Document:

Exhibit
10.9

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT
(“Agreement”) is entered into by and between Jim Warner (“Employee”) and HSN
General Partner LLC, a Delaware limited liability company (the “Company”), and
is effective
                                              
2007 (the “Effective Date”).

 

WHEREAS, the Company
desires to establish its right to the services of Employee, in the capacity
described below, on the terms and conditions hereinafter set forth, and
Employee is willing to accept such employment on such terms and conditions.

 

NOW, THEREFORE, in
consideration of the mutual agreements hereinafter set forth, Employee and the
Company have agreed and do hereby agree as follows:

 

1A.                             EMPLOYMENT.  The Company
agrees to employ Employee as EVP and General Counsel, and Employee accepts and
agrees to such employment.  During
Employee’s employment with the Company, Employee shall do and perform all
services and acts necessary or advisable to fulfill the duties and
responsibilities as are commensurate and consistent with Employee’s position
and shall render such services on the terms set forth herein.  During Employee’s employment with the
Company, Employee shall report directly such person(s) as from time to
time may be designated by the Company (hereinafter referred to as the “Reporting
Officer”).  Employee shall have such
powers and duties with respect to the Company as may reasonably be assigned to
Employee by the Reporting Officer, to the extent consistent with Employee’s
position and status.  Employee agrees to
devote all of Employee’s working time, attention and efforts to the Company and
to perform the duties of Employee’s position in accordance with the Company’s
policies as in effect from time to time. 
Employee’s principal place of employment shall be the Company’s offices
located in St. Petersburg, Florida.

 

2A.                             TERM OF AGREEMENT. 
The term (“Term”) of this Agreement shall commence on the Effective Date
and shall continue for two (2) years, unless sooner terminated in
accordance with the provisions of Section 1 of the Standard Terms and
Conditions attached hereto.  During the
period that is 90-120 days prior to the expiration of the Term, Employee shall
have the right to request, by written notice to the Reporting Officer, with a
copy to the General Counsel of IAC/InterActiveCorp, an extension of the
Term.  The Company shall have until the
60th day prior to the expiration of the Term to accept such request,
and upon acceptance, the Agreement shall renew for one additional year, which
additional year shall be added to and deemed part of the Term as defined in the
first sentence of this Section 2A. 
Notwithstanding anything in this Section 2A to the contrary,
nothing herein shall obligate either party to request an extension to the Term
or agree to such an extension.

 

 

3A.                             COMPENSATION.

 

(a)                                  BASE
SALARY.  During the Term of this
Agreement, the Company shall pay Employee an annual base salary of $315,000
(the “Base Salary”), payable in equal biweekly installments or in accordance
with the Company’s payroll practice as in effect from time to time.  For all purposes under this Agreement, the
term “Base Salary” shall refer to Base Salary as in effect from time to time.

 

(b)                                 DISCRETIONARY
BONUS.  During the Term, Employee
shall be eligible to receive discretionary annual bonuses.

 

(c)                                  BENEFITS.  From the Effective Date through the date of
termination of Employee’s employment with the Company for any reason, Employee
shall be entitled to participate in any welfare, health and life insurance and
pension benefit and incentive programs as may be adopted from time to time by
the Company on the same basis as that provided to similarly situated employees
of the Company.  Without limiting the
generality of the foregoing, Employee shall be entitled to the following
benefits:

 

(i)                                     Reimbursement
for Business Expenses.  During the
Term, the Company shall reimburse Employee for all reasonable and necessary
expenses incurred by Employee in performing Employee’s duties for the Company,
on the same basis as similarly situated employees and in accordance with the
Company’s policies as in effect from time to time.

 

(ii)                                  Paid
Time Off (“PTO”).  During the Term,
Employee shall be entitled to paid time off per year, in accordance with the
plans, policies, programs and practices of the Company applicable to similarly
situated employees of the Company generally.

 

4A.                             NOTICES.  All notices
and other communications under this Agreement shall be in writing and shall be
given by first-class mail, certified or registered with return receipt
requested or hand delivery acknowledged in writing by the recipient personally,
and shall be deemed to have been duly given three days after mailing or
immediately upon duly acknowledged hand delivery to the respective persons
named below:

 

	
  If to the Company:

  	
  HSN General Partner LLC

  
	
   

  	
  1 HSN Drive

  
	
   

  	
  St. Petersburg, FL
  33729

  
	
   

  	
  Attention: General
  Counsel

  
	
   

  	
   

  
	
  If to Employee:

  	
  Jim Warner

  
	
   

  	
  69 Park Road

  
	
   

  	
  Teddington,
  Middlesex

  
	
   

  	
  TW11
  OAU, United Kindgom

  

 

Either party may change such party’s address for notices
by notice duly given pursuant hereto.

 

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5A.                             GOVERNING LAW; JURISDICTION. 
This Agreement and the legal relations thus created between the parties
hereto shall be governed by and construed under and in accordance with the
internal laws of the State of Florida without reference to the principles of
conflicts of laws.  Any and all disputes
between the parties which may arise pursuant to this Agreement will be heard
and determined before an appropriate federal court in Pinellas or Hillsborough
Counties or, if not maintainable therein, then in an appropriate Florida state
court.  The parties acknowledge that such
courts have jurisdiction to interpret and enforce the provisions of this
Agreement, and the parties consent to, and waive any and all objections that
they may have as to, personal jurisdiction and/or venue in such courts.

 

6A.                             COUNTERPARTS. 
This Agreement may be executed in several counterparts, each of which
shall be deemed to be an original but all of which together will constitute one
and the same instrument.  Employee
expressly understands and acknowledges that the Standard Terms and Conditions
attached hereto are incorporated herein by reference, deemed a part of this
Agreement and are binding and enforceable provisions of this Agreement.  References to “this Agreement” or the use of
the term “hereof” shall refer to this Agreement and the Standard Terms and
Conditions attached hereto, taken as a whole.

 

7A.                             SECTION 409A OF THE INTERNAL REVENUE
CODE.  This Agreement is not intended to constitute
a “nonqualified deferred compensation plan” within the meaning of Section 409A
of the Internal Revenue Code of 1986, as amended, and the rules and
regulations issued thereunder (“Section 409A”).  Notwithstanding the foregoing, if this
Agreement or any benefit paid to Employee hereunder is subject to Section 409A
and if Employee is a “Specified Employee” (as defined under Section 409A)
as of the date of Employee’s termination of employment hereunder, then the
payment of benefits, if any, scheduled to be paid by the Company to Employee
hereunder during the first six (6) month period beginning the date of a
termination of employment hereunder shall be delayed during such six (6) month
period and shall commence immediately following the end of such six (6) moth
period (and the period in which such payments were scheduled to be made if not
for such delay shall be extended accordingly). 
In no event shall the Company be required to pay Employee any “gross-up”
or other payment with respect to any taxes or penalties imposed under Section 409A
with respect to any benefit paid to Employee hereunder.

 

[The Signature Page Follows]

 

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IN WITNESS WHEREOF, the
Company has caused this Agreement to be executed and delivered by its duly
authorized officer, and Employee has executed and delivered this Agreement on
                                    ,
2007

 

	
   

  	
  HSN GENERAL PARTNER LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: Lisa Letizio

  
	
   

  	
  Title: EVP Human Resources

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JIM WARNER

  

 

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STANDARD TERMS AND CONDITIONS

 

1.                                       TERMINATION
OF EMPLOYEE’S EMPLOYMENT.

 

(a)                                  DEATH.  In the event Employee’s employment hereunder
is terminated by reason of Employee’s death, the Company shall pay Employee’s
designated beneficiary or beneficiaries, within 30 days of Employee’s death in
a lump sum in cash, Employee’s Base Salary through the end of the month in
which death occurs and any Accrued Obligations (as defined in paragraph 1(f) below).

 

(b)                                 DISABILITY.  If, as a result of Employee’s incapacity due
to physical or mental illness (“Disability”), Employee shall have been absent
from the full-time performance of Employee’s duties with the Company for a
period of four consecutive months and, within 30 days after written notice is
provided to Employee by the Company (in accordance with Section 6 hereof),
Employee shall not have returned to the full-time performance of Employee’s
duties, Employee’s employment under this Agreement may be terminated by the
Company for Disability.  During any
period prior to such termination during which Employee is absent from the
full-time performance of Employee’s duties with the Company due to Disability,
the Company shall continue to pay Employee’s Base Salary at the rate in effect
at the commencement of such period of Disability, offset by any amounts payable
to Employee under any disability insurance plan or policy provided by the
Company.  Upon termination of Employee’s
employment due to Disability, the Company shall pay Employee within 30 days of
such termination (i) Employee’s Base Salary through the end of the month
in which termination occurs in a lump sum in cash, offset by any amounts
payable to Employee under any disability insurance plan or policy provided by
the Company; and (ii) any Accrued Obligations (as defined in paragraph 1(f) below).

 

(c)                                  TERMINATION
FOR CAUSE.  The Company may terminate
Employee’s employment under this Agreement for Cause at any time prior to the
expiration of the Term.   As used herein,
“Cause” shall mean:   (i) the plea
of guilty or nolo contendere to, or conviction for, the commission of a felony
offense by Employee; provided, however, that after indictment,
the Company may suspend Employee from the rendition of services, but without
limiting or modifying in any other way the Company’s obligations under this
Agreement; (ii) a material breach by Employee of a fiduciary duty owed to
the Company; (iii) a material breach by Employee of any of the covenants
made by Employee in Section 2 hereof; (iv) the willful or gross
neglect by Employee of the material duties required by this Agreement; or (v) a
material violation of any Company policy pertaining to ethics, wrongdoing or
conflicts of interest that, in the case of the conduct described in clause (iii) or
(iv) above, if curable, is not cured by Employee within ten (10) days
after Employee is provided with written notice thereof.  In the event of Employee’s termination for
Cause, this Agreement shall terminate without further obligation by the
Company, except for the payment of any Accrued Obligations (as defined in
paragraph 1(f) below).

 

(d)                                 TERMINATION
BY THE COMPANY OTHER THAN FOR DEATH, DISABILITY OR CAUSE.  If Employee’s employment is terminated by the
Company for any 

 

 

reason other than
Employee’s death or Disability or for Cause, then (i) the Company shall
pay Employee the Base Salary through the end of the Term over the course of the
then remaining Term; and (ii) the Company shall pay Employee within 30 days
of the date of such termination in a lump sum in cash any Accrued Obligations
(as defined in paragraph 1(f) below). 
The payment to Employee of the severance benefits described in this Section 1(d) shall
be subject to Employee’s execution and non-revocation of a general release of
the Company and its affiliates in a form substantially similar to that used for
similarly situated executives of the Company and its affiliates.

 

(e)                                  MITIGATION;
OFFSET.  In the event of termination
of Employee’s employment prior to the end of the Term, Employee shall use
reasonable best efforts to seek other employment and to take other reasonable
actions to mitigate the amounts payable under Section 1 hereof.  If Employee obtains other employment during
the Term, the amount of any payment or benefit provided for under Section 1
hereof which has been paid to Employee shall be refunded to the Company by
Employee in an amount equal to any compensation earned by Employee as a result
of employment with or services provided to another employer after the date of
Employee’s termination of employment and prior to the otherwise applicable
expiration of the Term, and all future amounts payable by the Company to
Employee during the remainder of the Term shall be offset by the amount earned
by Employee from another employer.  For
purposes of this Section 1(e), Employee shall have an obligation to inform
the Company regarding Employee’s employment status following termination and
during the period encompassing the Term.

 

(f)                                    ACCRUED
OBLIGATIONS.  As used in this
Agreement, “Accrued Obligations” shall mean the sum of (i) any portion of
Employee’s Base Salary through the date of death or termination of employment
for any reason, as the case may be, which has not yet been paid; and (ii) any
compensation previously earned but deferred by Employee (together with any
interest or earnings thereon) that has not yet been paid.

 

2.                                       CONFIDENTIAL
INFORMATION; NON-SOLICITATION; AND PROPRIETARY RIGHTS.

 

(a)                                  CONFIDENTIALITY.  Employee acknowledges that while employed by
the Company Employee will occupy a position of trust and confidence.  Employee shall not, except as may be required
to perform Employee’s duties hereunder or as required by applicable law,
without limitation in time or until such information shall have become public
other than by Employee’s unauthorized disclosure, disclose to others or use,
whether directly or indirectly, any Confidential Information regarding the
Company or any of its subsidiaries or affiliates.  “Confidential Information” shall mean
information about the Company or any of its subsidiaries or affiliates, and
their clients and customers that is not disclosed by the Company or any of its
subsidiaries or affiliates for financial reporting purposes and that was
learned by Employee in the course of employment by the Company or any of its
subsidiaries or affiliates, including (without limitation) any proprietary
knowledge, trade secrets, data, formulae, information and client and customer
lists and all papers, resumes, and records (including computer records) of the
documents containing such Confidential Information.  Employee acknowledges that such Confidential
Information is specialized, unique in nature and of great value to the Company
and its subsidiaries or affiliates, and that such information gives the Company
and its subsidiaries or 

 

2

 

affiliates a competitive advantage.  Employee agrees to deliver or return to the
Company, at the Company’s request at any time or upon termination or expiration
of Employee’s employment or as soon thereafter as possible, all documents,
computer tapes and disks, records, lists, data, drawings, prints, notes and
written information (and all copies thereof) furnished by the Company and its
subsidiaries or affiliates or prepared by Employee in the course of Employee’s
employment by the Company and its subsidiaries or affiliates.  As used in this Agreement, “subsidiaries” and
“affiliates” shall mean any company controlled by, controlling or under common
control with the Company.

 

(b)                                 NON-COMPETITION.                         During
Employee’s employment with the Company and for twelve (12) months thereafter,
Employee shall not, directly or indirectly, on behalf of Employee or on behalf
of or with any other person, enterprise or entity, in any individual or
representative capacity, engage or participate in any business, including its
affiliated Internet entities, that is in competition with the Company or any
subsidiary or affiliate of the Company in the United States of America in the
field of television retailing, including, without limitation, QVC, Shop NBC
(formerly called ValueVision) or Shop at Home, as well as any company which
subsequently enters the field of television retailing as its primary business
(collectively, the “Competing Companies”). Employee’s obligations under this Section shall
continue during the Term and for the period after the Term set forth above and
shall not, for any reason, cease upon termination of Employee’s employment with
the Company.  Notwithstanding anything
else contained in this Section, Employee may own, for investment purposes only,
up to five percent (5%) of the stock of any Competing Company if it is a
publicly-held corporation whose stock is either listed on a national stock
exchange or on the NASDAQ National Market System and if Employee is not
otherwise affiliated with or participating in such corporation.  As used herein, “participate” means lending
one’s name to, acting as consultant or advisor to, being employed by or
acquiring any direct or indirect interest in any business or enterprise,
whether as a stockholder, partner, officer, director, employee, consultant or
otherwise.  In the event that (1) the
Company or any of its subsidiaries or affiliates places, or has placed for it,
all or substantially all of its assets up for sale within one (1) year
after termination of Employee’s employment hereunder or (2) Employee’s
employment is terminated in connection with the disposition of all or
substantially all of such assets (whether by sale of assets, equity or
otherwise), Employee agrees to be bound by, and to execute such additional
instruments as may be necessary or desirable to evidence Employee’s agreement
to be bound by, the terms and conditions of any non-competition provisions
relating to the purchase and sale agreement for such assets, without any
consideration beyond that expressed in this Agreement, provided that the
purchase and sale agreement is negotiated in good faith with customary terms
and provisions and the transaction contemplated thereby is consummated.  Notwithstanding the foregoing, in no event
shall Employee be bound by, or obligated to enter into, any non-competition
provisions referred to in this Section 2(b) which extend beyond
twelve (12) months, in each case from the date of termination of Employee’s
employment hereunder or whose scope extends the scope of the non-competition
provisions set forth in this Section 2(b). 
The twelve (12) month time period referred to above shall be tolled on a
day-for-day basis for each day during which Employee participates in any
activity in violation of this Section 2(b) so that Employee is
restricted from engaging in the conduct referred to in this Section 2(b) for
a full twelve (12) months.

 

3

 

(c)                                  NON-SOLICITATION
OF EMPLOYEES.  Employee recognizes
that he will possess confidential information about other employees of the
Company and its subsidiaries or affiliates relating to their education,
experience, skills, abilities, compensation and benefits, and inter-personal
relationships with suppliers to and customers of the Company and its
subsidiaries or affiliates.  Employee
recognizes that the information he will possess about these other employees is
not generally known, is of substantial value to the Company and its
subsidiaries or affiliates in developing their respective businesses and in
securing and retaining customers, and will be acquired by Employee because of
Employee’s business position with the Company. 
Employee agrees that, during the Term (and for a period of 12 months
beyond the expiration of the Term), Employee will not, directly or indirectly,
solicit or recruit any employee of the Company or any of its subsidiaries or
affiliates for the purpose of being employed by Employee or by any business,
individual, partnership, firm, corporation or other entity on whose behalf
Employee is acting as an agent, representative or employee and that Employee
will not convey any such confidential information or trade secrets about other
employees of the Company or any of its subsidiaries or affiliates to any other
person except within the scope of Employee’s duties hereunder.  Notwithstanding the foregoing, Employee is
not precluded from soliciting any
individual who (i) responds to any public advertisement or general
solicitation or (ii) has been terminated by the Company or any of its
subsidiaries or affiliates prior to the solicitation.

 

(d)                                 PROPRIETARY
RIGHTS; ASSIGNMENT.  All Employee
Developments shall be made for hire by the Employee for the Company or any of
its subsidiaries or affiliates.  “Employee
Developments” means any idea, discovery, invention, design, method, technique,
improvement, enhancement, development, computer program, machine, algorithm or
other work or authorship that (i) relates to the business or operations of
the Company or any of its subsidiaries or affiliates, or (ii) results from
or is suggested by any undertaking assigned to the Employee or work performed
by the Employee for or on behalf of the Company or any of its subsidiaries or
affiliates, whether created alone or with others, during or after working
hours.  All Confidential Information and
all Employee Developments shall remain the sole property of the Company or any
of its subsidiaries or affiliates.  The Employee
shall acquire no proprietary interest in any Confidential Information or
Employee Developments developed or acquired during the Term.  To the extent the Employee may, by operation
of law or otherwise, acquire any right, title or interest in or to any
Confidential Information or Employee Development, the Employee hereby assigns
to the Company all such proprietary rights. 
The Employee shall, both during and after the Term, upon the Company’s
request, promptly execute and deliver to the Company all such assignments,
certificates and instruments, and shall promptly perform such other acts, as
the Company may from time to time in its discretion deem necessary or desirable
to evidence, establish, maintain, perfect, enforce or defend the Company’s
rights in Confidential Information and Employee Developments.

 

(e)                                  COMPLIANCE
WITH POLICIES AND PROCEDURES.  During
the Term, Employee shall adhere to the policies and standards of
professionalism set forth in the Company’s Policies and Procedures as they may
exist from time to time.

 

(f)                                    REMEDIES
FOR BREACH.  Employee expressly
agrees and understands that Employee will notify the Company in writing of any
alleged breach of this Agreement by the 

 

4

 

Company, and the
Company will have 30 days from receipt of Employee’s notice to cure any such
breach.

 

Employee expressly agrees and understands that the remedy at law for
any breach by Employee of this Section 2 may be inadequate and that damages
flowing from such breach may not be susceptible to being measured in monetary
terms.  Accordingly, it is acknowledged
that upon Employee’s violation of any provision of this Section 2 the
Company may be entitled to obtain from any court of competent jurisdiction
immediate injunctive relief and obtain a temporary order restraining any
threatened or further breach as well as an equitable accounting of all profits
or benefits arising out of such violation. 
Nothing in this Section 2 shall be deemed to limit the Company’s
remedies at law or in equity for any breach by Employee of any of the
provisions of this Section 2, which may be pursued by or available to the
Company.

 

(g)                                 SURVIVAL
OF PROVISIONS.  The obligations
contained in this Section 2 shall, to the extent provided in this Section 2,
survive the termination or expiration of Employee’s employment with the Company
and, as applicable, shall be fully enforceable thereafter in accordance with
the terms of this Agreement.  If it is
determined by a court of competent jurisdiction in any state that any
restriction in this Section 2 is excessive in duration or scope or is
unreasonable or unenforceable under the laws of that state, it is the intention
of the parties that such restriction may be modified or amended by the court to
render it enforceable to the maximum extent permitted by the law of that state.

 

3.                                       TERMINATION
OF PRIOR AGREEMENTS.  This Agreement
constitutes the entire agreement between the parties and terminates and
supersedes any and all prior agreements and understandings (whether written or
oral) between the parties with respect to the subject matter of this
Agreement.  Employee acknowledges and
agrees that neither the Company nor anyone acting on its behalf has made, and
is not making, and in executing this Agreement, the Employee has not relied
upon, any representations, promises or inducements except to the extent the
same is expressly set forth in this Agreement. 
Employee hereby represents and warrants that by entering into this
Agreement, Employee will not rescind or otherwise breach an employment
agreement with Employee’s current employer prior to the natural expiration date
of such agreement

 

4.                                       ASSIGNMENT;
SUCCESSORS.  This Agreement is
personal in its nature and none of the parties hereto shall, without the
consent of the others, assign or transfer this Agreement or any rights or
obligations hereunder, provided that, in the event of the merger,
consolidation, transfer, or sale of all or substantially all of the assets of
the Company with or to any other individual or entity, this Agreement shall,
subject to the provisions hereof, be binding upon and inure to the benefit of
such successor and such successor shall discharge and perform all the promises,
covenants, duties, and obligations of the Company hereunder, and all references
herein to the “Company” shall refer to such successor.

 

5.                                       WITHHOLDING.  The Company shall make such deductions and
withhold such amounts from each payment and benefit made or provided to
Employee hereunder, as may be required from time to time by applicable law,
governmental regulation or order.

 

5

 

6.                                       HEADING
REFERENCES.  Section headings in
this Agreement are included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose.  References to “this Agreement” or the use of
the term “hereof” shall refer to these Standard Terms and Conditions and the
Employment Agreement attached hereto, taken as a whole.

 

7.                                       WAIVER;
MODIFICATION.  Failure to insist upon
strict compliance with any of the terms, covenants, or conditions hereof shall
not be deemed a waiver of such term, covenant, or condition, nor shall any
waiver or relinquishment of, or failure to insist upon strict compliance with,
any right or power hereunder at any one or more times be deemed a waiver or
relinquishment of such right or power at any other time or times.  This Agreement shall not be modified in any
respect except by a writing executed by each party hereto.  Notwithstanding anything to the contrary
herein, neither the assignment of Employee to a different Reporting Officer due
to a reorganization or an internal restructuring of the Company or its
affiliated companies nor a change in the title of the Reporting Officer shall
constitute a modification or a breach of this Agreement.

 

8.                                       SEVERABILITY.  In the event that a court of competent
jurisdiction determines that any portion of this Agreement is in violation of
any law or public policy, only the portions of this Agreement that violate such
law or public policy shall be stricken. 
All portions of this Agreement that do not violate any statute or public
policy shall continue in full force and effect. 
Further, any court order striking any portion of this Agreement shall
modify the stricken terms as narrowly as possible to give as much effect as
possible to the intentions of the parties under this Agreement.

 

9.                                       INDEMNIFICATION.  The Company shall indemnify and hold Employee
harmless for acts and omissions in Employee’s capacity as an officer, director
or employee of the Company to the maximum extent permitted under applicable
law; provided, however, that neither the Company, nor any of its
subsidiaries or affiliates shall indemnify Employee for any losses incurred by
Employee as a result of acts described in Section 1(c) of this Agreement.

 

ACKNOWLEDGED AND
AGREED:

 

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HSN GENERAL PARTNER LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: Lisa Letizio

  
	
   

  	
  Title: EVP Human
  Resources

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JIM WARNER

  

 

6Filed by sedaredgar.com - West Canyon Energy Corp. - Exhibit 10.1

ASSIGNMENT
 OF
FARMOUT INTEREST 

     THIS ASSIGNMENT is made and
entered into, by and between, West Canyon Energy Corp., also known as PetroSouth
Energy Corp. hereinafter collectively referred to as “Assignor”, and Cobra Oil
& Gas Company, hereinafter referred to as “Assignee”. 

     WHEREAS, this Assignment concerns
and effects a change in ownership of a 25% interest in and to that certain
Farmout Agreement dated February 1, 2008 (FOA copy attached) by and between
Transco Oil & Gas, Inc. (TOG) as Farmor and the Assignor (set out above) to
this Assignment. Assignor is the owner and holder of a 25% interest in and to
the FOA to the “North Semitropic Prospect” (Prospect) more fully described in
the FOA and located in Kern County, California. Assignor hereby agrees to
transfer Assignor’s 25% interest in the FOA to Assignee along with all rights,
benefits and obligations therein stated. Assignee hereby agrees to accept said
25% interest in the FOA herein assigned along with all rights, benefits and
obligations therein stated. Assignee acknowledges that the drilling and testing
of the Prospect is eminent, and failure to meet cash calls as per the FOA will
result in a loss of interest in the FOA and Prospect. Assignee states that it
has read and fully understands the FOA and hereby accepts same and agrees to
abide by all the terms and conditions therein stated. 

     WHEREAS, this Assignment is made
in accordance with and expressly subject to the terms and provisions of the FOA
and shall become immediately affective upon execution by both Assignor and
Assignee and approval of TOG as Farmor to the FOA stated above. 

     NOW, THEREFORE, in consideration
of the sum of $34,000.00 and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Assignor does hereby convey,
transfer and assign to Assignee all of Assignor’s right, title and interest in
and to the said FOA and Prospect described above.

     This Assignment shall inure to
and be binding upon the respective successors and assigns of the parties hereto.

          IN WITNESS
WHEREOF, this Assignment is executed the day and year as set out below. 

	ASSIGNOR: 	 	ASSIGNEE: 
	  	 	  
	Dated:____16 June 2008_____________ 	 	Dated:_______________________
	  	 	  
	West Canyon Energy Corp. 	 	Cobra Oil & Gas Company 
	  	 	  
	(aka PetroSouth Energy Corp.) 	 	  
	  	 	  
	  	 	  
	By:___________________________________	 	By:___________________________________
	               
       Fred B. Zaziski - Chairman 	 	           
         Max Pozzoni - President 
	                 20333
      State Hwy. 249 	 	           
         Uptown Center 
	               
       Suite 200 – 113 	 	           
         2100 West Loop South 
	               
       Houston, TX 77070 	 	           
         Suite 900 
	  	 	           
         Houston, TX 77027 
	  	 	  
	  	 	  
	  	 	  
	APPROVED by TOG as Farmor: 	 	  
	  	 	  
	Dated:_______________________	 	  
	  	 	  
	Transco Oil & Gas, Inc. 	 	  
	  	 	  
	  	 	  
	By:___________________________________	 	  
	           Larry J. Messmer –
      President 	 	  
	           11605 Meridian
      Market View 	 	  
	           Unit 124, # 303
	 	  
	           Falcon, CO 80831

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