TERMINATION AGREEMENT
(U.S.
Prospect Acquisition Agreement)
THIS AGREEMENT dated as of May
11, 2010.
AMONG:
ETERNAL ENERGY CORP., a body
corporate having offices in the City of Littleton, in the State of Colorado
(“Eternal”)
- and
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FAIRWAY EXPLORATION LLC., a
body corporate having offices in the City of Littleton, in the State of Colorado
(“Fairway”)
- and
-
PROSPECTOR OIL, INC., a body
corporate having offices in the City of Xxxxxxxx, in the State of Montana
(“Prospector”)
- and
-
PEBBLE PETROLEUM INC., a body
corporate having an office in the City of Vancouver, in the Province of British
Columbia (“Pebble”)
- and
-
ROVER RESOURCES INC., a body
corporate having offices in the City of Vancouver, in the Province of British
Columbia (“Rover”)
- and
-
XXXXXX XXXXXXX, an individual
residing in the City of Littleton, in the State of Colorado (“Xxxxxxx”)
- and
-
XXXXXXX X. XXXXXXX, an
individual residing in the City of Xxxxxxxx, in the State of Montana (“Xxxxxxx”)
- and
-
XXXXXX X. XXXXX, an individual
residing in the City of Littleton, in the State of Colorado (“Xxxxx”)
- and
-
XXXXXX OIL CORPORATION, a body
corporate having offices in the City of Vancouver, in the Province of British
Columbia (“Xxxxxx”)
WHEREAS Eternal, Fairway,
Prospector, Pebble (as the successor by name change to 0770890 B.C.
Ltd.) and Rover are parties to the U.S. Prospect Acquisition
Agreement;
AND WHEREAS Xxxxxxx is the
President and principal shareholder of Prospector and Xxxxxxx is the President
and principal shareholder of Fairway;
AND WHEREAS Fairway and
Prospector have been providing geological consulting services to Rover and
Pebble from time to time under the U.S. Prospect Acquisition
Agreement and in the course thereof have produced the Work Product;
AND WHEREAS the parties
terminated the U.S. AMI by mutual agreement effective as of November 1,
2009;
AND WHEREAS Eternal, Fairway,
Prospector, Pebble and Rover executed a Termination Agreement effective as of
April 29, 2010 which terminated the U.S. Prospect Acquisition Agreement as
between Eternal and Pebble/Rover;
AND WHEREAS the parties have
subsequently determined that the U.S. Prospect Acquisition Agreement should be
terminated in its entirety;
AND WHEREAS Xxxxxx is the
parent corporation of Pebble, and Pebble is the parent corporation of
Rover;
NOW THEREFORE in consideration
of the premises hereto, the covenants and agreements hereinafter set forth and
contained and other good and valuable consideration (the receipt and sufficiency
of which is hereby acknowledged), the parties agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions
Each
capitalized word or phrase used in this Agreement, including the recitals and
this Section, shall have the meaning ascribed thereto below:
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(a)
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“Agreement” means this
agreement and any schedule attached
hereto;
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(b)
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“Effective Date” means
May 1, 2010;
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(c)
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“Maps” means collectively
the three maps attached to this Agreement and marked as Schedule
“A”;
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(d)
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“Prospect” has the
meaning ascribed to such term in the U.S. Prospect Acquisition
Agreement;
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(e)
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“U.S. AMI” means the area
of mutual interest created pursuant to the U.S. Prospect
Acquisition Agreement;
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(f)
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“U.S. Prospect Acquisition
Agreement” means that certain Letter Acquisition Agreement dated
October 26, 2006 among Eternal, Fairway,
Prospector, Rover and 0770890 B.C. Ltd. (now known
as Pebble); and
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(g)
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“Work Product” means any
and all geological data, methodologies, intellectual property and other
work produced by Xxxxxxx and/or Fairway and Xxxxxxx and/or Prospector in
respect of the Prospect, including without limitation the
Maps.
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ARTICLE 2
TERMINATION
2.1 Termination
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(a)
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The
parties acknowledge and agree that the U.S. AMI was terminated by mutual
agreement and consent of the parties as of November 1, 2009, with the
intent and effect that Fairway, Prospector and Eternal had from and after
that date, and shall continue to have, the right to acquire and develop
mineral rights in and to the Prospect and further, Xxxxxx and Rover
acknowledge that they expressly gave consent to Fairway and Prospector to
engage in acquisition activities in respect of the Prospect from and after
November 1, 2009.
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(b)
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The
parties further agree that the U.S. Prospect Acquisition
Agreement is hereby terminated in entirety as of the Effective Date as to
any go-forward rights and obligations thereunder. For greater certainty,
the parties acknowledge and agree that: (i) Fairway and
Prospector shall not be entitled to any royalty interest or acreage fees
in respect of any Prospect acreage acquired from and after the Effective
Date, and (ii) any consulting arrangements between Pebble/Rover and
Fairway and Prospector are hereby terminated as of the Effective
Date.
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2.2 Accrued
Rights and Obligations
The
termination of the U.S. Prospect Acquisition Agreement as provided above will
not affect any rights and obligations which were fully accrued as of the
Effective Date except as otherwise provided in Section 2.1(a) and Section 2.3
hereof. Accordingly, Rover acknowledges that it has received invoices
from Fairway for consulting services rendered from January 2010 to the Effective
Date and agrees to pay such invoices within ten (10) days following execution of
this Agreement by the parties.
2.3 Work
Product
Fairway
and Prospector shall own and shall be entitled to retain and utilize copies of
the Work Product, including the Maps, as they see fit. Pebble and Rover shall
also own and shall be entitled to retain and utilize copies of the Work Product,
including the Maps, as they see fit and further, Xxxxxx and Rover acknowledge
that they expressly gave consent to Fairway and Prospector to use the Work
Product from and after November 1, 2009.
ARTICLE
3
RELEASES
AND INDEMNITIES
3.1 Release of Other Parties by Ryland,
Pebble and Rover
Ryland, Pebble
and Rover (the “Xxxxxx
Parties”) do hereby jointly and severally remise, release and forever
discharge each of Fairway, Prospector, Eternal, Xxxxxxx, Xxxxxxx and Xxxxx (the
“Fairway Parties”) and
all of their respective directors, officers, employees, predecessors,
successors, assigns, executors, administrators and insurers (“Representatives”) of and from
any and all actions, causes of action, claims, demands, damages, costs or
expenses, whatsoever existing up to the present time, known or unknown, which
the Xxxxxx Parties or any of their Representatives ever had, now have or can,
shall or may hereafter have, in respect of any matter arising from or related to
the U.S. Prospect Acquisition Agreement and use of the Work Product, up to and
including the Effective Date.
3.2
Indemnification of Other Parties by Ryland Parties
The
Xxxxxx Parties agree to jointly and severally indemnify and save harmless each
of the Fairway Parties and their Representatives from and against any and all
claims, actions, suits, proceedings, and hearings of any nature and kind in any
court of law or equity or before any arbitrator or other body, board or
tribunal, losses, damages, personal and bodily injuries, property damage,
claims, counterclaims, complaints, disputes, demands, causes of action,
liabilities, obligations, legal fees on a solicitor and his own client basis,
costs, expenses, and disbursements (including disbursements as between solicitor
and own client) of any nature or kind, whatsoever and howsoever arising, whether
known or unknown, whether in law or in equity or pursuant to statute, and
whether in any court of law or equity or before any arbitrator or other body,
board or tribunal which arise out of or result from any matter arising from or
related to the U.S. Prospect Acquisition Agreement and use of the Work Product,
up to and including the Effective Date.
3.3
Release of Ryland Parties by Other Parties
The
Fairway Parties do hereby jointly and severally remise, release and forever
discharge each of the Xxxxxx Parties and their Representatives of and from any
and all actions, causes of action, claims, demands, damages, costs or expenses,
whatsoever existing up to the present time, known or unknown,
which any of the Fairway Parties or any of their Representatives ever
had, now have or can, shall or may hereafter have, in respect of any matter
arising from or related to the U.S. Prospect Acquisition Agreement
and use of the Work Product, up to and including the Effective
Date.
ARTICLE
4
MISCELLANEOUS
4.1
Headings
The
headings of clauses herein are inserted for convenience of reference only and
shall not affect the construction of the provisions hereof.
4.2
Supercedes Previous Agreements
This
Agreement supercedes any other agreements, documents, writings and verbal
understandings between the parties relating to the subject matter of this
Agreement, and expresses all of the terms and conditions agreed upon by the
parties with respect thereto. In the event of a conflict between this
Agreement and any other agreement or document relating to the subject matter
hereof, including without limitation, the provisions of the Royalty Purchase
Agreement, the provisions of this Agreement shall prevail.
4.3
Governing Laws/Courts
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(a)
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Governing
Laws: This Agreement and the U.S. Prospect
Acquisition Agreement shall, in all respects, be subject to, interpreted,
construed and enforced in accordance with and under the laws of the
Province of British Columbia and the laws of Canada applicable
therein and shall, in every regard, be treated as contracts made in the
Province of British Columbia. To the extent that the
location of the Prospect in the State of North Dakota requires the
application of the laws in force in the State of North Dakota, such laws
shall be adduced as evidence in the British Columbia courts having
jurisdiction in respect of a dispute arising
hereunder.
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(b)
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Courts: The
parties irrevocably attorn and submit to the exclusive jurisdiction of the
courts of the Province of British Columbia and courts of appeal
therefrom in respect of all matters arising out of this
Agreement.
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4.4
Severability
If any
covenant or condition contained in this Agreement is determined to be, in whole
or in part, invalid or unenforceable by reason of any rule of law or public
policy, such invalidity or unenforceability will not affect the validity or
enforceability of any other covenant or provision, such partial invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of such covenant or provision and such invalid or unenforceable
covenant or provision or portion thereof, as the case may be, shall be severable
from the remainder of this Agreement.
4.5
Further Assurances
Each
party, without further consideration, shall in a timely fashion do or perform or
cause to be done or performed all such further and other acts and things,
execute, acknowledge and deliver or cause to be executed, acknowledged and
delivered all such further and other instruments, deeds and other writings and
generally shall take or cause to be taken all such further and other actions as
may be reasonably necessary or desirable to carry out its obligations hereunder
or to ensure and give full force and effect to the provisions and intent,
purpose and meaning of this Agreement.
4.6
Enurement
This
Agreement shall be binding upon and shall enure to the benefit of the parties
and (as applicable) their respective heirs, executors, administrators, personal
representatives, successors, receivers, receiver-managers, trustees and
permitted assigns.
4.7
Counterparts and Delivery
This
Agreement may be executed in counterparts and delivered by electronic or other
means, which shall constitute effective execution and delivery.
IN WITNESS WHEREOF the parties
have executed this Agreement as of the date first written above.
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FAIRWAY
EXPLORATION LLC
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Per:
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/s/
Xxxxxxx X. Xxxxx
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Per:
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/s/
Xxxxx Xxxxxxx
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Xxxxxxx
X. Xxxxx
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Xxxxx
Xxxxxxx
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Chief
Executive Officer
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Manager
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PROSPECTOR
OIL, INC.
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PEBBLE
PETROLEUM INC.
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Per:
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/s/
Xxxxxxx X. Xxxxxxx
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Per:
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/s/
Xxxxxx X. Xxxxxxx
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Xxxxxxx
X. Xxxxxxx
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Xxxxxx
X. Xxxxxxx
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President
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President
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/s/
Xxxxxxx X. Xxxxxxx
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/s/
Xxx Xxxxxx
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XXXXXXX
X. XXXXXXX
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Witness
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/s/
Xxxxxx Xxxxxxx
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/s/
Xxxxxx Xxxxxxx
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XXXXXX
XXXXXXX
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Witness
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/w/
Xxxxxx X. Xxxxx
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/s/
Xxxxxx Xxxxxxx
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XXXXXX
X. XXXXX
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Witness
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XXXXXX
OIL CORPORATION
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Per:
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/s/
Xxxxxx X. Xxxxxxx
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Xxxxxx
X. Xxxxxxx
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President
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ROVER
RESOURCES INC.
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/w/
Xxxxxx X. Xxxxxxx
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Xxxxxx
X. Xxxxxxx
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President
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SCHEDULE
“A” ATTACHED TO A TERMINATION AGREEMENT AMONG ETERNAL ENERGY CORP., FAIRWAY
EXPLORATION LLC, PROSPECTOR OIL, INC., XXXXXX XXXXXXX, XXXXXXX X. XXXXXXX,
XXXXXX X. XXXXX, PEBBLE PETROLEUM INC., ROVER RESOURCES INC AND XXXXXX OIL
CORPORATION RESPECTING THE U.S. PROSPECT ACQUISITION AGREEMENT
MAPS
(See
attached)
