AMENDMENT AND TERMINATION
AGREEMENT
Exhibit 10.1
*** Denotes certain parts that have not
been disclosed and have been filed separately with the Secretary,
Securities and Exchange Commission, and is subject to a
confidential treatment request pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934.
This amendment and termination agreement (this
“ Agreement ”) is dated effective July 6, 2007 (the “
Effective Date ”), and is between FS SUBPARTICIPATION #1 GP, LLC, a
Texas limited liability company (“ FSS #1 GP ”), FS
SUBPARTICIPATION #1, L.P., a Texas limited partnership (the
“ FSS#1 ”), WILDES EXPLORATION, LLC, a Texas limited liability
company (“ Wildes
Exploration ”), and PRIMEGEN ENERGY
CORPORATION, a Nevada corporation (formerly known as Maysia
Resources Corporation) (“ PrimeGen ”).
FSS#1 GP is the general partner, and PrimeGen and
Wildes Exploration are limited partners, of FSS#1 (collectively,
the “ Partners
”). The Partners are party to an Instrument of
Accession and Amendment dated effective November 2, 2006, a copy of
which is attached to Schedule A
to this Agreement (the “ Instrument ”). Pursuant to the
Instrument, PrimeGen acceded to, and the parties amended, the terms
of the Limited Partnership Agreement of FSS#1 dated July 14, 2006
(the “ LPA ”). The LPA, as amended by the Instrument (together, the
“ Amended LPA ”), also evidences the terms of FSS#1’s
subparticipation (the “Subparticipation ”) in
Wildes Exploration’s participation (the “
Participation ”)
with One TEC, LLC, a Texas limited liability company
(“ One TEC ”), pursuant to a Participation Agreement (Van Buren,
Stone and Cleburne Counties, Arkansas) dated October 5, 2005, a
Participation Agreement (Pearson AMI – Cleburne and Stone
Counties, Arkansas) dated January 31, 2006, and addenda attached to
such agreements and transmitted to Wildes Exploration by One TEC on
February 28, 2006. PrimeGen desires to terminate its obligations to
FSS#1 under the Amended LPA, and FSS#1 its obligations to Wildes
Exploration under the Subparticipation, and FSS#1 and Wildes
Exploration wish to accept, respectively, such terminations, all on
the terms and subject to the conditions set forth in this
Agreement. The parties therefore agree as follows:
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1.
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Each term appearing in this Agreement with initial
capitalization and not defined in this Agreement shall have the
meaning ascribed to it in the Amended LPA.
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2.
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The transactions contemplated by Agreement shall be
consummated (the “ Closing ”) through legal
counsel for Wildes Exploration, Kessler Collins, P.C., 2100 Ross
Avenue, Dallas, Texas 75201, on or before August 3, 2007, at 5:00
p.m. Western time, or on such other date, or at such other time or
place, as may be agreed upon by the parties in writing (the
“ Closing Date
”).
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3.
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The Closing shall consist of the following
concurrent transactions, which the parties agree shall be deemed to
have occurred in the order set forth in this Section:
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AMENDMENT AND TERMINATION
AGREEMENT — Page
1
CW1318097.1
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(a)
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FSS#1 shall settle the Subparticipation by agreeing
to accept an amount of cash (the “ Subparticipation Settlement Amount ”) from Wildes Exploration at Closing equal to a return
of all Capital Contributions made by PrimeGen to FSS#1 in respect
of Subparticipation Payments, True-Up Payments and Subparticipation
Obligations (“ Investment
Capital ”) plus 85% of Acreage Net
Proceeds (as that term is defined in this Agreement). The term
“ Acreage Net Proceeds
” means a sum obtained by multiplying $*** per
net acre of leasehold interest that Wildes Exploration is actually
entitled to under the Participation (the “
Leasehold Entitlement ”) and subtracting from such sum the amount of Investment
Capital and any past-due Capital Contributions in respect of
Management Fees (“ Management Fee
Arreage ”). The Leasehold
Entitlement is presently estimated to approximate *** net acres.
The Subparticipation Settlement Amount shall be determined no later
than three business days prior to Closing, with the amount of
Leasehold Entitlement being determined from lease and title records
and reports from the Participation, and the amount of Investment
Capital and Management Fee Arreage from the books and records of
FSS#1, which shall be furnished by Wildes Exploration and FSS#1 GP
respectively. Upon receipt of the Subparticipation Settlement
Amount, the Subparticipation between FSS#1 shall be terminated, and
the Subparticipation Settlement Amount shall be considered an item
of income, gain or credit, as applicable, allocable to the Class A
Property of FSS#1, and thus the Class A Limited Partner of FSS#1,
PrimeGen.
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(b)
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Anything to the contrary in the Amended LPA
notwithstanding, FSS#1 agrees to distribute to PrimeGen at Closing,
as the Class A Limited Partner of FSS#1, 100% of the
Subparticipation Settlement Amount (the “
Final Distribution ”). Upon receipt of the Final Distribution: (i) PrimeGen
shall be deemed to have withdrawn from FSS#1 and shall no longer be
a Partner in FSS#1, or have any further entitlements or rights with
respect to, or interest in FSS#1, including the Class A Interest,
or commitments or obligations to FSS#1 except as provided by this
Agreement, including in respect of Capital Contributions; and (ii)
FSS#1 GP and Wildes Exploration may continue the business of FSS#1
or FSS#1 GP may file a certificate of termination for FSS#1with the
Secretary of State for the State of Texas, as determined in the
sole discretion of FSS#1 GP.
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(c)
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The parties desire at Closing to compromise and
settle any and all claims, demands or suits, known or unknown,
fixed or contingent, liquidated or unliquidated, actual or
potential, as
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