxxxxx AMI which he, in his sole
discretion, determines to exhibit reasonable seismic bright spot and AVO
characteristics. Beta shall pay 100% of the costs of: (a) approximately 50 miles
of 2-D seismic data and proceesing, (b) obtaining and renewing oil and gas
interests covering approximately 320 acres, and (c) drilling and completing two
xxxxx thereon at locations selected by Xxxxxxxx.
2. Acquisition of Oil and Gas Interests; Assignment to Beta.
The terms of any acquisition of oil and gas interests shall be at the sole
discretion of Xxxxxxxx provided that the following principal terms are not
exceeded:
a. For Leases - 1/5 Royalty or less, 3 year term or
greater and $30/acre rent or less.
b. For Seismic Options - 1 year option term or
greater, $10/acre option payment or less and lease
terms as set forth in I.D.2a.
It is understood that all oil and gas interests shall be acquired in the name
of Xxxxxxxx or his duly authorized agent. Within thirty (30) days after
acquiring any oil and gas interests, Xxxxxxxx shall deliver to Beta a duly
executed and recordable assignment of an undivided 75% interest therein,
reserving, only for the benefit of independent geologist/geophysicist
compensation, an overriding royalty interest not to exceed 2.5% of 8/8ths. Any
such assignment shall be without warranty of title, express or implied, except
as relates to the acts of Xxxxxxxx.
3. Prospect Fee. In addition to other costs paid by Beta
hereunder, Beta shall pay Xxxxxxxx a prospect fee of $25,000.00 for each of the
first two (2) xxxxx drilled within the San Xxxxxxx AMI, each such payment to e
due upon the spudding of each such well.
4. Operating Agreement. Concurrent with the initial assignment
to Beta provided above, the parties hereto shall be deemed to have entered into
the Operating Agreement attached hereto as Exhibit "C." Except as expressly
provided in this Agreement, the Operating Agreement shall govern all operations
on any Prospect within the San Xxxxxxx AMI. The Operating Agreement shall
designate Xxxxxxxx, or his duly authorized agent, as operator.
5. Cost of First Two Xxxxx. Notwithstanding anything to the
contrary contained herein or in the Operating Agreement, Beta shall be
responsible for 100% of the costs of drilling and completing (through to the
tanks, if completed as a producer, and plugged and abandoned, if a dry hold) the
first two (2) xxxxx within the San Xxxxxxx AMI (regardless of whether such
xxxxx, or any of them, are exploratory or development in nature). Thereafter,
all operations on said two (2) xxxxx, if any, shall be governed by the Operating
Agreement. It is understood and agreed that Beta shall not be entitled to any
form of reimbursement with respect to its payment of a disproportionate share
(i.e., 100% instead of 75%) of the costs and expenses associated with the first
two (2) xxxxx.
6. Other Xxxxx Within the San Xxxxxxx AMI. As to each
Prospect, other than the first 2 xxxxx, within the San Xxxxxxx AMI identified by
Xxxxxxxx, Beta shall pay Xxxxxxxx a prospect fee of $10,000.00, each such
payment to be due upon the spudding of each such well. All operations on each
such Prospect, and the parties' respective shares thereof, shall be governed by
the Operating Agreement.
II. BETA'S INITIAL PAYMENT
Concurrent with its execution of this Agreement, Beta shall pay
Xxxxxxxx the sum of $175,000.00, as an advanced payment, to be used by Xxxxxxxx
toward initial coses associated with the purchase of seismic shooting and
processing, purchasing seismic data and processing, and obtaining oil and gas
interests and/or seismic options covering lands within the Sacramento AMI or the
San Xxxxxxx AMI under the terms of this Agreement. The initial payment also
includes an advance of prospect fees for one Sacramento AMI well ($30,000) and
one San Xxxxxxx AMI well ($25,000), for a total of $55,000 to be used at
Xxxxxxxx'x discretion. An estimated schedule of costs to casing point for the
first five (5) xxxxx in both AMI's, including the initial payment, is shown in
Exhibit D. Beta understands that its obligation to pay 100% of the costs of such
oil and gas interests, seismic and drilling as set forth in this Agreement may
be more or less than the amount referenced in Exhibit D. Beta also agrees that
the time estimated for such acquisitions and drilling as forth in this Agreement
may be shorter or longer than referenced in Exhibit D. Beta agrees to pay within
15 days of being cash called by Xxxxxxxx, as estimated in Exhibit D, any and all
other costs required of it hereunder, or under the Operating Agreement, failing
which shall be deemed a material breach.
However, notwithstanding anything to the contrary contained in the
Agreement, in the event a cash call for oil and gas interests, seismic or
drilling will cause costs to exceed by more than 25% the estmiated amount seet
forth in Exhibit D, Beta shall have the election to either (1) terminate its
rights and obligations under this Agreement applicable to the particular cash
call, or (2) approve such cash call. Beta shall notify Xxxxxxxx in writing
within three (3) days after receiving the cash call whether it elects to (1)
terminate or (2) approve. Beta's failure to timely notify Xxxxxxxx of its
election shall be deemed an election to a approve the cash call. If Beta elects
to terminate, Beta shall, continue to be responsible for payment of all costs
properly attributable to it which were incurred prior to the date of its
election.
III. OUTSIDE PROSPECTS, & PRODUCING PROPERTY ACQUISITIONS
A. Identification of Outside Prospects; Beta's Option to Participate.
Xxxxxxxx may, but is not obligated to, identify one or more Outside Prospects
which he, in his sole discretion, determines to be viable candidates for
acquiring oil and gas interests thereon for purposes of drilling exploratory
and/or development xxxxx. As to each Outside Prospect identified by Xxxxxxxx,
Beta shall have the option to participate therein for a minimum of 50% working
interest. If Beta elects to participate, the parties will enter into another AMI
agreement similar to this Agreement, but specific to the area covered by the
Outside Prospect, which includes, without limitation, the following general
terms:
1. As to Beta's participation, it shall pay Xxxxxxxx a
non-refundable prospect generation fee of $15,000.00 of 8/8ths for each well
drilled.
2. As to Beta's participation, it shall provide Xxxxxxxx with
a 10% of 8/8th carried working interest on all costs to casing point for each
well drilled.
3. Beta's right to participate in any Outside Prospects shall
terminate at the end of the year 2000.
B. Identification of Producing Property Acquisitions; Beta's Option to
Participate. Xxxxxxxx may, but is not obligated to, identify one or more
Producing Party Acquisitions which he, in his sole discretion, determines to be
viable candidates for acquiring oil and gas interests thereon for purposes of
particating in the operation of producing xxxxx. As to each Producing Party
Acquisition identified by Xxxxxxxx, Beta shall have the option to participate
therein for a minimum of 50% working interest. If Beta elects to participate,
the parties will enter into another AMI agreement similar to this Agreement, but
specific to the area covered by the Producing Party Acquisition, which includes,
without limitation, the following general terms:
1. Xxxxxxxx shall not be entitled to any finder's fee.
2. As to Beta's particpation, it shall provide Xxxxxxxx with a
2.5% of 8/8th carried working interest in all acquired properties.
3. Beta's right to participate in any Producing Party
Acquisition shall terminate at the end of the year 2000.
IV. RENEWALS AND EXTENSIONS
As to each Prospect within the Sacramento AMI or the San Xxxxxxx AMI,
it is understood and agreed that in the event any oil and gas interest covered
hereby expires and a new oil and gas interest (including, without limitation,
new lease, top lease, renewal, extension or other instrument affecting the
acreage covered thereby, or a portion thereof), is acquired by either party
hereto, or by any party representing or acting on behalf of such party (the
"acquiring party"), within one (1) year from the latest expiration date of any
oil and gas interest thereon, such new oil and gas interest shall become subject
to this Agreement to the same effect as though it originally covered such
prospect if, and only if, the other party (the "non-acquiring party") elects to
participate in such acquisition.
In that regard, the acquiring party shall immediately notify the
non-acquiring party in writing of such acquisition, including all relevant
details relating thereto. The non-acquiring party shall have thirty (30) days
thereafter to notify the acquiring party in writing of its election to
participate in such acquisition. If the non-acquiring party elects to so
participate, it shall reimburse the acquiring party for the non-acquiring
party's percentage interest of the acquisition costs. Promptly after receipt of
such payment, the acquiring party shall deliver to the non-acquiring party a
duly executed and recordable assignment of the non-acquiring party's percentage
interest in and to the new oil and gas interest. Such assignment shall be
without warranty of title, express or implied, except that the acquiring party
shall warrant such new oil and gas interest is free and clear of any and all
liens and encumbrances by, through, and under the acquiring party, but not
otherwise. Failure to timely elect to participate in such acquisition shall be
deemed an election not to participate. The phrase "non-acquiring party's
percentage interest" as used in this paragraph means such party's interest in
the prospect in which the new oil and gas interest was acquired.
The parties hereto specifically agree that the provisions of this
Article III shall remain in effect notwithstanding a termination of the rights
and obligations provided for in this Agreement.
V. BETA'S CASH REQUIREMENTS AND LIQUIDATED DAMAGES
A. Beta's Cash Requirements. Beta understands that Xxxxxxxx'x efforts
to identify prospects and acquire oil and gas interests thereon will require the
purchase of seismic, seismic processing and/or geological data relating thereto.
In that regard, Beta shall at all times during the terms of this Agreement and
as estimated by Exhibit D, promptly advance funds when cash called within 15
days and/or pay accounts within 15 days of being invoiced by Xxxxxxxx. Beta's
failure to perform either of these requirments shall be deemed a material breach
of this Agreement, the result of which shall be, at Xxxxxxxx'x election, Beta's
forfeiture of any and all further rights under this Agreement, and at any time
before the first five (5) xxxxx have been drilled, payment of the amount set
forth in paragraph V.B.
B. Liquidated Damages. If Beta fails to advance funds when cash called
by Xxxxxxxx, as estimated in Exhibit D, within 15 days and/or pay accounts
within 15 days of being invoiced by Xxxxxxxx, then Xxxxxxxx, at his option, may
terminate this Agreement and all rights and obligations hereunder by giving
written notice thereof to Beta. Thereupon, Xxxxxxxx shall be relieved of any
obligation to identify and/or acquire oil and gas interests on any prospect, and
at any time before the first three xxxxx in the Sacramento AMI and two xxxxx in
the San Xxxxxxx AMI have been drilled, Xxxxxxxx shall be entitled to immediate
payment from Beta of the sum of $100,000.00 as liquidated damages, and each
party hereto shall return to the other party any and all documents rightfully
belonging such other party. Xxxxxxxx shall not be entitled to liquidated damages
if after 18 months of the execution of this Agreement, he fails to identify the
five (5) prospects as set forth in paragraph I.C.1 and I.D.1.
Xxxxxxxx and Beta agree that it would be extremely impractical and
difficult to estimate the amount of damages Xxxxxxxx might suffer in the event
of Beta's default hereunder. The parties hereby agree that the delivery of the
above-noted liquidated damages to Xxxxxxxx in the event of Beta's default
represents a fair and reasonable estimate of said damages.
Xxxxxxxx'x Initials:__________ Beta's Initials:__________
VI. OPERATING AGREEMENT
A. As to each Prospect with the Sacramento AMI and the San Xxxxxxx AMI,
the parties agree that the Operating Agreement attached hereto as Exhibit "C"
and by this reference made a part hereof shall automatically become effective
and, except as expressly provided in this Agreement, shall govern all operations
as to each such Prospect. Xxxxxxxx, or his designated agent, shall act as
operator.
B. Notwithstanding anything to the contrary contained herein or in the
Operating Agreement, it is understood and agreed that, as to the first five (5)
xxxxx drilled hereunder (i.e., three (3) xxxxx within the Sacramento AMI and two
(2) xxxxx within the San Xxxxxxx AMI, as set forth above), Beta shall pay 100%
of all costs associated with drilling and completing such xxxxx through the
tanks (if completed as a producer of oil or gas), or plugged and abandoned (if a
dry hole). Thereafter, all operations on said five (5) xxxxx, if any, shall be
governed by the Operating Agreement.
VII. ASSIGNABILITY
It is understood and agreed that this Agreement and any assignment or
sublease which either party hereto may become entitled to under the terms hereof
shall not be assigned or subleased, in whole or in part, without the other
party's prior written consent, and the granting of any such consent by either
party shall not have the effect of waiving this limitation on any future or
additional assignments or subletting thereof. Every such assignment or sublease
made without the appropriate party's prior written consent shall be void. A
party's prior written consent to any assignment hereunder shall not be
unreasonably withheld.
VIII. TITLE
Irrespective of any provision contained herein to the contrary, it is
specifically understood and agreed that Xxxxxxxx makes no warranty whatsoever
regarding the title to any oil and gas interest acquired hereunder.
Specifically, Xxxxxxxx does not warrant the title to nor represent that the oil
and gas interests cover a full interest in the lands covered thereby. It is
agreed that Xxxxxxxx shall not be required to furnish any preliminary title
reports, abstracts of title, or similar documentation regarding title to any oil
and gas interests acquired hereunder, and Xxxxxxxx shall have no obligation to
purchase any policies of title insurance or title opinions, nor shall Xxxxxxxx
be obligated to do any curative work in connection with the title to any of the
oil and gas interests, except as specifically required for the drillsite leases
as set forth in Article IV of the Operating Agreement, attached as Exhibit C.
Any assignment from Xxxxxxxx will be without warranty, either express or
implied, except as to Xxxxxxxx'x own acts. Furthermore, should any oil and gas
interest require written consent to assign, Xxxxxxxx'x assignment to Beta shall
be subject to Xxxxxxxx'x ability to secure such consent, and Xxxxxxxx shall not
be liable to Beta for its inability to obtain such consent in any manner.
IX. INSURANCE
Frimodif shall carry the insurance provided for in the Operating
Agreement with respect to all operations conducted by Xxxxxxxx wihtin the AMIs,
including operations conducted and to be conducted at the sole cost, risk and
expense of Beta. Such insurance shall be charged to the parties and carried for
the mutual benefit and protection of both Xxxxxxxx and Beta.
X. DISCLOSURES
Beta agrees to notify Xxxxxxxx five days in advance of any type of
disclosure to any third party regarding any of the terms of this Agreement or
any details relating to the Sacramento AMI or San Xxxxxxx AMI.
XI. NOTICES
Any notice, request, instruction or other document to be delivered
hereunder by any party hereto to any other party shall be in writing and
delivered personally, via telecopy (with receipt confirmed) or by registered or
certified mail, postage prepaid:
If to Xxxxxxxx: Xxx Xxxxxxxx
P. O. Xxx 00000
Xxx Xxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
If to Beta: Beta Oil & Gas, Inc.
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
or at such other address for a party as shall be specified by like notice. Any
notice that is delivered personally in the manner provided herein shall be
deemed to have been duly given to the party to whom it is directed upon actual
receipt by such party (or its agents for notices hereunder). Any notice that is
addressed and mailed in the manner herein provided shall be conclusively
presumed to have been duly given to the party to which it is addressed at the
close of business, local time of the recipient, on the third day after the day
it is so placed in the mail. Any notice that is sent by telecopy shall be deemed
to have been duly given to the party to which it is addressed upon telephonic
confirmation of the same as provided herein. A copy of any notice delivered by
telecopy shall promptly be mailed in the manner herein provided to the party to
which such notice was given.
XII. REPRESENTATIONS AND WARRANTIES OF THE PARTIES
A. Except as may otherwise be set forth in this Agreement, Xxxxxxxx
hereby represents and warrants to and covenants with Beta as follows:
1. Effect of Agreement; Consent. The execution and delivery of
this Agreement by Xxxxxxxx and the consummation by Xxxxxxxx of the transactions
contemplated hereby do not require the consent, approval, clearance, waiver,
order or authorization of any other person.
2. No Misleading Statements. This Agreement, and the
information referred to herein, when taken as a whole, do not include any untrue
statement of a material fact and do not omit any material fact necessary to make
the statements contained herein or therein not misleading.
3. Execution and Delivery. Xxxxxxxx has full power and
authority to execute and deliver this Agreement and to perform his obligations
hereunder. This Agreement has been duly executed and delivered by Xxxxxxxx and
constitutes a legal, valid and binding obligation of Xxxxxxxx, enforceable
against him in accordance with its terms, except as such enforceability may be
limited by or subject to (a) any bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditor's rights generally and (b)
general principles or equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
B. Except as may otherwise be set forth in this Agreement, Beta hereby
represents and warrants to and covenants with Xxxxxxxx as follows:
1. Corporate Organization. Beta is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada and has all requisite corporate power and authority to carry on its
business in the State of California as it is now being conducted, and to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby.
2. No Misleading Statements. This Agreement, and the
information referred to herein, when taken as a whole, do not include any untrue
statement of a material fact and do not omit any material fact necessary to make
the statements contained herein or therein not misleading.
3. Due Authorization, Execution and Delivery; Effect of
Agreement. The execution and delivery by Beta of this Agreement and the
consummation by Beta of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Beta. This Agreement
has been duly and validly executed and delivered by Beta and constitutes the
legal, valid and binding obligation of Beta, enforceable against it in
accordance with its terms, except as such enforceability may be limited by or
subject to (a) any bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to creditor's rights generally and (b) general principles
or equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
4. Consents. No consent, approval or authorization of, or
exemption by, or filing with, any person or entity is required in connection
with the execution, delivery or performance by Beta of this Agreement or the
taking of any other action contemplated hereby.
XII. GENERAL PROVISIONS
A. Agreement Subject to Laws. This Agreement is subject to all valid
and applicable Federal, State and local laws, rules, orders and regulations and
all operations hereunder shall be conducted in conformity therewith.
B. Successor and Assigns. This Agreement will inure to the benefit of
and be binding upon the parties hereto, and their respective successors and
permitted assigns. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any parties hereto without the prior
written consent of the other parties hereto. Any assignment without such consent
being first obtained shall be void.
C. Expenses. Except as may otherwise be provided in this Agreement or
the Operating Agreement, each party hereto shall be responsible for the payment
of the fees and expenses of their respective counsel, accountants and other
experts in the negotiation and preparation of this Agreement.
D. Modification and Waiver. Any of the terms or conditions of this
Agreement may be waived in writing at any time by the party which is entitled to
the benefits thereof. No waiver of any of the provisions of this Agreement shall
be deemed to or shall constitute a waiver of any other provisions hereof
(whether or not similar).
E. Further Assurances. The parties agree to take all such further
actions and execute, acknowledge and deliver all such further documents that are
necessary or useful in carrying out the purpose and intent of this Agreement, to
the extent permitted by applicable law.
F. Invalidity. Except as may otherwise be provided, if any term or
other provision of this Agreement is invalid, illegal or incapable of being
enforced by any rule of law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect.
Upon such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the extent possible.
G. Attorneys' Fees. In the event of any claim, dispute or controversy
arising out of or relating to this Agreement, the prevailing party in such
action or proceeding shall be entitled to recover its reasonable attorneys' fees
and costs. The court shall determine who is the "prevailing party," whether or
not the dispute or controversy proceeds to final judgment.
H. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall constitute the same instrument.
I. Headings. Headings used in this Agreement are included for
convenience only and shall not be deemed to constitute part of this Agreement
or to affect its construction.
J. Gender and Number. Masculine, feminine, or neuter gender
and the singular and the plural number, shall each be considered to include
the other whenever the context so requires.
K. Governing Law; Interpretation. This Agreement shall be construed in
accordance with and governed by the laws of the State of California (regardless
of the laws that might otherwise govern under applicable California principles
of conflict of laws) as to all matters, including, but not limited to, matters
of validity, construction, effect, performance and remedies.
L. Jurisdiction. Any legal action or proceeding with respect to this
Agreement may be brought in the federal or state courts for the County of Xxxx,
in the State of California, and by execution and delivery of this Agreement, the
parties hereto hereby accept the jurisdiction of the aforesaid courts.
M. No Warranties. No representation, warranty, or recommendation is
made by either party, their respective agents, employees, or attorneys regarding
the legal sufficiency, legal effect, or tax consequences of this Agreement or
the transaction, and each signatory is advised to submit this Agreement to his
respective attorney before signing it.
N. Survival. The warranties, representations and indemnities contained
in this Agreement, and in any other instrument delivered pursuant hereto, shall
survive the date hereof and shall remain in full force and effect thereafter.
O. Time of Essence. Time is of the essence in this Agreement and a
failure of this condition shall be a material breach hereof.
P. Conflict. In the event of any conflict between the terms of this
Agreement and the terms of the Operating Agreement attached hereto, the terms of
this Agreement shall prevail.
Q. Entire Agreement. This Agreement constitutes the sole understanding
of the parties hereto with respect to the matters provided for herein and
supersedes any previous agreements and understandings between the parties with
respect to the subject matter hereof. No amendment, modification or alteration
of this Agreement shall be binding unless in writing and duly executed by all
parties hereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the Effective Date, and each party acknowledges receipt of a
fully executed copy of this Agreement.
BETA OIL & GAS, INC.,
a Nevada corporation
By
Xxx Xxxxxxxx Xxxxx Xxxxx, President
