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Unassociated Document

Exhibit 10.11

 

 

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AMENDMENT NO. 2 TO LOAN AGREEMENT

This Amendment No. 2 (the "Amendment") dated as of January 14, 2011, is between Bank of America, N.A. (the "Bank") and KSW, Inc. (the "Borrower").

RECITALS

A. The Bank and the Borrower entered into a certain Loan Agreement dated as of April 1, 2007 (together with any previous amendments, the "Agreement").

 

B.  The Bank and the Borrower desire to amend the Agreement effective as of March 31, 2011.

 

AGREEMENT

1. Definitions. Capitalized terms used but not defined in this Amendment shall have the meaning given to them in the Agreement.

 

2. Amendments. The Agreement is hereby amended as follows:

2.1 In Paragraph 1.2 the date "March 31, 2011" is changed to "March 31, 2012". 

 

2.2 Paragraph 8.13 Lawsuits is hereby added:

Lawsuits. Any lawsuit or lawsuits are filed on behalf of one or more trade creditors against the Borrower or any Obligor in an aggregate amount of Two Hundred Fifty Thousand Dollars ($250,000.00) or more in excess of any insurance coverage.

3. Representations and Warranties. When the Borrower signs this Amendment, the Borrower represents and warrants to the Bank that: (a) there is no event which is, or with notice or lapse of time or both would be, a default under the Agreement except those events, if any, that have been disclosed in writing to the Bank or waived in writing by the Bank (b) the representations and warranties in the Agreement are true as of the date of this Amendment as if made on the date of this Amendment, (c) this Amendment does not conflict with any law, agreement, or obligation by which the Borrower is bound, and (d) if the Borrower is a business entity or a trust, this Amendment is within the Borrower's powers, has been duly authorized, and does not conflict with any

of the Borrower's organizational papers.

4. Effect of Amendment. Except as provided in this Amendment, all of the terms and conditions of the Agreement shall remain in full force and effect.

5. Counterparts. This Amendment may be executed in counterparts, each of which when so executed shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.

6. FINAL AGREEMENT.  BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT: (A) THIS DOCUMENT REPRESENTS THE FINAL AGREEMENT BETWEEN PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF, (B) THIS DOCUMENT SUPERSEDES ANY COMMITMENT LETTER, TERM SHEET OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS RELATING TO THE SUBJECT MATTER HEREOF, UNLESS SUCH COMMITMENT LETTER, TERM SHEET OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS EXPRESSLY PROVIDES TO THE CONTRARY, (C) THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (D) THIS DOCUMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.

 

 

 

	TextearCodeAmendment to Loan Agreement	- 1 -	 
	 	 	 

 

                                                                    

  

 

  

 

The parties executed this Amendment as of the date stated at the beginning of this Amendment, intending to create an instrument executed under seal.

	 	
Bank of America, N.A.

	 	 
	 	 	 	 	 
	
 

	
By: 

	 	 	 
	 	 	
Victoria E. Scolaro, Vice President

	 	 
	 	 	 	 	 
	 	 	BORROWER(S) 

 

KSW, Inc.

	 	 
	 	 	 	 	 
	 	 
By: 

	/s/ Floyd Warkol 	 	(Seal)
	 	 	Floyd Warkol Chief Executive Officer	 	 

	
TextBarCodeAmendment to Loan Agreement

	- 3 -ex10_1.htm

Exhibit 10.1

STAFFORD AREA PARTICIPATION AGREEMENT

 

This Stafford Area Participation Agreement (hereinafter “Agreement”) is entered into by and between Aura Oil Holdings Ltd., c/o AMS Limited, whose address is The Continental Building, 25 Church Street, P.O. Box Hm265, Hamilton HMAX, Bermuda (hereinafter “PARTICIPANT”) and Mogul Energy International, Inc. (hereinafter “Mogul”), whose address for this Agreement is 2500 Wilcrest Dr., Suite 405, Houston, TX 77042, and shall be effective as of the 20th day of January, 2011 (hereinafter the “Effective Date”).

WITNESSETH:

WHEREAS, MOGUL has acquired and continues to acquire certain leasehold interests in the oil and gas leases within the lands described in Exhibit “A” attached hereto and made a part hereof (hereinafter the “Leases”);

WHEREAS, PARTICIPANT desires to acquire a working interest in a portion of the Leases, in the manner provided for in this Agreement, and desires to enter into this Agreement for the purposes of joining MOGUL in the exploration and development of the Leases;

WHEREAS, MOGUL agrees to sell to PARTICIPANT a certain interest in oil and gas leases, leasehold rights, and rights to participate in the development of oil, gas and other related substances (such oil and gas leases, leasehold rights, and rights to participate in the development of oil, gas and other related substances being hereinafter called “Oil and Gas Rights”) in the Leases.

NOW, THEREFORE, in consideration of the mutual promises in this Agreement and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, PARTICIPANT and MOGUL agree as follows:

I.

ACQUISITION TRANSACTIONS

MOGUL shall continue to purchase Oil and Gas Rights in the Contract Acreage Area identified in Exhibit “A” attached hereto and made a part hereof.  Simultaneously with the execution of this Agreement by both PARTICIPANT and MOGUL, PARTICIPANT agrees to pay to MOGUL the following: Seventy Five Thousand Five Hundred Twenty One Dollars and No/100 ($75,521.00) for its interest in the Oil and Gas Leases and its share of the Drilling and Completion costs of one (1) vertical well (the “Initial Prospect Well”) to a proposed depth of 7,400 feet so as to test the Frio Formation.  PARTICIPANT shall earn Eight and One Third Percent (8.3333%) of the rights, title, and interest in and to the Oil and Gas Rights in the Leases acquired within the anticipated production unit area. PARTICIPANT agrees to make the payments in the following phases:

	
  

	
A.)

	
Nine Thousand Eight Hundred Forty Four Dollars & 00/100 ($9,844.00) upon execution of this Agreement and the Joint Operating Agreement (JOA);

	
  

	
B.)

	
Thirty Seven Thousand Eight Hundred Thirty Three Dollars ($37,833.00) upon execution of this Agreement and the Joint Operating Agreement (JOA);

	
  

	
C.)

	
Twenty Seven Thousand Eight Hundred Forty Four Dollars and 00/100 ($27,844.00) due within three (3) days of when and if the operator decides to complete the well.

Both MOGUL and PARTICIPANT agree to compensate Don Timko and Jim Sorrells a proportionate sum equal to Sixteen Thousand Dollars ($16,000), based upon 8/8th total, upon the spudding of the initial well drilled on this prospect and further provide them, based upon an 8/8th total, with an overriding royalty interest equal to four (4.00%) percent of 8/8ths upon initial production of each well.

Payments should be made payable to:  Mogul Energy – Stafford Escrow Acct. and mailed to the address provided for above. PARTICIPANT and MOGUL agree to execute such assignments of the Oil and Gas Rights as may be necessary to vest PARTICIPANT with such Eight & One Third Percent (8.33%) working interest, subject to Article IX below.

 

  

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II.

DRILLING OPERATIONS ON PROSPECT WELLS

On or before February 15, 2011, or as soon as practical after a permit has been issued and any and all potential unit issues have been resolved, MOGUL agrees to drill the Initial Prospect Well, which is contemplated to be a vertical well to test the Frio formation, which will be referred to as the Stafford Well #1.  PARTICIPANT shall pay its stated costs of the Initial Prospect Well to receive its Eight & One Third Percent (8.33%) working interest in each Initial Prospect Well.

Following the completion of drilling operations conducted on the Initial Prospect Well, if it is determined by MOGUL that subsequent wells are necessary, then PARTICIPANT has the right and option to participate in the drilling of up to two (2) additional prospect wells (the “Additional Prospect Wells”).  PARTICIPANT shall pay its similar proportionate costs, through completion, to drill and complete the Additional Prospect Wells to receive its Eight & One Third Percent (8.33%) working interest in these wells.  Thereafter, each Subsequent Well, as defined in Article IV, PARTICIPANT has the option to pay Eight & One Third Percent (8.33%) of costs for a Eight & One Third Percent (8.33%) working interest in each well.

III.

CONSEQUENCES OF FAILURE TO CONDUCT

 DRILLING OPERATIONS ON ADDITIONAL PROSPECT WELLS

In the event PARTICIPANT fails to participate in and submit its payment when due on any Additional Prospect Well, PARTICIPANT shall forfeit its rights, title, and interest in the Oil and Gas Rights in the Leases that it may have and hold under any Leases outside the bounds of existing units previously drilled and completed within or partially within AMI Lands area as defined herein in Article VI. At such time PARTICIPANT forfeits any rights, title, and interests in the Oil and Gas Rights in the Leases, PARTICIPANT shall immediately re-assign to MOGUL all rights, title and interests outside those existing units in which PARTICPANT participated.  Afterwards, PARTICIPANT shall have no further rights, title and interests in those Oil and Gas Rights in the Leases re-assigned to MOGUL by PARTICIPANT pursuant to this Article III.  Further, PARTICIPANT shall have no further rights to any future wells drilled in this area pursuant to this Agreement and the AMI (described below in Article VI) shall automatically terminate.

IV.

DRILLING OPERATIONS ON SUBSEQUENT WELLS

Following the completion of drilling operations conducted on the Initial Prospect Well and the two (2) Additional Prospect Wells, if subsequent wells, defined as any subsequent well, (each a “Subsequent Well”) is drilled, each such well will be drilled on a “heads up” basis.  On each Subsequent Well proposed by MOGUL, MOGUL shall submit to PARTICIPANT an AFE for approval, and PARTICIPANT shall have twenty (20) days to make its election to participate in such Subsequent Well. If approval is granted by PARTICIPANT, then PARTICIPANT’s share of all funds necessary to drill and complete the Subsequent Well shall be deposited by PARTICIPANT in the operating account of MOGUL simultaneously at such time approval is granted.  In the event PARTICIPANT does not approve the AFE for any Subsequent Well and/or does not make the required AFE payment within the allotted twenty (20) days, then PARTICIPANT shall forfeit all of its right, title and interests in any leases or tracts of land it would have earned under the Subsequent Well and MOGUL shall have the right to fund such well at its sole discretion.  At such time PARTICIPANT forfeits any rights, title, and interests in the Oil and Gas Rights in the Leases, PARTICIPANT shall immediately re-assign to MOGUL all rights, title and interests outside those existing units in which PARTICIPANT participated.  Afterwards, PARTICIPANT shall have no further rights, title and interests in those Oil and Gas Rights in the Leases re-assigned to MOGUL by PARTICIPANT pursuant to this Article IV.  Notwithstanding anything to the contrary, PARTICIPANT shall have no obligation to approve an AFE presented by MOGUL or fund its portion of a Subsequent Well, and PARTICIPANT will have no liability in the event it chooses not to approve an AFE or fund its portion of a Subsequent Well thereafter.

 

  

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V.

NET REVENUE INTEREST

The net revenue interest in the Oil and Gas Rights in the Leases shall be seventy-five percent (72.50%).  In the event there is any outstanding interest acquired under the existing tracts of land in the Leases described on Exhibit “A”, PARTICIPANT’S share of such interest shall be delivered to PARTICIPANT at seventy-two and one half percent (72.50%) Net Revenue Interest.  Other interests acquired shall be covered under the AMI described below.

VI.

AREA OF MUTUAL INTEREST

PARTICIPANT and MOGUL hereby designate an AMI covering a one mile distance from the Stafford Prospect Area Outline of Jackson County, Texas (the “AMI Lands”), as defined in Exhibit “A”.  The AMI shall exist for a term of two (2) years from the Effective Date of this Agreement.  If PARTICIPANT (acquiring party) acquires any rights, title and interests in any leases or tracts of land within or partially within the AMI Lands, subject to this Agreement or not, then the acquiring party shall give the non-acquiring party (whether one or more) notice by facsimile, e-mail, or other means of transmission through which a receipt showing that notice was given may be obtained stating the acquisition price, the number of acres acquired, and other relevant details about such acquisition, and providing a copy of the instrument(s) evidencing such acquisition.  The non-acquiring party shall have fifteen (15) days after receipt of such notice to elect to acquire its proportionate share of the rights, title and interests in such AMI Lands by paying its proportionate share of the actual out of pocket acquisition cost, with no overhead or other similar charge to be made by the acquiring party.  If the non-acquiring party does not make payment within the fifteen (15) day period, then the non-acquiring party shall forfeit all of its right, title and interests in any leases or tracts of land it would have earned in the acquired AMI Lands.  All actual out of pocket acquisition costs for any rights, title and interests acquired within the AMI by the acquiring party, including but not limited to bonuses and other payments for acquisition, recording fees, broker fees paid to unrelated parties, attorney fees for title opinions and other matters, and title curative, shall be borne by the parties herein according to each of their respective working interest shares, assuming each consents to acquire its proportionate share.  All acreage acquired by Mogul within the AMI Lands shall be offered to PARTICIPANT on the same basis as outlined in Paragraph II above.  Nothing in this Agreement shall be deemed to create a partnership or a joint venture between PARTICIPANT and MOGUL.

VII.

AGREEMENTS

The Oil and Gas Rights in the Leases shall be subject to the terms and provisions of the following agreements:

	
  

	
(a)

	
The JOA; and

	
  

	
(b)

	
Instruments creating the Oil and Gas Rights in the Leases; and

	
  

	
(c)

	
Agreements relating to sale of production from the Leases; and

	
  

	
(d)

	
Agreements to which Oil and Gas Rights in the Leases are subject to when acquired.

The parties’ interests shall be subject to all of the agreements identified above as well as any other agreement(s) which affect Oil and Gas Rights in the Leases.  To the extent that the terms of any such agreements conflict with the terms of this Agreement, this Agreement shall control unless the terms of any such other agreement controls by operation of law or otherwise.

 

  

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VIII.

DEPTH LIMITATION

There are no depth limitations; provided, however, PARTICIPANT and MOGUL shall be subject to depth limitations imposed by instruments creating Oil and Gas Rights in the Leases.

IX.

ASSIGNMENT

Any assignment of the Leases shall be without warranty, and equipment and other personal property, if any, shall be assigned on an “AS IS, WHERE IS” basis negating any express or implied warranty of merchantability or fitness for a particular purpose.  The effective date of the assignment shall be the same as the effective date of the acquisition of Oil and Gas Rights in the Leases.  The form of assignment shall be the same form as is attached as Exhibit “C” and made a part of this Agreement.

X.

OPERATIONS

Operations on the Leases shall be conducted in accordance with the terms of the JOA attached as Exhibit “B.”  MOGUL, or its designated operator, shall be named operator.  PARTICIPANT shall be obligated to pay its share of operating expenses on all active wells in which PARTICIPANT owns a working interest as provided for in the JOA.

XI.

TERM

The term of this Agreement shall be concurrent with the term of the Oil and Gas Rights in the Leases; provided, however, if the rights expire prior to the AMI then the term of this agreement shall be concurrent with the term of the AMI as stated in section VI.

XII.

NOTICES

All information, notices, or other correspondence provided for in this Agreement shall be given as follows:

 

	
PARTICIPANT

	
MOGUL

	
Aura Oil Holdings LTD.

	  
	
AMS Limited

	  
	
The Continental Building

	  
	
25 Church Street

	  
	
PO Box Hm265

	
Mogul Energy International, Inc.

	
Hamilton IlMAX

	
2500 Wilcrest Dr., Ste. 405

	
Bermuda

	
Houston. TX 77042

 

  

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XIII.

MISCELLANEOUS

Waiver.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver or any other provision of this Agreement (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided.

Headings.  The headings of articles and sections used in this Agreement are for convenience only and shall not be considered a part of nor affect the construction or interpretation of any provision of this Agreement.

Provisions Binding.  The provisions of this Agreement shall be binding upon and inure to the benefit of MOGUL and PARTICIPANT, and their respective successors, legal representatives and assigns.

Governing Law.  This Agreement and the legal relations between the parties hereto shall be governed by and construed in accordance with the laws of the State of Texas, without regard to conflicts of law provisions.

Attorney’s Fees.  In the event any legal action, mediation, arbitration or any other proceeding is instituted in order to enforce or interpret the provisions of this Agreement, the prevailing party in such action shall be entitled to recover, as an item of its costs, its reasonable attorney’s fees and other expenses incurred in such action.

Severability.  If any term or other provision of this Agreement is determined to be 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.

References.  References made in this Agreement, including use of a pronoun, shall be deemed to include where applicable, masculine, feminine, singular or plural, individuals, partnerships or corporations.

Construction.  MOGUL and PARTICIPANT have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Assignment shall be construed as if drafted jointly by MOGUL and PARTICIPANT and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

Counterparts; Facsimile/Email Transmission.  This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.  Each party to this Agreement agrees that its own facsimile and/or emailed signature will bind it and that it accepts the facsimile and/or emailed signature of the other party to this Agreement.

No Partnership or Joint Venture.  Neither this Agreement nor the Joint Operating Agreement entered into by MOGUL and PARTICIPANT is intended to create, nor shall the same be construed as creating a mining partnership, commercial partnership, nor any other partnership or joint venture relationship or other association whereby the parties are jointly liable.  Rather, it is the intent and purpose of this Agreement to create a relationship which is limited to the exploration, development and extraction of oil and/or gas for sale.  The liability of the Parties shall be several and not joint or collective.

Cooperation.  The Parties will cooperate as necessary to complete any documents or agreements required to accomplish this Agreement.

Covenants Running with the Leases.  All covenants and agreements of the Parties set forth in this Agreement shall be deemed covenants running with the lands covered by the Subject Leases.

IN WITNESS WHEREOF, this Agreement has been executed as of the dates of acknowledgments of the parties but shall be effective as of the Effective Date first above written.

 

 

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SIGNATURES

	
Mogul Energy International, Inc.

	
 

 

	
By:

	 	
 

	 	 	
 

	
        Tim Turner

	  
	 	 
	
Its: Executive Vice President

	 	 	
 

 

	
PARTICIPANT

 

 

	
By:

	 	
 

	  
	 
	
Its:

	 	
 

 

ACKNOWLEDGMENTS

STATE OF TEXAS

COUNTY OF HARRIS

This instrument was acknowledged before me this 20th day of January, 2011 by Tim Turner of Mogul Energy International, Inc.

 

 

	My Commission Expires:  	 	 
	 	Notary Public in and for the State of Texas

 

 

STATE OF ___________

COUNTY OF ____________

This instrument was acknowledged before me this ______ day of ____________, 2011 by  ____________________ of PARTICIPANT.

 

 

 

	My Commission Expires:   	 	 
	 	
 

Notary Public in and for the State of ________________

 

  

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Exhibit “B”

Joint Operating Agreement Attached to and made part of that certain Stafford Area Participation Agreement dated January 20, 2011 by and between Mogul Energy International, Inc., Operator and PARTICIPANT, Non-Operator.

See Attached Electronic PDF File

 

  

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Exhibit “C”

 

Attached to and made part of that certain Stafford Area Participation Agreement dated January 20, 2011 by and between Mogul Energy International, Inc., Operator and PARTICIPANT, Non-Operator.

 

FORM OF ASSIGNMENT

 

ASSIGNMENT OF OIL, GAS AND MINERAL INTERESTS

 

 

	STATE OF TEXAS 	§	 
	 	§	 
	COUNTY OF JACKSON 	§	 

 

This Assignment of Oil, Gas and Mineral Interests (this “Assignment”) dated ________ ____, 20__, is by and between ________________________________whose mailing address is __________________________ (“Assignor”), and ___________________________, whose address is ________________________________________________ (“Assignee”). Assignor and Assignee are sometimes hereinafter referred to individually as a “Party” and collectively as the “Parties.”

FOR and in consideration of TEN and NO/100 DOLLARS ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and subject to the terms and provisions hereinafter set forth, Assignor has GRANTED, BARGAINED, SOLD, ASSIGNED, TRANSFERRED, CONVEYED and DELIVERED and by these presents does hereby GRANT, BARGAIN, SELL, ASSIGN, TRANSFER, CONVEY and DELIVER unto Assignee, its successors and assigns, an undivided EIGHT & ONE THIRD PERCENT (8.33%) of Assignor’s right, title and interest in and to the oil, gas and mineral leases and other interests described in Exhibit “A” attached hereto (the “Interests”).

TO HAVE AND TO HOLD the Interests, together with a like share of all other rights appurtenant thereto, unto Assignee, its successors and assigns forever, subject to the following:

	
1.

	
This Assignment is subject to the terms and provisions of that certain Stafford Area Participation Agreement dated December 23, 2010, by and between Assignor and Assignee (the “Participation Agreement”), and nothing in this Assignment shall operate to limit, release, or impair any of Assignor's or Assignee's respective rights and obligations in the Participation Agreement.  To the extent the terms and provisions of this Assignment conflict with the terms and provisions of the Participation Agreement, the terms and provisions of the Participation Agreement shall control.

 

	
2.

	
This Assignment is subject to the terms and provisions of that certain Joint Operating Agreement dated December ___, 2010, by and between Mogul Energy International, Inc, as Operator, and Assignee, as Non-Operators (the “Joint Operating Agreement”).  To the extent the terms and provisions of this Assignment conflict with the terms and provisions of the Joint Operating Agreement, the terms and provisions of the Joint Operating Agreement shall control.

 

	
3.

	
This Assignment is subject to the terms and provisions of all applicable easements, rights of way, and pooling and unitization agreements of record.

 

	
4.

	
This Assignment is made without warranty of title, express, implied, statutory or otherwise.

	
5.

	
The Parties agree to execute, acknowledge and deliver such further agreements, instruments, notices, stipulations and/or conveyances as may be necessary to accomplish the intents and purposes of this Assignment

	
6.

	
This Assignment binds and inures to the benefit of the Parties and their respective successors and assigns.

	
7.

	
This Assignment may be executed in counterparts, each of which shall be deemed to be an original for all purposes, and all of which, when taken together, shall constitute one and the same instrument.  Neither Party shall be bound by the terms hereof unless and until all Parties have executed a counterpart original.

 

  

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IN WITNESS WHEREOF, this Assignment is executed on the dates set forth in the acknowledgments below, but shall be effective as to each of the Interests as of the effective date of acquisition of such Interests by Assignor.

 

	 	ASSIGNOR:	 
	 	 	 	 
	 	Aura Oil Holdings LTD	 
	 	 	 	 
	 	By:	/s/ David Thompson 	 
	 	 	David Thompson, Director	 

 

BERMUDA

This instrument was acknowledged before me this 26th day of January, 2010 by David Thompson of Auro Holdings LTD.

 

	 	[illegible]	 
	My Commission Expires: 	Notary Public in and for the State of Texas
	 	 	 
	
Exhibit “A”, property description, attached by electronic file

	 	 

 

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