of Ontario
("UHC")
- and -
EXCELARON LLC, a limited liability corporation formed under the laws of
California
("Excelaron")
- and -
MOGUL ENERGY INTERNATIONAL, INC., a corporation formed under the laws of the
State of Delaware
("Mogul")
- and -
BARISAN ENERGY LIMITED, a corporation formed under the laws of the Commonwealth
of Australia
("Barisan")
- and -
AUSTRALIAN OIL COMPANY LIMITED, a corporation incorporated under the laws of the
Commonwealth of Australia ("AOC")
- and -
WILLIAM DIVINE, an individual resident in the State of California ("WD")
- and -
EXECUTION VERSION
VESTA CAPITAL CORP., a corporation formed under the laws of Ontario
("Vesta").
RECITALS:
WHEREAS Vesta is a "CPC" (as hereinafter defined in the Policy (as hereinafter
defined in Article 1)) and is required to complete a "Qualifying Transaction"
(as hereinafter defined in Article 1);
AND WHEREAS Subco (as hereinafter defined in Article 1) is a corporation to be
incorporated and wholly-owned by Vesta;
AND WHEREAS Excelaron is a California limited liability company and is the 100%
owner of the Project (as hereinafter defined in Article 1);
AND WHEREAS AOC, Barisan and WD entered into an operating agreement on June 30,
2006, which Operating Agreement (as hereinafter defined in Article 1) was
restated in its entirety effective February 1, 2008;
AND WHEREAS Barisan contributed US$1,000,000 to Excelaron on December 21, 2007;
AND WHEREAS the Operating Agreement provided, inter alia, that AOC owned a 50%
Membership Interest (as hereinafter defined in Article 1), that WD owned a 50%
Membership Interest and incorrectly stated that Barisan could earn a 10%
Membership Interest by contributing US$1,000,000 to Excelaron and a further 10%
Membership Interest by contributing a further US$1,000,000 to Excelaron;
AND WHEREAS the Operating Agreement should have, inter alia, ratified Barisan's
contribution of US$1,000,000 to Excelaron and provided that upon payment of such
amount Barisan had earned an 8% Membership Interest, and should have provided
that Barisan could earn a further 10% Membership Interest by contributing a
further US$1,000,000 to Excelaron;
AND WHEREAS on February 1, 2008 the Membership Interests of each of AOC, Barisan
and WD were as follows:
AOC
46%
Barisan
8%
WD
46%
AND WHEREAS AOC, Barisan, WD and UHC entered into a waiver and assumption
agreement effective as of January 1, 2009 (a copy of which is attached hereto as
Schedule "A") (the "First Agreement") pursuant to which WD transferred his
Membership Interest to UHC, and UHC agreed to observe and perform all of the
covenants and obligations of WD under the Operating Agreement as though UHC were
an original signatory thereto;
2
EXECUTION VERSION
AND WHEREAS by agreement dated in counterparts on February 11 and February 12,
2009 (a copy of which is attached hereto as Schedule "B") (the "Second
Agreement") between Excelaron and Mogul, and agreed to by each of Australian Oil
Company #2 Ltd., a corporation incorporated under the laws of the Commonwealth
of Australia ("AOC2"), Barisan and UHC: (a) UHC's Membership Interest was
reduced from a 46% Membership Interest