ROYALTY AGREEMENT This Agreement dated this 12th day of December, 2003 BETWEEN:
Exhibit
10.2
This
Agreement dated this 12th day of December, 2003
BETWEEN:
MIKWEC
ENERGY CANADA LTD.,
a body
corporate, having an office in the City of
Edmonton, in the Province of Alberta (hereinafter referred to as
“Grantor”)
OF
THE
FIRST PART
and
NEARSHORE
PETROLEUM CORPORATION,
a body
corporate, having an office in the City of Calgary, in the Province of Alberta
(hereinafter referred to as “Grantee”)
OF
THE
SECOND PART
WHEREAS
Grantee
provided Grantor with certain technical information with respect to the said
Lands; and
WHEREAS
Grantor
has agreed to grant to Grantee an overriding royalty on its interest in the
Lease(s) and said Lands; and
AND
WHEREAS
the
parties desire to document the gross overriding royalty.
NOW
THEREFORE THIS AGREEMENT WITNESSETH
that the
parties hereto agree as follows:
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1.
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DEFINITIONS
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In
this Agreement, including the recitals and the Schedules, unless
the
context otherwise requires, the following words shall have the meanings
ascribed thereto, namely:
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(a)
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“Assignment
Procedure”shall
mean the 1993 CAPL Assignment Procedure attached hereto as Schedule
“B”;
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(b)
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“Current
Market Value”shall
mean the price received by the Grantor at the point of measurement
for its
share of Petroleum Substances produced and marketed from or pursuant
to a
scheme of pooling or unitization allocated to the said Lands which
price
shall not be less than that which the Grantor would have received
at the
wellhead if acting as a reasonably prudent operator having regard
to the
current market prices, availability to market and economic conditions
of
the petroleum industry generally;
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(c)
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“Effective
Date”shall
mean December 12, 2003;
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(d)
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“Grantor”shall
mean Mikwec Energy Canada Ltd.;
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(e)
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“Gross
Overriding Royalty and/or Royalties”shall
mean a non-convertible gross overriding royalty of Six and One Half
Percent (6.5%) to Nearshore Petroleum Corporation of all Petroleum
Substances produced, saved and marketed from below the Surface from
the
said Lands;
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(f)
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“Lands”shall
mean any lands comprising the Petroleum and Natural Gas Licence(s),
Oil
Sands Leases, Petroleum and Natural Gas Lease(s)and any Oil Sands
Licence(s), which may be selected therefrom as described in the attached
Schedule “A”;
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(g)
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“Lease(s)”
shall mean any Petroleum and/or Natural Gas Lease(s), Oil Sands Leases,
or
other title document(s) in or acquired in the area set forth in Schedule
“A” and any renewal or extensions thereof or substitution
therefore;
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(h)
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“Petroleum
Substances”shall
mean all petroleum, natural gas, heavy oil, related hydrocarbons,
sulphur
and every other substance an interest in which is granted under the
said
Lease(s) below the Surface;
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(i)
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“Point
of Measurement”shall
mean the production tankage, in the case of crude oil, shall mean
the
point of delivery in the case of natural gas and shall mean the point
of
delivery for all other Petroleum Substances;
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(j)
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“Royalty
Owner”shall
mean Nearshore Petroleum Corporation;
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2.
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GROSS
OVERRIDING ROYALTY
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(a)
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Grantor
hereby grants and assigns Grantee a 6.5% gross overriding royalty
on the
leased substances on the interest which Grantor holds in the Lease(s).
It
is understood that the gross overriding royalty applies not only
against
the initial working interest of Grantor, but also to the interest
of any
third party which derives its interest from or through the
Grantor.
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(b)
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The
gross overriding royalty shall be paid to Grantee during the term
of the
Lease(s) and any renewal or extension thereof.
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3.
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DEDUCTIONS
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The
said Royalty shall be paid on the current market value of the Petroleum
Substances without any deductions except the following,
namely:
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(a)
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With
respect to crude oil, the said Royalty will bear its proportionate
share
of the actual costs of transportation to market connection, where
sales
are not made f.o.b. the tanks serving the said Lease(s), provided
that the
costs shall not exceed those permitted by the Crown in right of the
Province of Alberta.
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(b)
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With
respect to natural gas, the cost of gathering, processing and transporting
the said Royalty share of the natural gas may be deducted from the
current
market value of the natural gas, provided:
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(i)
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the
deduction of gathering, processing, and transportation costs shall
not
exceed those permitted by the Crown in right of the Province of Alberta
in
the calculation of Crown Royalty; and
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(ii)
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such
costs may only be deducted to the extent that they are actually incurred
and are reasonable and shall never be reduced below fifty (50%) percent
of
current market value.
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If
any Petroleum Substances are sold at less than current market value
in any
transactions (including those transactions which are not at arm’s-length
or any transactions involving any arrangement from which the Grantor
obtains a collateral advantage in consideration of the reduced price),
the
gross proceeds of the sale of such Petroleum Substances shall, for
the
purposes of calculating the said Royalty, not be less than the current
market value of those Petroleum Substances when produced from the
said
Lands as defined by clause 1(b)
hereof.
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Notwithstanding
anything to the contrary herein contained, the Grantor shall be entitled
to use, and as a consequence thereof the Grantor shall be free from
the
obligation of payment or delivery of the Grantee’s Royalty, such part of
the Petroleum Substances as is reasonably required for and used by
the
Grantor in its operations upon the Lands, including treating and
preparing
Petroleum Substances therefrom for market, but not including injection
thereof in connection with any secondary recovery
operations.
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4.
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TAKING
IN KIND
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(a)
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The
Royalty Owner shall have the right to take in kind the Royalty Owner’s
share of Petroleum Substances. Such right may be exercised separately
with
respect to crude oil, condensate, liquefied petroleum gases and marketable
gas. In the case of crude oil condensate, such right shall only be
exercised on a minimum of sixty (60) days notice to the Grantor.
In the
case of liquefied petroleum gases such rights shall only be exercised
on
six (6) months notice to the Grantor. If the Royalty Owner, however,
signified in writing its consent to the sale of any of the Royalty
Owner’s
share of Petroleum Substances under a contract made by the Grantor
providing for a minimum term in excess of the said respective notice
periods, the Royalty Owner’s right to take in kind any petroleum substance
subject to such contract shall be suspended during the term of such
contract. The Royalty Owner may cease to take in kind any Petroleum
Substances upon giving the Grantor the same minimum notice as required
in
order to permit the Royalty Owner to take such Petroleum Substances
in
kind as aforesaid. The right to take in kind or to cease to take
in kind
may be exercised from time to time subject only to the provisions
of this
clause 4.
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(b)
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When
the Royalty Owner is taking in kind any of the Royalty Owner’s share of
the Petroleum Substances, the Royalty Owner shall have the right
to use
free of charge a proportionate share of the Grantor’s lease tankage and
storage facilities to store a maximum of ten (10) days production
of the
Royalty Owner’s share of crude oil and condensate and five (5) days
production of the Royalty Owner’s share of marketable gas which will be
delivered by the Grantor at the point of delivery downstream from
the
plant and to the purchase designated by the Royalty Owner, for the
Royalty
Owner’s account.
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5.
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OPERATIONS
ON THE LANDS
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No
royalty shall be payable on Petroleum Substances reasonably used
in
operations on the said Lands for the production, treating, processing
and
storing of Petroleum Substances on which the said Royalty is payable
to
the Royalty Owner hereunder.
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Any
overriding royalty exemption shall be restricted only to that portion
of
the production from a test well used as fuel for heaters, treaters,
compressors, separators, instruments and similar equipment required
to
produce Petroleum Substances from the test well spacing unit. Grantor
shall not be granted any overriding royalty exemption from production
of
Petroleum Substances used for reservoir injection or pressure maintenance,
secondary and heavy oil recoveries or upgrading schemes, or fuel
and/or
feedstock for any gas plant, refinery, satellite or
battery.
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6.
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RIGHT
TO POOL OR UNITIZE
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Grantor
is hereby given the right and authority, at any time and from time
to
time, to pool the said Lands, or any portion thereof to form a production
spacing unit or unitize the said Lands or any portion thereof, or
any zone
or formation underlying the same, on such terms and conditions as
the
Grantor may determine from time to time. In the event of such pooling
or
unitization, Grantee’s gross overriding royalty shall be determined on
that portion of the production of the leased substances from the
area so
pooled or unitized which is allocated to that portion of the said
Lands
which is contributed to the pooled or unitized area pursuant to the
pooling or unitization Agreement
concerned.
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7.
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RIGHT
TO COMMINGLE
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The
Grantor shall have the right to commingle Petroleum Substances produced
from the said Lands with Petroleum Substances produced from other
lands
provided methods acceptable to the Royalty Owner are used to determine
the
proper measurement of individual well production.
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Where
governmental regulations or orders require segregated production
tests of
individual ▇▇▇▇▇ at intervals not greater than two months, such tests
will
be deemed acceptable to the Royalty Owner under this clause and no
further
tests will be required.
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8.
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DEVELOPMENT
OF LANDS
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Notwithstanding
any provision herein contained, the Grantor shall be under no obligation
to Grantee to develop the said Lands or any part thereof to produce
the
leased substances which may be within, upon or under the said
Lands.
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9.
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RENTALS,
RENEWALS AND ROYALTIES
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Grantor
shall during the term of this Agreement make timely payment of all
rentals, renewals or extension fees, payment in lieu of actual production
and royalties becoming due or due in respect of the Lease(s), the
Lands or
the Petroleum Substances.
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10.
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TAXES
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Each
party hereto shall be liable for its proportionate share of taxes
and
other charges levied or assessed against the Petroleum Substances,
and in
lieu of payment by the Grantee of its share thereof, Grantor may
make such
payment and deduct the amount thereof from any money payable by it
to the
Grantee.
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11.
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RIGHT
TO AUDIT
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Grantee,
upon notice in writing to Grantor, shall have the right to audit
the
Grantor’s accounts and records relating to the accounting hereunder for
any calendar year within the twelve (12) month period next following
the
end of such calendar year. Any payment made or statement rendered
by the
Grantor hereunder which is not disputed by the Royalty Owner on or
before
the last day of the twenty-fourth month following the month for which
such
statement or payment was rendered shall be deemed to have been correct.
Any cost to conduct such audit as granted herein shall be at the
sole
cost, risk and expense of the Royalty Owner.
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12.
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ASSIGNMENT
OF ROYALTY
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Royalty
Owner may convey or assign any portion of its interest in the gross
overriding royalty payable under the Agreement but the Grantor shall
not
become liable to make payments in respect of the gross overriding
royalty
to more than one person. If the interest of Royalty Owner hereunder
is at
any time owned by more than one person, such persons shall nominate
one
person to act as a common trustee for receipt of monies payable hereunder
and to deal with the Grantor in respect of the said interests. In
such
event, Grantor shall thereafter make payments to and deal solely
with such
common trustee in respect of the said interest.
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13.
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ASSIGNMENT
OF WORKING INTEREST
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Grantor
may at any time, sell or otherwise dispose of all or any of its interest
in the said Lands but Grantor covenants that it shall cause any Assignee
or successor of the Grantor to deliver to Grantee a written and
enforceable undertaking to assume the obligations of Grantor under
this
Agreement insofar as they relate to such interest and the obligations
which accrue pursuant to the terms of this Agreement, whereupon the
Grantor shall be relieved of the obligation so assumed.
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14.
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BOOKS
AND ACCOUNTS
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Grantor
shall maintain complete and accurate records of the leased substances
produced, saved and marketed from the said Lands and of the monies
received from the sale thereof and shall furnish to Grantee with
each
payment of the gross overriding royalty hereunder a statement giving
sufficient detail for Grantee to ascertain the accuracy of the payment
of
the gross overriding royalty made
therewith.
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15.
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SALE
OF LEASED SUBSTANCES
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Any
sale of leased substances by Grantor shall include the gross overriding
royalty, which shall be sold at a price not less than that for which
Grantor is selling its share of production. Not later than the last
day of
each calendar month, Grantor shall pay to Grantee the proceeds of
the sale
of the gross overriding royalty during the preceding calendar month.
Grantee’s gross overriding royalty share of production shall bear its
proportionate share of the costs of any transportation services that
are
provided with respect thereto prior to the sale
thereof.
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16.
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FORCE
MAJEURE
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The
obligation of the parties, other than the obligations of the Grantor
to
the Lessor of the Lease(s), its successors and assigns, shall be
suspended
and there shall be no liability for damages during the time and to
the
extent that either party is prevented from complying with its obligations
under this Agreement in part or in whole by strikes, lockouts, acts
of God
or the Queen’s enemies, war, blockades, riots, laws, orders or regulations
of governmental bodies or agencies, unavoidable accidents, delays
in
transportation, inability to obtain necessary materials in the open
market, or any other cause, except financial, whether similar or
dissimilar to those specifically enumerated, beyond the reasonable
control
of the party affected. The party whose obligations under this Agreement
are suspended shall give notice, including reasonably full particulars,
of
the cause for such suspension, in writing or by telegraph to the
other
parties within a reasonable time after the occurrence thereof. The
performance of such obligations shall begin or be resumed within
a
reasonable time after such cause has been removed.
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17.
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CONFIDENTIAL
INFORMATION
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(a)
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Except
as provided herein, all data and information of whatsoever nature
acquired
by the parties from any operations pursuant to this Royalty Agreement
or
supplied by one party to the other pursuant hereto shall be for the
sole
and exclusive use and benefit of the parties hereto unless the parties
agree to the dissemination of such information or unless a party
thereto
is required to give such information to any governmental department,
body
or agency, or any recognized association within the petroleum industry,
of
which it is a member, that engages in the exchange of factual information
relating to the type of operations contemplated by this Royalty Agreement.
In no event shall information of any type of character relating to
▇▇▇▇▇
drilled on a confidential basis to the parties be
disclosed.
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(b)
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The
provisions of this clause shall not apply to disclosures to Affiliates
provided that such Affiliate agree to be bound by the terms of this
clause.
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18.
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DURATION
OF AGREEMENT
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This
Agreement shall remain in full force and effect for so long as any
interest hereunder is retained by the parties or any assignees
thereof.
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19.
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NOTICES
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Whether
or not so stipulated herein, all notices, communications and statements
(hereinafter called “notices”) required or permitted hereunder shall be in
writing. Notices may be served:
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(a)
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personally,
by leaving them with the party on whom they are to be served at the
party’s address hereinafter given. Personally served notices shall be
deemed received by the addressees when actually delivered provided
such
delivery shall be during normal business hours; or
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(b)
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by
telegraph (or any other like method by which a written and recorded
message may be sent) directed to the party on whom they are to be
served
at that party’s address hereinafter given. Notices so served shall be
deemed received by the addressees thereof eight hours after the time
of
transmission or at the commencement of the next ensuing normal business
day, whichever is the later; or
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(c)
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by
mailing them first class registered post, postage prepaid to the
party on
whom they are to be served. Notices so served shall be deemed to
be
received by the addressees on the second day (excluding as the second
day,
Saturdays, Sundays and statutory holidays) following the mailing
thereof
in Canada.
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The
addresses of each of the respective parties hereto shall be as
follows:
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Mikwec
Energy Canada Ltd.
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▇▇▇▇▇
▇▇▇, ▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
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▇▇▇
▇▇▇
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Attn:
President
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Nearshore
Petroleum Corporation
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Suite
3175, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇.
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▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇
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▇▇▇
▇▇▇
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Attn:
President
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Any
party hereto may change its said address by notice served as
aforesaid.
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20.
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FURTHER
ASSURANCES
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Each
of the parties hereto shall, from time to time, and at all times,
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.
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21.
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ENTIRE
AGREEMENT
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The
terms of this Agreement express and constitute the entire agreement
between the parties with respect to the matters herein addressed,
this
Agreement hereby wholly supersedes and replaces all prior agreements
and
representations, whether oral or in writing, between the Parties,
with
respect to the subject matter hereof.
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22.
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TIME
OF ESSENCE
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Time
is of the essence of this
Agreement.
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23.
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WAIVER
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No
waiver by any party of any breach of any of the covenants, conditions
and
provisions herein contained shall be effective or be binding upon
any of
the parties unless the same shall be expressed in writing. Any waiver
so
expressed shall not limit or affect its right with respect to any
other or
future breach.
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24.
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NO
AMENDMENT EXCEPT IN WRITING
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No
amendment or variation of the provisions of this Agreement shall
be
binding upon any party unless it is evident in writing and executed
by all
parties.
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25.
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BINDS
SUCCESSORS AND ASSIGNS
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This
Agreement shall enure to the benefit of and be binding upon the parties
hereto, their successors and permitted assigns.
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26.
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COUNTERPART
EXECUTION
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This
Agreement may be executed in counterparts and when each such party
has
executed a counterpart, all counterparts taken together shall constitute
one agreement.
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IN
WITNESS WHEREOF
the
parties have executed this Agreement as of the day and year first above
written.
| MIKWEC ENERGY CANADA LTD. | ||
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| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ | |
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| ▇▇▇▇▇▇ ▇▇▇▇▇, President | ||
| NEARSHORE PETROLEUM CORPORATION | ||
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| By: | /s/ ▇▇▇▇▇ ▇▇▇▇▇ | |
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| ▇▇▇▇▇ ▇▇▇▇▇, President | ||
SCHEDULE
‘A’
Attached
to and forming part of a ROYALTY AGREEMENT dated 12th December, 2003, between
Mikwec Energy Canada Ltd. and Nearshore Petroleum Corporation
INCLUSION
LANDS - RIGHTS
Township
091 Range 12 West 5: Sections 1 to 36 All P&NG, All Oil Sands
Township
091 Range 13 West 5: Sections 1 to 36 All P&NG, All Oil Sands
Township
092 Range 12 West 5: Sections 1 to 36 All P&NG, All Oil Sands
Township
092 Range 13 West 5: Sections 1 to 36 All P&NG, All Oil Sands
CAPL
-
1993
SCHEDULE
“B”
ASSIGNMENT
PROCEDURE
Attached
to and forming part of the Agreement dated the 12th
day
of
December
A.D.
2003
BETWEEN: (AMONG)
MIKWEC
ENERGY CANADA LTD.
and
NEARSHORE
PETROLEUM CORPORATION
ARTICLE
1
DEFINITIONS
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1.01
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In
this Assignment Procedure, the following terms, when capitalized,
shall
have the meaning assigned to each
below:
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(a)
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“Affiliate”
- for the purposes of this Assignment Procedure, means a corporation
or
partnership that is affiliated with the party in respect of which
the
expression is being applied, and, for the purpose of this definition
a
corporation or partnership is affiliated with another corporation
or
partnership if it directly or indirectly controls or is controlled
by that
other corporation or partnership, and for the purpose of determining
whether a corporation or partnership is so controlled, it shall be
deemed
that:
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(i)
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a
corporation is directly controlled by another corporation or partnership
if the shares of the corporation to which are attached more than
50% of
the votes that may be cast to elect directors of the corporation
are
beneficially owned by that other corporation or partnership and the
votes
attached to those shares are sufficient, if exercised, to elect a
majority
of the directors of the
corporation;
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(ii)
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a
partnership is directly controlled by a corporation or other partnership
it that corporation or partnership beneficially owns more than a
50%
interest in the partnership;
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(iii)
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a
corporation or partnership is indirectly controlled by another corporation
or partnership if control, as defined above, is exercised through
one or
more other corporations or
partnerships.
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Where
two
or more corporations or partnerships are affiliated at the same time with the
same corporation or partnership, they shall be deemed to be Affiliates of each
other.
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(b)
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“Agreement”
- means the agreement to which this Assignment Procedure is attached
and
made a part.
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(c)
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“Assigned
Interest” - means the interest in the Agreement which is the subject of an
assignment and which is specified in a Notice of Assignment, but
shall not
include rights of the Assignor as
operator.
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(d)
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“Assignee”
- means the entity named in a Notice of Assignment as the
Assignee.
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(e)
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“Assignment
and Novation Agreement” - means an agreement by all parties to the
Agreement and a party to whom an interest in the Agreement has been
assigned where:
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(i)
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the
assignee assumes the duties and obligations of the assignor for the
Assigned Interest; and
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(ii)
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the
assignor is released from its duties for the Assigned Interest;
and
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(iii)
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the
assignee is substituted as a party to the Agreement in the place
of the
assignor to the extent of the Assigned
Interest.
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(f)
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“Assignor”
- means the party to the Agreement named in a Notice of Assignment
as the
Assignor.
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(g)
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“Binding
Date” - means the first day of the second calendar month following the
month in which the Notice of Assignment is served in accordance with
Article IV below.
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(h)
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“Notice
of Assignment” - means a notice in the form entitled Notice of Assignment
attached hereto as Appendix A.
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(i)
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“Third
Party” - means the parties to the Agreement who are not the
Assignor.
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(j)
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“Transfer
Date” - means the effective date of the transfer of the Assigned Interest,
as specified in the Notice of
Assignment.
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1.02
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In
this Assignment Procedure, when a numbered clause or Article is referred
to, that clause or Article is of this Assignment
Procedure.
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ARTICLE
II
APPLICATION,
CONDITIONS AND FORM OF NOTICE
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2.01
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(a)
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A
Notice of Assignment issued in accordance with this Assignment Procedure
shall be used in place of an Assignment and Novation Agreement for
assignments where the Agreement:
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(i)
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requires
parties to use; or
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(ii)
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entitles
parties to request; or
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(iii)
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is
silent as to the right of any party to
request;
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an
Assignment and Novation Agreement.
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(b)
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The
Notice of Assignment shall be in the form indicated in Appendix A
and
shall be executed by the Assignor and the
Assignee.
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2.02
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If
there is a conflict between the Assignment Procedure and the provisions
of
the Agreement, the Assignment Procedure shall
prevail.
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2.03
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If
the Agreement requires each Third Party’s consent to an assignment but
does not specify a time within which each Third Party shall respond
or
shall be deemed to have responded, then consent of each Third Party
to an
assignment shall be deemed if it fails to reply within 20 days of
receipt
of a written request for consent.
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2.04
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(a)
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If
the Agreement is silent regarding rights of first refusal or consent
from
Third Party which relates to an Assigned Interest, then Assignor
shall, by
notice pursuant to Article IV:
|
|
(i)
|
advise
Third Party of:
|
-
its
intention to make the disposition;
-
a
description of the Assigned Interest; and
-
the
identity of the proposed Assignee, and
|
(ii)
|
request
Third Party’s written consent to such disposition, which consent shall not
be unreasonably withheld.
|
Consent
of each Third Party shall be deemed if it fails to reply to Assignor within
20
days of receipt of the written request for consent.
|
(b)
|
Clause
2.04 (a) shall not apply in the following instances,
namely:
|
|
(i)
|
an
assignment made by way of security for present or future indebtedness,
or
liabilities (whether contingent, direct or indirect and whether financial
or otherwise), the issuance of the bonds or debentures of a corporation,
or the performance of the obligations of a guarantor under a guarantee,
provided that in the event the security is enforced by a sale or
foreclosure, Clause 2.04 (a) shall apply;
or
|
|
(ii)
|
an
assignment to an Affiliate, or in consequence of a merger or amalgamation
with another corporation or pursuant to an assignment made by a party
of
its entire interest in the Agreement to a corporation in return for
shares
in that corporation or to a registered partnership in return for
an
interest in that partnership; or
|
|
(iii)
|
an
assignment is required within the terms of the Agreement (such as,
but not
limited to, abandonment, forfeiture or
surrender).
|
|
2.05
|
An
assignment of an Assigned Interest shall (subject to Clause 2.06)
be
effective against Third Party on the Binding Date
if:
|
|
(a)
|
all
prohibitions, limitations or conditions (such as, but not limited
to, a
right of first refusal or a requirement for prior consent from Third
Party) applying to the Assigned Interest have been complied with
and
satisfied pursuant to the Agreement, or waived by Third Party, including,
if applicable, compliance with Clauses 2.03 and 2.04;
and
|
|
(b)
|
following
compliance with Clause 2.05(a), a Notice of Assignment is served
on Third
Party in accordance with Article
IV.
|
|
2.06
|
(a)
|
A
Third Party who objects to the Notice of Assignment on the basis
of a
failure to comply with Clause 2.05 may, prior to the Binding Date,
notify
(pursuant to Article IV) Assignor and Third Party of its
objections.
|
|
(b)
|
If
a notice of objection is served pursuant to Clause 2.06(a), the Notice
of
Assignment to which the notice of objection relates will be of no
effect.
|
|
(c)
|
If
a Third Party does not object pursuant to Clause 2.06(a), the Notice
of
Assignment will be effective for purposes of Article Ill, but each
Third
Party will retain all other rights or remedies arising as a consequence
of
the failure of Assignor to comply with Clause 2.05, including (without
limitation), rights to seek damages for breach of the Agreement and
rights
to seek specific performance of a right of first
refusal.
|
ARTICLE
III
ASSIGNMENT,
ASSUMPTION AND DISCHARGE BY NOTICE
|
3.01
|
If
a Notice of Assignment has become effective in accordance with Clauses
2.05 or 2.06, then Assignor, Assignee and Third Party shall have
agreed
that:
|
|
(a)
|
Subject
to Clause 3.01(d), Assignor and Assignee shall have acknowledged
and
represented that the Assignor has transferred, assigned and conveyed
the
Assigned Interest to Assignee as of the Transfer
Date.
|
|
(b)
|
Subject
to Clause 3.01(d), Assignee shall replace Assignor as a party to
the
Agreement with respect to the Assigned Interest on and after the
Transfer
Date.
|
|
(c)
|
Only
insofar as Third Party is concerned, notwithstanding the terms and
provisions in the “Transfer Agreement” referenced in the Notice of
Assignment:
|
|
(i)
|
Subject
to Clause 3.01(d), Assignee shall assume and be bound by, observe
and
perform all terms, obligations and provisions in the Agreement with
regard
to the Assigned Interest at all times on or after the Transfer Date;
and
|
|
(ii)
|
Assignor
shall retain and be entitled to all rights, benefits and privileges
under
the Agreement with respect to the Assigned Interest at all times
prior to
the Transfer Date; and
|
|
(iii)
|
Subject
to Clause 3.01(d), Assignee shall assume and be entitled to all rights,
benefits and privileges under the Agreement with respect to the Assigned
Interest at all times on and after the Transfer
Date.
|
|
(d)
|
In
all matters relating to the Assigned Interest subsequent to the Transfer
Date and prior to the Binding Date, Assignor acts as trustee for
and duly
authorized agent of Assignee, and Assignee, for the benefit of Third
Party, ratifies, adopts and confirms all acts or omissions of the
Assignor
in such capacity as trustee and agent. Third Party agrees to recognize
and
accept Assignor as trustee and agent for
Assignee.
|
|
(e)
|
On
and after the Transfer Date, Third
Party:
|
|
(i)
|
releases
and discharges Assignor from the observance and performance of all
terms
and covenants of the Agreement and all obligations and liabilities
which
arise or occur on or after the Transfer Data under the Agreement
with
respect to the Assigned Interest;
and
|
|
(ii)
|
does
not release and discharge Assignor from any obligation or liability
which
had arisen or accrued prior to the Transfer Data or which does not
relate
to the Assigned Interest.
|
|
(f)
|
Subject
to the terms and provisions of the “Transfer Agreement” referenced in the
Notice of Assignment, Assignee on and after the Transfer
Date:
|
|
(i)
|
releases
and discharges Assignor from the observance and performance of all
terms
and covenants of the Agreement and all obligations and liabilities
which
arise or occur on or after the Transfer Date under the Agreement
with
respect to the Assigned Interest;
and
|
|
(ii)
|
does
not release and discharge Assignor from any obligation or liability
which
had arisen or accrued prior to the Transfer Date or which does not
relate
to the Assigned Interest.
|
|
(g)
|
The
address of Assignee for the purposes of the Agreement and the serving
of
notices under it shall be the address stated for Assignee in the
Notice of
Assignment.
|
|
(h)
|
The
Agreement shall continue in full force and effect from and after
the
Transfer Date with Assignee made a party thereto to the extent of
the
Assigned Interest, subject to Clause 3.01(d). The Agreement is amended
as
necessary to give effect to the Notice of Assignment and, as so amended,
is ratified and confirmed by each
party.
|
|
3.02
|
In
no event shall errors, inaccuracies or misdescriptions in a Notice
of
Assignment have any effect on the Third Party or the interests of
Third
Party in the Agreement, even if Third Party has knowledge of an error,
inaccuracy or misdescription.
|
|
3.03
|
Assignor
and Assignee shall be solely responsible for any adjustment between
themselves with respect to the Assigned Interest as to revenues,
benefits,
costs, obligations or indemnities which accrue prior to Binding
Date.
|
ARTICLE
IV
SERVICE
OF NOTICES
|
4.01
|
All
notices and Notices of Assignment (herein called “notices”) required or
permitted by the terms of this Assignment Procedure shall be in writing,
subject to the provisions of this Article. This Article applies only
to
notices served pursuant to this Assignment Procedure. Any notice
to be
given under this Assignment Procedure shall be deemed to be served
properly if served in any of the following
modes:
|
|
(a)
|
personally,
by delivering the notice to the party on whom it is to be served
at that
party’s address for service. Personally served notices shall be deemed
received by the addressee when actually delivered as aforesaid, if
such
delivery is during normal business hours, on any day other than a
Saturday, Sunday or statutory holiday. If a notice is not delivered
during
normal business hours, such notice shall be deemed to have been received
by such party at the commencement of the day next following the date
of
delivery, other than a Saturday, Sunday or statutory holiday;
or
|
|
(b)
|
by
telecopier or telex (or by any other like method by which a written
and
recorded message may be sent) directed to the party on whom it is
to be
served at that party’s address for service (however, an original executed
copy of a Notice of Assignment shall subsequently be provided to
all
addressees without delay). A notice so served shall be deemed received
by
the respective addressees: (i) when actually received by them, if
received
within the normal business hours on any day other than a Saturday,
Sunday
or statutory holiday; or (ii) at the commencement of the next ensuing
business day following transmission thereof if such notice is not
received
during such normal business hours;
or
|
|
(c)
|
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
whom it
is to be served at that party’s address for service. Notices so served
shall be deemed to be received by the addressees at noon, local time,
on
the earlier of the actual date of receipt or the fourth (4th) day
(excluding Saturdays, Sundays and statutory holidays) following mailing.
However, if postal service is interrupted or operating with unusual
or
imminent delay, notice shall not be served by such means during such
interruption or period of delay.
|
|
4.02
|
The
addresses for service of a notice pursuant to this Assignment Procedure
shall be as set out (and amended from time to time) in the
Agreement.
|
CAPL
-
1993
(Appendix
A to the 1993 CAPL ASSIGNMENT PROCEDURE)
NOTICE
OF
ASSIGNMENT
___________________________________
___________________________________
___________________________________
(For
reference only: general land description)
WHEREAS,
by agreement (“Transfer Agreement”) dated _________________________, (full name
of Assignor[s]), as Assignor, transferred and conveyed effective
__________________ (“Transfer Date”) an interest in property as more fully
described below to ___________________________(full name of Assignee[s]), as
Assignee; and
WHEREAS,
Assignor and one or more parties (“Third Party”) are subject to and bound by
that certain_______________________ agreement dated_______________, made
between, by or
among___________________________________________________________________as
may
have been amended, affecting the land or property therein described (“Master
Agreement”); and
WHEREAS,
in accordance with the terms and provisions of the Master Agreement, Assignor
and Assignee intend to serve notice to Third Party to the Master Agreement
of
the transfer and conveyance as described in the Transfer Agreement.
NOW,
THEREFORE, THIS NOTICE OF ASSIGNMENT WITNESSES THAT in consideration of the
mutual advantages to the parties hereto, notice is hereby given, as
follows:
|
1.
|
Assignor
(specify proportions if more than one
Assignor):
|
|
2.
|
Assignee
(specify proportions if more than one Assignee and include address
for
service of notice pursuant to Master
Agreement):
|
|
3.
|
Current
Third Party to Master Agreement:
|
|
4.
|
Assigned
Interest: (Check A or B below):
|
_____A.
Transfer Agreement covers ______% of Assignor’s entire undivided right, title
and interest in the Master Agreement but shall not include rights of the
Assignor as operator (“Assigned Interest”); OR
_____B.
Transfer Agreement covers a portion of Assignor’s right, title and interest in
the Master Agreement but shall not include rights of the Assignor as operator
(“Assigned Interest”). In the event Alternative B is checked, the following is
the legal description of all lands and interests transferred and conveyed in
the
Transfer Agreement (attach schedule if more space is needed):
|
5.
|
Subject to Clause 7 of this Notice of Assignment, Assignor and Assignee, in accordance with the terms of the Transfer Agreement, acknowledge that: |
|
(i)
|
Assignor
has transferred and conveyed the Assigned Interest to the Assignee
as of
the Transfer Date; and
|
|
(ii)
|
Assignee
agrees to replace Assignor, on and after the Transfer Date, as a
party to
the Master Agreement with respect to the Assigned Interest;
and
|
|
(iii)
|
Assignee
agrees to be bound by and observe all terms, obligations and provisions
in
the Master Agreement with respect to the Assigned Interest on and
after
the Transfer Date.
|
|
6.
|
Subject
to the terms and provisions of the Transfer Agreement, Assignee on
and
after the Transfer Date:
|
|
(i)
|
discharges
and releases the Assignor from the observance and performance of
all terms
and covenants in the Master Agreement and any obligations and liabilities
which arise or occur under the Master Agreement with respect to the
Assigned Interest, and
|
|
(ii)
|
does
not release and discharge the Assignor from any obligation or liability
which had arisen or accrued prior to the Transfer Date or which does
not
relate to the Assigned Interest.
|
|
7.
|
Assignee
and Assignor agree that in all matters relating to the Master Agreement
with respect to the Assigned Interest, subsequent to the Transfer
Date and
prior to the Binding Date, Assignor acts as trustee for and duly
authorized agent of the Assignee and Assignee, for the benefit of
the
Third Party, ratifies, adopts and confirms all acts or omissions
of the
Assignor in such capacity as trustee and
agent.
|
|
8.
|
This
Notice of Assignment shall become binding on all parties to the Master
Agreement on the first day of the second calendar month following
the
month this notice is served on Third Party in accordance with the
terms of
the Master Agreement (“Binding Date”). In addition, Assignor and Assignee
agree that they shall be solely responsible for any adjustment between
themselves with respect to the Assigned Interest as to revenues,
benefits,
costs, obligations or indemnities which accrue prior to the Binding
Date.
|
|
9.
|
Assignor
represents and certifies that this Notice of Assignment and its service
are in compliance with all the terms and provisions of the Master
Agreement.
|
IN
WITNESS WHEREOF this Notice of Assignment has been duly executed by the Assignor
and Assignee on the date indicated for each below:
|
Assignor
|
Assignee
|
|||
|
Per:
|
Per:
|
|||
|
Per:
|
Per:
|
|||
|
Date:
|
Date:
|
|||