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EXHIBIT 10.72
STOCK OPTION AGREEMENT
THIS AGREEMENT made as of June 25, 1998 BETWEEN:
TRANS NEW ZEALAND OIL COMPANY, a body corporate subsisting
under the laws of Nevada, with a place of business at ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇ (the "Company")
OF THE FIRST PART
AND:
SOURCE ROCK HOLDINGS LTD., a body corporate subsisting under
the laws of New Zealand, with a place of business at ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇(▇▇▇ "Grantee")
OF THE SECOND PART
WHEREAS:
A. The Company's common shares are traded through the facilities
of the OTC Bulletin Board, United States;
B. The Company is not a reporting company under the Securities
Exchange Act of 1934;
C. The Grantee is an affiliate of the Company as interpreted
under the Securities Act of 1933; and
D. The Company wishes to grant to the Grantee an option to
purchase common shares of the Company;
WITNESSES that the parties mutually covenant and agree as
follows:
ARTICLE 1 DEFINITIONS AND INTERPRETATION
1.01 In this Agreement, including the recitals and schedules
to this Agreement, unless the context otherwise requires:
Company means Trans New Zealand Oil Company.
Exchange means the OTC Bulletin Board.
Exchange Act means the Securities Exchange Act of 1934 (U.S.), as
amended from time to time.
Exercise Price means US$0.50 per Optioned Share.
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Expiry Date means the earlier of 5:00 p.m., Nevada time, on July
31, 2000 or thirty business days after the Company or any
subsidiary of the Company ceases to have a right to earn an
interest in, or to hold an interest in, petroleum exploration
permit ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇.
Grantee means Source Rock Holding Ltd.
Option means the right granted by this Agreement to acquire the
Optioned Shares.
Optioned Shares means 1,000,000 Shares.
Regulation S means Regulation S promulgated under the Securities
Act.
Securities Act means the Securities Act of 1933 (U.S.), as amended
from time to time.
Share or Shares means a common share or common shares of the
Company as constituted on June 25, 1998.
1.02 The captions, section numbers and article numbers
appearing in this Agreement are inserted for convenience of
reference only and will in no way define, limit, constrict or
describe the scope or intent of this Agreement nor in any way
affect this Agreement.
1.03 This Agreement and all matters arising under this
Agreement will be governed by, construed and enforced in accordance
with the laws of Nevada and any proceeding commenced or maintained
in connection with this Agreement will be so commenced and
maintained in the court of appropriate jurisdiction in the City of
Reno, Nevada to which jurisdiction the parties irrevocably attorn.
1.04 In this Agreement, wherever the context requires, words
importing the singular number will include the plural and vice
versa, words importing the masculine gender will include the
feminine and neuter genders and words importing persons will
include firms and corporations and vice versa.
1.05 Unless otherwise stated, a reference in this Agreement to
a numbered or lettered article, section, paragraph or subparagraph
refers to the article, section, paragraph or subparagraph bearing
that number or letter in this Agreement.
1.06 If any covenant or other provision of this Agreement is
invalid, illegal or incapable of being enforced by reason of any
rule of law or public policy such covenant or other provision will
be severed; all other terms and conditions of this Agreement will,
nevertheless, remain in full force and effect and no covenant or
provision will be deemed dependent upon any other covenant or
provision unless so expressed herein.
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ARTICLE 2 GRANT OF OPTION
2.01 The Company grants the Grantee an irrevocable, non-
transferable and non-assignable option (the "Option") to purchase
Optioned Shares for the Exercise Price on the terms and other
conditions of this Agreement.
2.02 It is a condition that:
(a) the Grantee has executed and delivered an agreement
granting to the Company the right to earn a 15% interest, and
subsequently a 25% interest, in and to petroleum exploration
permit ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇; and
(b) the Grantee has by separate agreement subscribed and paid
for 1,000,000 Shares at US$0.25 per share.
ARTICLE 3 EXERCISE OF OPTION
3.01 The Grantee may exercise the Option from time to time
with respect to all or part of the Optioned Shares or the Optioned
Shares remaining unpurchased.
3.02 The Option will be exercised by the Grantee or its legal
representative by delivering to the principal business office of
the Company in Vancouver, British Columbia or such other place as
is designated by the Company from time to time:
(a) a notice stating the number of Optioned Shares being
purchased; and
(b) a certified cheque or bank draft in favour of the Company
drawn in United States dollars for the product of the number
of Optioned Shares being purchased and the Exercise Price.
3.03 On exercise of Option, the Company will forthwith cause
its transfer agent to deliver to any of the Grantee, its legal
representative or such other person as the Grantee may otherwise
direct in the notice of exercise of the Option a certificate or
certificates in the name of any of the Grantee, its legal
representative or such other person as the Grantee may otherwise
direct in the notice of exercise of the Option representing such
number of Optioned Shares for which payment has been made.
3.04 Nothing in this Agreement obligates or will obligate the
Grantee to purchase or pay for any Optioned Shares except those
Optioned Shares in respect of which the Grantee has exercised the
Option in the manner prescribed.
3.05 The certificate or certificates representing the Optioned
Shares issued from time to time will be endorsed with a legend as
follows:
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THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), THE
NEVADA STATE SECURITIES ACT OR ANY OTHER APPLICABLE SECURITES
ACT AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT (1)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT
AND SUCH STATE SECURITIES LAWS, OR (2) AT THE OPTION OF THE
COMPANY, UPON DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL
FOR THE TRANSFEROR, REASONABLY SATISFACTORY TO COUNSEL FOR THE
COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.
3.06 The Grantee acknowledges that the Option has been
granted, and the Optioned Shares will from time to time be issued
pursuant to the exemption from the registration requirements
contained in Regulation S of the Securities Act and that:
(a) the Option and the Optioned Shares have not been
registered under the Securities Act or any state securities
laws, and are being offered in reliance on certain exemptions
contained in the Securities Act and such state securities
laws;
(b) the Optioned Shares will not be sold or transferred except
pursuant to:
(i) an effective registration statement under the
Securities Act and any applicable state securities laws;
(ii) Rule 144 promulgated under the Securities Act; or
(iii) an opinion of counsel satisfactory to the Company
to the effect that such registration is not required; and
(c) no federal or state agency has made any finding or
determination as to the fairness of the investment, or any
recommendation or endorsement of the Optioned Shares.
ARTICLE 4 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE GRANTEE
4.01 The Grantee represents and warrants to, and covenants
with, the Company that:
(a) the Grantee is a resident of New Zealand located outside
the United States and is aware that the Option is being
granted, and the Optioned Shares will from time to being
issued pursuant to the exemption from registration contained
in Regulation S of the Securities Act;
(b) the Grantee is acquiring the Option and any Optioned
Shares acquired on exercise of the Option for investment
purposes as principal for its own account and not for the
benefit of any other person;
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(c) the Grantee has the legal capacity and competence to
execute this Agreement and that all necessary approvals by
directors and shareholders of the Grantee have been, or will
in the ordinary course be, given to authorize the execution
and delivery of this Agreement by the Grantee;
(d) the Grantee is not acquiring the Option as a result of
having any material information about the Company's affairs
which has not been generally disclosed as at the date of the
announcement of the purchase;
(e) the Grantee is an affiliate of the Company as interpreted
under the Securities Act;
(f) the Grantee understands that the Optioned Shares have not
been registered under the Securities Act or the securities
laws of any states, and that Grantee has no right to require
such registration;
(g) the Grantee has such knowledge and experience in financial
and business matters that it is capable of seeking out and
evaluating the information relevant to evaluating the Company,
the proposed activities thereof, and the merits and risks of
the prospective investment, and to make an informed investment
decision in connection therewith;
(h) the Grantee realizes that, because the Optioned Shares are
restricted and cannot be readily sold, that the Grantee may
not be able to sell or dispose of any of the Optioned Shares
and, therefore, that Grantee must not purchase the Optioned
Shares unless Grantee has liquid assets sufficient to assure
that such purchase will cause no undue financial difficulties;
(i) the Grantee is aware of the provisions of Rule 144
promulgated under the Securities Act ("Rule 144") which permit
limited resale of shares purchased in a private placement
subject to the satisfaction of certain conditions, including,
among other things, the existence of a public market for the
Optioned Shares or conversion stock, the availability of
certain current public information about the Company, the
resale occurring not less than one year after a party has
purchased and paid for the security to be sold, the sale being
effected through a "broker's transaction" or in transactions
directly with a "market maker" and the number of shares being
sold during any three-month period not exceeding specified
limitations;
(j) the Grantee understands that all information which Grantee
has provided to the Company concerning the Grantee, the
Grantee's financial position and knowledge of financial and
business matters is correct and complete as of this Agreement
and, if there should be any material change in such
information before the acceptance of this subscription, the
Grantee will promptly notify the Company;
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(k) the Grantee is an "accredited investor" within the meaning
of Rule 501(a) of Regulation D promulgated by the Securities
and Exchange Commission;
(l) the Grantee has been provided with all materials and
information requested, to the extent possessed or obtainable
by the Company without unreasonable effort and expense,
including any information requested to verify information
furnished and has been provided the opportunity to ask
questions of, and receive answers from, the Company and the
officers, employees, and representatives of the Company
concerning the terms and conditions of this offering; and
(m) no party has made any representations to the Grantee as to
the profitability, if any, of the Company, nor has the Grantee
relied on any statements made by any persons concerning the
value of the investment in the Optioned Shares or the risks
associated therewith and the Grantee has made such inquiries
as deemed necessary to make an informed decision, independent
of any representations by any persons connected in any way
with the Company.
4.02 The representations, warranties, covenants and agreements
of the Grantee contained in this Agreement will be true at and as
of the date of issuance of Optioned Shares as though such
representations, warranties, covenants and agreements were made at
and as of such date and except for the waiver of any condition by
the Company, the representations, warranties, covenants and
agreements of the Grantee will survive the issuance of the Optioned
Shares and, notwithstanding such issuance, will continue in full
force and effect.
ARTICLE 5 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
5.01 The Company represents and warrants to, and covenants
with, the Grantee that:
(a) the Company is a body corporate subsisting under the laws
of Nevada, validly exists and is in good standing with respect
to all applicable law, and is duly registered to carry on
business in all jurisdictions in which it carries on business;
(b) the Optioned Shares for which certificates are delivered
to the Purchaser pursuant to this Agreement will, at the time
of such delivery, be duly authorized, validly issued, fully
paid and non-assessable;
(c) the authorized capital of the Company is 100,000,000
common shares without par value and the Company will allot and
conditionally reserve for issuance sufficient number of common
shares to issue the Optioned Shares;
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(d) the Company is not, and makes no representation that it
will become, a reporting corporation under the Exchange 1934;
and
(e) the execution and delivery of this Agreement has been duly
authorized by all necessary corporate proceedings and the
completion of the transactions contemplated in this Agreement
does not conflict with or result in the breach or acceleration
of any indebtedness under, or constitute default under, the
constating documents of the Company or any indenture,
mortgage, agreement, lease, license or other instrument to
which the Company is a party or by which it is bound, or any
judgment or order of any Court or administrative body by which
the Company is bound; and
5.02 The representations, warranties, covenants and agreements
of the Company contained in this Agreement will be true at and as
of the time of issuance of the Optioned Shares as though such
representations, warranties, covenants and agreements were made at
and as such date and except for the waiver of any condition by the
Grantee, the representations, warranties, covenants and agreements
of the Company will survive the issuance of the Optioned Shares and
notwithstanding such issuance, will continue in full force and
effect.
ARTICLE 6 TERMINATION OF OPTION
6.01 The Option and this Agreement will terminate on the
earlier of the Expiry Date or:
(a) the date on which the Grantee makes an assignment for the
benefit of its creditors or otherwise seeks the protection of
applicable insolvency or bankruptcy legislation;
(b) the time at which any securities regulatory authority
issues against the Grantee a cease trade order based on a
determination that trading of the securities of the Company by
the Grantee is not in the best interests of the public; or
(c) the time at which the Company determines that any of the
Grantee, its legal representative or such other person as is
designated by the Grantee in the notice exercising the Option
as the person to whom Optioned Shares are to be issued is in
breach of any condition in this Agreement or applicable law
relating to the sale by the Grantee, its legal representative
or such other person as is designated of any of the Optioned
Shares.
ARTICLE 7 PROHIBITION ON DEALING WITH THE OPTION AND RESTRICTIONS
ON SALE OF OPTIONED SHARES
7.01 The Grantee will not pledge, mortgage, hypothecate, sell,
assign or transfer, or agree to pledge, mortgage, hypothecate,
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sell, assign or transfer the Option or any interest in, or right
to, the Option.
7.02 Purchaser acknowledges that the Option is granted, and
the Optioned Shares will be issued, pursuant to the exemption from
the registration requirements contained in Regulation S of the
Securities Act and that:
(a) the Option and the Optioned Shares have not been
registered under the Securities Act or any state securities
laws, and are being offered in reliance on certain exemptions
contained in the Securities Act and such state securities
laws;
(b) the Optioned Shares will not be sold or transferred except
pursuant to:
(i) an effective registration statement under the
Securities Act and any applicable state securities laws;
(ii) Rule 144 promulgated under the Securities Act; or
(iii) an opinion of counsel satisfactory to the Company
to the effect that such registration is not required; and
(c) no federal or state agency has made any finding or
determination as to the fairness of the investment, or any
recommendation or endorsement of the Optioned Shares.
ARTICLE 8 ADJUSTMENT OF NUMBER OF OPTIONED SHARES
8.01 The number of Optioned Shares deliverable upon the
exercise of the Option will be adjusted as follows:
(a) if there is any subdivision or subdivisions of the Shares
while the Option is in effect into a greater number of Shares,
the Company will deliver at the time of purchase of Optioned
Shares, in addition to the number of Optioned Shares in
respect of which the right to purchase is being exercised,
such additional number of Optioned Shares as result from such
subdivision or subdivisions without the Grantee making any
additional payment or giving any other consideration;
(b) if there is any consolidation or consolidations of the
Shares while the Option is in effect into a lesser number of
Shares, the Company will deliver and the Grantee will accept,
at the time of purchase of Optioned Shares, instead of the
number of Optioned Shares in respect of which the right to
purchase is being exercised, the lesser number of Optioned
Shares as a result from such consolidation or consolidations;
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(c) if there is any change of the Shares of the Company while
the Option is in effect, the Company will deliver at the time
of purchase of Optioned Shares the number of Optioned Shares
of the appropriate class resulting from the such change as the
Grantee would have been entitled to receive in respect of the
number of Optioned Shares so purchased had the right to
purchase been exercised before such change;
(d) if there is any capital reorganization, reclassification
or change of outstanding equity shares, other than a change in
the par value, of the Company or if there is any
consolidation, merger or amalgamation of the Company with or
into any other company or any sale of the property of the
Company as or substantially as an entirety at any time while
the Option is in effect, the Grantee may purchase and receive,
instead of the Optioned Shares purchasable and receivable upon
the exercise of the Option, the kind and amount of Shares and
other securities and property receivable upon such capital
reorganization, reclassification, change, consolidation,
merger, amalgamation or sale which the holder of a number of
Shares equal to the number of Optioned Shares purchasable and
receivable upon the exercise of the Option would have received
as a result of such event.
The subdivision or consolidation of Shares at any time
outstanding into a greater or lesser number of Shares, whether with
or without par value, will not be deemed to be a capital
reorganization or a reclassification of the capital of the Company
for the purposes of this paragraph (d).
8.02 The adjustments provided for in section 8.01 are
cumulative.
8.03 The Company will not be required to issue fractional
Optioned Shares in satisfaction of its obligations and any
fractional interest in an Optioned Share that would, except for the
provisions of this section, be deliverable upon the exercise of the
Option will be cancelled and not be deliverable by the Company.
8.04 If any questions at any time arise with respect to the
exercise price or number of Optioned Shares deliverable upon
exercise of the Option, such questions will be conclusively
determined by the Company's auditors, or, if they decline to so
act, any other firm of chartered accountants that the Company may
designate and who will have access to all appropriate records and
such determination will be binding upon the Company and the
Grantee.
8.05 The Grantee will have no rights whatsoever as a
shareholder in respect of any of the Optioned Shares, including any
right to receive dividends or other distributions, other than in
respect of Optioned Shares in respect of which the Grantee has
exercised its Option and which the Grantee has taken up and paid
for.
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ARTICLE 9 GENERAL PROVISIONS
9.01 Time is of the essence of the performance of every
obligation under this Agreement, and no failure or lack of
diligence by any party in proclaiming or seeking redress for any
violation of, or insisting on strict performance of, any provision
of this Agreement will prevent a subsequent violation of that
provision, or of any other provision, from giving rise to any
remedy that would be available if it were an original violation of
that provision or another provision.
9.02 This Agreement will be binding upon and enure, to the
extent permitted, to the benefit of the respective successors and
assigns of the parties.
9.03 Unless otherwise provided herein, any notice, payment or
other communication to a party under this Agreement may be made,
given or served by delivery or telecopy and addressed as follows:
(a) if to the Company:
Trans New Zealand Oil Company
Suite 1200, 1090 West ▇▇▇▇▇▇ Street
Vancouver, B. C. V6E 2N7
Attention: President
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
(b) if to the Grantee:
Source Rock Holdings Ltd.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇
Attention: President
Telecopy: ▇▇▇-▇▇▇-▇▇▇-▇▇▇▇
8.04 Any notice, payment or other communication so delivered
or telecopied will be deemed to have been given or served at the
time of delivery of transmission by telecopy
8.05 A party may by notice change its address for service.
8.06 This Agreement constitutes the entire agreement between
the parties and supercedes all previous agreements or
understandings between the parties in any way relating to its
subject matter and the Company has made not representations,
inducements, warranties or promises concerning this Agreement or
the matters referred to herein which are not embodied in this
Agreement.
IN WITNESS WHERE OF this Agreement has been executed by the
parties as at the date first above written.
▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ OIL COMPANY
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Secretary
EXECUTED AS AN AGREEMENT
Signed for Source Rock Holdings Ltd.
by its duly authorised representative
/s/ ▇.▇. ▇▇▇▇▇▇▇
Signature of representative
Office Held: President
Name of Representative: ▇. ▇. ▇▇▇▇▇▇▇
