PETROLEUM, NATURAL GAS
AND GENERAL RIGHTS CONVEYANCE
THIS AGREEMENT made as of the 14th day of June, 2006.
BETWEEN:
STONE PETROLEUMS LTD., SUPERNOVA RESOURCES LTD.,
349385 ALBERTA LTD., and TORLAND LTD., bodies
corporate of the City of Calgary, in the Province of
Alberta,
(hereinafter collectively referred to as the "Vendor")
OF THE FIRST PART
- and -
GIANT OIL & GAS INC., a body corporate, of the City
of Calgary, in the Province of Alberta,
(hereinafter referred to as the "Purchaser")
OF THE SECOND PART
WHEREAS the Vendor has agreed to sell and assign to the
Purchaser and the Purchaser has agreed to purchase and acquire the entire
interest of the Vendor in the Said Leases other than Vendor's royalty interest;
NOW THEREFORE in consideration of the premises hereto, and the
covenants and agreements hereinafter set forth and contained, the parties hereto
covenant and agree as follows:
1. DEFINITIONS
In this Agreement, including the preamble hereto, this clause
and the Schedule hereto, unless the context otherwise requires:
(a) "Closing Date" means June 20th, 2006;
(b) "Effective Time" means June 14th, 2006;
(c) "Petroleum Substances" means petroleum, natural gas and
related hydrocarbons and all other substances whether liquid
or solid and whether hydrocarbons or not, the rights to which
are granted by the Said Leases;
(d) "Said Lands" means Township Fifty-One (51), Range
Twenty-One (21), West of the Fourth (4th) Meridian, Section
Twenty-Six (26) Northeast Quarter (NE/4);
(e) "Said Leases" means Alberta Crown Petroleum and Natural
Gas Lease No. 0405030802, as further set forth and described
in Schedule "A" hereto by virtue of which the holder thereof
is entitled to drill for, win, take or remove the Petroleum
Substances underlying all or any part of the Said Lands;
(f) "Sold Assets" means an undivided one hundred percent
(100%) interest in the Said Leases, subject to the
encumbrances set forth and described in Schedule "A" hereto;
2. CONVEYANCE
(a) In consideration of the purchase price of Seven Thousand
Five Hundred ($7,500.00) Dollars of lawful money of Canada
paid to the Vendor on the Closing Date and subject to the
reservation of a gross overriding royalty in favour of the
Vendor, Vendor hereby sells, assigns, transfers, conveys and
sets over to the Purchaser, the entire right, title and
interest of the Vendor in and to the Sold Assets, TO HAVE AND
TO HOLD the same, together with all benefit and advantage to
be derived therefrom absolutely, subject only to the
respective terms and conditions of the Said Leases.
(b) The parties hereto agree that the purchase price of Seven
Thousand Five Hundred ($7,500.00) Dollars shall be allocated
and attributed as follows:
Stone $ 4,650.00
Supernova $ 1,350.00
349385 $ 750.00
Torland $ 750.00
TOTAL $7,500.00
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(c) The parties acknowledge that the cash portion of the
purchase price shall be paid to Stone on the Closing Date on
behalf of the Vendor.
3. ADJUSTMENTS
All rental payments accruing, payable or paid in respect of
the Sold Assets hereby assigned shall be apportioned between the Vendor and the
Purchaser as of the Effective Time and settled by payment to or by the Vendor
and the Purchaser, as the case may be, on the Closing Date.
4. COVENANTS, REPRESENTATIONS AND WARRANTIES
Each of the parties making up the Vendor covenants with, and
represents and warrants to the Purchaser to the extent of its interest only
that:
(a) It now has good right, full power and absolute authority
to bargain, sell, transfer, assign and convey its entire
interest in and to the Sold Assets for the purposes and in the
manner herein provided for according to the true intent and
meaning of this agreement. It does not warrant its title to
the Sold Assets but it does hereby warrant to the Purchaser
that it has done no act or thing whereby any of its interest
in and to the Sold Assets may be cancelled or terminated, nor
has it encumbered or alienated the same or any interest
therein and the Sold Assets are now free and clear of all
liens, encumbrances, adverse claims, demands and royalties or
other interests created by, through or under it, save as set
forth in Schedule "A" hereto;
(b) Subject to the rents, covenants, conditions and
stipulations in the Said Leases reserved and contained and on
the said Lessee's or holder's part thereunder to be paid,
performed and observed, the Purchaser may enter into and upon
the Said Lands, and hold and enjoy the Sold Assets for the
residue of the respective terms and all renewals or extensions
thereof as to the interests hereunder assigned for its own use
and benefit without any lawful interruption of or by it or any
other person whomsoever claiming or to claim by, through or
under it and it binds itself to warrant and forever defend, at
its sole cost and expense, all and singular the Sold Assets
against all persons whomsoever claiming or to claim the same
or any part thereof or any interest therein by, through or
under it;
(c) There are no approved authorizations for expenditures
pursuant to which expenditures are to be made, nor any other
approved financial commitments which are now outstanding or
due, in respect of the Sold Assets or operations in respect
thereof.
(d) The Vendor's interest in and to the Said Leases is not
subject to reduction by virtue of the conversion or other
alteration of the interest of any third party under existing
agreements pertaining to the Sold Assets except as is
specifically noted in Schedule "A" hereto.
(e) The Vendor has performed and observed all of its duties,
liabilities, obligations and covenants of any nature or kind
required to be satisfied, performed and observed by it under
the terms of any of the Said Leases and the Vendor is not in
default under or in breach of any of the terms, covenants and
conditions thereof.
(f) There are no charges, claims, proceedings or actions in
existence, and to the best of its knowledge, information and
belief of the Vendor there are no charges, claims proceedings
or actions contemplated or threatened, against or with respect
to the Sold Assets or the interest of the Vendor therein.
(g) The Vendor has incurred no obligation or liability,
contingent or otherwise, for brokers' or finder's fees in
respect of this transaction for which the Purchaser shall have
any obligation or liability.
(h) The Sold Assets are legally and validly assignable by the
Vendor to the Purchaser and at Closing Date will not be
subject to any preemptive or preferential right of purchase by
any third party.
(i) The Vendor is not obligated by virtue of prepayment
arrangement under any contract for the sale of Petroleum
Substances and containing a "take or pay" or similar
provision, or a production payment or of any other
arrangement, to deliver Petroleum Substances produced from the
Said Lands at some future time without then or thereafter
receiving full payment therefor, except to the extent that
specific notice thereof has been given by the Vendor to the
Purchaser prior to the acceptance hereof by the Vendor.
The covenants, representations and warranties contained herein
shall not merge with the transfer of the Sold Assets but shall survive the
purchase and sale herein provided for and shall continue and remain in full
force and effect for the benefit of the Purchaser for a period of one (1) year
from the Effective Time.
5. INDEMNITY
(a) Subject to clause 5(c), the Vendor shall continue to
remain liable and shall indemnify the Purchaser from and
against any liability, loss, costs, claims or damages arising
out of or pertaining to the failure of Vendor's covenants,
representations and warranties set out in Clause 4 herein and
accruing prior to the Effective Time. The parties agree that
the extent of Vendors liability and indemnity of whatsoever
nature, shall not exceed the purchase price referred to in
clause 2 (b).
(b) The Purchaser shall be liable and shall indemnify the
Vendor for all liability, loss, costs, claims, or damages with
respect to the Said Leases and Said Lands incurred and arising
subsequent to the Effective Time.
(c) Purchaser agrees to assume and be liable for any costs,
claims, cause or causes of action with respect to any
environmental matters, well abandonments and reclamation costs
attributable to the Said Lands, whether the same arose prior
or subsequent to the Effective Time.
6. FURTHER ASSURANCES
The Vendor will, from time to time and at all times hereafter,
at the request of the Purchaser, but without further consideration, do such
further acts and deliver all such further assurances, deeds and documents as
shall be reasonably required in order to fully perform and carry out the terms
of this agreement.
7. OTHER AGREEMENTS
The provisions contained in all specific conveyances
collateral hereto of the various interests being conveyed by the Vendor to the
Purchaser shall at all times be read subject to the provisions of this agreement
and, in the event of conflict, the provisions of this agreement shall prevail.
8. SUBROGATION
The assignment and conveyance effected by this agreement is
made with full right of substitution and subrogation of Purchaser in and to all
covenants and warranties by others heretofore given or made in respect of the
Sold Assets or any part hereof.
9. GOVERNING LAW
This agreement shall, in all respects, be subject to,
interpreted, construed and enforced in accordance with and under the laws of the
Province of Alberta, in the English language, and shall, in every regard, be
treated as a contract made in the Province of Alberta.
10. ENUREMENT
This agreement shall be binding upon and shall enure to the
benefit of each of the parties hereto and their respective administrators,
trustees, receivers, successors and assigns.
11. TIME OF ESSENCE
Time is of the essence in this agreement.
12. NOTICES
The addresses for service of the parties hereto shall be as
follows:
Vendor: STONE PETROLEUMS LTD.
#0000, 000 - 0xx Xxxxxx XX
Xxxxxxx, Xxxxxxx X0X OZ3
SUPERNOVA RESOURCES LTD.
1400, 000 - 0xx Xxxxxx XX
Xxxxxxx, Xxxxxxx X0X 0X0
000000 XXXXXXX LTD.
000 - 000xx Xxxxxx XX
Xxxxxxx, Xxxxxxx X0X 0X0
TORLAND LTD.
x/x #0000, 000 - 0xx Xxxxxx XX
Xxxxxxx, Xxxxxxx X0X 0X0
Purchaser: GIANT OIL & GAS INC.
0000 - 000 Xxxxxxx Xxxxx XX
Xxxxxxx, Xxxxxxx X0X 0X0
Any of the parties may from time to time, change its address
for service, by giving written notice to the other party hereto. Any notice may
be served by personal service, courier, telecopier or by a letter by prepaid
post in a properly addressed envelope addressed to the other party hereto. Any
notice served by personal service, courier or telecopier shall be deemed to be
received on the same day. Any notice mailed as aforesaid shall be deemed to be
received by the addressee on the fifth (5th) day after mailing thereof.
13. SCHEDULE
The Schedule "A" attached hereto is incorporated herein by
reference as fully as though contained in the body hereof. Wherever any term or
condition, express or implied of such Schedule "A" conflicts or is at variance
with any term or condition of this agreement, such term or condition of this
agreement shall prevail.
IN WITNESS WHEREOF the parties hereto have caused this
agreement to be executed under corporate seal by their respective officers duly
authorized in that behalf effective as of the day and year first above written.
GIANT OIL & GAS INC. STONE PETROLEUMS LTD.
Per: Per:
SUPERNOVA RESOURCES LTD. TORLAND LTD.
Per: Per:
349385 ALBERTA LTD.
Per:
Signature page attached to and forming part of Petroleum, Natural Gas and
General Rights Conveyance between Giant Oil & Gas Inc. and Stone Petroleums
Ltd., Supernova Resources Ltd, 349385 Alberta Ltd. and Torland Ltd., dated June
14th, 2006.
SCHEDULE "A" ATTACHED TO AND FORMING PART OF THE PETROLEUM, NATURAL GAS
AND GENERAL RIGHTS CONVEYANCE BETWEEN STONE PETROLEUMS LTD., SUPERNOVA
RESOURCES LTD., 349385 ALBERTA LTD., AND TORLAND LTD., AS VENDOR AND
GIANT OIL & GAS INC., AS PURCHASER DATED JUNE 14TH, 2006.
existing agreements: nil
Said Lands: Township Fifty-One (51), Range Twenty-One (21),
West of the Fourth (4th) Meridian, Section Twenty-six
(26) Northeast Quarter (NE/4).
Said Leases: Alberta Crown Petroleum and Natural Gas Lease No.
0405030802 with a term commencement date of March
24th, 2005, issued to Stone Petroleums Ltd., as to
80%, Supernova Resources Ltd., as to 20%.
encumbrances: 1. Alberta Crown Lessor's Royalty.
2. Five (5%) percent gross
overriding royalty reserved to Stone
Petroleums Ltd., Supernova Resources Ltd.,
349385 Alberta Ltd., and Torland Ltd., to be
reserved concurrent with the conveyance.
