Re: Finder?s Fee Agreement ? Fort Scott Energy CorporationFee Agreement |
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Search Fee Agreement by:
Attn: Mr. Thornton J. Donaldson, President
Re: Finder’s Fee Agreement
– Fort Scott Energy Corporation
As contemplated in our Confidentiality
Agreement as at November 1, 2005, and in furtherance of our proposed meeting
with my “prospect group” – Cedar Strat Corp., on December 16,
2005, I want to confirm the following agreement as between Fort Scott Energy
Corp. (Fort Scott or its assigns) and Texola Energy Corporation (Texola)
arising from any participation or exploration agreement entered into or arising
out of the said meeting.
It is hereby agreed as between each of Fort
Scott and Texola that in consideration of the time, effort, skill,
negotiations, relationships, and meetings set up by Fort Scott relating to the
lands and leases set out in Schedule A hereto; and in further consideration of
any direct or indirect participation or exploration agreements which may be
entered into (the Participation Agreement) as between Texola and Cedar
Stratagrahpic Corp.:
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1. |
That forthwith upon the execution and
delivery of the Participation Agreement, Texola will grant and deliver to
Fort Scott (or its assigns) a convertible debenture, effective as at November
1, 2005, in the principle amount of $500,000 usd. The debenture will have a 3
year term and bear interest at a rate of 6%. The debenture and any interest
accrued thereon may be convertible by Fort Scott at any time after the date
of grant, into “Units” at a deemed price of $0.50 per Unit. Each
Unit will consist of one non assessable and fully paid common share in the
capital stock of Texola and one warrant to purchase one additional common
share upon payment of the additional consideration of $0.50 per share; and |
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2. |
That Texola will further execute and
deliver any such of the form of Confidentiality Agreement as may be required
by Fort Scott and Cedar Strat prior to the proposed meting of December 16,
2005. |
In discussions as between Fort Scott and
Cedar Strat over the past few weeks, Fort Scott sought to provide greater
certainty on the proposed terms which would be demanded or required by Cedar
Strat relating to any oil and gas prospects on the lands and Leases set out
herein. To this end, Fort Scott has been successful in negotiating the
following general terms and conditions that would be required to form part of
any Participation Agreement, the details of which shall be negotiated as
between Texola and Cedar Strat after a prospect area is identified.
General Participation -Texola:
1. Prospect Fees:
Areas have been defined in Schedule A and priced based upon approximately
$10/acre.
If required by Texola,
Fort Scott will work with Texola to select the prospect from the lease areas
set out in Schedule A. To cover expenses incurred by Fort Scott in its dealings
and negotiations with Cedar Strat, Cedar Strat will be required to pay Fort
Scott the sum of $0.50 cents per acre from the $10 prospect fee it receives.
10% of the prospect fee will be required to
be paid to Cedar Strat upon the execution and delivery of the Participation
Agreement with the balance to be paid when the acreage is acquired. Texola is
required to acquire the acreage at its cost. The area and the prospect fee for
each such prospect is as setout in Schedule A. If Texola does not acquire the
entire amount of acreage in a prospect area, the fee does not change.
2. Royalty: &
