Exhibit 10.3

 

 

SURRENDER AND CANCELLATION OF EP 468 EARNING AGREEMENT

 

THIS SURRENDER OF ALL RIGHTS UNDER THE EP 468 EARNING AGREEMENT AND CANCELLATION
OF THE EP 468 EARNING AGREEMENT (“Surrender”) is made as of the 9th day of
August, 2017 (the “Effective Date”), by and among Nation Energy (Australia) Pty
Ltd, an Australian company, with an address of 1500 West 16th Avenue, Suite F,
Vancouver, B.C. Canada V6J 2L6 (“Nation Australia”), and Officer Petroleum Ltd.,
an Australian company, with an address of Level 10, 32 Martin Place, Sydney, New
South Wales 2000  (“Officer”).  Nation Australia and Officer may be referred to
collectively as the “Parties” or individually as a “Party”. 

 

RECITALS

 

WHEREAS, pursuant to the terms of the Earning Agreement dated May 31, 2016,
attached hereto as Exhibit “A”, between Nation Australia and Officer regarding
exploration permit EP 468 (the “Permit”), Nation Australia incurred certain work
permit payment obligations, and other billable charges, including administrative
and general expenses, to Officer;

 

WHEREAS, Nation Australia is in arrears for payment to Officer for
USD$1,029,955.53 at March 31, 2017, which consists of unpaid work permit
expenses and other billable charges, including administrative and general
expenses, to be paid by Nation Australia pursuant to the EP 468 Earning
Agreement (the “EP 468 Expenses”), whereby such failure of payment has resulted
in the cancelation of the EP 468 exploration permit by the Australian
Government, further resulting in an impairment loss of USD$5,797,476.00 to
Officer (the “EP 468 Impairment”);

 

WHEREAS, related to amounts owed by Nation Australia under the Earning Agreement
and other earning agreements, pursuant to the terms of that certain Promissory
Note dated May 31, 2016, issued by Nation Australia to Paltar Petroleum Limited
(“Paltar”) in the principal amount of AUD$24,322,501.00, with a maturity date of
May 31, 2019, Nation Australia is obligated to pay the full principal amount to
Paltar plus currently accrued interest, for a total amount owed, as converted
into United States Dollars, of USD$19,368,913.78  at March 31, 2017 (the
“Promissory Note”), and Nation Energy Inc. has guaranteed payment of the
Promissory Note;

 

WHEREAS, by written notice delivered on the 10th of July, 2017, to Nation
Australia, Officer has asserted that Nation Australia has failed to comply fully
with the Earning Agreement and the Promissory Note.  Nation Australia neither
admits nor denies this claim;

 

WHEREAS, given Nation Australia’s  default of the Earning Agreement, and with
knowledge of its inability to remedy and cure the default within 30 days
following Officer’s notice as provided in Section 7.3 of the Earning Agreement,
Nation Australia is required to surrender its entire interest in the Earning
Agreement to Officer, free of all encumbrances arising by, though or under
Nation Australia, and Nation Australia will execute this surrender agreement;

--------------------------------------------------------------------------------

 

 

Now therefore, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledge and intending to be legally bound, Nation
Australia and Officer agree as follows:

 

1.                  Incorporation of Recitals.  The foregoing recitals are
incorporated herein by reference. 

 

2.                  Surrender and Release. Nation Australia hereby surrenders,
terminates its entire interest in the aforementioned Permit and Officer cancels
the Earning Agreement. Nation Australia’s rights and interests to the Permit
under the Earning Agreement are hereby terminated.  Termination of the Earning
Agreement does not eliminate Nation Australia’s obligation to pay the Promissory
Note.

 

3.                  Entire Agreement.       This Surrender sets forth the entire
agreement between the Parties, and fully supersedes any and all prior
contemporaneous agreements of understandings between the Parties which pertain
to the subject matter hereof.  The terms of this Surrender may not be
contradicted by evidence of any prior contemporaneous agreement and no extrinsic
evidence whatsoever may be introduced to vary its terms in any judicial
proceeding involving this Surrender or the subject matter of this Surrender.

 

4.                  Binding Effect.           As used in this Surrender, the
terms Nation Australia and Officer include their respective heirs, personal
representatives, successors, assigns, affiliates, predecessors in interest,
successors in interest, assignors, assignees, agents, independent contractors,
employees, attorneys, directors, shareholders, investors, insurers, sureties,
and anyone claiming by, through or under the respective Party.

 

5.                  Applicable Law.          This Surrender shall be governed
by, construed, interpreted and applied in accordance with the laws of Western
Australia, Australia, excluding any choice of law rules which would refer the
matter to the laws of another jurisdiction. 

 

[Signature and Acknowledgement Page Follows]

2

 

 

--------------------------------------------------------------------------------

 

 

IN WITNESS WHEREOF, the Parties hereto have duly executed this Surrender on the
Effective Date indicated above.

 

 

 

 

Executed by Nation Energy (Australia) Pty Ltd (ACN 606 533 046) in accordance
with section 127 of the Corporations Act 2001 by authority of its directors:

 

 

/s/ Michael Caetano

 

 

 

 

 

 

 

/s/ Robert Madzej

Chief Executive Officer/Director

 

Michael Caetano

 

Director

 

Robert Madzej

Print name

 

Print name

 

 

 

 

 

Executed by Officer Petroleum Pty Ltd (ACN 142 330 738) in accordance with
section 127 of the Corporations Act 2001 by authority of its directors:

 

/s/ Marc Bruner

 

 

 

 

 

/s/ David Sutton

Director

 

Marc Bruner

 

Director

 

David Sutton

Print name

 

Print name