Contract
Xxxxxxx
00.0
XXXXXX
XXXXX, XXXXXXX
THIS
AGREEMENT made this 28th
day of
January 2005
BETWEEN:
XXXX
RESOURCES
LTD.,
a body
corporate, having an office in the City of Calgary in the Province of Alberta,
(herein
called the "Grantor")
THE
PARTY OF THE
FIRST PART
-and-
QUEST CANADA CORP.,
a body
corporate, having an office in the City of Edmonton in the Province of
Alberta,
(hereinafter
called the "Participant")
THE
PARTY OF THE
SECOND PART
WHEREAS,
pursuant to an Agreement (hereinafter referred to as "the Seismic Option
Agreement") dated the 9th
day of
December, 2005, and made between Moraine Resources Ltd. (hereinafter referred
to
as the "the Farmor") and the Grantor (hereinafter sometimes referred to as
"the
Farmee"), it is provided that the Farmee, by performing certain obligations
in
the Seismic Option Agreement(a true and correct copy of which is attached
hereto
as Schedule "B") contained, will become entitled to earn an interest in certain
title documents and the lands therein contained, all as more particularly
described in the Farmout Agreement (a true and correct copy of which is attached
hereto as Schedule "A"), and
WHEREAS
the participant desires to participate with the Grantor as if it had been
an
original party to the Farmout Agreement by assuming a share of the obligations
therein contained and earning a share of the interest to be earned
thereunder,
NOW
THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the premises
and of
the covenants and agreements of the parties hereinafter set forth, the parties
do hereby covenant and agree as follows:
1. INTERPRETATION
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(a)
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The
headings of the clauses of this Agreement are inserted for convenience
of
reference only and shall not affect the meaning or construction
thereof.
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(b)
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The
terms and expressions used herein shall have the same meanings
as are
ascribed to such terms and expressions under the Farmout
Agreement.
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(c)
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Wherever
the plural or masculine or neuter is used the same shall be construed
as
meaning singular or feminine or body politic or corporate, or vice
versa
as the context so requires.
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2. APPOINTMENT
OF OPERATOR
Participant
is appointed Operator as between Grantor and Participant with respect to
all
operations conducted hereunder and the Grantor authorized solely to deal
with
the Farmor on behalf of the parties in respect of all matters arising out
of the
Farmout Agreement.
3. FARMOUT
AGREEMENT
Except
as
modified by the terms of this Agreement, all of the Terms and conditions
of the
Farmout Agreement together with its operating provisions shall control the
operation of the parties and shall be deemed to be incorporated herein as
if
included mutatis mutandis.
4.
TRUST
CONDITIONS AND TERM
Unless
and until Participant becomes novated into the Farmout Agreement, Grantor
shall
hold the participating interest of Participant in Trust and Grantor agrees,
if
practical, to novate Participant into the Farmout Agreement after earning
has
taken place thereunder.
This
Agreement shall terminate as to both parties on the date the Participant
is
novated into and becomes bound by the provisions in the Farmout
Agreement.
5. PARTICIPATING
INTEREST
The
Parties shall firstly bear and assume all costs, expenses, risks and burdens
paid or incurred by the Farmee pursuant to the Farmout Agreement and the
drilling of the Test Well and secondly, be entitled to all of the benefits
and
interests earned by the Farmee in the Farmout Lands under the Farmout Agreement
in accordance with the following respective participating
interests:
Participant 100%
Working Interest
reserving
unto Grantor a 3% Gross Over-riding Royalty as described in Schedule B attached
hereto as part of Schedule “B”
subject
always to the provisions of this Agreement.
6. OPTION
WELL(S)
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(a)
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The
parties agree to discuss exercising the option granted under the
Farmout
Agreement relating to the Option Well(s). If both parties agree
to
exercise the option, the provisions of clause 5 hereto as it relates
to
the Test Well and the Farmout Lands shall apply mutatis mutandis
to the
Options Well(s) and the Option
Lands.
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(b)
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If
only one party elects to exercise the option, then such exercising
party
shall be free to do so without any liability to the other party
and the
exercising party shall solely be entitled to all benefits and interests
and shall solely be responsible for all costs and expenses under
the
Farmout Agreement insofar as it relates to the Option Well(s) and
the
Option Lands.
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7. SELETION
OF WELL LOCATIONS
The
parties agree to meet from time to time to discuss ongoing operations under
the
Farmout Agreement including selection of well locations. Notwithstanding
such
discussions, should the parties fail to agree on the location of an earning
well
then the Participant's choice shall be binding upon the parties.
8. GRANT
AND CREDITS
Any
credits or grants allowable under any acts, rules, regulations or other laws
of
the Province of Alberta and/or Canada shall be shared by the parties in
accordance with the manner in which the parties bear the cost of operations
which give rise to the generation of such credits or grants.
9. ASSIGNMENT
BY PARTICIPANT
Participant
shall not assign its rights under this Agreement in whole or in part without
first obtaining the written consent of Grantor which consent may not be
unreasonably withheld. Notwithstanding any assignment by Participant, Grantor
will always look to Participant for performance of any duties and obligations
required to be carried out by Participant under this Agreement during the
earning phase of the Farmout Agreement unless otherwise agreed to in writing
by
Grantor.
10.
OTHER
ENCUMBERANCES
If
the
interest of either party in the Farmout Lands hereafter shall become encumbered
by any royalty, production payment or other charge of a similar nature, other
than the royalties as set forth under the Farmout Agreement, such royalty,
production payment or other charge shall be charged to and paid entirely
by the
party whose interest is or becomes thus encumbered.
11.
WARRANTY
OF TITLE
Grantor
makes no representation or warranties as to its or Farmor's title to the
Farmout
Lands and Option Lands but covenants that they are encumbered only to the
extent
noted in the Farmout Agreement.
During
the term of this Agreement, no party shall do or cause to be done any act
nor
make or cause to be made any omission whereby the Farmout Lands or Option
Lands
become encumbered in such a way as to adversely affect the interests of the
other parties, or become subject to termination or forfeiture.
12.
NO
PARTNERSHIP
The
rights, duties, obligations and liabilities of the parties shall be several
and
not joint or collective, it being the parties' express purpose and intention
that nothing herein shall be construed as creating a partnership of any kind
or
imposing upon any party hereto any partnership duty, obligation or liability
to
the other party.
13. NOTICE
PERIODS
The
parties will endeavor on a bonafide basis to meet at least five (5) days
prior
to the date when either any election must be made or any notice must be sent
to
the Farmor, for the purposes of discussing such election or notice in order
to
enable Grantor, on behalf of the parties, to comply with the provisions of
the
Farmout Agreement.
14. FURTHER
ASSURANCE
Each
of
the parties shall at all times do all such further acts and deliver all such
further deeds and documents as shall be reasonably required in order to fully
perform and carry out the terms of this Agreement.
Exhibit
10.1
15. NOTICE
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Notwithstanding
anything to the contrary contained herein, all notices required
or
permitted hereunder shall be in writing. Any notice to be given
hereunder
shall be deemed to be served properly if served in any of the following
modes:
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a)
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personally,
by delivering the notice to the Party on which it is to be served
at that
Party's address for service; or
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b)
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by
telecopier or telex (or by any other like method by which a written
message may be sent) directed to the party on which it is to be
served at
that Party's address for service. A notice so served shall be deemed
to be
received by the addressee when actually received by it, if received
within
normal business hours on any day other than a Saturday, Sunday
or
statutory holiday in Alberta or at the commencement of the next
ensuing
business day following transmission if such notice is not received
during
such normal business hours; or
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c)
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by
mailing it first class (air mail if to or from a location outside
of
Canada) registered post, postage prepaid, directed to the Party
on which
it is to be served at that Party's address for service. Notices
so served
shall be deemed to be received by the addressee at noon, local
time, on
the earlier of the actual date of receipt or the fourth (4th)
day (excluding Saturdays, Sundays and statutory holidays in Alberta)
following the mailing thereof. However, if postal service is (or
is
reasonably anticipated to be) interrupted or operating with unusual
delay,
notice shall not be served by such means during such interruption
or
period of delay.
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16.
ADDRESS
FOR SERVICE
The
address for service of notices hereunder of each of the Parties shall be
as
follows:
Grantor: Xxxx
Resources Ltd.
0000
Xxxxxxx Xxxxx XX.
Xxxxxxx,
Xxxxxxx X0X 0X0
Participant: Quest
Canada Corp.
#000-00000
Xxxxxx Xxx.
Xxxxxxxx,
Xxxxxxx X0X 0X0
A
Party
may change its address for service by notice to the other Party, and such
changed address for service thereafter shall be effective for all purposes
of
this Agreement.
17.
INSURANCE
The
parties shall individually carry insurance with a reputable insurance company
in
the manner and in the amounts set out in the Operating Procedure. To the
extent
of its cost sharing interest Participant agrees to be covered by Grantor's
"Control of Well" insurance and Grantor agrees to make suitable arrangements
in
that regard. Participant will bear and pay its proportionate share of such
coverage at cost.
18.
SUCCESSORS
AND ASSIGNS
This
Agreement shall enure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns.
19. PROPER
LAW
This
Agreement and the relationship between the parties shall be construed and
determined according to the laws of the Province of Alberta and the courts
having original jurisdiction with respect to any matter or thing arising
directly or indirectly relating to this Agreement shall be the courts of
the
Province of Alberta.
20.
SUPERCESSION
This
Agreement supercedes and replaces all other agreements, documents, writings
and
verbal understandings between the parties with respect to the subject matter
of
this Agreement.
IN
WITNESS WHEREOF the parties hereto have caused this Agreement to be executed
as
of the day and year first written above.
XXXX
RESOURCES LTD. QUEST
CANADA CORP.
per:__________________________ per:_____________________________
per:__________________________ per:_____________________________
