Document:

blfs_ex1029.htm

EXHIBIT 10.29

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (the “Agreement”) effective as of the last date written below, (the “Effective Date”) is hereby executed by and between BioLife Solutions, Inc., a Delaware corporation (the “Company”) and Daphne Taylor (“Executive”).

 

In consideration of the premises and the mutual covenants herein contained and for other good and valuable consideration, the parties agree as follows:

 

1.    Term of Employment; Executive Representation.

 

a.   Executive’s employment shall commence on the Effective Date.  Executive’s term of employment shall be for a period of one year from and including the Effective Date (the “Initial Term”); provided, however, that this Agreement shall automatically renew for successive one (1) year periods in the event either party does not send the other a “termination notice” at least ninety (90) days prior to the expiry of the Initial Term, and in subsequent years, prior to the expiry of any such successive annual period.  Executive and the Company agree and acknowledge that Executive’s employment with the Company may be terminated at any time, with or without cause, by the Company or Executive, upon written notice in accordance with Section 7 of this Agreement.

 

b.   Executive hereby represents to the Company that the execution and delivery of this Agreement by Executive and the performance by Executive of the Executive’s duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any statute, law, regulation, employment agreement or other agreement or policy to which Executive is a party or otherwise bound.

 

2.   Position.

 

a.   While employed hereunder as an executive and corporate officer, Executive’s title shall be Vice President, Finance & Administration and Chief Financial Officer.

 

   While employed hereunder, Executive will devote Executive’s full business time and best efforts to the performance of Executive’s duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict with the rendition of such services either directly or indirectly, without the prior written consent of the CEO; provided that nothing herein shall preclude Executive from: (1) continuing to serve on the board of directors or trustees of any business corporation or any charitable organization on which he currently serves and which is identified on Exhibit A hereto, or (2) subject to the prior approval of the CEO, from appointment to any additional directorships or trusteeships, or (3) serve in an advisory role for other business entities, provided in each case, and in the aggregate, that such activities do not interfere with the performance of Executive’s duties hereunder or conflict with Section 8 of this Agreement.

 

  

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3.   Base Salary, Achievement Bonus.  While employed hereunder, the Company shall pay Executive a base salary (the “Base Salary”) at the annual rate of $150,000, payable in regular installments in accordance with the Company’s usual payment practices.  Executive may be entitled to increases in Executive’s Base Salary, if any, as may be determined from time to time in the sole discretion of the CEO and Board of Directors. During the Initial Term and any successive terms, in addition to Executive's base salary, Executive shall be entitled to an annual bonus of up to ten percent (10%) of Executive’s base salary, payable annually, based upon the achievement of specific milestones to be accomplished by the Executive for the ensuing year as determined by the CEO.

 

4.   Stock Option Grant. In recognition of Executive’s promotion, Executive is hereby granted a non-incentive stock option to purchase 500,000 shares of Company common stock, par value $.001 per share, which options shall (a) extend for a period of 10 years, (b) be exercisable at a price per share equal to the closing price of the Company’s common stock on the Effective Date of this Agreement, and (c) shall vest to the extent of (i) 25% thereof on the first anniversary date of the Effective Date of this Agreement, and (ii) one-thirty sixth of the remaining balance thereof on the anniversary date of the Effective Date of this Agreement in each of the ensuing 36 months following the first anniversary date of the Effective Date of this Agreement.

 

5.   Executive Benefits.  The Company shall provide Executive the following benefits during the term of his employment hereunder:

 

a.   Coverage under all Executive pension and welfare benefit programs, plans and practices in accordance with the terms thereof, which the Company generally makes available to its Executives.

 

b.   Accrued paid vacation of four (4) weeks each calendar year, which shall be the maximum number of days Executive may accrue at any time, and which shall be taken at such times as are consistent with Executive’s responsibilities hereunder.

 

6.   Business Expenses. Executive shall be reimbursed for the reasonable expenses in carrying out his duties and responsibilities under this Agreement, including, without limitation, expenses for travel and similar items related to such duties and responsibilities.

 

7.   Termination.  The Executive’s employment hereunder may be terminated by either party at any time and for any reason; provided that Executive will be required to give the Company at least 90 days advance written notice of any resignation of Executive’s employment (unless the Company waives its right to receive such 90-day notice).  Notwithstanding any other provision of this Agreement, the provisions of this Section 7 shall exclusively govern Executive’s rights upon termination of employment with the Company and its affiliates.

 

a.   By the Company for Cause; By the Executive Without Good Reason.

 

(i)   The Executive’s employment hereunder may be terminated by the Company for Cause (as defined below) at any time or by Executive without Good Reason after 90 days prior written notice (unless the Company waives such notice requirement or a portion thereof).

 

(ii)   For purposes of this Agreement, “Cause” shall mean:

 

(A) Executive’s continued failure substantially to perform Executive’s duties hereunder (other than as a result of total or partial incapacity due to physical or mental illness) for a period of 10 consecutive days following notice by the Company to the Executive of such failure,

 

(B) dishonesty in the performance of Executive’s duties hereunder,

 

  

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(C) an act or acts on Executive’s part constituting (a) a felony under the laws of the United States or any state thereof, or (b) a misdemeanor involving moral turpitude,

 

(D) Executive’s malfeasance or misconduct in connection with Executive’s duties hereunder or any act or omission of Executive which is materially injurious to the financial condition or business reputation of the Company or any of its subsidiaries or affiliates, or

 

(E) Executive’s breach of the provisions of Section 8 or 9 of this Agreement.

 

(iii)          If Executive’s employment is terminated by the Company for Cause or by Executive without Good Reason, Executive shall be entitled to receive:

 

(A) the Base Salary through the date of termination;

 

(B) reimbursement for any unreimbursed business expenses properly incurred by Executive in accordance with Company policy prior to the date of Executive’s termination; and

 

(C) such Executive Benefits, if any, as to which Executive may be entitled under the Executive benefit plans of the Company (the amounts described in clauses (A) through (C) hereof being referred to as the “Accrued Rights”).

 

Following such termination of Executive’s employment by the Company for Cause or by Executive without Good Reason, except as set forth in this Section 7(a),  Executive shall have no further rights to any compensation or any other benefits under this Agreement.

 

b.   Disability or Death.

 

(i)   The Executive’s employment hereunder shall terminate upon Executive’s death and if Executive becomes physically or mentally incapacitated and is therefore unable for a period of sixty (60) consecutive days or for an aggregate of ninety (90) days in any twelve (12) consecutive month period to perform Executive’s duties (such incapacity is hereinafter referred to as “Disability”).  Any question as to the existence of the Disability of Executive as to which Executive and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to Executive and the Company.  If Executive and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing.  The determination of Disability made in writing to the Company and Executive shall be final and conclusive for all purposes of the Agreement.

 

(ii)   Upon termination of Executive’s employment hereunder for either Disability or death, Executive or Executive’s estate (as the case may be) shall be entitled to receive the Accrued Rights.

 

Following the termination of Executive’s employment hereunder due to death or Disability, except as set forth in this Section 7(b), Executive shall have no further rights to any compensation or any other benefits under this Agreement.

 

c.   By the Company Without Cause or Resignation by Executive for Good Reason.

 

(i)   The Executive’s employment hereunder may be terminated by the Company without Cause or by Executive’s resignation for Good Reason.

 

  

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(ii)   For purposes of this Agreement, “Good Reason” shall mean:

 

(A) the occurrence of a “change in control” of the Company (as defined below);

 

(B) without Executive’s express written consent, the Company materially changes Executive’s position, duties, responsibilities, or status as in effect at the time of the execution of this Agreement, other than  a change to the position, duties, responsibilities, or status associated with the position of Vice President of Finance and Administration and Chief Financial Officer;

 

(C) a request by the Company that Executive relocate to another work location and Executive’s refusal to do so;

 

(D) a failure by the Company to comply with any material provision of this Agreement, which has not been cured within thirty (30) days after notice of such non-compliance has been given by Executive to the Company, including but not limited to (1) a reduction by the Company in Executive’s base salary as in effect on the date hereof or as the same may be increased from time to time during the term of this Agreement (other than as a result of a general salary reduction affecting substantially all Company Executives); (2) any failure by the Company to obtain the assumption of this Agreement by any successor or assign of the Company;

 

(iii)   If Executive’s employment is terminated by the Company without Cause (other than by reason of death or Disability) or if Executive resigns for Good Reason, Executive shall be entitled to receive:

 

(A) the Accrued Rights;

 

(B) Subject to Executive’s continued compliance with the provisions of Section 8 and 9 of this Agreement, continued payment of the Base Salary (1) six months after the date of such termination, with such payments to begin on the 15th day of the month following separation and to continue on the 15th day of each succeeding month for a total of 6 months or (2) in the event of a change of control, continued payment of the Base Salary for a period of six months after the effective date of the change of control event, with the payment of base salary  to begin on the 15th day of the month following the change of control and to continue on the 15th day of each succeeding month for a total of 6 months.

(C) In the event of a change of control, accelerated vesting of any remaining unvested stock options pursuant to the terms the Option Agreement attached hereto as Exhibit B,

 

(iv)   A “change in control” of the Company shall be deemed to have occurred if:

 

(A) There shall be consummated (1) any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of the Company’s Common Stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of the Company’s Common Stock immediately prior to the merger have the same proportionate ownership of at least 50% of common stock of the surviving corporation immediately after the merger, or (2) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company;

 

  

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(B) The stockholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company;

 

(C) Any person (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) shall become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of 50% or more of the Company’s outstanding Common Stock.

 

d.   Notice of Termination.  Any purported termination of employment by the Company or by Executive (other than due to Executive’s death) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 12 (h) hereof.  For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of employment under the provision so indicated.

 

8.   Non-Disclosure Confidential Information and Trade Secrets; Non-Solicitation; Works Made For Hire.

 

a. At any time during or after Executive’s employment with the Company, Executive shall not, without the prior written consent of the Company, use, divulge, disclose or make accessible to any other person, firm, partnership, corporation or other entity any Confidential Information (as hereinafter defined) pertaining to the business of the Company or any of its subsidiaries, except (i) while employed by the Company, in the business of and for the benefit of the Company, or (ii) when required to do so by a court of competent jurisdiction, by any governmental agency having supervisory authority over the business of the Company, or by any administrative body or legislative body (including a committee thereof) with jurisdiction to order Executive to divulge, disclose or make accessible such information.  For purposes of this Section 8(a), “Confidential Information” shall mean non-public information concerning the financial data, strategic business plans, intellectual property and other non-public, proprietary and confidential information of the Company as in existence as of the date of Executive’s termination of employment that, in any case, is not otherwise available to the public (other than by Executive’s breach of the terms hereof).  Executive agrees that all confidential information described in this Paragraph of this Agreement is and constitutes trade secret information and is the exclusive property of the Company.

 

b. Executive agrees that all confidential information described in Section 8a of this Agreement is and constitutes trade secret information, and is the exclusive property of the Company.    Executive agrees that the unauthorized use or disclosure of any of the Company's confidential information or trade secrets obtained during or following his employment with Company constitutes misappropriation.  Executive agrees not to engage in any misappropriation at any time, whether during or following the completion of his employment with the Company.  In addition, during the period of his employment hereunder and for twenty-four (24) months thereafter, Executive agrees that, without the prior written consent of the Company, he shall not, on his own behalf or on behalf of any person, firm or company, directly or indirectly, solicit, interfere with, induce or attempt to induce, or offer employment to any person who has been employed by the Company at any time during the twelve (12) months immediately preceding such solicitation, or directly or indirectly solicit, interfere with, induce or attempt to induce any customer of the Company to reduce, withdraw, or withhold business from the Company.

 

c. The results and proceeds of Executive’s services hereunder, including, without limitation, any works of authorship resulting from Executive’s services during Executive’s employment with the Company and/or any of the Company’s affiliates and any works in progress, will be works-made-for hire and the Company will be deemed the sole owner throughout the universe of any and all rights of whatsoever nature therein, whether or not now or hereafter known, existing, contemplated, recognized or developed, with the right to use the same in perpetuity in any manner the Company determines in its sole discretion without any further payment to Executive whatsoever.  If, for any reason, any of such results and proceeds will not legally be a work-for-hire and/or there are any rights which do not accrue to the Company under the preceding sentence, then Executive hereby irrevocably assigns and agrees to assign any and all of Executive’s right, title and interest thereto, including, without limitation, any and all copyrights, patents, trade secrets, trademarks and/or other rights of whatsoever nature therein, whether or not now or hereafter known, existing, contemplated, recognized or developed, to the Company, and the Company will have the right to use the same in perpetuity throughout the universe in any manner the Company determines without any further payment to Executive whatsoever.  Executive will, from time to time as may be requested by the Company, (i) during the term of Executive’s employment without further consideration, and (ii) thereafter at Executive’s then current rate of compensation, do any and all things which the Company may deem useful or desirable to establish or document the Company’s exclusive ownership of any and all rights in any such results and proceeds, including, without limitation, the execution of appropriate copyright and/or patent applications or assignments.  To the extent Executive has any rights in the results and proceeds of Executive’s services that cannot be assigned in the manner described above, Executive unconditionally and irrevocably waives the enforcement of such rights.  This subsection is subject to and will not be deemed to limit, restrict, or constitute any waiver by the Company of any rights of ownership to which the Company may be entitled by operation of law by virtue of the Company being Executive’s employer.  This Section does not apply to an invention for which no equipment, supplies, facilities or Confidential Information was used, which does not (i) relate to the business of the Company; (ii) relate to the Company’s actual or demonstrable anticipated research or development.

 

  

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d. Executive and the Company agree that the covenants outlined in this Section 8 are reasonable covenants under the circumstances, and further agree that if in the opinion of any court of competent jurisdiction any such restraint is not reasonable in any respect, such court shall have the right, power and authority to excise or modify such provision or provisions of this Section as to the court shall appear not reasonable and to enforce the remainder of the covenants as so amended.  Executive agrees that any breach of the covenants contained in this Section 8 would irreparably injure the Company.

 

9.   Non-Competition.

 

In view of the unique and valuable services that Executive has rendered and is expected to render to the Company, and Executive's knowledge of the business of the Company and proprietary information relating to the business of the Company and similar knowledge regarding the Company that Executive has obtained and is expected to obtain during the course of his employment with the Company and in consideration of the compensation to be received by Executive hereunder, Executive agrees that during the Employment Period and for a period of twelve months immediately following the termination or expiration thereof he will not compete with, or, directly or indirectly, own, manage, operate, control, loan money to, or participate in the ownership, operation or control of, or be connected with as a director, partner, consultant, agent, independent contractor or otherwise, or acquiesce in the use of his name in any other business or organization which is in competition with the Company in any geographical area in which the Company is then conducting business or any geographical area in which, to the knowledge of Executive at the time of cessation of employment, the Company plans to conduct business within twenty four months from the date thereof.

 

10.   Specific Performance.  Executive acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the provisions of Section 8 or 9 would be inadequate and, in recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to cease making any payments or providing any benefit otherwise required by this Agreement and obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.

 

11.   Arbitration.

 

a. Executive agrees that any dispute or controversy arising out of, relating to, or in connection with this Agreement, or the interpretation, validity, construction, performance, breach, or termination thereof, shall be settled by binding arbitration to be held in Snohomish County, WA, in accordance with the National Rules for the Resolution of Employment Disputes then in effect of the American Arbitration Association (the “Rules”).  The arbitrator may grant injunctions or other relief in such dispute or controversy.  The decision of the arbitrator will be final, conclusive and binding on the parties to the arbitration.  Judgment may be entered on the arbitrator's decision in any court having jurisdiction.

 

b. The arbitrator(s) will apply Washington state law to the merits of any dispute or claim, without reference to rules of conflicts of law.  Executive hereby consents to the personal jurisdiction of the state and federal courts located in Washington (or such other state as to which the parties may agree) for any action or proceeding arising from or relating to this Agreement or relating to any arbitration in which the parties are participants.

 

c. EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION.  EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EXECUTIVE RELATIONSHIP.

 

  

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12.   Miscellaneous.

 

a. Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Washington, without regard to conflicts of laws principles thereof.

 

Entire Agreement/Amendments.  This Agreement contains the entire understanding of the parties with respect to the employment of Executive by the Company.  There are no restrictions, agreements, promises, warranties, covenants or undertakings between the parties with respect to the subject matter herein other than those expressly set forth herein.  This Agreement may not be altered, modified, or amended except by written instrument signed by the parties hereto.

 

b. No Waiver.  The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

 

c. Severability.  In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby.

 

d. Assignment.  This Agreement shall not be assignable by Executive.  This Agreement may be assigned by the Company to a company which is a successor in interest to substantially all of the business operations of the Company.  Such assignment shall become effective when the Company notifies the Executive of such assignment or at such later date as may be specified in such notice.  Upon such assignment, the rights and obligations of the Company hereunder shall become the rights and obligations of such successor company, provided that any assignee expressly assumes the obligations, rights and privileges of this Agreement.

 

e. Mitigation. Executive shall not be required to mitigate damages or the amount of any salary continuation payments provided for under this Agreement by seeking other employment or otherwise, nor shall the amount of any payments provided for under this Agreement be reduced by any compensation earned by Executive as the result of employment by another employer or self-employment after the date of termination.

 

f. Successors; Binding Agreement.  This Agreement shall inure to the benefit of and be binding upon personal or legal representatives, executors, administrators, successors, heirs, distributes, devises and legatees.

 

g. Notice.  For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered, sent via telecopier/telefax, or mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below Agreement, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

 

If to the Company:

Biolife Solutions, Inc.

3303 Monte Villa Parkway, Suite 310

Bothell, WA  98021

Attention:  Chief Executive Officer

 

 

If to Executive:

 Daphne Taylor

 904 - 232nd Street SE

 Bothell, WA 98021

Withholding Taxes.  The Company may withhold from any amounts payable under this Agreement such Federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.

 

h. Counterparts.  This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

 

  

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the last date written below.

 

	 	“Company”	 
	 	 	 
	 	BioLife Solutions, Inc.	 
	 	 	 
	
 

	
By: 

	/s/ Michael Rice 	 
	 	Name: 	Michael P. Rice	 
	 	Its: 	Chief Executive Officer	 
	 	 	 	 
	 	Date:	8/17/2011	 

 

	 	“Executive”	 
	 	 	 	 
	
 

	
By: 

	/s/ Daphne Taylor	 
	 	 	Daphne Taylor	 
	 	 	 	 
	 	Date: 	8/17/2011	 

 

  

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Exhibit A

(Permitted Activities) – NONE DECLARED

 

 

 

 

 

 

 

 

 

 

Page 9henc_ex107.htm

EXHIBIT 10.7

 

TERRA NOVA MINERALS INC.

837 West Hastings Street, Suite 408

Vancouver, BC V6C 3N6

 

Private and Confidential

 

March 19, 2012

Holloman Energy Corporation

333 North Sam Houston Parkway East

Suite 600

Houston, TX 77024

USA

Attention:          Mark Stevenson, President and CEO

 

Re:           Earn-In Respecting PEL 112 and PEL 444

 

Dear Sir:

 

This letter (the “LOI”) sets out our intention to complete a transaction (the “Transaction”) between Terra Nova Minerals Inc. (“Terra Nova”) and Holloman Energy Corporation (“Holloman”) through which Terra Nova will have the right to earn a 55% working interest (the “Farm-In Interest”) in two onshore Petroleum Exploration Licenses (individually a “License” or jointly the  “Licenses”) located on the western flank of the Cooper Basin in the State of South Australia, Australia, namely PEL 112 (comprised of 2,196 square kilometers) and PEL 444 (comprised of 2,358 square kilometers), on the terms and conditions set forth herein. Terra Nova and Holloman are to be known individually as a “Party” and jointly as the “Parties” under this LOI.

 

The Transaction is expressly subject to:

 

	
(a)

	
a due diligence review by each Party of the other Party, including such other Party’s business, operations, properties and title thereto;

 

	
(b)

	
the negotiation, execution and delivery of a definitive earn-in agreement for the Transaction (the “Definitive Agreement”) among the Parties;

 

	
(c)

	
the approval of the Transaction by the board of directors of each of the Parties;

 

	
(d)

	
the pro-rata working interest participation in the Transaction by Australian-Canadian Oil Royalties Ltd. and Eli Sakhai, each of whom are current owners of a 16.67% interest in the Licenses;

 

	
(e)

	
the approval of the Transaction by the TSX Venture Exchange (the “Exchange”) or any other stock exchange or regulatory body applicable having jurisdiction or authority over either of the Parties.

 

  

 

  

 

	
1.

	
Non-Refundable Fee and Shares

 

1.1 On execution of this LOI, Terra Nova shall pay to Holloman an initial, non-refundable fee (the “Fee”) in the amount of USD$100,000, which Fee shall not be repayable or repaid by Holloman to Terra Nova under any circumstances.

 

1.2 Within ten Business Days of the effective date of the Definitive Agreement, Terra Nova shall issue to Holloman 1,000,000 common shares (the “Shares”) of Terra Nova, it being acknowledged and agreed that such Shares will be subject to a hold period of four months and a day in accordance with the policies of the Exchange and applicable securities laws.

 

	
2.  

	
Transaction

 

2.1      The Parties will only be legally bound to complete the Transaction upon execution of the Definitive Agreement incorporating the terms and conditions of this LOI.  The Parties agree to negotiate the Definitive Agreement in good faith with the goal of executing the Definitive Agreement within 30 days of the date of execution of this LOI.  The Parties further acknowledge that the Definitive Agreement will incorporate the principal terms of the Transaction contemplated herein and will also contain customary provisions typical for transactions and agreements of this type, including but not limited to a standard right of first refusal for any future disposition of an interest by a Party in the Licenses.  The principal terms of the Transaction under which Terra Nova will have the right to earn the Farm-In Interest in each of PEL 112 and PEL 444 are as follows:

 

1. Seismic Earning Obligations:

 

	
(a)

	
Within 15 days from the execution of this LOI, Terra Nova shall pay into the trust account of Holloman’s solicitors USD$250,000, which, upon execution of the Definitive Agreement, will be transferred to Holloman for its unrestricted use. In the event a Definitive Agreement is not executed between the Parties, such amount will be refunded to Terra Nova;

 

	
(b)

	
Within 15 days from the execution of this LOI, Terra Nova shall pay into the trust account of such solicitors as may be selected by the mutual consent of the Parties AUD$4,000,000 which, upon the execution of the Definitive Agreement, will be used by Terra Nova in the completion of a seismic acquisition program, including work area clearance and seismic interpretation, on both PEL 112 and PEL 444 (the “Initial Seismic Program”). At a minimum, the scope of the Initial Seismic Work Program shall be sufficient to cover the seismic acquisition requirements for both Licenses as set forth in their respective license conditions.  In the event a Definitive Agreement is not executed between the Parties, such amount will be refunded to Terra Nova;

 

	
(c)

	
On or before May 1, 2012, Terra Nova shall pay into the trust account of such solicitors as may be selected by the mutual consent of the Parties, AUD$700,000 for use by Terra Nova to complete the Initial Seismic Program.

 

  

2

  

 

The earning obligations listed in Articles 2.1(a) to 2.1(c) are collectively referred to as the “Seismic Earning Obligations”. Seismic data obtained during performance of the Seismic Earning Obligations shall be the property of all Parties to be held in working interest percentages calculated as though Terra Nova had successfully completed its Seismic Earning Obligations and Drilling Obligations.

 

In the event Terra Nova’s costs to complete the Seismic Earning Obligations is less than the amounts escrowed in Articles 2.1(b) and 2.1(c), such excess escrowed funds shall continue in escrow for use in the pursuit of whatever exploration activities upon the Licenses as may be agreed by the Parties, until June 13, 2013.

 

Upon final funding of the Seismic Earning Obligations for a License, Holloman agrees to transfer to Terra Nova, and register in its favour, a 20% working interest in such License (the “Seismic Working Interest”). Terra Nova shall hold the Seismic Working Interest on each License in trust and for the sole benefit of Holloman until the seismic program for that License is complete. For greater clarity, the Seismic Working Interest shall be earned by Terra Nova on a License by License basis such that the completion of a seismic program on PEL 444 shall earn Terra Nova its Seismic Working Interest in PEL 444 and completion of a seismic program on PEL 112 shall earn Terra Nova its Seismic Working Interest in PEL 112.

 

During such period that Terra Nova holds the Seismic Working Interest on either License for the benefit of Holloman, Terra Nova shall indemnify and save harmless Holloman from and against all actions, claims, demands, losses, damages, costs and expenses (including all legal and other professional charges on a full solicitor/client indemnity basis) and other liability whatsoever which may be incurred, suffered or sustained by Holloman in connection with any act or omission of Terra Nova in connection with the Licenses.

 

Earning Obligations - Drilling

 

	
(d)  

	
On or before November 1, 2012, Terra Nova shall pay into the trust account of such solicitors as may be selected by the mutual consent of the Parties, AUD$4,500,000, which will be used by Terra Nova to conduct a three (3) well drill program on the Licenses (the “Initial Drilling Program”). Well locations drilled during the Initial Drilling Program shall be selected by Terra Nova except that at a minimum of one well must be drilled on each of the Licenses.  In connection with the Initial Drilling Program, Terra Nova shall solely fund dry-hole costs of the three wells. In the event Initial Drilling Program dry-hole costs exceed an aggregate amount of AUD$4,500,000, such excess cost shall be borne solely by Terra Nova. In the event any well drilled as part of the Initial Drilling Program shall test positively for commercially viable production of oil or gas, Terra Nova shall pay 50% of the total aggregate completion costs respecting such well(s) and the current working interest holders shall pay 50% of the total aggregate completion costs respecting such well(s) in accordance with their respective current working interests.

 

	
(e)  

	
At the option of Terra Nova, on or before March 1, 2013, Terra Nova may pay into the trust account of such solicitors as may be selected by the mutual consent of the Parties, AUD$4,500,000, which will be used by Terra Nova to conduct an additional three (3) well drill program on the Licenses (the “Optional Drilling Program”). Well locations drilled during the Optional Drilling Program shall be selected by Terra Nova except that at a minimum of one well must be drilled on each of the Licenses.  In connection with the Optional Drilling Program, Terra Nova shall solely fund (up to an aggregate amount of AUD$4,500,000) dry-hole costs of the three wells. In the event any well drilled as part of the Optional Drilling Program shall test positively for commercially viable production of oil or gas, Terra Nova shall pay 50% of the total aggregate completion costs respecting such well(s) and the current working interest holders shall pay 50% of the total aggregate completion costs respecting such well(s) in accordance with their respective current working interests.

 

  

3

  

 

The earning obligations listed in Articles 2.1(d) to 2.1(e) are collectively referred to as the “Drilling Obligations”.

 

Upon drilling and abandonment or completion of each well constituting the Initial Drilling Program, Terra Nova shall be deemed to have earned an additional 5.8333% working interest (a total 17.5% working interest in the event the entire Initial Drilling Program is completed)  in each of the Licenses (the “Initial Well Working Interests”). Upon completion of the Initial Drilling Program, or in the event Terra Nova fails to complete the Initial Drilling Program on or before June 1, 2013, Holloman agrees to transfer to Terra Nova, and register in its favour a working interest percentage equal to the total of the Initial Well Working Interests earned during the Initial Drilling Program.

 

Upon drilling and abandonment completion of each well constituting the Optional Drilling Program, Terra Nova shall be deemed to have earned an additional 5.8333% working interest (a 17.5% working interest in the event the entire Optional Drilling Program is completed)  in each of the Licenses (the “Optional Well Working Interests”). Upon completion of the Optional Drilling Program, or in the event Terra Nova fails, or determines not to complete the Optional Drilling Program on or before June 1, 2014, Holloman agrees to transfer to Terra Nova, and register in its favour a working interest percentage equal to the total of the Optional Well Working Interests earned during the Optional Drilling Program.

 

Holloman shall hold the Initial Well Working Interests and Optional Well Working Interests on each License in trust and for the sole benefit of Terra Nova until the applicable drilling program is completed or terminated. During such period Holloman shall indemnify and save harmless Terra Nova from and against all actions, claims, demands, losses, damages, costs and expenses (including all legal and other professional charges on a full solicitor/client indemnity basis) and other liability whatsoever which may be incurred, suffered or sustained by Terra Nova in connection with any act or omission of Holloman in connection with the Licenses.

 

2.2      Terra Nova, shall act as Operator with respect to all seismic and drilling work contemplated by this LOI.

 

2.3      Unless specifically agreed otherwise, amounts if any, incurred in relation to the Licenses in excess of the Terra Nova Seismic Earning Obligations and Drilling Obligations during the earning period related to production, seismic work area clearance, the Initial Seismic Program, the Initial Drilling Program and the Optional Drilling Program, shall be borne by Terra Nova and the current working interest holders in accordance with their working interest percentages calculated as though Terra Nova had successfully completed its Seismic Earning Obligations and Drilling Obligations.

 

2.4      In the event any well drilled in connection with the Initial Drilling Program or Optional Drilling Program is a commercially viable producer of petroleum substances (a “Successful Well”), Terra Nova shall be entitled to a preferential recovery of its dry-hole costs relating to that Successful Well (a “Successful Well Cost Recovery”). Successful Well Cost Recovery payments to Terra Nova shall be calculated as eighty (80%) percent of net revenues accruing to  Holloman’s then working interest in all petroleum substances produced and sold from such Successful Well (“Net Revenues”). Successful Well Cost Recovery payments shall be paid on a Successful Well by Successful Well basis until either:

 

	
(a)

	
Such Successful Well has ceased production and is subsequently abandoned; or

 

	
(b)

	
Terra Nova has recovered its entire dry hole costs related to such Successful Well.

 

  

4

  

 

For the purposes of Successful Well Cost Recovery, Net Revenues shall be gross oil and gas sales from a Successful Well net of:

 

	
(a)

	
Permit rentals and maintenance cost,

 

	
(b)

	
Royalties payable to the Australian government, aboriginal peoples and any other third parties,

 

	
(c)

	
Taxes (including current production or severance taxes and prospective taxes but excluding any Petroleum Resource Rent Tax), except any taxes based upon the Company’s net income,

 

	
(d)

	
Successful Well operating and transportation expenses,

 

	
(e)

	
The costs of replacing or repairing any equipment related to the Successful Well,

 

	
(f)

	
Environmental remedial and land restoration costs, and

 

	
(g)

	
All regulatory compliance costs related to the Successful Well.

 

Net Revenue shall not, in any event, be calculated upon any oil, gas, casinghead gas or other hydrocarbon substances used for operating, development or production purposes upon the permits or unavoidably lost; and no Net Revenue shall be calculated upon gas used for repressuring or recycling operations or pressure maintenance operations benefiting the permits.

 

2.5      The Parties shall negotiate the terms and conditions of the Definitive Agreement and, in good faith determine the structure that would be most beneficial to each of the Parties, taking into account various securities, tax and operating considerations.

 

2.6      Subsequent to the execution of the Definitive Agreement, Holloman may nominate a mutually acceptable candidate for a seat on the board of directors of Terra Nova which upon qualification by the current members of the Terra Nova board and approval of the Exchange shall be appointed to hold office until successors are elected. It is expected that the candidate shall have the experience and qualifications required to act as a public company director.

 

  

5

  

 

	
3.  

	
Confidentiality

 

3.1      Each Party acknowledges that it will be providing to the other information that is non-public, confidential, and proprietary in nature and agrees (along with its affiliates, representatives, agents and employees) to keep such information confidential and will not, except as otherwise provided below, disclose such information or use such information for any purpose other than for the evaluation and consummation of the Transaction.  This section 3.1 will not apply to information that:

 

	
(a)

	
becomes generally available to the public absent any breach of section 3.1;

 

	
(b)

	
was available on a non-confidential basis to a Party prior to its disclosure pursuant to this LOI; or

 

	
(c)

	
becomes available on a non-confidential basis from a third party who is not bound to keep such information confidential.

 

3.2      Each Party agrees that it will not make any public disclosure of the existence of this LOI or of any of its terms without first advising the other Party and obtaining consent of such other Party to the proposed disclosure, unless such disclosure is required by applicable law or regulation, in which event the Party contemplating disclosure will inform the other Party of the form and content of such disclosure.

 

3.3      The Parties agree that immediately upon any discontinuance of activities by either Party which result in the Transaction not being consummated, it will forthwith return to the other all confidential information of such other Party, if requested to do so.

 

	
4.  

	
Access

 

3. 4.1                       Prior to the execution of the Definitive Agreement, each of the Parties and its representatives will provide the other party with:

 

	
(a)

	
such information (including copies of documents) as either Party may reasonably request; and

 

	
(b)

	
access to its financial records, geological data, claim information, facilities and personnel as the other Party may reasonably request.

 

	
5.  

	
Consents and Approvals

 

5.1      The Transaction will be conditional upon each of the Parties obtaining all required consents and approvals required for the Transaction as set forth in this LOI.

 

	
6.  

	
Expenses

 

6.1      Except as may be set forth in this LOI, each of the Parties will bear its own respective costs and expenses associated with the Transaction.

 

  

6

  

 

	
7.  

	
Right to Terminate

 

7.1      This LOI may be terminated by either Party:

 

	
(a)

	
if the Definitive Agreement is not executed within a reasonable period which shall not be less than 60 days from the execution of this LOI, unless such time period is extended by the Parties;

 

	
(b)

	
if Terra Nova determines, acting reasonably, that the Transaction is not in its best interests; or

 

	
(c)

	
if Holloman determines, acting reasonably, that the Transaction is not in its best interests.

 

	
8.  

	
Binding Effect

 

8.1      Except for section 1.1 (Non-Refundable Fee and Shares), section 3 (Confidentiality), section 4 (Access), section 6 (Expenses) and section 9 (Reasonable Commercial Efforts and Good Faith), which are intended to create binding obligations, it is understood that no legal obligation or liability will be created by this LOI as against the Parties and that the legal obligations and the liabilities of the Parties will arise only upon the duly authorized execution and delivery of the Definitive Agreement.

 

8.2      Each of the Parties acknowledge and agree that adequate consideration (the receipt and sufficiency of which is hereby acknowledged) was received by it for the binding obligations contained herein.

 

	
9.  

	
Reasonable Commercial Efforts and Good Faith

 

9.1      The Parties will use their reasonable commercial efforts and good faith to negotiate the terms of the Definitive Agreement and consummate the Transaction as soon as is practicable after the execution of this LOI.

 

	
10.  

	
Notices

 

10.1      Any notice, consent, waiver, direction or other communication required or permitted to be given under this LOI by a Party hereto will be in writing and will be delivered to the Party to which the notice is to be given at the address set forth above or sent by facsimile to the number set forth above or to such other address or facsimile number as will be specified by a Party by like notice. Any notice, consent, waiver, direction or other communication aforesaid will, if delivered, be deemed to have been given and received on the date on which it was delivered to the address provided herein (if a Business Day or, if not, then the next succeeding Business Day) and if sent by facsimile be deemed to have been given and received at the time of receipt (if a Business Day (as such term is defined below) or, if not, then the next succeeding Business Day) unless actually received after 4:00 p.m. (Calgary time) at the point of delivery in which case it will be deemed to have been given and received on the next Business Day.  For the purposes of this LOI, “Business Day” means any day, other than a Saturday, a Sunday or a statutory holiday in Calgary, Alberta.

 

10.2                         Any Party hereto may at any time and from time to time notify the other Parties in writing of a change of address and the new address to which notice will be given to it thereafter until further change.

 

  

7

  

 

	
11.  

	
General

 

11.1      The headings of this LOI are for convenience only, do not form a part of this LOI and are not intended to interpret, define or limit the scope, extent or intent of this LOI or any of its provisions.

 

11.2      The words “herein”, “hereof”, and “hereunder” and other words of similar import refer to this LOI as a whole and not to any particular part, clause, subclause or other subdivision or schedule.

 

11.3      A provision of this LOI must not be construed to the disadvantage of a Party merely because that Party was responsible for the preparation of the LOI or the inclusion of the provision in the LOI.

 

11.4      This LOI and the Schedules attached hereto, if any, set forth the entire agreement and understanding of the Parties in respect of the transactions contemplated hereby and supersede all prior agreements and understandings, oral or written, among the Parties or their respective representatives with respect to the matters herein and will not be modified or amended except by written agreement signed by the Parties to be bound thereby.

 

11.5      Except as otherwise provided herein, all dollar amounts referred to in this LOI are expressed in Australian dollars.

 

11.6      This LOI is private to Terra Nova and Holloman and may not be assigned.

 

11.7      This LOI may be executed in several counterparts as may be necessary or by facsimile and each such counterpart agreement or facsimile so executed are deemed to be an original and such counterparts and facsimile copies together will constitute one and the same instrument.

 

11.8 The binding obligations of this LOI are and will be deemed to be made in the Province of Alberta for all purposes will be governed exclusively by and construed and enforced in accordance with the laws prevailing in the Province of Alberta and the federal laws of Canada applicable therein.

 

11.9      Each person signing this LOI as an authorized officer of a Party hereto hereby represents and warrants that he is duly authorized to sign the LOI for that Party and that the LOI will, upon having been so executed, be binding on that party in accordance with its terms.

 

  

8

  

 

If the foregoing reflects your understanding of the Transaction and if you are in agreement with the terms and conditions of the proposal herein, please so acknowledge by executing an original of this LOI and returning the same to Terra Nova by March 25, 2012.

 

Yours truly,

 

 

	
TERRA NOVA MINERALS INC.

	 
	 	 	 
	Per:   	/s/ NORMAN MACKENZIE	 
	 	
Norman Mackenzie, Chief Executive Officer

	 

 

 

ACKNOWLEDGED AND AGREED TO this 19th day of March, 2012.

 

	
HOLLOMAN ENERGY CORPORATION

	 
	 	 	 
	Per:   	
/s/ MARK STEVENSON

	 
	 	
Mark Stevenson, President & CEO

 

  

9

  

 

TERRA NOVA MINERALS INC.

837 West Hastings Street, Suite 408

Vancouver, BC V6C 3N6

 

Private and Confidential

 

March 23, 2012

Holloman Energy Corporation

333 North Sam Houston Parkway East

Suite 600

Houston, TX 77024

USA

Attention:           Robert Wesolek, Chief Financial Officer

 

Re:           Amendment to Letter of Intent dated March 19, 2012

 

Dear Sir:

 

Reference is made to the letter of intent dated March 19, 2012 between Terra Nova Minerals Inc. and Holloman Energy Corporation (the “Letter of Intent”). Unless otherwise defined herein, capitalized terms used in this amending letter shall have the same meanings given to them in the Letter of Intent. The purpose of this letter is to amend the Letter of Intent by changing the timeframe within which certain payments must be made by Terra Nova Minerals Inc.

 

In this regard, the parties hereto agree that the Letter of Intent shall be amended as follows:

 

	
1.  

	
the words “Within 15 days from the execution of this LOI,” contained in paragraph 2.1(a) are hereby deleted in their entirety and replaced with the words “Within 15 days from approval of the LOI by the Exchange (as evidenced by the release of the associated press disclosures),”; and

 

	
2.  

	
the words “Within 15 days from the execution of this LOI,” contained in paragraph 2.1(b) are hereby deleted in their entirety and replaced with the words “Within 15 days from approval of the LOI by the Exchange (as evidenced by the release of the associated press disclosures),”.

 

  

10

  

 

This amending letter may be signed in counterpart and by facsimile or other electronic means.

 

If you find the foregoing to be satisfactory and if you are in agreement with the terms and conditions of the proposal herein, please so acknowledge by executing an original of this amending letter and returning the same to Terra Nova by March 25, 2012. Upon acceptance, this amending letter will constitute an amendment to the Letter of Intent.

 

Yours truly,

 

	
TERRA NOVA MINERALS INC.

	 
	 	 	 
	Per:   	
/s/  NORMAN MACKENZIE

	 
	 	
Norman Mackenzie, Chief Executive Officer

 

 

ACKNOWLEDGED AND AGREED TO this 23rd day of March, 2012.

 

	
HOLLOMAN ENERGY CORPORATION

	 
	 	 	 
	Per:   	
/s/ ROBERT WESOLEK

	 
	 	
Robert Wesolek, Chief Financial Officer

 

 

11

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