Exhibit 10.13
CONFIDENTIAL
December 1, 2004
Mr. George S. Young
President & CEO
Fellows Energy
370 Interlocken Boulevard, Suite 400
Broomfield, CO 80021
Dear Mr. Young:
As set forth herein, this letter confirms our
agreement with respect to Axiom Capital Management, Inc.’s
(“Axiom”) introduction of John McGrain, Jed Oil,
Enterra Energy, and JMG Exploration (together with their affiliates
and controlled persons, the “Introduced Persons”) to
Fellows Energy (the “Company”) in connection with the
following contemplated transactions, as well as any other
transactions that may be engaged in by and between any Introduced
Persons and the Company (collectively, the
“Transactions”):
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1.
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A loan by Mr.
McGrain to the Company of approximately $1,500,000
(“Loan”);
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2.
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A loan or
investment by one or more of the Introduced Persons equal or
greater than $1,500,000 to $2,000,000 to the Company (to be used in
connection with development and drilling of Company projects
(“Project Financing”); and
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3.
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One or more
Introduced Persons will finance future projects of the Company
(“Future Financings”).
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The Company expressly agrees and acknowledges
that under no circumstances will Axiom be liable for failure of any
Introduced Person to consummate any Transaction. The Company will
promptly notify Axiom if any Transaction contains a contingency
which must be satisfied prior to such Transaction being
consummated.
For its introductions, Axiom shall be
compensated as follows:
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a.
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3% of the
amount of the Loan, to be paid in cash;
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b.
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10% of the
amount of any Project Financing, to be paid in registered stock of
the Company at a price of $1 per share, i.e., $1,500,000 Financing
= 150,000 shares; and
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c.
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For any Future
Financings, 1% of any revenues received by the Company from
projects that result from these Future Financings and 1% of any
revenue or sale proceeds received by the Company from the sale of
these projects.
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The Company will notify Axiom within 10 days of
the consummation of any Transaction. All compensation shall be paid
to Axiom within 30 days of consummation of the related
Transaction.
Axiom will not provide advice to the Company nor
to Introduced Persons and will not negotiate the terms of any
Transaction between any Introduced Person and the Company. Axiom
will not be responsible fo
