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This MASTER SWAP AGREEMENT (this “Master Agreement”) is entered into and dated as of this 1 st day of January, 2008 (the “Effective Date”) and is by and between APOLLO RESOURCES INTERNATIONAL, INC., a Delaware corporation (“Apollo”) and Arizona LNG, LLC, a Nevada limited liability company (“Counterparty”) have entered and/or anticipate entering into one or more swap transactions (each a “Transaction”) that are or will be governed by this Master Agreement, which includes the schedule dated of even date herewith (the “Schedule”), and the documents and other confirming evidence (each a “Confirmation”) exchanged between the parties confirming those Transactions.

Accordingly, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:


Definitions . The terms defined in Section 16 and in the Schedule will have the meanings specified therein for the purpose of this Master Agreement.

Inconsistency . In the event of any inconsistency between the provisions of the Schedule and the other provisions of this Master Agreement, the Schedule will prevail. The Schedule is incorporated into this Master Agreement by reference as if fully stated herein. In the event of any inconsistency between the provisions of any Confirmation and this Agreement (including the Schedule), such Confirmation will prevail for the purpose of the relevant Transaction.

Single Agreement . All Transactions are entered into in reliance on the fact that this Agreement (including the Schedule) and all Confirmations form a single agreement between the parties (collectively referred to as this “Agreement”). Unless and until this Agreement is terminated according to the terms hereof, all Transactions entered into among the parties are subject to the terms hereof, except by the parties express written agreement with respect to each Transaction that shall not be governed by this Agreement.


Each party represents to the other party (which representations will be deemed to be repeated by each party on each date on which a Transaction is entered into) that:

(a)                  Basic Representation

Status . It is duly organized and validly existing under the laws of the jurisdiction of its organization or incorporation and, if relevant under such laws, in good standing;



Powers . It (1) has the power to execute and deliver this Agreement and any other documentation relating to this Agreement to which it is a party, (2) to deliver this Agreement and any other documentation relating to this Agreement that it is required by this Agreement to deliver, (3) to perform its obligations under this Agreement, and (4) has taken all necessary action to authorize such execution, delivery and performance;

No Violation or Conflict . Such execution, delivery and performance do not violate or conflict with any applicable law, any provision of its constitutional documents, any order or judgment of any court or other applicable agency of government, or any of its assets or any contractual restriction binding on or affecting it or any of its assets;

Consents . All governmental and other consents that are required to have been obtained by it with respect to this Agreement have been obtained and are in full force and effect and all conditions of any such consents have been fulfilled;

Obligations Binding . Its obligations under this Agreement constitute its legal, valid and binding obligations, enforceable in accordance with their respective terms (subject to applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors’ rights generally and subject, as to enforceability, to equitable principles of general application – regardless of whether enforcement is sought in a proceeding in equity or at law);

United States Person .  It is a United States person (as such term is defined in Section 7701 of the Internal Revenue Code);

No Withholding Tax .  During the term of this Agreement, it will not be doing business in any jurisdiction that imposes any withholding tax or similar levy on any payment made or received by it under this Agreement;

Eligible Swap Participant .  (1) It constitutes an “eligible swap participant” as such term is defined in 17 C.F.R. Section 35.1(b)(2), and (2) this Agreement and any Transaction entered into hereunder constitutes a “swap agreement” within the meaning of 17 C.F.R. Section 35.1(b)(1);

Line of Business .  (1) It is entering into this Agreement in conjunction with its line of business (including financial intermediation services) or the financing of its business, and (2) solely with respect to options, it is a producer, processor, commercial user of, or merchant handling, the commodity subject to a Transaction or the products or byproducts thereof, and it has entered or will enter into Transactions solely for purposes related to its business as such; and



No Reliance on Other Party .  (1) The other party to this Agreement (A) is not acting as a fiduciary or financial, investment or commodity trading advisor for it, and (B) has not given to it (directly or indirectly through any other person) any assurance, guaranty, or representation whatsoever as to the merits (either legal, regulatory, tax, financial, accounting or otherwise) of This Agreement or any Transaction or the expected performance or result of this Agreement or any Transaction, and (2) in connection with the negotiation and execution of this Agreement (A) it is acting as a principal (and not as an agent or in any other capacity, fiduciary or otherwise), (B) it is not relying upon any advice, counsel, or representations (whether written or oral) of the other party other than the representations expressly set forth in this Agreement, (C) it has made and will make its own decisions regarding the entering into of this Agreement and any Transactions hereunder based upon its own judgment and upon the advice from such professional advisors as it deemed, or will deem, necessary to consult, and (D) it has a full understanding of all the terms, conditions, and risks (economic and otherwise) of this Agreement, and it is capable of assuming and willing to assume (financially and otherwise) those risks.

Absence of Certain Events.   No Event of Default or Potential Event of Default or, to its knowledge, Termination Event with respect to it has occurred and is continuing and no such event or circumstance will occur as a result of its entering into or performing its obligations under this Agreement.

Absence of Litigation .  There is not pending, nor to its knowledge threatened against it or any of its Affiliates, any action, suit or proceeding at law or in equity or before any court, tribunal, governmental body, agency or official or any arbitrator that is likely to affect the legality, validity or enforceability against it of this Agreement or its ability to perform its obligations under this Agreement.

Accuracy of Specified Information .  All applicable information that is furnished in writing by or on behalf of it to the other party and is identified for the purpose of this Section 2(d) in the Schedule is, as of the date of the information, true, accurate and complete in every material respect.

Term of this Agreement

The term of this Agreement shall extend for a period of one (1) year from the Effective Date and month-to-month thereafter until terminated on thirty (30) days advance written notice by either Party; provided, however, that the provisions hereof shall survive termination of this Agreement and continue to apply to any Transactions entered into between Apollo and Counterparty prior to the date of termination of this Agreement until such time as any and all such Transactions are completed or terminated. Notwithstanding the foregoing, the representations, warranties, and indemnities set forth in this Agreement will survive termination of this Agreement.



Transactions and Obligations

Transactions. Formation .  Should the parties come to an understanding regarding a particular Transaction, the Transaction will be formed and effectuated by either (1) a written paper-based letter executed by the parties (including by either facsimile and/or original counterparts) substantially in the form of Exhibit A attached hereto and incorporated herein by reference or a different form agreed to by the parties (the “Confirmation Letter”), (2) by an exchange of e-mails (which together shall constitute the Confirming Electronic Message) between the parties with substantially the same content as set out on Exhibit A, and such e-mail must conform exactly as to each term marked on Exhibit “A” with an * (the Confirmation Letter and/or Confirming Electronic Message may also be interchangeably or collectively referred to as a “Confirmation”).  Each party may stipulate by prior notice (oral or written) to the other party that any particular contemplated Transaction may be effectuated and formed only by means of procedure (1) above.  The parties shall be legally bound by each Transaction from the time they agree to its terms in accordance with this Section 4(a) and acknowledge that each party will rely thereon in doing business related to the Transaction.  The Confirming Electronic Message is adopted by the parties as means by which a Transaction is reduced to tangible form, and the parties to a Transaction are identified and authenticate a Transaction.  Any Transaction formed and effectuated pursuant to the foregoing shall be considered a “writing” or “in writing” and to have been “signed” and any Confirming Electronic Message shall be deemed to constitute an “original” document evidencing the Transaction.  Each party consents to the recording of its employees’ telephone conversations without any further notice.

Obligations .

Payment Obligations .

Each party shall make each payment as specified for such party in each Confirmation, subject to the other provisions of this Agreement.

Payments under this Agreement will be made on the due date for value by wire or other electronic transfer into the account specified in the relevant Confirmation or otherwise pursuant to this Agreement, in freely transferable funds and in the manner customary for payments in United States dollars.

Each obligation of each party under Section 4(b)(i)(1) is subject to (A) the condition precedent that no Event of Default or Potential Event of Default with respect to the other party has occurred and is continuing, (B) the condition precedent that no Early Termination Date in respect of the relevant Transaction has occurred or been



effectively designated, and (C) each other applicable condition precedent specified in this Agreement.

Change of Account .  Either party may change its account for receiving a payment by giving written notice to the other party at least five (5) Business Days prior to the scheduled date for the payment to which such change applies unless such other party gives timely notice of a reasonable objection to such change.

Netting of Payments .  If on any payment date amounts would otherwise be payable in respect of the same Transaction by each party to the other, then, on such date, each party’s obligation to make payment of any such amount will be automatically satisfied and discharged, and if the aggregate amount that would otherwise have been payable by one party exceeds the aggregate amount that would otherwise have been pay

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