ROYALTY AGREEMENT
This
Agreement made effective as of the 19th day of
January, 2010
BETWEEN:
IMPERIAL OIL AND GAS, INC., a
body corporate, having an office at the City of Calgary, in the Province of
Alberta (hereinafter called “Grantor”)
-and-
LITTLE EAGLE RESOURCES INC., a
body corporate, having an office at the City of Calgary, in the Province of
Alberta, wholly owned and controlled by Xxxx XxXxxxxxx (hereinafter called
“Grantee”)
Each or
together “Party” or “Parties”
WHEREAS Grantee has agreed to
participate in the evaluation, development and management of oil and gas
prospects (“Prospects”) on behalf of the Grantor; and
WHEREAS Grantor has agreed to
entered into a management agreement with Little Eagle Resources Inc. for the
provision of the management services of Xxxx XxXxxxxxx (the “Management
Agreement”, Exhibit 1).
WHEREAS the Grantee has
reserved a royalty interest in any lands acquired by the Grantor in the North
West Premont Prospect including surrounding areas of mutual interest and the
Ricinus Area Prospect procured by Grantee and accepted by the Grantor on the
terms and conditions as hereinafter set forth;
WHEREAS Grantee reserves the
right to assign the Agreement in part or full, to another entity of its
choice;
NOW THEREFORE THIS AGREEMENT
WITNESSETH that in consideration of the mutual premises and covenants
contained herein, the parties agree each with the other as follows:
|
1.
|
Throughout
this Agreement, the “Royalty Area”
means:
|
All
petroleum and natural gas lands and interests in the North West Premont Prospect
including surrounding areas of mutual interest, and the Xxxxxxx Xxxx Xxxxxxxx
(00-0X0X) accepted by the Grantor and in which the Grantor either purchases an
interest or enters into a third party agreement and subsequently earns an
interest in such lands and properties (the “Royalty Lands”).
|
2.
|
This
Agreement shall make up in part the Management
Agreement.
|
|
3.
|
The
Grantee reserves and the Grantor agrees to pay to the Grantee a gross
overriding royalty on production of petroleum substances from the Royalty
Lands (the “Overriding Royalty”). The Overriding Royalty shall
be calculated and paid in accordance with the terms and conditions
contained in the 1997 CAPL Overriding Royalty Procedure with insertions as
set forth in Schedule “A” attached hereto. The Overriding
Royalty will be calculated and paid in the lawful currency of the United
States of America for Royalty Lands located in the United States and in
the lawful currency of Canada for Royalty Lands located in
Canada.
|
| 4. |
a.
|
The
Grantor agrees that any interest it (or it together with any partners it
brings into the Royalty Area) may acquire prior to December 31, 2010
in the Royalty Area shall be subject to the Overriding Royalty, this date
to be extended subject to board approval of
Grantor
|
|
|
b.
|
At
such time as the Grantor acquires an interest in the Royalty Lands, it
shall provide Grantee with an assignment (recordable in the jurisdiction
where the applicable Royalty Lands are located) of the Grantee's interest
in such Royalty Lands.
|
|
5.
|
Miscellaneous
Provisions
|
|
|
a.
|
If
any term or condition of this Agreement conflicts with a term or condition
of the Title Documents, then such term or condition in the Title Documents
shall prevail and this Agreement shall be deemed to be modified
accordingly. If any term or condition of this Agreement
conflicts with any term or condition of Schedule “A”, then such term or
condition in this Agreement shall prevail and Schedule “A” shall be deemed
to be modified accordingly. Schedule “A” attached hereto is
incorporated into and forms a part of this Agreement. In case
of any inconsistencies between the body of this Agreement and Schedule
“A”, the body of this Agreement shall in each and every instance
prevail.
|
|
|
b.
|
The
headings of the clauses of this Agreement are inserted for convenience of
reference only and shall not affect the meaning or construction
thereof.
|
|
|
c.
|
Whenever
the plural or masculine or neuter is used in this Agreement the same shall
be construed as meaning singular or feminine or body politic or corporate
and vice versa where the context so
requires.
|
|
|
d.
|
Full
and unrestricted assignability. Either party may assign or
otherwise transfer all or any portion of its rights, interests or
obligations under this Agreement to any other successor or assign, all of
which will enure in their entirety and be binding on any such successor or
assign, with the prior written consent of the other Party which shall not
be unreasonably withheld.
|
|
|
e.
|
This
Agreement shall enure to the benefit of and be binding on the Parties and
their respective successors and permitted assigns and upon the heirs,
executors, administrators and assigns of natural persons who are or become
Parties hereto.
|
|
|
f.
|
The
Parties agree that this Agreement shall for all purposes be construed and
interpreted according to the laws of the Province of Alberta and that the
courts having jurisdiction with respect to any matter or thing arising
directly or indirectly relating to this Agreement, the Schedules attached
or the relationship between the Parties, shall be the courts of said
Province, to the jurisdiction of which courts the Parties by their
execution of this Agreement do hereby
submit.
|
|
|
g.
|
This
Agreement may be executed in counterpart and when each Party has executed
a counterpart, all counterparts taken together shall constitute one
agreement.
|
|
|
h.
|
The
terms of this Agreement express and constitute the entire agreement
between the Parties insofar as the specific subject matter contained in
this Agreement. No implied covenant or liability of any kind on
the part of the Parties is created or shall arise by reason of these
presents or anything contained in this
Agreement.
|
|
|
i.
|
This
Agreement supersedes and replaces all previous agreements, memoranda or
correspondence, whether written or oral among the parties with respect to
the subject matter of this
Agreement.
|
|
|
j.
|
Each
of the parties shall from time to time and at all times do such further
acts and execute and deliver such further deeds and documents as shall be
reasonably required in order to fully perform and carry out the terms of
this Agreement.
|
|
|
k.
|
If
any portion of this Agreement shall be or deemed to be unenforceable,
illegal or invalid, the remaining portions of the Agreement shall not be
affected thereby.
|
|
|
l.
|
Time
is of the essence of this
Agreement.
|
|
|
m.
|
The
two-year period for seeking a remedial order under section 3(1)(a) of the
Limitations Act, R.S.A. 2000 c.L-12, as amended, for any claim (as defined
in that Act) arising in connection with this agreement is extended
to:
|
|
|
i.
|
for
claims disclosed by an audit, two years after the time this agreement
permitted that audit to be performed;
or
|
|
|
ii.
|
for
all other claims, four years.
|
|
|
n.
|
Each
of the Parties represents and warrants that it now has or is entitled to
have full right, full power and absolute authority to enter into this
Agreement.
|
|
|
o.
|
The
addresses for notice for the parties
are:
|
|
Little
Eagle Resources Inc.
|
Imperial
Oil and Gas, Inc.
|
|
00
Xxxxxxxxx Xxxxx Xxxxxxxx X.X.
|
2600,
144 – 4th
AVENUE S. W.
|
|
Calgary,
Alberta T3H 4R4
|
Xxxxxxx,
Xxxxxxx X0X 0X0
|
IN WITNESS WHEREOF the parties
hereto have executed and delivered this Agreement as of the day and year first
above written.
|
LITTLE
EAGLE RESOURCES INC.
|
IMPERIAL
OIL AND GAS, INC.
|
|
|
Xxxx
XxXxxxxxx
|
Xxxxx
Xxxxxx
|
|
|
President
|
President
|
