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THIS AGREEMENT is made on 21st April, 1997.
BETWEEN XXXXXXXXX ENTERPRISES LIMITED of Xxxxx 00, 000 Xxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxxxx ("Xxxxxxxxx")
AND AUSTRALIAN WORLDWIDE EXPLORATION NL = ACN 078 897 440 of
Xxxxx 0, XXX Xxxxx, Xxxxx Xxx, Xxxxxx Square, Redfern, New
New South Wales ("AWE")
RECITALS
X. Xxxxxxxxx, Indo Overseas Exploration Ltd ("Indo") and Euro
Pacific Energy Pty Ltd ("Euro") are holders of working interests
in PEP 38716 and the PEP 38716 Joint Venture in the following
proportions:
Xxxxxxxxx - 52.8%
Indo - 38.4%
Euro - 8.8%
B Xxxxxxxxx has agreed to grant to AWE an option to acquire from
Xxxxxxxxx a 25% working interest in PEP 38716 and the PEP 38716
Joint Venture upon the terms and conditions set out in this
Agreement.
OPERATIVE PROVISIONS
1 DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Agreement, except where the context otherwise requires,
the following terms and expressions shall have the following
meanings:
"Agreement" means this option agreement;
"Information" has the meaning given to that term in clause 4.1.
"Operations" means all exploration, development, processing,
reporting, analyzing, studying or any other operations or actions of
whatsoever kind undertaken on or in respect of PEP 38716 which are
appropriate to the exploration of such area the assessing of the
petroleum content of such area, the investigation of the feasibility
of carrying out of petroleum production operations on such area.
"Option" means the option to acquire a 25% working interest in
PEP 38716 and the PEP 38716 Joint Venture granted to AWE pursuant to
clause 3.1.
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"PEP 38716" means Petroleum Exploration Permit number 38716
issued under the Crown Minerals Xxx 0000 of New Zealand and any
extension, renewal, conversion, substitution, modification or
variation thereof.
"PEP 38716 Operating Agreement" means the Operation Agreement
entered into or to be entered into between Xxxxxxxxx, Indo Overseas
Exploration Limited and Euro Pacific Energy Pty Limited in relation
to PEP 38716.
"PEP 38716 Joint Venture" means the unincorporated joint venture
established in relation to PEP 38716 by the PEP 38716 Operating
Agreement.
"Purpose" has the meaning given to that term in clause 5.3.
"Related Body Corporate" has the meaning given to the term in
the Corporations Law of Australia.
"Representatives" has the meaning given to that term in clause
5.3.
"working interest" means the total undivided percentage working
interest from time to time of a party as tenant-in-common in PEP
38716 and the PEP 38716 Joint Venture.
1.2 Interpretation
Unless expressed to the contrary:
(a) words importing:
(i) the singular include the plural and vice versa;
(ii) any gender include the other genders;
(b) if a word or phrase is defined cognate words and phrases
have corresponding definitions:
(c) a reference to:
(i) a person includes a firm, unincorporated association,
corporation and a government or statutory body or
authority;
(ii) a person includes its legal personal representatives,
successors and assigns;
(iii) a statute, ordinance, code or other law includes
regulations and other statutory instruments under it and
consolidations, amendments, re-enactments or replacements
of any of them;
(iv) a right includes a benefit, a remedy, a discretion, an
authority or power;
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(v) an obligation includes a warranty or representation
and reference, to a failure to observe or perform an
obligation includes a breach of warranty or
representation:
(d) provisions or terms of this Agreement or another agreement,
understanding or arrangement includes a reference to both
express and implied provisions and terms;
(e) "$" or "dollars" is a reference to the lawful currency of
New Zealand;
(f) this or any other agreement includes the document as varied
or replaced and notwithstanding any change in the identity of
the parties:
(g) writing includes any mode of representing or reproducing
words in tangible and permanently visible form, and includes
facsimile transmission;
(h) a reference to anything (including, without limitation, any
amount)is a reference to the whole or any part of it and a
reference to a group of things or persons is a reference to
any one or more of them;
(i) an agreement, representation or warranty on the part of or
in favor of two or more persons binds, or is for the
benefit of them jointly and severally.
1.3 Headings
The clause headings used herein are for convenience only and
shall not be used in construing or interpreting any provision of this
Agreement.
2 WARRANTIES
2.1 Xxxxxxxxx warrants that:
(a) it is the holder of 52.8% working interest in PEP
38716;
(b) it has maintained PEP 38716 in good standing;
(c) PEP 38716 is unencumbered as at the date of this
Agreement, and Xxxxxxxxx is not aware of any claims,
demands, litigation or proceedings of any nature whatsoever
pending or threatened in respect of PEP 38716;
(d) Xxxxxxxxx has the power to transfer to AWE a 25%
working interest in PEP 38716 subject to compliance with
relevant legislative requirements.
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3 OPTION
3.1 In consideration of the payment by AWE to Xxxxxxxxx of the
sum of one dollar ($1.00), the payment of which is hereby
acknowledged by the parties. Xxxxxxxxx hereby grants to AWE an
option to acquire from Xxxxxxxxx a 25% working interest in PEP 38716
and the PEP 38716 Joint Venture upon the terms and conditions set out
in the Agreement.
3.2 The Option may be exercised at any time on or before:
(a) 30 June 1997; or
(b) 31 July 1997 if, prior to 30 June 1997:
(i) AWE requests in writing an extension of the
period within which to exercise the Option from 30
June 1997 to 31 July 1997; and
(ii) Xxxxxxxxx notifies AWE in writing that the period
within which to exercise the Option is extended to 31
July 1997; and
(iii) AWE pays to Xxxxxxxxx, within 48 hours of
receipt by AWE of a notice under clause 3.2(b)(ii), a
non-refundable payment of $250,000 in immediately
available funds.
3.3 The Option os exercisable by AWE forwarding to Xxxxxxxxx:
(a) written notice of exercise of the Option; and
(b) evidence to the satisfaction of Xxxxxxxxx that AWE is
financially competent to fulfil its obligations under this
Agreement and the PEP 38716 Operating Agreement, and for
this purpose evidence of execution of a firm underwriting
agreement by an underwriter both satisfactory to Xxxxxxxxx,
underwriting the raising by AWE of sufficient capital to
enable it to fulfil its obligations under this agreement,
will be sufficient evidence of such financial competence.
3.4 If AWE does not give written notice of exercise of the
Option within the period referred to in clause 3.2, or having given
such notice, Xxxxxxxxx within 30 days of such notice gives notice
that it is not satisfied that AWE is financially in a position to
fulfil its obligations under this Agreement and the PEP 38716
Operating Agreement, this Agreement, with the exception of the
confidentiality provisions contained in clause 5, shall terminate.
4 DISCLOSURE OF INFORMATION TO AWE
4.1 As soon as reasonably practicable after execution of this
Agreement, Xxxxxxxxx shall make available to AWE all exploration and
mining information in Xxxxxxxxx'x possession or control which
relates to PEP 38716 or PEP 38716 Joint Venture and which;
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(a) is not already in the public domain; and
(b) in Xxxxxxxxx'x reasonable opinion, would be required by AWE
in order for it to make an informed decision as to whether or
not to exercise the Option, including, without limitation,
documents, maps, reports, records, studies and other written
data, including data which is stored on magnetic tapes, discs or
other media, relating to or derived a s a result of geological,
geochemical, geophysical or drilling or sampling activities
conducted on or in respect of PEP 38716 ("Information").
4.2 Any information which comes into Xxxxxxxxx'x possession or
control after execution of this Agreement shall be made available to
AWE as soon as reasonably practicable.
5 CONFIDENTIALITY OF INFORMATION
5.1 AWE acknowledges that the Information is confidential to
Xxxxxxxxx and is and remains at all times the valuable and exclusive
property of Xxxxxxxxx.
5.2 Subject to Clause 5.3:
(a) AWE shall not disclose in any way or form the
Information or the terms of this Agreement to any other
person without the prior written consent of Xxxxxxxxx; and
(b) Xxxxxxxxx may grant or withhold its consent in its
absolute and unfettered discretion, and may impose any
conditions on that consent.
5.3 Notwithstanding Clause 5.2, AWE may, without obtaining the
prior written consent of Xxxxxxxxx, disclose the Information or any
part thereof to those of AWE's officers, employees and independent
advisors ("Representatives") who require access to such Information
for the purpose of enabling AWE to make an informed decision as to
whether or not to exercise the Option ("Purpose"), provided that AWE
must ensure that each Representative to whom disclosure of
Information is made has first executed a confidentiality undertaking
in a form satisfactory to Xxxxxxxxx. AWE is responsible for any use
or disclosure of the Information by its Representatives which is
contrary to the provisions of this clause.
5.4 The obligations of confidentiality under this clause shall
not be taken to have been breached where Information is required to
be disclosed to comply with any applicable law, order, regulation or
ruling or the listing requirements of the Australian Stock Exchange
Limited. If AWE must make a disclosure of this nature, it must
disclose only the minimum required to comply and must notify
Xxxxxxxxx in writing of the disclosure.
5.5 Unless otherwise agreed in writing, AWE must use the
Information only for the Purpose.
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5.6 AWE shall not copy or reduce into tangible, visible or
recorded form or allow to be copied or reduced into tangible, visible
or recorded form, any Information furnished to it by or on behalf of
Xxxxxxxxx without Xxxxxxxxx'x prior written approval, which approval
may be granted or refused, or granted subject to conditions, in
Xxxxxxxxx'x absolute discretion.
5.7 AWE shall use its best endeavors to secure and protect the
Information from unauthorized disclosure, access or use.
5.8 As far as Xxxxxxxxx is aware, the Information is accurate.
However, AWE acknowledges that Xxxxxxxxx does not make any other
representation or warranty as to the accuracy o completeness of any
Information which is provided. Xxxxxxxxx shall not be liable to AWE
in relation to the use of such Information by AWE or any other party.
5.9 Immediately upon termination of this Agreement, whether
under clause 3.4 or otherwise, AWE shall return to Xxxxxxxxx all
copies of Information furnished to AWE by or on behalf of Xxxxxxxxx
which exists in tangible, visible or recorded form and remains in
AWE's possession.
5.10 The obligations under this clause shall remain in force
indefinitely and shall not be affected by the return of all copies of
the Information to Xxxxxxxxx or by the termination of this Agreement.
6 EARNING OF WORKING INTEREST
6.1 Upon validly exercising the Option, AWE shall become
obliged to pay the first $2.0 million of Xxxxxxxxx'x share (based on
Xxxxxxxxx'x 52.8% working interest in PEP 38716 and the PEP 38716
Joint Venture) of the costs of Operations incurred after 30 June
1997. AWE shall pay Xxxxxxxxx'x share of such costs at such times
and in such manner as is required under the terms of the PEP 38716
Operating Agreement. The obligation contained in this clause 6.1
shall continue until AWE has paid an aggregate of $2.0 million of
Xxxxxxxxx'x share of the costs of Operations incurred after 30 June
1997, irrespective of the nature of such Operations.
6.2 Upon validly exercising the Option, AWE shall be deemed to
have acquired from Xxxxxxxxx a 25% working interest in PEP 38716 and
the PEP 38716 Joint Venture, and as soon as reasonably practicable
thereafter:
(a) Xxxxxxxxx and AWE shall take all steps as may be reasonable
necessary in order to have AWE recorded as the holder of a 25%
working interest in PEP 38716; and
(b) AWE shall enter into an agreement with the parties who are
then bound by the PEP 38716 Operating Agreement ("Existing
Parties") under which AWE agrees to become a party to the Pep
38716 Operating Agreement with such modifications and amendments
to the Pep 38716 Operating Agreement as the Existing Parties may
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reasonably require. Xxxxxxxxx shall use all reasonable
endeavors to procure the entry into such agreement by the
Existing Parties.
6.3 Upon AWE acquiring from Xxxxxxxxx a 25% working interest in
PEP 38716 and the PEP 38716 Joint Venture pursuant to Clause 6.2, the
following parties shall hold the following working interest:
Xxxxxxxxx - 27.8%
Indo - 38.4%
Euro - 8.8%
AWE - 25.0%
6.4 If AWE fails to comply with its obligation under Clause 6.1
to pay the first $2.0 million of Xxxxxxxxx'x share of the costs of
Operations incurred after 30 June 1997 or any part thereof, this
Agreement shall thereupon terminate and AWE shall immediately cease
to have a working interest in PEP 38716 and the PEP 38716 Joint
Venture. The 25% working interest previously held by AWE shall
immediately vest in Xxxxxxxxx and AWE shall do all acts and things
and sign all documents which are reasonably necessary in order to
have Xxxxxxxxx recorded as the holder of that working interest.
6.5 Where AWE has paid to Xxxxxxxxx a non-refundable payment of
$250,000 as contemplated in clause 3.2(b)(iii) above, clauses 6.1,
6.2 and 6.4 shall be construed as if all references to $2.0 million
were in fact references to $1.75 million.
7 MAINTENANCE OF PEP 38716
7.1 On and from the date of execution of this Agreement and
until such time as either AWE becomes a party to the PEP 38716
Operating Agreement or this Agreement is terminated (whether pursuant
to clause 3.4 or otherwise). Xxxxxxxxx shall exercise all of its
rights in respect of the PEP 38716 Joint Venture with a view to
ensuring that PEP 38716 is kept in full force and effect at all times
during its term and shall not cause, suffer or permit to be done or
omit to do any act, matter or thing whereby PEP 38716 may in any way
be lost or rendered liable to forfeiture or cancellation.
8 APPROVALS
8.1 This Agreement and the transfer to be effected pursuant to
Clause 6.2 above, are subject to and conditional upon the obtaining
of any relevant consents and approvals under the Crown Minerals Xxx
0000 (NZ) or any other legislation which are necessary to give effect
to this Agreement. Xxxxxxxxx and AWE agree to do all acts and things
within their respective powers which are reasonably necessary to
apply for and obtain all such consents and approvals.
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9 RELINQUISHMENT OF BLOCKS
9.1 Where any graticular blocks contained within PEP 38716 must
be surrendered from the area of PEP 38716 pursuant to the Crown
Mineral Act 1991 (NZ) or the conditions upon which PEP 38716 was
issued, Xxxxxxxxx shall in its sole discretion determine which
graticular blocks shall be surrendered so as to satisfy such
requirement. In making such determination Xxxxxxxxx must act bona
fide and consistence with good oil-field practice. This clause 9.1
shall terminate once AWE has satisfied in full its obligations under
clause 6.1.
10 ASSIGNMENT
10.1 Subject to Clause 10.2, AWE shall not assign, transfer,
declare a trust of, mortgage, charge or otherwise dispose of or
encumber its rights or interests under this Agreement.
10.2 AWE may assign it rights and obligations under this
Agreement to a Related Body corporate provided that:
(a) AWE provides evidence to the satisfaction of Xxxxxxxxx of
the proposed assignee's financial competence;
(b) the parties to the PEP 38716 Operating Agreement other than
Xxxxxxxxx consent to such assignment in accordance with the
provisions of the PEP 38716 Operating Agreement; and,
(c) the proposed assignee enters into an agreement with
Xxxxxxxxx in a form reasonably satisfactory to Xxxxxxxxx
pursuant to which the assignee agrees to be bound by this
Agreement as if it had originally been a party to this Agreement
in the place of AWE.
11 DRILLING OF WELL
11.1 Xxxxxxxxx undertakes:
(a) to propose to the parties under the PEP 38716 Operation
Agreement the drilling of a well as part of the Operations of
PEP 38716 as soon as reasonably practicable after Xxxxxxxxx is
in a position to select the optimum location of such well.
(b) to exercise its rights under the PEP 38716 Operating
Agreement to have the drilling of such well form part of an
approved program and budget, and
(c) subject to a program and budget for such well being approved
by all parties to the PEP 38716 Operating Agreement, to commence
the drilling of such well prior to 31 December 1997 provided
that a rig is available to Xxxxxxxxx for this purpose and all
necessary government approvals have been received.
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12 NOTICE
12.1 A notice, demand, waiver, approval, consent, communication
or other document in connection with this Agreement ("Notice"):
(a) may be given to an authorized officer of the relevant party;
and
(b) must be given in writing; and
(c) must be left at the address of the addressee, or sent by
prepaid ordinary post (airmail if outside Australia) to the
address of the addressee or by facsimile to the facsimile number
of the addressee which is specified below, or if the addressee
notifies in writing another address or facsimile number, then to
that address or facsimile number.
12.2 Unless a later time is specified in it, a Notice takes
effect from the time it is actually received or taken to be received.
12.3 A Notice sent by post or facsimile is taken to be received:
(a) in the case of a letter, on the 3rd (7th, if outside
Australia) day after posting; and
(b) in the case of a facsimile, on the date of production of a
transmission report by the machine from which the facsimile was sent
which indicated that the facsimile was sent in its entirety to the
facsimile number of the recipient notified for the purpose of this
clause if produced before 5pm on a Business Day, otherwise on the
next Business Day.
12.4 The address for service of a Notice shall be as follows:
Xxxxxxxxx:
(a) Address: Xxxxx 00, 000 Xxxx Xxxxxx, Xxxxxxxx,
Xxx, 0000 Xxxxxxxxx
(x) Postal Address: XXX Xxx 000, Xxxxxxxx, Xxx, 0000
(c) Facsimile Number: (61) 00-0000 0000
AWE:
(a) Address: Attention: Company Secretary, Xxxxx 0,
XXX Xxxxx, Xxxxx Xxx, Xxxxxx Xxxxxx,
Xxxxxxx, XXX, Xxxxxxxxx
(b) Postal Address: As above
(c) Facsimile Number: 00-0-0000-0000
with copy to:
(a) Address: X X Xxxxxxxx, 00 Xxxxxxxx Xxxxx,
Xxxxxxxxxxx, XXX 0000, Xxxxxxxxx
(b) Postal Address: As above
(c) Facsimile Number: 00-0-0000-0000
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13 GOVERNING LAW
13.1 This Agreement shall be governed by and be construed in
accordance with the laws of New Zealand and the parties agree to and
hereby submit themselves to the jurisdiction of the Courts of New
Zealand and any Courts of Appeal from them.
14 FURTHER ASSURANCES
14.1 The parties shall execute and deliver such documents and
shall take such actions and do all such things as shall be necessary
for the complete performance of all their respective obligations
under this Agreement.
15 RELATIONS BETWEEN THE PARTIES
15.1 Nothing in this Agreement shall be considered or
interpreted as constituting the relationship of the parties as a
partnership or to lead to the conclusion that the parties are jointly
in receipt of income or, except as otherwise herein expressly
provided, as constituting any party, the agent or legal
representative of another or as creating any fiduciary relationship
between them. No party shall have any authority to act for or assume
any obligation or liability on behalf of another party except as
expressly provided in this Agreement.
16 INVALIDITY
16.1 If any term, clause or provision of this Agreement shall be
or be deemed or judged to be invalid for any reason, such invalidity
shall not affect the validity or operation of any other term, clause
or provision of this Agreement except to the extend necessary to give
effect to such invalidity.
17 ENTIRE AGREEMENT
17.1 This Agreement constitutes the entire agreement between the
parties with respect to the subject matter thereof and contains all
the representations, undertakings, warranties, covenants, agreements
and deeds of the parties.
17.2 This Agreement supersedes all prior negotiations,
contracts, arrangements, understandings, agreements and deeds with
respect to the subject matter thereof.
17.3 There are not representations, undertakings, warranties,
covenants, agreements or deeds between the parties, express or
implied, except as contained in this Agreement or any document
contemplated by this Agreement.
18 WAIVER AND VARIATION
18.1 A provision or a right created by this Agreement may not be
waived or varied except in writing signed by the party or parties to
be bound.
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19 STAMP DUTY AND COST
19.1 All stamp duty payable on this Agreement and any instrument
executed pursuant hereto shall be borne by AWE which shall indemnify
and keep indemnified Xxxxxxxxx against all and any claims and all
liability for stamp duty. AWE shall also be liable for any
registration fees or other fees payable in respect of obtaining any
and all approvals and/or registration under the Crown Mineral Act
1991 (NZ) in respect of this Agreement. Otherwise each party shall
pay its own costs in respect of this Agreement.
20 COMPLIANCE WITH STOCK EXCHANGE REQUIREMENTS
20.1 To ensure compliance by AWE with the listing requirements
of the Australian Stock Exchange Limited, Xxxxxxxxx, in its capacity
as the Operator under the PEP 38716 Operating Agreement, shall
disclose immediately to AWE any significant discovery of hydrocarbons
or mineralization within PEP 38716 and all such other information as
AWE may require in order to comply with such listing requirements.
AWE shall have the right to make all or part of such information
available to the Australian Stock Exchange Limited.
21 FORCE MAJEURE
21.1 If any party is rendered unable wholly or in party by Force
Majeure to carry out its obligations under this Agreement (other than
any obligation to make money payments) that party shall give to the
other party prompt written notice of the Force Majeure with
reasonably full particulars concerning it. The obligations of the
party giving the notice so far as they are affected by the Force
Majeure shall be suspended during but not longer than the continuance
of the Force Majeure. The affected party shall use all reasonable
efforts to overcome the Force Majeure as quickly as possible.
21.2 The provisions of Clause 21.1 shall not require the
settlement of strikes, boycotts, lockouts or other labor difficulty
by the party involved contrary to its wishes and such matters shall
be handled entirely within the discretion of the party concerned.
21.3 If this Clause 21 the term "Force Majeure" means any event
or circumstance beyond the reasonable control of a party which
renders that party unable in whole or in part to carry out its
obligations under this Agreement including without limitation,
strike, lockout, fire, flood, tornado, hurricane, lightning,
explosion, collision, radiation, act or God or the public enemy, war,
blockade, government regulation, order or decree, uncontrollable
delay in transportation, inability to obtain adequate labor,
contractors or necessary materials or equipment in the open market,
inadequate facilities for the transportation of necessary materials
or equipment, or any other cause, whether similar or dissimilar to
the causes herein specifically enumerated, beyond the reasonable
control of such party and which such party is unable to overcome by
the exercise of reasonably diligence and at a reasonable cost,
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provided however, the lack of finances of inability to borrow the
same shall in no event be deemed a cause beyond the reasonable
control of a party.
THE AGREEMENT END HERE.
