UNANIMOUS SHAREHOLDER
AGREEMENT
THIS AGREEMENT is made
effective as of the 26 rd day of November,
2007.
BETWEEN:
Cheetah Oil & Gas Limited,
a corporation incorporated pursuant to the laws of
the State of Nevada (hereinafter referred to as "
Nevadaco ")
- and -
Invicta Oil & Gas Ltd.,
a corporation incorporated pursuant to the laws of
the Province of British Columbia (hereinafter referred to as
" Investorco ")
- and -
Cheetah Oil & Gas Limited,
a corporation incorporated pursuant to the laws of
the Province of British Columbia (hereinafter referred to as
the "Corporation" )
WHEREAS :
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A.
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Nevadaco and Investorco wish to participate in a
joint oil and gas exploration and development program to be
conducted on lands situated in Papua New Guinea;
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B.
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Licenses granting petroleum and natural gas rights
in respect of such lands have been granted to Cheetah Oil & Gas
(PNG) Limited and Scotia Petroleum (PNG) Ltd., both bodies
corporate incorporated under the laws of Papua New
Guinea;
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C.
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The Corporation owns 98.5% of the issued and
outstanding shares of Scotia Petroleum Inc. a body corporate
incorporated under the laws of British Columbia;
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D.
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The Corporation owns all of the issued and
outstanding shares of Cheetah Oil & Gas (PNG) Ltd. which in
turn owns all of the issued and outstanding shares of Scotia
Petroleum (PNG) Ltd;
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E.
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The Corporation is authorized to issue 10,000 Class
A Common Shares, 10,000 Class B Common Shares, 10,000 Class C
Common Shares, 1,000,000 Class D Preference Shares and 1,000,000
Class E Preference Shares of which there are 1000 Class A Common
Shares issued and outstanding;
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F.
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Nevadaco is the legal and beneficial owner of 100 of
the aforesaid issued and outstanding Class A Common
Shares;
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G.
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The remaining 900 outstanding Class A Common Shares
of the Corporation have been acquired by Investorco from treasury
pursuant to the provisions of a Share Subscription Agreement (the
“Subscription Agreement”) dated as of July 20
th , 2007 and amended as of September 27,
2007;
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H.
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It is a condition of the Subscription Agreement that
this Agreement be entered into by Nevadaco and Investorco to
establish their rights and obligations with respect to the shares
of the Corporation now and hereafter owned by each of them,
including but not limited to, the election and removal of
directors, the management and control of the Corporation, the
financing of the Corporation to enable it to fund the exploration
and development expenses incurred by the Subsidiaries (as defined
below) and the rights to purchase and sell shares of the
Corporation;
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I.
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The parties intend that this Agreement shall be
construed as a unanimous shareholder agreement as defined in the
Act;
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NOW THEREFORE THIS AGREEMENT WITNESSETH
THAT in consideration of the respective
covenants and agreements hereinafter set forth and other good and
valuable consideration (the receipt and sufficiency of which are
hereby acknowledged by each of the Parties), the Parties hereto
agree as follows:
ARTICLE 1
INTERPRETATION
In this Agreement, including the preamble, the
following words and phrases shall have the following
meanings:
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(a)
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"Act" means the
Business Corporations Act (British Columbia), together with the regulations promulgated
thereunder, as amended from time to time and every statute that may
be substituted therefor, and in the case of any such amendment and
substitution, any reference in this Agreement to the Act shall be
read as referring to the amended or substituted provisions
therefor;
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(b)
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"Agreement", "this Agreement", "herein",
"hereto", "hereof" and similar
expressions refer to this Agreement, as it may be amended or
restated from time to time, as a whole, including the recitals and
schedules hereto and, unless otherwise stated, not to a particular
article, section, paragraph, clause or other subdivision of this
Agreement;
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(c)
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"Arm's Length" has the
meaning assigned under the Income Tax
Act (Canada);
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(d)
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"Articles" means the
Articles of the Corporation, as amended or restated from time to
time;
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(e)
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" B.C.
Indebtedness " means the indebtedness of
the Corporation to Nevadaco in the amount of approximately
$10,800,000 U.S., with the exact amount to be confirmed by the
parties hereto;
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(f)
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"Board" means the board
of directors of the Corporation;
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(g)
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"Investorco Cash Subscription
Proceeds" means the sum of $7,450,000
(U.S.) received by the Corporation in partial consideration for the
issuance of 900 common shares of the Corporation to
Investorco;
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(h)
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" Licenses
" means: (i) Petroleum Prospecting Licences 249, 250
and 252, which are 100% legally and beneficially owned by Cheetah
Oil and Gas (PNG) Ltd, (ii) Petroleum Prospect License 13, which is
owned by Cheetah Oil and Gas (PNG) Ltd as to an undivided 85%
interest and by Scotia Petroleum (PNG) Ltd. as to an undivided 15%
interest; and (iii) Petroleum Prospecting Licences 245 and 246
which are 100% legally and beneficially owned by Scotia Petroleum
(PNG) Ltd. ;
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(i)
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" MacQuarie
Indebtedness " means the indebtedness of
Nevadaco to the MacQuarie Holdings (USA) Inc. in the amount of
$7,800,000 (U.S.) which has been assigned to the Corporation at an
assigned value of $7,550,000 (U.S.) in partial consideration for
the issuance of 900 Common Shares of the Corporation to
Investorco;
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(j)
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" Nevadaco
Payables " means the various amounts
payable by Nevadaco as more particularly described in Schedule A
hereto and which amount is approximately $6,600,000 (U.S.), with
the exact amount to be confirmed by the parties hereto;
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(k)
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"Parties" means the
parties to this Agreement (and includes any person who may
hereafter execute a counterpart of this Agreement upon becoming a
Shareholder, any person who may be deemed by operation of law to be
a party to this Agreement and any person who otherwise becomes
bound by this Agreement) and their successors, and permitted
assigns, and "Party" shall mean one of the Parties;
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(l)
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"Petroleum Prospecting Licence"
means a prospecting licence granted pursuant to the
Oil and Gas Act , No. 49 of 1998 of the Independent State of Papua
New Guinea
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(m)
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" PNG
Indebtedness " means the Indebtedness of
Cheetah Oil and Gas (PNG) Ltd. to Nevadaco in the amount of
approximately $4,000,000 (U.S.), with the exact amount to be
confirmed by the parties hereto;
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(n)
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"Prospect Lands" means
the lands situated in Papua New Guinea in respect of which the
Licences have granted the petroleum and natural gas
rights.
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(o)
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"Proportionate Contribution"
means, with respect to any requirement on the part
of the Shareholders to contribute additional funds to the
Corporation pursuant to Section 4.7, 90% of such additional funds
in the case of Investorco and 10% of such additional funds in the
case of Nevadaco;
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(p)
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"Shareholders" means
Nevadaco and Investorco and any person or individual who is bound
by this Agreement upon becoming a holder of Shares or an Optionee
and signs a counterpart to this Agreement;
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(q)
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" Shares
" means any of the shares of the
Corporation;
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(r)
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" Subsidiaries
" means Scotia Petroleum Inc., Scotia Petroleum
(PNG) Ltd. and Cheetah Oil &Gas PNG Ltd.;
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(s)
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"Successor" means any
Third Party which acquires all of the issued and outstanding shares
of Investorco and which causes Investorco to be either wound up or
vertically amalgamated ;
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(t)
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"Third Party" means a
person with whom the Shareholders deal at Arm's Length.
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1.2
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Sections and Headings
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The division of this Agreement into articles,
sections and paragraphs and the insertion of headings are for the
convenience of reference only and shall not affect the construction
or interpretation of this Agreement. Unless something in the
subject matter or context is inconsistent therewith, references
herein to articles, sections and paragraphs are to articles,
sections and paragraphs of this Agreement.
Words importing singular number only shall include
the plural and vice versa
and words importing the masculine gender shall
include the feminine and neuter genders and words importing the
neuter gender shall include the feminine and masculine genders and
words
importing persons shall include companies,
corporations, partnerships, syndicates, trusts and any number of
aggregate of persons.
Words and phrases used in this Agreement and not
defined herein have the same meaning assigned to them in the
Act.
The provisions of this Agreement relating to the
Shares shall apply, mutatis
mutandis , to any Shares or securities
into which such Shares may be converted, changed, reclassified,
redivided, redesignated, redeemed, subdivided or consolidated, to
any Shares or securities that are received by the Shareholders as a
stock dividend or distribution payable in Shares or securities of
the Corporation and to any Shares or securities of the Corporation
or of any successor or continuing company or corporation to the
Corporation that may be received by the Shareholders on a
reorganization, amalgamation, consolidation or merger, statutory or
otherwise.
It is expressly acknowledged and declared that it is
not the purpose of this Agreement to create any association,
partnership or syndicate, and that this Agreement shall not be
construed or considered as creating any association, partnership or
syndicate.
In the event of any conflict between the provisions
of this Agreement and the Articles, the provisions of this
Agreement shall govern. Each of the Shareholders agrees to vote or
cause to be voted the Shares owned by him so as to cause the
Articles to be amended to resolve any such conflict in favour of
the provisions of this Agreement.
This Agreement shall in all respects be subject to
and interpreted, construed and enforced in accordance with the laws
of the Province of British Columbia and the federal laws of Canada
applicable therein and shall, in every respect, be treated as a
contract made in the Province of British Columbia, and the parties
submit to the jurisdiction of the courts of the Province of British
Columbia for the interpretation and enforcement hereof.
ARTICLE 2
BUSINESS OF THE CORPORATION AND
SUBSIDIARIES
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2.1
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Restriction on the Business of the
Corporation
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The business of the Corporation shall be restricted
to (i) the direct or indirect ownership of shares and debt
instruments issued by the Subsidiaries; and (ii) the provision of
financing and management services to the Subsidiaries.
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2.2
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Restriction on the Business of the
Subsidiaries
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The business of the Subsidiaries shall be restricted
to conducting oil and gas exploration, development and production
activities with respect to the Prospect Lands.
ARTICLE 3
PROVISIONS REGARDING THE BOARD, OFFICERS AND
NAME OF THE CORPORATION
The Board shall consist of four Directors; and each
of the Shareholders shall vote its Shares and take all such steps
and actions as may be necessary so as to ensure that the Board
shall at all times be comprised of three individuals who are the
nominees of Investorco and one individual who is the nominee of
Nevadaco. Initially, the Board shall be comprised of the following
individuals:
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(a)
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______________, ______________ and ______________ ,
being
nominees of Investorco; and
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(b)
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Ian McKinnon, being the current nominee of
Nevadaco.
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Any Shareholder, (the "Notifying Shareholder") may
at any time require the other Shareholder to immediately adopt a
resolution in writing pursuant to which:
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(a)
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Any vacancy in the Board created by the resignation,
death or disqualification of the notifying Shareholder's nominee is
filed; or
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(b)
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A nominee of the Notifying Shareholder is removed
from the Board and a new Director is elected in his
stead.
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The Board shall elect or appoint such
