Exhibit 99.1
LEASE AGREEMENT
This Agreement made and entered into this 13th day of July, 2007, by and between
SOVEREIGN OIL, Inc. ("SOVEREIGN OIL"), a Nevada corporation, and NORTH AMERICAN
REFINING CO. ("NORTH AMERICAN") (hereinafter referred to collectively as
"parties").
IT IS HEREBY AGREED:
1. TERM: The term of this Agreement shall commence from the date of the
execution of this Agreement by both parties to and including January 8, 2008.
("Lease Period").
2. TERMS OF PAYMENT/LEASE VALUE AND CONSIDERATION: SOVEREIGN OIL shall pay NORTH
AMERICAN the following:
Lease Payment: $10.00 for the Lease Period, and
Blending and Drying fees: blending fees at $0.15 per gallon and drying fees at
$0.15 per gallon. No minimum fees required under this Lease.
in consideration for use of the following located at 0000 Xxxx 00xx Xxxxxx,
XxXxxx, Xxxxxxxx 00000 ("Premises"): a) the "blending building" and associated
equipment b) associated loading dock, and c) use of up to twenty (20) storage
tanks for the blending based on availability of oils and d) equipment associated
with the items above based on availability (a-d collectively referred to as the
"Leased Premises"). It is agreed that SOVEREIGN OIL will also retain the right
to use other incidentals associated with its business, such as occasional use of
the truck scale for weighing of loaded trucks, associated pumps for storage
tanks, and entry to the site for loading or unloading of materials, entry/exit
of work force, and /or servicing of equipment.
SOVEREIGN OIL's payment terms are cash or good Company Check, with the Lease
Payment being due upon the execution of this agreement to cover the Lease Period
and blending and drying fees are due and payable monthly on the tenth day
following the last day of each month for the previous month's activity.
All blending and drying fees shall remain at the set price during the duration
of this Agreement, unless otherwise agreed upon by both parties in writing,
and/or in the event that SOVEREIGN OIL requests additional storage, or site
usage above and beyond that specified within said Agreement. Should SOVEREIGN
OIL request additional site space, NORTH AMERICAN has agreed to make every
effort possible to provide additional space within reason.
3. LICENSES: Both parties shall maintain all licenses and permits as required
for their separate businesses.
4. WARRANTIES/RETENTION OF OWNERSHIP: SOVEREIGN OIL represents and warrants that
it shall comply with applicable laws and regulations regarding any business
conducted at the Premises, and NORTH AMERICAN represents and warrants that the
ownership of all equipment and/or product kept at the Premises by SOVEREIGN OIL
shall be retained by SOVEREIGN OIL. SOVEREIGN OIL is responsible for all product
loading and unloading in an environmentally sound and safe manner.
5. TERMINATION OF AGREEMENT: NORTH AMERICAN shall have the right to terminate
this Agreement with 15 days written notice.
6. FORCE MAJEURE: Neither SOVEREIGN OIL nor NORTH AMERICAN shall be
construed to be in default of this Agreement to the extent either party fails to
perform its obligations or duties due to forces beyond its control, including
but not limited to, acts of nature, floods, fire, explosions, strikes or other
labor disturbances, failure in, or inability to obtain on reasonable terms raw
materials, finished products, transportation, storage and/or manufacturing
facilities, breakage or malfunction, governmental, or interruptions of
operations caused by acts of war or other government restraint, law or
regulation.
Should SOVEREIGN OIL or NORTH AMERICAN believe that a Force Majeure conditions
exists, the other party shall be notified within 5-business days of such event.
If such condition(s) arise that causes work stoppage, and/or reduced site use,
and cannot be remedied within forty-five (45) days from the date of notice, the
other party may terminate this Agreement by providing written notice of
termination.
7. INSURANCE: SOVEREIGN OIL agrees to maintain general public liability
insurance in the sum of $1.000.000 per person/$2,000,000 per occurrence for its
operations under this Lease at the Premises.
SOVEREIGN OIL agrees to maintain Workers' Compensation insurance for its own
employees who will be present upon the Premises during the term of this Lease.
SOVEREIGN OIL agrees to maintain property insurance for the replacement cost
value to cover any damage or loss to its property on the premises including
inventory.
8. LIABILITY. Each party acknowledges that it shall be responsible for any loss,
cost, damage, claim, or other charge that arises out of or is caused by the
actions of that Party or its employees, or agents. No Party shall be liable for
any loss, cost, damage, claim, or other charge that arises out of or is caused
by the actions of any other Party or its employees or agents. Joint and several
liability will not attach to the Parties; no Party is responsible for the
actions of any other Party, but is only responsible for their own actions.
9. INDEMNIFICATION: SOVEREIGN OIL hereby releases and agrees to defend,
indemnify and hold NORTH AMERICAN including, but not limited to, its officers,
directors, partners, employees, agents or other representatives, harmless from
any and all liabilities, damages, costs, expenses (including without limitation,
reasonable attorney's fees), losses, claims, demands, suits, actions, judgments,
fines (excluding punitive damages) or payments for or on account of any person
or SOVEREIGN OIL itself, including its officers, directors, partners, employees,
agents or other representatives arising out of or resulting from any negligent
act or omission of SOVEREIGN OIL, its officers, directors, partners, employees,
agents or other representatives, in connection with this agreement including
personal injury (death or bodily injury) to any person or damage to any property
including property of SOVEREIGN OIL and/or NORTH AMERICAN and/or other parties,
or violation of any law agency ruling, or regulations arising out of or in any
way connected with SOVEREIGN OIL's operations under this Agreement and any claim
by Sovereign Oil's customers.
NORTH AMERICAN hereby releases and agrees to defend, indemnify and hold
SOVEREIGN OIL including, but not limited to, its officers, directors, partners,
employees, agents or other representatives, harmless from any and all
liabilities, damages, costs, expenses (including without limitation, reasonable
attorney's fees), losses, claims, demands, suits, actions, judgments, fines or
payments for or on account of any person or NORTH AMERICAN itself, including its
officers, directors, partners, employees, agents or other representatives
arising out of or resulting from any act or omission of NORTH AMERICAN, its
officers, directors, partners, employees, agents or other representatives, in
connection with this agreement including personal injury (death or bodily
injury) to any person or damage to any property including property of SOVEREIGN
OIL and/or NORTH AMERICAN and/or other parties, or violation of any law agency
ruling, or regulations arising out of or in any way connected with North
American's operations under this Agreement or operations at the facility located
at 0000 Xxxx 00xx Xxxxxx, XxXxxx, Xxxxxxxx 00000 and any claim by North
American's customers.
10. GENERAL:
a) The right of either party to require strict performance by the other party
hereunder shall not be affected by any previous waiver, forbearance or course of
dealing. All understandings and agreements relating to the subject matter
hereof, either oral or written, except insofar as incorporated in this
Agreement, are hereby cancelled and withdrawn. This Agreement constitutes the
entire agreement of the parties in respect to the subject matter hereof and may
be altered only in writing and signed by the parties hereto.
b) No employees, agents and/or representatives of the respective parties shall
be deemed to be the employees, agents and/or representatives of the other party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and
date first above written.
NORTH AMERICAN REFINING CO.
By: /s/ Xxxxxx Xxxxxxxxxxx
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Name: Xxxxxx Xxxxxxxxxxx
Title: Manager
SOVEREIGN OIL, INC.
By: /s/ Xxxxxxxxx X. XxXxxx
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Name: Sebastein X. XxXxxx
Title: President
