Document:

EX-10.3

 Exhibit 10.3 

EXECUTION VERSION 

EMPLOYMENT AGREEMENT 
 EMPLOYMENT
AGREEMENT (the “Agreement”) dated as of the 14 day of June, 2015, by and between Standard Pacific Corp., a Delaware corporation (the “Company”), and Larry T. Nicholson (the “Executive”). 

In consideration of the mutual covenants and agreements of the parties set forth in this Agreement, and other good and valuable consideration the receipt and
sufficiency of which are acknowledged, the parties agree as follows: 
  

	1.	Term. The term of this Agreement shall commence on the Effective Date (as defined in the Merger Agreement, dated June 14, 2015, between the Company and The Ryland Group, Inc. (the “Merger
Agreement”)) and shall continue, unless earlier terminated pursuant to Section 5 of this Agreement, through the third anniversary of the Effective Date (the “Term”). This Agreement shall automatically terminate and be of no force
or effect if the Merger Agreement is terminated prior to the Effective Time (as defined in the Merger Agreement). 

  

	2.	Position and Responsibilities. During the Term, the Executive shall serve as the President and Chief Executive Officer of the Company and, subject to his election or reelection to such position by
shareholders of the Company, a member of the Board of Directors of the Company (the “Board”). In his capacity as President and Chief Executive Officer, the Executive shall devote his best efforts to the performance of the services
reasonably assigned by the Board, consistent with his position and as reasonably agreed to by the Executive and the Board. The Executive shall report to the Board. 

 

	3.	Performance of Duties. The Executive shall devote his full time, attention and energies to the Company’s business and will not engage in consulting work or any business for his own account or for
any person, firm or corporation other than the Company. Subject to the Company’s corporate governance policies, as in effect from time to time, the Executive may serve as a director of other companies so long as this service does not
interfere with the performance of his duties with the Company. 

  

	4.	Compensation. 

  

	 	4.1.	Salary. During the Term, the Company shall pay the Executive an annual base salary of $1,000,000, payable in equal installments on the Company’s regularly recurring paydays in accordance with the
Company’s normal payroll practice. Increases in annual base salary shall be at the sole discretion of the Compensation Committee of the Board (the “Compensation Committee”). 

 

	 	4.2.	Annual Bonus Incentive Program. During the Term, the Executive shall be entitled to participate in the Company’s annual bonus incentive program established for the Company’s executives (such
bonus program, as in effect from time to time, the “Bonus Program”). The Executive’s target annual bonus opportunity under the Bonus Program for fiscal 2015 shall be equal to 200% of his base salary and the Executive’s target
annual bonus opportunity for future years shall be determined annually by the Compensation Committee, in its sole discretion. The Executive’s annual bonus under the Bonus Program shall be earned based upon objectives established by the
Compensation Committee each year. Any annual bonus earned with respect to any fiscal year during the Term shall be paid to the Executive consistent with the Company’s prevailing bonus payment practices, but no later than March 15 following
the end of such fiscal year. 

	 	4.3.	Incentive and Equity Awards. During the Term, the Executive shall be eligible to receive incentive and equity grants at the discretion of and as approved by the Compensation Committee.

  

	 	4.4.	Reimbursement of Expenses. In accordance with established policies and procedures of the Company as in effect from time to time, the Company shall pay or reimburse the Executive for all reasonable and
actual out-of-pocket expenses, including but not limited to travel, hotel, and similar expenses, incurred by the Executive from time to time in performing his obligations under this Agreement. Any reimbursement of the Executive’s expenses made
by the Company pursuant to this Agreement shall be payable in the normal business course in accordance with the Company’s expense reimbursement policy, but in no event later than the last day of the calendar year following the calendar year in
which the expense was incurred, the expenses eligible for reimbursement in any one calendar year shall not affect the expenses eligible for reimbursement in any other calendar year and the right to reimbursement or in-kind benefits shall not be
subject to liquidation or exchange for another benefit. 

  

	 	4.5.	Personal Health and Services Allowance. During the Term, the Executive shall be entitled to an annual personal health and services allowance equal to 9.5% of his base salary. 

 

	 	4.6.	Other Benefits. During the Term, the Executive shall be entitled to such other employee benefits, including but not limited to life insurance, medical and hospitalization, disability, and retirement
benefits, as may be provided by the Company and as may be amended from time to time, consistent with the benefits provided to other senior executives of the Company. 

 

	5.	Employment Termination. 

  

	 	5.1.	Termination of Employment. Subject to the terms of the CEO Severance Agreement, dated December 17, 2009, between the Executive and The Ryland Group, Inc., as amended to date (the “CEO
Severance Agreement”) and the Senior Executive Severance Agreement, dated July 7, 2004, between the Executive and The Ryland Group, Inc., as amended to date (the “Executive Severance Agreement,” and, together with the CEO
Severance Agreement, the “Severance Agreements”), either of the Company or the Executive can terminate the Executive’s employment at any time for any or no reason. Any payments or benefits that may become payable in connection with
any termination of the Executive’s employment shall be governed by the terms of the Severance Agreements as in effect from time to time. For the avoidance of doubt, upon a termination of the Executive’s employment during the “Change
in Control Period” (as such term is defined in the Executive Severance Agreement), the Executive’s severance and other termination entitlements shall be as set forth in whichever of the Executive Severance Agreement or the CEO Severance
Agreement conveys the greater economic benefit to the Executive, however, in no event shall the Executive be entitled to benefits under both the CEO Severance Agreement and the Executive Severance Agreement upon a termination of his employment.
Notwithstanding anything herein or the Severance Agreements to the contrary, the Executive’s employment with the Company may only be terminated by the Company without Cause (as defined in the Severance Agreements) if at least seventy-five
percent (75%) of the full Board (excluding the Executive) shall have approved a resolution authorizing such termination. 

  

	 	5.2.	Waiver of Good Reason. The parties hereto acknowledge and agree that the consummation of the transactions contemplated by the Merger Agreement, as well as the changes to the Executive’s
compensation, responsibilities and role in connection with the transactions contemplated by the Merger Agreement, as described in this Agreement, shall not constitute “Good Reason” for purposes of the Severance Agreements.

	 	5.3.	Change of Control. The parties hereto acknowledge that the consummation of the transactions contemplated by the Merger Agreement shall constitute a Change of Control for purposes of the Severance
Agreements. The parties further agree that the definition of “Change of Control Period” for purposes of the Executive Severance Agreement shall be modified to expire three (3) years after the consummation of the transactions
contemplated by the Merger Agreement, rather than two (2) years as currently provided. 

  

	 	5.4.	Delay of Payment Pursuant to Section 409A. Should any payments made to the Executive in accordance with Section 5 of this Agreement be determined to be payments from a nonqualified deferred
compensation plan, as defined by Section 409A of the Internal Revenue Code of 1986 as amended (the “Code”), that are not exempt from Section 409A of the Code as a short-term deferral or otherwise, these payments, to the extent
otherwise payable within six (6) months after the Executive’s date of Separation from Service, will be paid in a lump sum on the earlier of the date that is six (6) months after the Executive’s date of Separation from Service or
the date of the Executive’s death. For purposes of this Section 5, a “Separation from Service” means an anticipated permanent reduction in the level of bona fide services to twenty percent (20%) or less of the average
level of bona fide services performed over the immediately preceding thirty-six (36) month period. For purposes of Section 409A of the Code, the payments to be made to the Executive in accordance with Section 5 of this Agreement
shall be treated as a right to a series of separate payments. 

  

	6.	Resignation as a Member of the Board of Directors. In all cases of termination and upon the expiration of this Agreement, unless otherwise agreed to in writing, the Executive shall be deemed to have
contemporaneously resigned from his position as a member of the Board and any other position he then holds with the Company or any of its subsidiaries or affiliates. 

 

	7.	Cooperation in Proceedings. In all cases of termination and upon the expiration of this Agreement, unless otherwise agreed to in writing, the Executive agrees to fully cooperate with the Company and
its affiliates during the entire scope and duration of any litigation or administrative proceedings involving any matters with which the Executive was involved during the Executive’s employment with the Company. Such cooperation shall be
subject to the reasonable demands of any subsequent employment undertaken by the Executive, and the Company shall cover any reasonable out-of-pocket expenses of the Executive in so cooperating. 

 

	8.	 Dispute Resolution. All disputes, disagreements, claims or controversies between the Executive and the Company, including those that
relate in any manner to this Agreement or the Executive’s employment with the Company or the termination thereof, including, but not limited to, claims of harassment, discrimination, wrongful termination, defamation, fraud, infliction of
emotional distress or other claims under any federal, state, or local law (excluding unemployment, workers’ compensation claims and claims under any Company benefit plan that provides its own arbitration procedure), shall be resolved
exclusively by final and binding arbitration before a single arbitrator who is a retired judge in accordance with the then existing JAMS Employment Arbitration Rules and Procedures. If JAMS is unavailable, the parties will use another mutually
agreed upon private dispute resolution service. The parties shall pay their own costs of arbitration; provided, however, that the Company will pay such costs of arbitration if required to do so by applicable law to make this Agreement enforceable or
if required to do so by the rules of the private arbitration service in effect at the time of the dispute. By agreeing to arbitrate, the Executive and the Company are waiving rights to a jury trial in court. In addition, to the maximum extent
permitted by law, the Executive and the Company agree that all disputes must be arbitrated in an individual capacity, and not as a plaintiff or class member in any purported class, collective, or representative action or proceeding. The arbitrator

	 	
shall have no authority or jurisdiction to enter an award or otherwise provide relief on a class, collective, or representative basis. Unless otherwise agreed to by the parties, the arbitration
shall be held in the principal city in the federal judicial district where the Executive was employed when the dispute first arose. The arbitrator shall apply the substantive law of the state where the Executive was employed at the time the dispute
first arose. This arbitration provision shall be governed by the Federal Arbitration Act, and any action to enforce this Agreement to arbitrate or to enforce or vacate the arbitration award shall also be governed by the Federal Arbitration Act. Any
request for arbitration must be made within one year of the date on which the dispute first arose unless a longer period of time for bringing such a claim is provided by law. The parties shall be entitled to conduct adequate discovery and to obtain
all remedies available to the parties as if the matter had been tried in court. The arbitrator shall issue a written decision that provides the findings and conclusions on which the award is based. The decision of the arbitrator shall be final and
binding on all parties, and may be entered as a judgment by any party with any federal or state court of competent jurisdiction. Unless prohibited by law, all aspects of the arbitration proceeding, and any ruling, decision or award by the
arbitrator, will be strictly confidential. The parties will have the right to seek relief in the appropriate forum to prevent any actual or threatened breach of this provision. This arbitration provision does not limit the Executive’s right to
file an administrative charge with the National Labor Relations Board, the Equal Employment Opportunity Commission, or any state agency charged with the enforcement of fair employment practice laws. 

 

	9.	Miscellaneous. 

  

	 	9.1.	Further Assurances. Each party shall execute all documents and take all other actions necessary to effect the provisions and purposes of this Agreement. 

 

	 	9.2.	Entire Agreement. Except as provided in the next sentence, this Agreement supersedes any prior agreements or understandings, oral or written, between the Executive and the Company with respect to the
subject matter hereof, and constitutes the entire agreement of the parties with respect thereto. Except as specifically set forth herein, nothing in this Agreement is intended to adversely affect any rights the Executive or the Company may have
under the Severance Agreements, including, but not limited to Sections 3 and 5 of the CEO Severance Agreement or Sections 1, 2.3 and 2.4 of the Executive Severance Agreement. 

 

	 	9.3.	Modification. This Agreement shall not be varied, altered, modified, cancelled, changed or in any way amended except by mutual agreement of the parties in a written instrument executed by the parties
or their legal representatives. 

  

	 	9.4.	Severability. In the event that any provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason, the remaining provisions of this Agreement shall be
unaffected and shall remain in full force and effect. 

  

	 	9.5.	Tax Withholding. The Company may withhold all Federal, state, city or other taxes required pursuant to any law or governmental regulation or ruling. 

 

	 	9.6.	Binding Effect. This Agreement shall bind and inure to the benefit of each of the parties and their respective heirs, successors, administrators, executors, and assigns. 

 

	 	9.7.	Governing Law. To the extent not preempted by Federal law, the provisions of this Agreement shall be construed and enforced in accordance with the laws of the State of California. 

	 	9.8.	Notice. Any notices, requests, demands or other communications required by or provided for in this Agreement shall be sufficient if in writing and sent by registered or certified mail to the Executive
at the last address he has filed in writing with the Company or, in the case of the Company, at its principal office. 

  

	 	9.9.	Counterparts; Facsimiles. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which, taken together, shall constitute one and the same instrument.
This Agreement may be executed and delivered by exchange of facsimile copies showing the signatures of the parties, and those signatures need not be affixed to the same copy. The facsimile copies so signed will constitute originally signed copies of
the same consent requiring no further execution. 

 [signature page follows] 

 IN WITNESS WHEREOF, the Executive and the Company have executed this Agreement as of the date first above
written. 
  

							
	STANDARD PACIFIC CORP.				EXECUTIVE:
				
	By:		 /s/ Bruce A. Choate
				 /s/ Larry T. Nicholson

			Bruce A. Choate, Chairman				Larry T. Nicholson
			Compensation Committee of the				
			Board of Directors				
				
	Attest:		 /s/ Jeffrey J. McCall
				
			 Jeffrey J. McCall
 Chief Financial
Officer
				

 SIGNATURE PAGE TO CEO EMPLOYMENT
AGREEMENTex-10.01

 

 EXHIBIT 10.01
 

 SETTLEMENT AGREEMENT
 

 This Release and Settlement Agreement (“Agreement”) is entered into between the following parties (“the Parties”): B&J Oil Company, Inc. (“B&J Oil Company” or “Plaintiff”), and Hydrocarbons Holdings, Inc. and its parent company Mongolia Holdings, Inc. (collectively, the “Company”), as of June 9th, 2015 (the “Effective Date”).
 

 RECITALS
 

 B&J Oil Company filed a civil action against Company, B&J Oil Company, Inc. vs. Consolidation Services, Inc., et al., in Green County (Kentucky) Circuit Court (the “Court”), Case Number 15-CI-00009 (the “Civil Case”).
 To avoid the time and expense of litigation, the Parties want to resolve their differences and reach an end, compromise, and settlement for all disputes existing and potentially existing between them.
 AGREEMENT
 

 In consideration of the mutual execution of this Agreement and the releases and promises made in the Agreement by the Parties, and other good and valuable consideration, the Parties agree as follows:
 

 1.
 In exchange for complete resolution of this matter the Company shall pay to B&J Oil Company, from the date of this Agreement forward, any and all sums payable to Company from Barrett Oil (or any other buyers approved by the Parties in writing) for crude oil sales from the leases in Kentucky, listed on Exhibit “A” attached hereto (the “Kentucky Assets”) now and until amounts identified on Exhibit “B” attached, equal to $412,270.73 hereto (the “Owed Amounts”) have been paid to B&J Oil Company in full, without interest, payable as set forth in Paragraph 4 below. These payments (the “Financial Settlement”) will be paid via a sweep account with Forcht Bank or another bank mutually acceptable to the Parties.  After the Owed Amounts have been paid in full, B&J Oil Company shall not be entitled to any additional revenue from the Kentucky Assets. If payments in connection with the Kentucky Assets are insufficient to cover the Owed Amounts, Hydrocarbons Holdings only, shall be responsible for any such shortfall. 
 

 2.
 Within three (3) business days after the Effective Date, Don Sharp, the attorney for the B&J Oil Company, shall file with the Court and submit to Company a signed Request for Dismissal of the Civil Case as to the entirety of the Civil Case, and B&J Oil Company and their attorneys shall take any other steps required to dismiss the Civil Case, with each side to bear their own attorneys’ fees and costs. B&J Oil Company further agree that they will not re-file or attempt to re-file the Civil Case, or any portion of it or any case arising from or relating to the same or similar claim or cause of action, in the same or any other jurisdiction.
 

 3.
 The Dismissal will indicate that the case is dismissed for good reason and that the Plaintiff is barred from bringing an action on the same claim. Upon Company’s receipt of evidence that B&J Oil Company have filed the Request for Dismissal of the Civil Case, Mongolia Holdings, Inc. shall issue One Hundred and Thirty Thousand (130,000) restricted shares of its common stock to B&J Oil Company or their designees, in one or more certificates bearing the following legend:
 

 

 
 THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS.  THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.  INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
 

 4.
 Except for the obligations and indemnifications created by this Agreement, B&J Oil Company and their officers, directors, employees, attorneys, agents, heirs, representatives, successors in interest, and all persons or entities having or claiming any interest by or through them (the “Releasors”) hereby permanently and irrevocably release and discharge the Company and their respective officers, directors, employees, attorneys, agents, heirs, representatives, successors in interest, and all persons or entities having or claiming any interest by or through them (collectively, the “Releasees”), from any and all liabilities, claims, causes of action, suits, debts, losses, costs and demands whatsoever, in law or in equity, known or unknown, which the Releasors ever had, now have, or hereinafter may have, against the Releasees by reason of any matter, cause or thing whatsoever, occurring from the beginning of time up to and including the Effective Date. 
  
 5.
 From the Effective Date and during the term of the Financial Settlement, B&J Oil Company will be solely responsible for any and all costs, fees, royalties, liability insurance, taxes or other obligations associated with the operation and maintenance of the Kentucky Assets that are in excess of the amount set forth in the following sentence. The total amount of Financial Settlement payments will be applied toward satisfaction and settlement of the Owed Amounts on an ongoing basis, with the sole exception of an amount not to exceed one thousand five hundred dollar ($1,500.00) a month in direct operational expenses, provided that such expenses are incurred and accounted for in accordance with the policies and procedures established by the Company and in effect when the expenses are incurred. 
 
 6.
 B&J Oil Company further agree that they will release, indemnify and defend Company against any actions or liens for: a) services provided to Company; b) arising out of the claims referenced in the Civil Case; c) related to the Kentucky Assets; d) or the activities of Hydrocarbon Holdings. B&J Oil Company will release and hold Company and its insurers free and harmless from any and all such actions or liens. Company will hold B&J Oil Company and its insurers free and harmless from any and all such actions or liens that are arising out of activities of the Company other then: a) claims referenced in the Civil Case; b) related to the Kentucky Assets; or c) the activities of Hydrocarbon Holdings.
 

 7.
 It is further understood and agreed by the Parties that all rights under section 1542 of the California Civil Code, and any similar law of any state or territory of the United States, are hereby waived as to claims which those parties released do not know or suspect to exist at the time they execute this release. This section reads as follows:
 

 A general release does not extend to the claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.
 Each party hereto understands and realizes that there may exist at this time claims herein released, the nature of which have not yet been discovered.  It is expressly understood and agreed that the possibility that such claims exist has been explicitly taken into account in determining the consideration to be given for any releases contained herein and that a portion of that consideration, having been bargained for in full knowledge of the possibility of such unknown claims, was given in exchange for the releases contained herein.
 

 2
 

 
 

 8.
 It is understood and agreed by the parties hereto that this Agreement does not create a fiduciary relationship between them; that Plaintiff shall be an independent contractor; and that nothing in this Agreement is intended to constitute either party an agent, legal representative, subsidiary, joint venturer, partner, employee, or servant of the other for any purpose whatsoever.  Company and Plaintiff acknowledge and agree that Plaintiff is not a commercial agent of Company or otherwise in relation to the Kentucky Assets under any commercial agency/distributor law (or any similar law) in effect in Kentucky (if any), or in any other jurisdiction.
 

 9.
 It is understood and agreed that nothing in this Agreement authorizes Plaintiff to make any contract, agreement, warranty, or representation on Company’s behalf, or to incur any debt or other obligation in Company’s name; and that Company shall in no event assume liability for, or be deemed liable hereunder as a result of, any such action, or by reason of any act or omission of Plaintiff in its operation of the Kentucky Assets, or any claim or judgment arising therefrom against Plaintiff.
 

 10.
 Plaintiff shall indemnify and hold Company (and its Affiliates, and employees, officers and directors thereof) harmless from and against any and all liabilities, claims, actions, fines, damages, losses, costs, and expenses (including reasonable attorneys’ fees) arising out of, caused by or connected directly or indirectly with the operation of the Kentucky Assets, or the performance or nonperformance of Plaintiff’s obligations hereunder, irrespective of whether such claims or suits shall be against Company solely or as a defendant with Plaintiff and/or other parties, and irrespective of whether any such claims or suits allege negligence on the part of Company, and regardless of the jurisdictions in which any such claims or suits may be brought.
 

 11.
 This Agreement constitutes a compromise, settlement, and release of disputed claims and is being entered into solely to avoid the burden, inconvenience, and expense of litigating those claims. No Party to this Agreement admits any liability to the other Party with respect to any such claim or any other matter. Each Party expressly denies liability as to every claim, which may be asserted by the other Party. Therefore, this Agreement is not to be and shall never be construed or deemed an admission or concession by any of the Parties hereto of liability or culpability at any time for any purpose concerning any claim being compromised, settled, and released, or any other matter.
 

 12.
 The Parties agree to act in good faith and to cooperate fully with each other in carrying out the intent of this Agreement, and for that purpose agree to execute all additional documents as may prove reasonably necessary to accomplish that intent.
  
 13.
 The Parties shall each bear their own costs and attorney fees incurred in connection with this Agreement, and each waives the right to make a claim against the other for such costs, attorney fees or any other expenses associated with the matters being settled here.
 

 14.
 The failure of any Party at any time to require performance of any provision of this Agreement shall not limit that Party’s right to enforce the provision, nor shall any waiver of any breach of any provision constitute a waiver of that provision itself.
 

 15.
 This Agreement shall inure to the benefit of and shall be binding upon each of the Parties here and their respective agents, representatives, executors, administrators, trustees, personal representatives, partners, directors, officers, shareholders, agents, attorneys, insurers, employees, representatives, predecessors, successors, heirs and assigns.
 

 16.
 The Parties agree that the laws of the State of Delaware shall be utilized in construing this Agreement and in enforcing the rights and remedies of the Parties. Any litigation arising out of a dispute concerning the Agreement shall be litigated in the Western District of Kentucky. The Parties agree to US District Court in that jurisdiction for all such disputes concerning this Agreement.
 

 3
 

 
 

 17.
 B&J Oil Company, for themselves and their shareholders, officers, directors, beneficiaries, successors, heirs, assigns, and all companies, partnerships or other persons or entities with which he is or becomes associated, hereby covenants, represents and warrants that they will not present, or refer for prosecution, any claim in any proceeding, judicial or administrative, criminal or civil, against or adverse to Company and their respective directors, officers, employees, consultants, agents, lenders, attorneys, heirs, predecessors, successors and assigns.
 

 18.
 B&J Oil Company acknowledges that Company would not have consented to the payment of the Financial Settlement were it not for B&J Oil Company’s agreement to the provisions of this Agreement, and that any breach of these provisions will frustrate the underlying purpose of this Agreement. For this reason, unless any court or tribunal determines there that there was a prior material breach of this Agreement by the Company, then any litigation originated against the Company by B&J Oil Company or its shareholders, officers, directors, beneficiaries, successors, heirs, assigns, and all companies, partnerships, will entitle the Company to a full measure of damages allowed by law, such damages to include, but not limited to:
 

 a.
 The return by B&J Oil Company to Company of all sums paid pursuant to this Agreement: and
 

 b.
 The Return by B&J Oil Company to Company of any recovery he obtains as a result of any legal or administrative proceedings brought against any Released Party or Parties in violation of this Release and Settlement Agreement.
 

 19.
 The provisions here are not intended for the benefit of any third party, but solely for the parties to this Agreement.
 

 20.
 The undersigned Parties each further expressly warrant and represent to one another as follows:
 

 a.
 They have read this Agreement and have consulted with their respective attorneys concerning its contents and legal consequences and have requested any change in language necessary or desirable to effectuate their intent and expectations so that the rule of construction of contracts construing ambiguities against the drafting party shall be inapplicable;
 

 b.
 They have investigated the facts to the extent that they have deemed necessary in their sole discretion and have assumed any risk of mistake of fact and any facts proven to be other than or different from the facts now known to any of the Parties and therefore intend this Agreement to be binding without regard to any mistake of fact or law relating to the subject matter of this Agreement;
 

 c.
 The Agreement is being executed solely in reliance on their own respective judgment, belief and knowledge of the matters set forth here and on the advice of their respective attorneys following an independent investigation of all relevant matters to the extent they deem necessary and reasonable;
 

 d.
 They have taken all actions and obtained all authorizations, consents and approvals as are conditions precedent to their authority to execute this Agreement and thus warrant that they are fully authorized to bind the Party for which they execute this Agreement; and
 

 e.
 There has been and will be no assignment or other transfer of any claim released here, or any part thereof, and each Party agrees to defend, indemnify and hold harmless the other party from any claims, obligations, or other liabilities, including specifically attorney’s fees and costs incurred, which result from the assertion by any third party of a right to any claim which is released by this Agreement.
 

 4
 

 
 

 21.
 The foregoing warranties and representations shall survive the execution and delivery of this Agreement.
 

 22.
 The Parties hereby incorporate the Recitals set forth above as an integral part of this Agreement and acknowledge the truth and accuracy of those Recitals.
 

 23.
 This Agreement is the entire, final, and complete agreement of the Parties relating to the subject of this Agreement, and supersedes and replaces all prior or existing written and oral agreements between the Parties or their representatives relating thereto. No amendment or modification of this Agreement shall be effective unless in writing executed by all Parties whose interests are affected by the modification.
 

 24.
 If any provision of this Agreement is held to be invalid or unenforceable, all remaining provisions will continue in full force and effect.
 

 25.
 This Agreement may be executed in multiple counterparts, all of which shall be deemed originals, and with the same effect as if all Parties had signed the same document. All of such counterparts shall be construed together with and shall constitute one Agreement, but in making proof, it shall only be necessary to produce one such counterpart. A facsimile transmission shall be as valid and enforceable as an original.
 26.
 The Parties each agree that they will each respectively maintain and uphold the other’s name and professional reputation and will refrain from engaging, directly or indirectly, in any action or conduct negligently or intentionally undertaken to damage the other’s name or professional reputation.
 

 27.
 Capacity; Organization; Existence.  The B&J Oil Company, Inc. has full capacity to enter into and perform under this Agreement, and all other agreements to be entered into in connection with the transactions contemplated hereby (the “Other Agreements”) and to consummate such transactions; and no other consent or joinder of any other persons or corporations is required.  This Agreement has been, and each of the Other Agreements executed by the B&J Oil Company, Inc. hereunder are duly authorized, executed and delivered by the B&J Oil Company, Inc.  This Agreement constitutes, and each of the Other Agreements executed by the B&J Oil Company, Inc. constitute, the legal, valid and binding obligations of the B&J Oil Company, Inc. enforceable in accordance with their respective terms. The B&J Oil Company, Inc. is duly organized and validly existing under the laws of the State of Kentucky. B&J Oil Company, Inc. has full power and authority to conduct its business as it is now being conducted and is duly qualified to do business in each jurisdiction where the Kentucky Assets are located, or the nature of the business conducted by B&J Oil Company, Inc. requires such qualification. B&J Oil Company, Inc. has all necessary licenses and authority to operate its business as now being conducted in the State of Kentucky.
 

 28.
 B&J Oil Company represent that will operate the Kentucky Assets to the best of its ability and that it has no intention of plugging the wells and will not do so without prior notification and written authorization of the Company, which authorization will not be unreasonable withheld. 
 

 

 

 

 5
 

 
 

 THE PARTIES, BY THEIR SIGNATURES BELOW, HAVE EXECUTED THIS AGREEMENT AND AGREE TO BE BOUND BY IT AS OF THE FIRST DATE WRITTEN ABOVE.
 

 	 	 	
	 For B&J Oil Company: 
 

 B&J Oil Company, Inc. 
 

 

 /s/: Louis Judd
	  
	  

	 By:  Louis Judd, its Chief Executive Officer 
	  
	  

	  
 For Company:
 

 Mongolia Holdings, Inc.
 

 

 /s/: Gary Kucher
	  
	 

 

  
 Hydrocarbons Holdings, Inc.
 

 

 /s/: Gary Kucher

	 By:  Gary Kucher, CEO 
	  
	 By:  Gary Kucher, CEO

 

 

 Louis Judd warrants and represents that Section 27 above is true and correct and that he has full authority to enter into this Agreement on behalf of B&J Oil Company Inc. and can insure its performance.
 

 

 

 /s/: Louis Judd
 By:  Louis Judd
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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