Joint Venture Agreement

 

JOINT VENTURE AGREEMENT

 

entered into by

 

Gulf United Energy Inc.

 

and

 

Cía. Mexicana de Gas Natural, S.A. de C.V.,

 

as of July 15, 2007

 

 

 

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Joint Venture Agreement

JOINT VENTURE AGREEMENT

THIS JOINT VENTURE AGREEMENT is entered into as of the 15^th day of July, 2007, by and among Gulf United Energy Inc. (“GLFE”), a corporation organized under the laws of the state of Nevada, United States of America, and Cía. Mexicana de Gas Natural, S.A. de C.V. (“MGN”), a sociedad anónima de capital variable (limited liability stock corporation of variable capital) organized under the laws of the United Mexican States (GLFE and MGN and are hereinafter collectively referred to as the “Parties” and each of them as a “Party”).

WHEREAS, GLFE and MGN entered into a Letter of Intent dated as of March 22, 2006 (as amended on November 14 and December 11, 2006, April 4 and May 30,2007 the “LOI”), pursuant to which the Parties committed to, among others, enter into this Agreement for purposes of documenting the rights and obligations of each of the Parties in regard to the incorporation, governance and capitalization of each of the JV Entities (as such term is defined in the LOI).

NOW, THEREFORE, in consideration of the mutual promises and undertakings contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

1.	Definitions, Interpretation and Construction.
	1.01. Definitions. In this Agreement, unless the context requires otherwise or is otherwise expressly set forth, the following terms when written with initial capital letters shall have the meaning set forth below:

 

“AFFILIATE”	In reference to a Person (“Person ‘A’”), means any Person which Controls Person “A”, Controlled by Person “A”, or under common Control with Person “A”.
“AGREEMENT” “AUDITOR” “BOARD” “BUSINESS DAY”	Means this Joint Venture Agreement. Means the Persons performing the duties of external auditors of each Company. Means the board of directors of a Company. Means any day except for Saturdays and Sundays, and those considered to be compulsory days of rest pursuant to the Federal Labor Law of Mexico.
“BUSINESS PLAN”	Means the yearly business plan of each Company, approved by the Board on a yearly basis.
“BY-LAWS”	Means the estatutos sociales (by-laws) of each Company, to be amended pursuant to this Agreement.
“CHAIRMAN”	Means the Chairman of the Board, as appointed by the Shareholders’ Meeting pursuant to Clause 7.05.
“CLOSING” “COMPANY”	Shall have the meaning set forth in Clause 15 of this Agreement. Means each of the Terminal Company and the Pipeline Company, indistinctively.

 

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Joint Venture Agreement

 

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Joint Venture Agreement

“PERSON”	Means a natural or legal person, joint venture, trust, fideicomiso (Mexican trust) or any other entity or organization, including a government or any entity or political subdivision of a government or any agency thereof, of any nationality.
“PESOS” OR “P$” “PIPELINE COMPANY”	Means the lawful tender of Mexico. Means “Fermaca Gas de Cancún”, S.A. de C.V., a Mexican Sociedad Anónima de Capital Variable (S.A. de C.V.) (limited liability stock corporation of variable capital), incorporated on May 24, 2006 under standard, non-specific by-laws (i) Controlled by MGN; (ii) in which GLFE shall acquire a 24% equity participation pursuant to this Agreement; (iii) which By-laws shall be amended as set forth herein, and (iv) which as of this date has an equity participation of 50% in the Pipeline SPC.
“PIPELINE SPC”	Means “Energía YAAX”, S.A. de C.V., a Mexican Sociedad Anónima de Capital Variable (S.A. de C.V.) (limited liability stock corporation of variable capital), incorporated on May 24, 2006 under standard, non-specific by-laws (i) in which as of this date each of the Pipeline Company and MGN have an equity participation of 50%, and (ii) through which the Pipeline will be developed, owned and operated.
“PIPELINE”	Means an open access natural gas transportation system, with the preliminary characteristics indicated in Exhibit “A” to the LOI.
“PROJECT ENTITY” “PROJECT”	Means each of the Pipeline SPC and the Terminal SPC, indistinctively. Means:

(i)	the construction, financing, ownership and operation of the Pipeline, and
(ii)	the construction, financing, ownership and operation of the Terminal.

“QUARTER” “SECRETARY”	Means a period comprising three Months. Means the Person appointed to perform the duties of secretary to the Board in each Company, and includes an assistant secretary, if any.
“SHARE” “SHAREHOLDER”	Means a share representative of the equity capital of a Company. Means the holder of at least one Share, as provided for in the By-laws of each Company.
“SHAREHOLDERS REPRESENTATIVE COMMITTEE” “STATUTORY AUDITOR”	Shall have the meaning set forth in Clause 8.09 of this Agreement. Means the Person appointed to perform the duties of comisario (accounting policies’ compliance officer) in each Company, and includes an assistant comisario (accounting policies’ compliance officer), if any.

 

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Joint Venture Agreement

“TERMINAL COMPANY”	Means “Fermaca LNG de Cancún”, S.A. de C.V., a Mexican Sociedad Anónima de Capital Variable (S.A. de C.V.) (limited liability stock corporation of variable capital), incorporated on May 24, 2006 under standard, non-specific by-laws (i) Controlled by MGN; (ii) in which GLFE shall acquire a 24% equity participation pursuant to this Agreement; (iii) which By-laws shall be amended as set forth herein, and (iv) which as of this date has an equity participation of 50% in the Terminal SPC.
“TERMINAL SPC”	Means “SIIT Energy”, S.A. de C.V., a Mexican Sociedad Anónima de Capital Variable (S.A. de C.V.) (limited liability stock corporation of variable capital), incorporated on May 24, 2006 under standard, non-specific by-laws (i) in which as of this date each of the Terminal Company and MGN have an equity participation of 50%, and (ii) through which the Terminal will be developed, owned and operated.
“TERMINAL”	Means an open-access LNG storage and regasification facility, with the preliminary characteristics indicated in Exhibit “B” to the LOI.
“TRANSFER”	Means:

		(i)	as a noun, any voluntary or involuntary transfer, sale, pledge, hypothecation, encumbrance or other disposition, and
		(ii)	as a verb, to voluntarily or involuntarily transfer, sell, pledge, hypothecate, encumber or otherwise dispose of.
1.02.	Interpretation and Construction.
	1.02.1	References to statutory provisions shall be construed as references to those provisions as amended or as their application is modified by other provisions (whether before or after the date hereof) from time to time.

 

     1.02.2 References herein to Sections, Clauses and Exhibits are to the sections, clauses and exhibits to this Agreement unless otherwise set forth, and the Exhibits to this Agreement shall be deemed to form part of this Agreement.

     1.02.3 The term “Shareholder”, where the context permits, includes the corresponding Person’s successors and permitted assigns.

     1.02.4 All headings are inserted for convenience only and shall not affect the interpretation and construction of this Agreement.

     1.02.5 Unless the context requires otherwise, words importing the singular include the plural and vice versa, and words importing a gender include every gender.

 

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Joint Venture Agreement

      1.02.6 A reference to any thing includes a part of that such thing.

     1.02.7 A reference to a document includes any agreement in writing, or any certificate, notice, instrument or other document of any kind, and an amendment or supplement to, or replacement or novation of that such document.

     1.02.8 A reference to an agreement includes an undertaking, deed, agreement or legally enforceable arrangement or understanding.

     1.02.9 A reference to an asset includes all property of any nature, including without limitation, all rights and obligations pertaining to such asset.

2.	Incorporation of the Companies.
	2.01. Incorporation; Legal Structure. Each of the Companies was incorporated on May 24, 2006, and organized as a Sociedad Anónima de Capital Variable (S.A. de C.V.) (limited liability stock corporation of variable capital) pursuant to the laws of Mexico, under standard, non-specific by-laws; provided, however, that:

     2.01.1 the Companies shall be transformed into Sociedades Anónimas de Capital Variable Promotoras de Inversiones (S.A. de C.V. P.I.) (investment-promoting limited liability stock corporations of variable capital) in order to incorporate certain provisions of this Agreement into the By-laws as soon as such incorporation is legally possible by reason of the entry into force of the new Ley del Mercado de Valores (Securities Market Law) in Mexico which shall allow for the referred transformation. This specific commitment of the Parties shall be effective upon the entry into force of such law, and

     2.01.2 the provisions of this Agreement referred to under Section 2.01.1 shall be marked as “(SAPI)”, and shall be effective upon the entry into force of the new Ley del Mercado de Valores (Securities Market Law) in Mexico.

     2.02. Amendment of By-laws; Transformation. After the execution hereof, the Parties shall hold a Shareholders’ Meeting in each Company in order to transform them into Sociedades Anónimas de Capital Variable Promotoras de Inversiones (S.A. de C.V. P.I.) (investment-promoting limited liability stock corporations of variable capital) and amend each Company’s By-laws so that they shall comply with the provisions of this Agreement.

     2.03. Registration Fees and Incorporation Expenses. Registration fees and other incorporation expenses (including notarization fees) incurred in connection with the incorporation of each Company have been expenses of the corresponding Company and have been reimbursed by each Company to MGN, immediately after the execution of each escritura constitutiva (deed of incorporation).

     2.04. Registered Office. The registered office of each Company is be Pedro Luis Ogazón 59-A, Colonia Guadalupe Inn, 01020, México, Distrito Federal, Mexico.

 

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Joint Venture Agreement

     2.05. Statutory Auditor. Each of the Companies shall have a Statutory Auditor. The Statutory Auditor in each Company after the Shareholders’ Meeting referred to under Clause 2.02, will be Laura Trejo Chaparro.

     2.06. Secretary. The Board of each Company shall have a Secretary. The first Secretary to each Board after the Shareholders’ Meeting referred to under Clause 2.02, will be Emilio Carrillo Peñafiel.

3.	GLFE Participation in the Companies.
	3.01. Acquisition of Shares by GLFE. On June 22, 2006, GLFE, as purchaser, and Fermaca Pipelinede la Península, S. de R.L. de C.V., as seller, entered into a mutually acceptable share purchase agreement whereby Fermaca Pipeline de la Península, S. de R.L. de C.V., Would transfer its Shares in each Company to GLFE, at book value (P$1,000.00 Pesos each). Such Share purchase agreement was subject to the condition precedent consisting that the same would not become effective unless and until the date of execution of this Agreement. Given the above and that the condition precedent has been complied by the execution hereof, the participation of the Parties in each of the Companies is as set forth in Section 3.02 and 3.03 below.

     3.02. Equity Capital of the Pipeline Company. The equity capital of the Pipeline Company, as of this date, is P$25,378,000.00 Pesos, of which (i) P$50,000.00 Pesos correspond to the fixed part, and (ii) P$25,328,000.00 Pesos correspond to the variable part, divided into a total number of 25,378 common, voting shares with a face value of P$1,000.00 Pesos each, as follows:

               3.02.1 GLFE (i) 12 shares of the fixed capital, and (ii) 6,086 shares of the variable part, equivalent to 24% of the equity capital of the Pipeline Company, and

               3.02.2 MGN (i) 38 shares of the fixed capital, and (ii) 19,242 shares of the variable part, equivalent to 76% of the equity capital of the Pipeline Company.

     3.03. Equity Capital of the Terminal Company. The equity capital of the Terminal Company, as of this date, is P$10,565,000.00 Pesos, of which (i) P$50,000.00 Pesos correspond to the fixed part, and (ii) P$10,515,000.00 Pesos correspond to the variable part, divided into a total number of 10,565 common, voting shares with a face value of P$1,000.00 Pesos each, as follows:

              3.03.1 GLFE (i) 12 shares of the fixed capital, and (ii) 2,523 shares of the variable part, equivalent to 24% of the equity capital of the Terminal Company, and

              3.03.2 MGN (i) 38 shares of the fixed capital, and (ii) 7,992 shares of the variable part, equivalent to 76% of the equity capital of the Terminal Company.

4.	Incorporation and Initial Capitalization of the Project Entities.
	4.01. Incorporation of the Project Entities.

 

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Joint Venture Agreement

4.01.1 Each of the Project Entities was incorporated on May 24, 2006, and organized as a

Sociedad Anónima de Capital Variable (S.A. de C.V.) (limited liability stock corporation of variable capital) pursuant to the laws of Mexico, under standard, non-specific by-laws; notwithstanding the foregoing, the Project Entities may also be transformed into Sociedades Anónimas de Capital Variable Promotoras de Inversiones (S.A. de C.V. P.I.) (investment-promoting limited liability stock corporations of variable capital) promptly after the entry into force of the new Ley del Mercado de Valores (Securities Market Law) in Mexico.

     4.01.2 Registration fees and other incorporation expenses (including notarization fees) incurred in connection with the incorporation of each Project Entity have been expenses of the corresponding Project Entity and have been reimbursed by each Project Entity to MGN, immediately after the execution of each escritura constitutiva (deed of incorporation).

     4.02. Equity Capital of the Pipeline SPC. The equity capital of the Pipeline SPC, as of this date, is P$50,706,000.00 Pesos, which correspond totally to the fixed part, divided into a total number of 50,706 common, voting shares with a face value of P$1,000.00 Pesos each, as follows:

              4.02.1 The Pipeline Company, 25,353 shares equivalent to 50% of the equity capital of the Pipeline SPC, and

             4.02.2 MGN, 25,353 shares equivalent to 50% of the equity capital of the Pipeline SPC.

     4.03. Equity Capital of Terminal SPC. The equity capital of the Terminal SPC, as of this date, is P$21,080,000.00 Pesos, which correspond totally to the fixed part, divided into a total number of 21,080 common, voting shares with a face value of P$1,000.00 Pesos each, as follows:

              4.03.1 The Terminal Company, 10,540 shares equivalent to 50% of the equity capital of the Terminal SPC, and

             4.03.2 MGN, 10,540 shares equivalent to 50% of the equity capital of the Terminal SPC.

4.04.	Initial Capitalization of the Project Entities.
	4.04.1	Each Project Entity has been initially capitalized pursuant to the following:
		(i) On June 22 2006, and December 13 2006, MGN, the pertaining Company and
	each Proje