ESCROW AGREEMENT
THIS AGREEMENT dated for reference the 8 day of April, 2011.
AMONG:
LONGSHOT OIL, LLC, of
0000 X. Xxxxxxxxx, Xxxxxxx,
XX 00000, XXX.
(“Longshot”)
OF THE FIRST PART
AND:
UNION TOWN ENERGY INC.,
of 0000 Xxxxxxx Xxxx Xx.,
Xxxxxxxxx, XX 00000.XXX
(“Union Town”)
OF THE SECOND PART
AND:
XXXXXX & COMPANY ,
Barristers and Solicitors,
with business offices at1880 – 0000 Xxxx Xxxxxxxx
Xxxxxx,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0.
(the “Escrow Holder”)
OF THE THIRD PART
WHEREAS:
A. By an Exploration Agreement dated April 8, 2011 (the “Exploration Agreement”) entered into among Longshot and Union Town, Longshot and Union Town agreed to conduct joint exploration operations, including the drilling of exploratory or development xxxxx, for the discovery of and for the production of oil and/or gas in the area in Pondera County, Montana.
B. In order to facilitate the dealings of the parties under the Exploration Agreement Longshot and Union Town agreed to deposit the Escrow Documents (as defined below) with the Escrow Holder to be held by the Escrow Holder in accordance with the terms and conditions of the Exploration Agreement and this Escrow Agreement;
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X. Xxxxxxxx, Xxxxx Xxxx and the Escrow Holder have entered into this agreement pursuant to the terms of the Exploration Agreement as a security for deliveries by Longshot and Union Town during the term of the Exploration Agreement.
THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the mutual covenants, agreements, and obligations herein contained, the parties hereto declare and agree as follows:
1.00 ESCROW DOCUMENTS
1.01 It has been delivered to the Escrow Holder and the Escrow Holder hereby acknowledges receipt of the items and documents as follows:
Fully executed and notarized oil and gas lease assignments for the lands located in Pondera County, Montana by Longshot to Union Town Energy Montana, LLC described as:
| (a) |
Township 28 North, Range 5 West, Section 20: S2NE; | |
| (b) |
Township 28 North, Range 5 West, Section 20: N2SE; and | |
| (c) |
Township 28 North, Range 5 West, Section 20: N2NE; |
which will be held by the Escrow Holder in escrow, subject to the terms and conditions of this agreement, which items and documents, together with such other documents as may from time to time be delivered to the Escrow Holder pursuant to this agreement, are hereinafter called the “Escrow Documents”.
2.00 DELIVERY OF ESCROW DOCUMENTS
2.01 The Escrow Holder will hold the Escrow Documents in escrow and undelivered and will deliver the Escrow Documents upon the following:
| (a) |
Union Town will deliver to the Escrow Holder a Statutory Declaration signed by its Director, XX. XXXXX XXXXXX stating that Union Town has performed the acts, required in order for the Escrow Documents or any specified items of the Escrow Documents to be released to Union Town pursuant to the terms and conditions of the Exploration Agreement (the “Performance”) in the form attached hereto as Schedule “A”. The Statutory Declaration so delivered shall specify the items of the Escrow Documents required to be released to it; | |
| (b) |
The Escrow Holder then will forward forthwith such Statutory Declaration to Longshot; | |
| (c) |
Longshot within 5 business days will deliver a Statutory Declaration in the form attached hereto as Schedule “B” to the Escrow Holder attesting to the following: |
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| (i) |
The Performance by Union Town is satisfactory to Longshot, the specification of the items of the Escrow Documents are correct and the Escrow Agent shall release the specified items of the Escrow Documents; or | |
| (ii) |
The Performance of Union Town is not satisfactory to Longshot or the specifications of the items of the escrow Documents are not correct and the Escrow Agent shall not release any part of the Escrow Documents; |
| (d) |
In the event Longshot is not responding within 10 business days, the Escrow Holder will release the specified items of the Escrow Documents to Union Town. |
3.00 EFFECT OF DELIVERY OF ESCROW DOCUMENTS
3.01 If the specified items of the Escrow Documents are released to Union Town under the provisions of Paragraph 2.01(d) hereof, all of the rights of Longshot to such items of the Escrow Documents shall be settled and cannot be contested.
4.00 EFFECT OF DISPUTE
4.01 In the event that there is a dispute between Longshot and Union Town regarding the release by the Escrow Holder of any and all of the Escrow Documents, the Escrow Holder will hold these particular items of the Escrow Documents until instructed by mutual direction of Longshot and Union Town as to the delivery of the Escrow Documents or a final determination has been made in any court action relating to the Exploration Agreement or the Escrow Documents and the Escrow Holder is directed to deliver the Escrow Documents in accordance with a court order in such action.
5.00 NOTICE OF DISPUTE
5.01 The Longshot and Union Town, or either of them, when a plaintiff or applicant in any action or actions relating to Exploration Agreement or the Escrow Documents, will cause a copy of the relative originating application or process to be served on the Escrow Holder as well as on the other parties to this agreement.
6.00 DELIVERY OF NOTICE
6.01 Any notice, payment, direction or other instrument or communication (collectively, a “Communication”) required or permitted to be given under this agreement will be in writing and must be given by delivery, telecopy, facsimile or email addressed to the party to whom it is required to be given at the address set forth on page 1 of this agreement as well as follows:
| Longshot | Attn: Xxxx Xxxxxx |
| Xxxxxxxxxx000@xxx.xxx |
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| Xxxxx Xxxx | Attn: Xxxxx Xxxxxx |
| xxxxxxxxxxx0@xxx.xxx | |
| Xxxxxx & Company | Attn: Xxxxx Xxxxxxxxx |
| xxxxx@xxxxxxxxxxxxx.xxx |
Any party may at any time give notice in writing of any change of address of the party giving the notice and from and after the giving of the notice, the address specified in the notice will be deemed to be the address of the party for the purposes of delivery of any Communication. A Communication will be deemed to have been received at the time it is physically or electronically sent, telecopied or faxed in accordance with this Paragraph 6.01 hereof.
7.00 RESPONSIBILITY OF ESCROW HOLDER
7.01 The Escrow Holder will not be responsible for the form, genuineness, validity, sufficiency or effect of the Escrow Documents or any part of it at any time, or for the act of any person or corporate entity which may render the Escrow Documents or any part of it null and void, or the failure of any of the parties to the Exploration Agreement to perform acts or payments under the Exploration Agreement when due and/or payable, or for any delay occasioned by reason of any restriction, ruling or provision with respect to Longshot or Union Town, the Escrow Documents or any part of it or the Exploration Agreement, or if, for any reason whatsoever, any of the parties to the Exploration Agreement should be in breach of its provisions.
8.00 LIABILITY OF ESCROW HOLDER FOR LOSS
8.01 The Escrow Holder, provided it acts in good faith, will not be held liable for any loss with respect to the Exploration Agreement except for a loss caused by its own dishonesty, gross negligence or wilful breach of trust.
8.02 The Escrow Holder shall have no responsibility in respect of loss of the Escrow Documents except the duty to exercise such care in the safekeeping thereof as it would exercise if the Escrow Documents were the property of the Escrow Holder. The Escrow Holder may act herein on the advice of counsel but will not be responsible for acting or failing to act on the advice of counsel.
8.03 The parties agree that the Escrow Holder will not be obliged to look behind or verify the contents of and will assume that all the signatures are genuine on any Statutory Declaration therein delivered to it by any party to this Escrow Agreement and will not be liable for any loss, risk or damage suffered by any party hereto or any other party whatsoever, provided it has acted in accordance with the provisions of this agreement and on the terms and conditions herein in reliance on such Statutory Declaration.
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8.04 The Escrow Agent shall act only in a capacity of an escrow agent under this Escrow Agreement and the Escrow Agent shall not provide legal advice in relation to it neither to Union Town nor to Longshot.
8.05 Union Town and Longshot either obtained independent legal advice or waived it in connection therewith before entering into this Escrow Agreement.
9.00 CHANGE OF ESCROW HOLDER
9.01 Union Town and Longshot may at any time, during the currency of this agreement, appoint another person, firm or corporation to act as Escrow Holder in addition to or in substitution for the existing Escrow Holder and the words “Escrow Holder”, whenever used throughout this Escrow Agreement, will include the Escrow Holder originally appointed and any additional Escrow Holder appointed in accordance with the provisions of this Paragraph 9.01 hereof.
10.00 PAYMENT OF ESCROW HOLDER
10.01 Longshot and Union Town will pay, in equal parts as between them, the fixed amount of $5,000.00 as fees of the Escrow Holder in connection with the performance of its duties hereunder. The payment will be due upon execution of this Escrow Agreement.
10.02 Longshot and Union Town also will, from time to time, pay the reasonable fees and expenses incurred by the Escrow Holder in connection with the performance of its duties hereunder as may be agreed upon from time to time by the Escrow Holder and Longshot and Union Town and failing such agreement, as may be determined by the provisions of the Trustee Act (British Columbia), as may be amended from time to time.
11.00 INDEMNITY OF ESCROW HOLDER
11.01 Longshot and Union Town, jointly and severally, will indemnify and save harmless the Escrow Holder of and from all claims, demands, damages, losses and expenses arising out of the performance by the Escrow Holder of its duties hereunder.
11.02 Longshot and Union Town further agree, without restricting the foregoing indemnity that, in the event that proceedings may hereafter be taken in any court respecting the matters referred to in this Escrow Agreement, the Escrow Holder will not be obliged to defend any such action or submit its rights to the court unless the Escrow Holder has been indemnified by good and sufficient security in addition to the indemnity hereinbefore given against the Escrow Holder’s costs of such proceedings.
12.00 DISCHARGE OF ESCROW HOLDER
12.01 In the event the Escrow Holder wishes to discharge its obligations hereunder other than in a manner provided herein, it may at any time, without further permission to be granted from the parties hereto, apply to the Supreme Court of British Columbia for an order for delivery into court of the Escrow Documents held by him pursuant to the terms of this Escrow Agreement, and the court may, on such notice as it thinks necessary, if any, make an order accordingly, and the application may, in the first instance be made ex parte, and delivery of the Escrow Documents into court will discharge the Escrow Holder from all further liabilities and obligations hereunder.
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13.00 GENERAL
13.01 Enurement
This agreement will enure to the benefit of and be binding on the parties hereto, their respective heirs, executors, administrators and assigns.
13.02 Time
Time is of the essence of this agreement.
13.03 Counterpart
This agreement may be executed in several parts in the same form and such parts as so executed will together form one original agreement, and such parts if more than one will be read together and construed as if all the signing parties hereby had executed one copy of this agreement.
13.04 Governing Law
This agreement will in all respects be governed by and be construed in accordance with the laws of the Province of British Columbia.
LEFT INTENTIONALLY BLANK
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13.05 Further Documents
The parties hereto will execute and deliver all such further documents and instruments and do all such further acts and things as may be reasonably required to carry out the full intent and meaning of this agreement.
IN WITNESS WHEREOF the parties hereto have executed this agreement as of the date set out on page 1 of this agreement.
| THE CORPORATE SEAL OF | ) | |
| LONGSHOT OIL, LLC | ) | |
| was affixed hereto in the presence of: | ) | |
| ) | ||
| ) | c/s | |
| Authorized Signatory | ) | |
| ) | ||
| THE CORPORATE SEAL OF | ) | |
| UNION TOWN ENERGY INC. | ) | |
| was affixed hereto in the presence of: | ) | |
| ) | ||
| ) | c/s | |
| Authorized Signatory | ) | |
| ) | ||
| SIGNED, SEALED AND DELIVERED | ) | |
| by XXXXXX & COMPANY | ) | |
| as Escrow Agent | ) | XXXXXX & COMPANY |
