Document:

Exhibit
10.16

     

    AMERICAN
DG ENERGY INC.

    COMMON
STOCK PURCHASE AGREEMENT

    

    
      	
              TO:

            	
              American
      DG Energy Inc.

            
	 
      	
              45
      First Avenue

            
	 
      	
              Waltham,
      Massachusetts 02451

            

    

    

    Ladies
and Gentlemen:

    

    The undersigned (the “Investor”)
desires to purchase from American DG Energy Inc., a Delaware corporation (the
“Company”), _______ shares of its Common Stock, par value $.001 per share (the
“Common Stock”). The purchase price for each share of Common Stock is
$0.70.

    

    1.           Subscription

    

    a.           Subject
to the terms and conditions of this Agreement (this “Agreement”), the Investor
agrees to subscribe for and purchase from the Company and tenders this
subscription for _______ shares of Common Stock (the “Shares”) together with
payment of the subscription price for the Shares in the amount of $________. The
subscription price is referred to in this Agreement as the “Funds”.

    

    b.           Tender
of the Funds shall be made by delivery of a personal or bank check payable to
the Company or by wire transfer to the Company’s designated bank account,
together with executed copies of this Agreement. The Investor should deliver the
executed subscription documents and payment for the Shares to the Company, at 45
First Avenue, Waltham, MA  02451 Attention: Anthony S. Loumidis, Chief
Financial Officer, Phone (781) 622-1117.

    

    2.           Acceptance
of Agreement

    

    It is understood and agreed that this
Subscription is made subject to the following terms and conditions:

    

    The
Company shall have the right to accept or reject this Subscription, in whole or
in part, for any reason, the ineligibility of a subscriber under applicable
state or foreign securities laws, for any other reason or for no reason. If this
Subscription is rejected, the Funds previously delivered to the Company will be
returned to the Investor.

    

    b.           Two
complete copies of this Agreement will be executed by the Investor. If this
Subscription is accepted, one copy of this Common Stock Purchase Agreement as
accepted by the Company shall be delivered to the Investor.

    

    c.           If
this Subscription is accepted in part and rejected in part, the Investor will be
so notified, at which time the excess Funds previously delivered to the Company
will be returned to the Investor.

    

    3.           Representations
and Warranties of the Investor

    

    In order to induce the Company to
accept this Agreement, the Investor hereby represents and warrants to the
Company as follows:

    

    a.           THE INVESTOR HAS READ CAREFULLY AND
UNDERSTANDS THIS AGREEMENT AND HAS CONSULTED THE INVESTOR'S OWN ATTORNEY,
ACCOUNTANT OR INVESTMENT ADVISER WITH RESPECT TO THE INVESTMENT CONTEMPLATED
HEREBY AND ITS SUITABILITY FOR THE INVESTOR.  THE INVESTOR HAS HAD AN
OPPORTUNITY TO ASK QUESTIONS OF AND RECEIVED ANSWERS FROM THE COMPANY, OR A
PERSON OR PERSONS ACTING ON THE COMPANY'S BEHALF, CONCERNING THE TERMS AND
CONDITIONS OF THIS INVESTMENT AND THE BUSINESS OF THE COMPANY, AND HAS RECEIVED
AND REVIEWED ALL ADDITIONAL DOCUMENTATION REGARDING THE BUSINESS AND OPERATIONS
OF THE COMPANY THAT HE OR SHE HAS REASONABLY REQUESTED.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    

    b.           The
Investor (i) has no need for liquidity in the investment in the Shares, (ii) is
able to bear the substantial economic risks of an investment in the Shares for
an indefinite period, and (iii) at the present time, could afford the complete
loss of such investment in the Shares.

    

    c.           The
address set forth at the end of this Agreement is the Investor's true and
correct residence, and the Investor has no present intention of changing such
residence to any other state or jurisdiction.

    

    d.           The
Investor confirms that all documents, records and books pertaining to the
investment in the Company reasonably requested by the Investor have been made
available to the Investor. The undersigned has relied only on such documents and
that no written or oral representation or information inconsistent with such
information has been made or furnished to the Investor in connection with the
Shares and if so made, has not been relied upon.

    

    e.           The
Investor understands that the Shares have not been registered under the
Securities Act, nor pursuant to the provisions of the securities laws or other
laws of any other applicable jurisdictions, in reliance on exemptions for
private offerings contained in the Securities Act and in the laws of such
jurisdictions. The Investor represents to the Company that he is an “accredited
investor”, as such term is defined in Rule 501(a) of Regulation D under the
Securities Act of 1933, as amended. The Investor is fully aware that the Shares
to which he or she is subscribing are to be sold in reliance upon such
exemptions based upon his or her representations, warranties and agreements set
forth in this Agreement. The Investor is fully aware that he or she must bear
the economic risk of his or her investment in the Company for an indefinite
period of time because the Shares have not been registered under the Securities
Act, and, therefore, cannot be offered or sold unless they are subsequently
registered under the Securities Act or an exemption from such registration is
available. The Investor further understands that the Company has no intention
and is under no obligation to register its Shares under the Securities Act or to
comply with the requirements for any exemption that might otherwise be
available, or to supply the Investor with any information necessary to enable
the Investor to make routine sales of the Shares under Rule 144 under the Securities Act
(which it understands is not now, and will not likely be, available) or any rule
of the Securities and Exchange Commission or any successor thereto.

    

    f.           The
Investor understands that the certificate(s) representing the Shares will bear
the following legend restricting its transfer and that a notation restricting
such transfer will be made on the stock transfer books of the
Company:

    

    “THE
SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE APPLICABLE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THESE SHARES HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO THEIR DISTRIBUTION OR
RESALE.  SUCH SHARES MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE ACT, OR AN
OPINION OF COUNSEL SATISFACTORY IN FORM AND SUBSTANCE TO THE COMPANY TO THE
EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.”

    

    g.           The
Shares are being acquired solely for the Investor's own account, for investment
and are not being purchased with a view to or for the resale or other
distribution of the Shares; and the Investor has no present plans to enter into
any contract, undertaking, agreement or arrangement relating to any resale or
other distribution of the Shares.

    

    h.           The
Investor understands that this Subscription may be accepted or rejected in whole
or in part in the sole and absolute discretion of the Company, and this
Agreement, unless properly revoked before the completion of the sale of the
Shares to the Investor, shall survive the Investor’s death, disability or
insolvency, except that the Investor shall have no obligations in the event that
this Subscription is rejected by the Company.

    

    i.         
  The Investor understands that even if the Company becomes a
"reporting company" under the Securities Exchange Act of 1934, as amended, the
provisions of Rule 144 promulgated under the Securities Act permitting resales
of the Shares will not be available for at least one (1) year, and there can be
no assurance that the conditions necessary to permit routine sales of the Shares
under Rule 144 will ever be satisfied, and, if Rule 144 should become available,
routine sales made in reliance on its provisions could be made only in limited
amounts and in accordance with the terms and conditions of the
Rule.  The Investor further understands that in connection with sales
of securities for which Rule 144 is not available, compliance with some other
exemption from registration will be required.  The Investor
understands that the Company is under no obligation to the undersigned to
register the Shares or to comply with the conditions of Rule 144 or take any
other action necessary in order to make available any exemption for the sale of
the Shares without registration.

    

    j.         
  The Investor has been advised to consult with the Investor’s own
attorney regarding legal, tax, and other matters concerning an investment in the
Company and has done so, to the extent the undersigned considers
necessary.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    k.           The
Investor acknowledges and is aware of the following:

    

    (i)           that
the Shares are a speculative investment and involve a high degree of risk of
loss by the Investor of the Investor's entire investment in the
Company;

    

    (ii)           that
there is no guarantee that the Investor will realize any gain from his or her
investment in the Company and that the Investor may lose his or her entire
investment;

    

    (iii)           that
the Company has no
current plan or intention to issue dividends with respect to the
Shares;

    

    (iv)           that
there has never been any representation, guarantee or warranty made to the
Investor by any broker, the Company, its agents or employees or any other
person, expressly or by implication, as to:

    

     
(A)           the
approximate or exact length of time that the Investor will be required to remain
as owner of the Shares; or

    

     
(B)           the past
performance or experience on the part of the officers or directors of the
Company, or of any other person, that will in any way indicate the predictable
results of the ownership of the Shares or any such other securities, or of the
overall business of the Company;

    

    v)            
that the Company may in the future issue additional shares of capital stock in
the Company, and that the Investor's interest in the Company may thereby become
diluted.

    

    The Investor acknowledges that he or
she understands the meaning and legal consequences of the representations,
warranties and acknowledgments contained in this Agreement. The Investor
confirms that such representations, warranties and acknowledgments are true and
accurate as of the date of this Agreement and shall be true and accurate as of
the date of delivery of the Funds to the Company and shall survive such
delivery. If in any respect such representations and warranties shall not be
true and accurate prior to acceptance of this Agreement pursuant to Section 2 of
this Agreement, the Investor shall give written notice of such fact to the
Company, specifying which representations and warranties are not true and
accurate and the reasons therefor.

    

    4.           Indemnification. The Investor acknowledges
that he or she understands the meaning and legal consequences of the
representations and warranties contained in Section 3 of this Agreement, and the
Investor agrees to
indemnify, defend and hold harmless the Company and each officer, director,
representative and agent of the Company and any person or entity controlling the
Company from and against any and all loss, cost, damage or liability (including
reasonable attorneys' fees) due to or arising out of a breach of any
representation or warranty of the Investor contained in this
Agreement.

    

    5.           No
Waiver.
Notwithstanding any of the representations, warranties, acknowledgments or
agreements made in this Agreement by the Investor, the
Investor does not thereby or in any other manner waive any rights granted to the
Investor under federal and state securities law.

    

    6.           Transferability. The Investor agrees not to
transfer or assign this Agreement, or any of the Investor's interest in this
Agreement, and further agrees that any assignment or transfer of the Shares
shall be made only in accordance with applicable securities laws and that an
appropriate legend with respect thereto may be placed by the Company on any
certificate evidencing such Shares.

    

    7.           Revocation. The Investor agrees that he
or she shall not cancel, terminate or revoke this Agreement.

    

    8.           Termination
of Agreement. If
any representation or warranty of the Investor contained in Section 3 of this
Agreement shall not be true prior to acceptance of this Agreement, and written
notice of such fact has been given by the Investor to the Company, then and in
any such event this Agreement shall be null and void and of no further force and
effect, and no party shall have any rights against any other party under this
Agreement or otherwise, and the Company shall promptly return to the Investor
the Funds together with all agreements executed by the
Investor.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    9.           Dispute
Resolution

    

    a.           All
disputes, claims, or controversies arising out of or relating to this Agreement
or any other agreement executed and delivered pursuant to this Agreement or the
negotiation, validity or performance hereof and thereof or the transactions
contemplated hereby and thereby that are not resolved by mutual agreement shall
be resolved solely and exclusively by binding arbitration to be conducted before
the American Arbitration Association (“AAA”).  If AAA ceases
operation, then the parties shall select a comparable organization that provides
qualified arbitration services.  The arbitration shall be held in
Boston, Massachusetts before a single arbitrator and shall be conducted in
accordance with the rules and regulations promulgated by AAA unless specifically
modified herein.

    

    b.           The
parties covenant and agree that the arbitration hearing shall commence within
ninety (90) days of the date on which a written demand for arbitration is filed
by any party hereto.  In connection with the arbitration proceeding,
the arbitrator shall have the power to order the production of documents by each
party and any third-party witnesses.  In addition, each party may take
up to three depositions as of right, and the arbitrator may in his or her
discretion allow additional depositions upon good cause shown by the moving
party.  However, the arbitrator shall not have the power to order the
answering of interrogatories or the response to requests for
admission.  In connection with any arbitration, each party shall
provide to the other, no later than seven (7) business days before the date of
the arbitration hearing, the identity of all persons that may testify at the
arbitration and a copy of all documents that may be introduced at the
arbitration hearing or considered or used by a party’s witness or expert. The
arbitrator’s decision and award shall be made and delivered within three (3)
months of the selection of the arbitrator. The arbitrator’s decision shall set
forth a reasoned basis for any finding of liability or award of
damages.  The arbitrator shall not have power to award damages in
excess of actual compensatory damages and shall not multiply actual damages or
award punitive damages or any other damages that are specifically excluded under
this Agreement, and each party hereby irrevocably waives any claim to such
damages.

    

    c.           The
parties covenant and agree that they will participate in the arbitration in good
faith and that they will share equally its costs, except as otherwise provided
herein.  The arbitrator may in his or her discretion assess costs and
expenses (including the reasonable legal fees and expenses of the prevailing
party whether claimant or respondent) against any party to a
proceeding.  Any party failing or refusing to comply with an order of
the arbitrators shall be liable for costs and expenses, including attorneys’
fees, incurred by the other party in enforcing the award. Nothing in this
Section 9 shall prohibit any party from proceeding in court without prior
arbitration for the limited purpose of seeking a temporary or permanent
injunction to avoid immediate and irreparable harm.  The provisions of
this Section 9 shall be enforceable in any court of competent
jurisdiction.

    

    d.           Unless
otherwise ordered, the parties shall bear their own attorneys’ fees, costs and
expenses in connection with the arbitration.  The parties will share
equally in the fees and expenses charged by AAA.

    

    e.           Each
of the parties hereto irrevocably and unconditionally consents to the exclusive
use of AAA to resolve all disputes, claims or controversies arising out of or
relating to this Agreement or any other agreement executed and delivered
pursuant to this Agreement or the negotiation, validity or performance hereof
and thereof or the transactions contemplated hereby and thereby and further
consents to the jurisdiction of the federal or state courts of the Commonwealth
of Massachusetts for the purposes of enforcing the arbitration provisions of
Section 9a of this Agreement.  Each party further irrevocably waives
any objection to proceeding before AAA based upon lack of personal jurisdiction
or to the laying of venue and further irrevocably and unconditionally waives and
agrees not to make a claim in any court that arbitration before AAA has been
brought in an inconvenient forum.  Each of the parties hereto hereby
consents to service of process by registered mail at the address to which
notices are to be given.  Each of the parties hereto agrees that its
or his submission to jurisdiction and its or his consent to service of process
by mail is made for the express benefit of the other parties
hereto.

    

    10.         Miscellaneous

    

    a.           All
notices or other communications given or made under this Agreement shall be in
writing and shall be delivered or mailed by (a) registered or certified mail,
return receipt requested, postage prepaid, or (b) overnight air courier, fees
prepaid, to the Investor at his or her address set forth below and to the
Company at its address set forth at the outset of this Agreement.

    

    b.           Failure
of the Company to exercise any right or remedy under this Agreement or any other
agreement between the Company and the Investor, or delay by the Company in
exercising the same, will not operate as a waiver of such right or
remedy.  No waiver by the Company will be effective unless and until
it is in writing and signed on behalf of the Company.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    c.           Notwithstanding
the place where this Agreement may be executed by any of the parties hereto, all
the terms and provisions hereof shall be construed in accordance with and
governed by the laws of the Commonwealth of Massachusetts, without giving effect
to its conflict of law principles.

    

    d.           This
Agreement is binding upon and inures to the benefit of the parties hereto and
their respective heirs, successors and permitted assigns.  This
Agreement cannot be assigned, amended or modified by the parties hereto, except
by written agreement executed by the parties hereto.

    

    e.           This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

    

    f.           If
any provision of this Agreement shall for any reason be held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision hereof and this Agreement shall be construed as if such invalid or
unenforceable provision had never been contained herein.

    

    g.          This
Agreement constitutes the entire agreement between the parties with respect to
the subject matter of this Agreement and may be amended only by a writing executed by
all parties.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the undersigned has executed this Agreement on this ___ day of
April, 2007.

    

    Manner in
which Title is to be held (Please Check One):

    

    
      
        	
                1.

              	
                ___

              	
                Individual

              
	 
      	 
      	 
      
	
                2.

              	
                ___

              	
                Joint
      Tenants With Right of Survivorship

              
	 
      	 
      	 
      
	
                3.

              	
                ___

              	
                Community
      Property

              
	 
      	 
      	 
      
	
                4.

              	
                ___

              	
                Tenants
      in Common

              
	 
      	 
      	 
      
	
                5.

              	
                ___

              	
                Married
      with Separate Property

              

      

    

    

    EXECUTION BY NATURAL
PERSONS

    

    ___________________________________________________________________________

    Exact
Name(s) in Which Title is to be Held

    (If Joint
Tenant or Tenants in Common, both persons must

    sign and
this page must contain all information for both persons).

    

    
      	
              ___________________________________

            	 
      	
              ___________________________________

            	 
      
	
              Signature

            	 
      	
              Signature

            	 
      
	 
      	 
      	 
      	 
      
	
              ___________________________________

            	 
      	
              __________________________________

            	 
      
	
              Name
      (Please Print)

            	 
      	
              Name
      (Please Print)

            	 
      
	 
      	 
      	 
      	 
      
	
              __________________________________

            	 
      	
              __________________________________

            	 
      
	
              Residence:
      Number and Street

            	 
      	
              Residence:
      Number and Street

            	 
      
	 
      	 
      	 
      	 
      
	
              ___________________________________

            	 
      	
              ___________________________________

            	 
      
	
              City,
      State, Zip Code

            	 
      	
              City,
      State, Zip Code

            	 
      
	 
      	 
      	 
      	 
      
	
              ___________________________________

            	 
      	
              ___________________________________

            	 
      
	
              Social
      Security Number

            	 
      	
              Social
      Security Number

            	 
      

    

    

    ___________________________________

    Telephone
Number

    

    Accepted
this ___ day of April 2007, on behalf of the Company.

    

    AMERICAN
DG ENERGY INC.

    

    
      	
              By:

            	
              __________________________

            
	 
      	 
      
	
              Name:

            	
              Anthony
      S. Loumidis

            
	
              Title:

            	
              Chief
      Financial Officer

            

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    EXECUTION BY SUBSCRIBER THAT
IS AN ENTITY

    

    (Corporation,
Limited Liability Company, Partnership, Trust, Etc.)

    

    ________________________________________________________

    Name of
Entity (Please Print)

    

    Date of
Incorporation or Organization:   
 ____________________________________________________

    

    State of
Principal
Offices:                           
____________________________________________________

    

    Federal
Taxpayer Identification Number:
 ____________________________________________________

    

    By:    ______________________________

    

    Title:               
    ________________________

    

    Attest:
_________________________                                        Address:             ________________________

    (If
Entity is a Corporation)

    _______________________________

     

    _______________________________

     

    _______________________________

    Taxpayer
Identification Number

    

    Accepted
this ___ day of April 2007, on behalf of the Company.

    

    AMERICAN
DG ENERGY INC.

    

    By:        __________________________

    

    Name:   Anthony
S. Loumidis

    Title:     Chief
Financial Officer

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    
      ACCREDITED INVESTOR
QUESTIONNAIRE

    

     

    Please check the box below that best
characterizes the person or entity subscribing for the Shares under the terms of
the foregoing Subscription Agreement.

     

    
      	
               
      

            	
               ̈

            	
              Any
      natural person whose individual net worth, or joint net worth with that
      person’s spouse, at the time of his purchase exceeds US
      $1,000,000;

            

    

     

    
      	
               
      

            	
               ̈

            	
              Any
      natural person who had an individual income in excess of $200,000 in each
      of the two most recent years or joint income with that person’s spouse in
      excess of $300,000 in each of those years and has a reasonable expectation
      of reaching the same income level in the current
  year;

            

    

     

    
      	
               
      

            	
               ̈

            	
              Any
      organization described in Section 501(c)(3) of the Internal Revenue Code,
      a corporation, a Massachusetts or similar business trust or a partnership,
      in each case, not formed for the purpose of this investment, with total
      assets in excess of US $5,000,000;

            

    

     

    
      	
               
      

            	
               ̈

            	
              Any
      director, executive officer, or general partner of the issuer of the
      securities being offered or sold, or any director, executive officer, or
      general partner of a general partner of that
  issuer;

            

    

     

    
      	
               
      

            	
               ̈

            	
              Any
      trust with total assets in excess of US $5,000,000, not formed for the
      specific purpose of acquiring the securities offered, whose purchase is
      directed by a sophisticated person as described in Rule 506(b)(2)(ii) of
      the Securities Act of 1933;

            

    

     

    
      	
               
      

            	
               ̈

            	
              Any
      entity in which all of the equity owners are accredited
      investors;

            

    

     

    
      	
               
      

            	
               ̈

            	
              Any
      private business development company as defined in Section 202(a)(22) of
      the Investment Advisers Act of
1940;

            

    

     

    
      	
               
      

            	
               ̈

            	
              Any
      Small Business Investment Company licensed by the U.S. Small Business
      Administration under Section 301(c) or (d) of the Small Business
      Investment Act of 1958;

            

    

     

    
      	
               
      

            	
               ̈

            	
              Any
      investment company registered under the Investment Company Act of 1940 or
      a business development company as defined in Section 2(a)(48) of that
      Act;

            

    

     

    
      	
               
      

            	
               ̈

            	
              Any
      bank as defined in Section 3(a)(2) or a savings and loan association or
      other institution defined in Section 3(a)(5)(A) of the Securities Act of
      1933 acting in either an individual or fiduciary
  capacity;

            

    

     

    
      	
               
      

            	
               ̈

            	
              Any
      insurance company as defined in Section 2(13) of the Securities Act of
      1933;

            

    

     

    
      	
               
      

            	
               ̈

            	
              Any
      employee benefit plan within the meaning of Title I of the Employee
      Retirement Income Security Act of 1974 whose investment decision is made
      by a fiduciary which is either a bank, savings and loan association,
      insurance company, or registered investment advisor, or whose total assets
      exceed US $5,000,000, or, if a self-directed plan, a plan whose investment
      decisions are made solely by persons who are accredited
      investors;

            

    

     

    
      	
               
      

            	
               ̈

            	
              Any
      broker or dealer registered pursuant to Section 15 of the Securities
      Exchange Act of 1934; or

            

    

     

    
      	
               
      

            	
               ̈

            	
              Any
      plan established and maintained by a state, its political subdivisions, or
      any agency or instrumentality of a state or its political subdivisions for
      the benefit of its employees, if such plan has total assets in excess of
      $5,000,000.

            

    

     

    
      	
               
      

            	
               ̈

            	
              None
      of the above.

            

    

     

    Name of
Subscriber:                      __________________________________

    

    Social
Security
Number:                __________________________________

    

    Signature:                                        __________________________________

    
      
         

      

      
        8Unassociated Document

    
       Exhibit
10.01

    

    

    OVERRIDING ROYALTY
AGREEMENT

    

    

    THIS AGREEMENT dated as of the
10th
day of June, 2009

    

    

    BETWEEN:

    

    

    CONTACT EXPLORATION INC., a
body corporate, having an office in the City of Calgary, in the Province of
Alberta (“Contact”)

    

    
      -
and
-

    

    

    ELMWORTH ENERGY CORPORATION, a
body corporate, having an office in the City of Calgary, in the Province of
Alberta (“Elmworth”)

    

    

    WHEREAS the Royalty Owner has
agreed to convey to the Royalty Payor the
Royalty Owner’s entire interest in the Royalty Lands subject to the reservation
of the Overriding Royalty.

    

    NOW THEREFORE the parties
hereto enter into this Agreement in consideration of mutual covenants and other
good and valuable consideration, which the parties hereby
acknowledge.

    

    

    
      	
              1.0

            	
              DEFINITIONS

            

    

    

    The
definitions contained in the Overriding Royalty Procedure shall apply to this
Agreement and in addition:

    

    a)           “Overriding
Royalty Procedure” means the 1997 CAPL Overriding Royalty Procedure attached as
Schedule “B”.

    

    
      	
               
      

            	
              b)

            	
              “Royalty
      Lands” means those lands described in Schedule
  “A”.

            

    

    

    
      	
               
      

            	
              c)

            	
              “Royalty
      Owner” means Contact.

            

    

    

    
      	
               
      

            	
              d)

            	
              “Royalty
      Payor” means Elmworth.

            

    

    

    
      	
               
      

            	
              e)

            	
              “Effective
      Date” means the 1st
      day of May, 2009.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    
      	
              2.0

            	
              SCHEDULES

            

    

    

    The
following Schedules are attached hereto and made part of this
Agreement:

    

    
      	
               
      

            	
              a)

            	
              Schedule
      “A” which describes the Title Documents, the Royalty Lands and the
      Encumbrances.

            

    

    

    
      	
               
      

            	
              b)

            	
              Schedule
      “B” which is the Overriding Royalty
Procedure

            

    

    

    
      	
              3.0

            	
              CONVEYANCE

            

    

    

    Royalty
Owner hereby conveys to Royalty Payor all of Royalty Owner’s undivided 30%
interest (the “Working Interest”) in the Royalty Lands and the Title Documents
subject to the reservation to Royalty Owner of an Overriding Royalty. Royalty
Payor shall assume all costs, expenses, risk and liability associated with the
Working Interest from and after the Effective Date. The parties hereto agree to
enter into a General Conveyance Agreement to evidence the agreement to sell,
assign, transfer and convey the Working Interest from Royalty Owner to Royalty
Payor as of the Effective Date

    

    
      	
              4.0

            	
              FURTHER
      CONSIDERATION

            

    

    

    In
further consideration of Royalty Owner conveying the Working Interest in the
Royalty Lands to Royalty Payor, Royalty Payor hereby agrees to pay to Royalty
Owner the amount of $270,000.00. In consideration of this payment by Royalty
Payor, Royalty Owner hereby agrees to reimburse Royalty Payor for all
outstanding amounts payable by Royalty Owner to Royalty Payor up to the
Effective Date. The total amounts payable under this provision shall not exceed
$270,000.00 regardless whether such costs occurred before or after the Effective
Date. Upon settlement of these outstanding amounts, Royalty Payor shall relieve
Royalty Owner of any future obligations to reimburse Royalty Payor for any
outstanding costs and expenses associated with the Royalty Lands from and after
the Effective Date.

    

    In
addition, Royalty Payor shall assume all of Royalty Owner’s liabilities and
future costs related to the reclamation of the well site and any access roads
associated with the well Oiltec et al Cogmagun #1 located at or near coordinates
45.082285 degrees North and 64.043977 degrees West. It is further understood and
agreed to by the parties that Royalty Payor will take over the surface lease for
the above referenced well and shall assume responsibility for the annual surface
rental  payments from and after the Effective Date.

    

    
      	
              5.0

            	
              AREA OF MUTUAL
      INTEREST

            

    

    

    The
provisions of Clause 6, Area of Mutual Interest (“AMI”), of the Farmout
Agreement dated May 10, 2007 between Royalty Owner and Royalty Payor, shall
remain in effect until September 15, 2009, whereby any new working interests
acquired by Royalty Payor within the AMI shall be subject to the Overriding
Royalty payable to Royalty Owner.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    6.0           TITLE

    

    
      	
               
      

            	
              a)

            	
              Each
      of the parties hereto represents and warrants that it has the requisite
      capacity and authority to enter into this Agreement and to perform the
      obligations to which it thereby becomes
subject.

            

    

    

    
      	
               
      

            	
              b)

            	
              The
      Royalty Owner does not warrant title to its interest in the Royalty Lands,
      but confirms that:

            

    

    

    
      	
               
      

            	
              i)

            	
              it
      has complied with the terms of the Title Documents to the extent necessary
      to keep them in full force and effect;
and

            

    

    

    
      	
               
      

            	
              ii)

            	
              as
      of the Effective Date, it has not received any notice of default related
      to the Title Documents which makes them subject to forfeiture;
      and

            

    

    

    
      	
               
      

            	
              iii)

            	
              its
      interest in the Title Documents is only encumbered with the applicable
      lessor’s royalty and such other encumbrances or royalties as are set out
      in Schedule “A”.

            

    

    

    
      	
               
      

            	
              c)

            	
              No
      party to this Agreement shall do, or cause to be done, anything to
      encumber the Royalty Lands which:

            

    

    

    
      	
               
      

            	
              i)

            	
              adversely
      and materially affects the interest of any other party;
  or

            

    

    

    
      	
               
      

            	
              ii)

            	
              results
      in the Title Documents becoming subject to termination or
      forfeiture.

            

    

    

    7.0           OVERRIDING
ROYALTY

    

    The
Royalty Owner reserves to itself a 5.75% overriding royalty interest in 87% of
the Petroleum Substances produced, or deemed to be produced from the Royalty
Lands (resulting in a 5.0025% overriding royalty based on 100% of production)
(the “Overriding Royalty”) as described in Article 2.00 of the Overriding
Royalty Procedure.

    

    8.0          
RIGHT TO
COMMINGLE

    

    The
Royalty Payor shall have the right to commingle production from the Royalty
Lands with production from other lands, provided methods acceptable to the
Royalty Owner are used to determine the proper measurement of individual well
production. Where governmental regulations or orders require segregated
production tests of individual wells 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.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    9.0           ASSIGNMENT
PROCEDURE

    

    As
provided in Clause 5.01 of the Overriding Royalty Procedure, assignments of
interest under this Agreement shall be carried out according to the 1993 CAPL
Assignment Procedure (“Assignment Procedure”).

    

    
      	
              10.0

            	
               NOTICES

            

    

    

    The
address for service of notices hereunder of each of the parties shall be as
follows:

    

    Royalty
Payor:     Elmworth Energy Corporation

    Suite 1250, 521 – 3rd Avenue
S.W.

    Calgary, Alberta

    T2P 3T3

    

    Attention: President &
Chief Operating Officer

    

    

    Royalty
Owner:    Contact Exploration Inc.

    Suite 400, 510 – 5th Street
S.W.

    Calgary, Alberta

    T2P 3S2

    

    Attention:
President

    

    

    
      	
              11.0

            	
               LIMITATIONS
      ACT

            

    

    

    The two
year period for seeking a remedial order under Section 3 of the Limitations Act,
R.S.A. 2000 c.L 12, as amended, for any claim (as defined in that Act) arising
in connection with this Agreement is extended to:

    

    
      	
               
      

            	
              a)

            	
              for
      claims disclosed by an audit, two (2) years after the time this Agreement
      permitted that audit to be performed;
or

            

    

    

    
      	
               
      

            	
              b)

            	
              for
      all other claims, four (4) years.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    
      	
              12.0

            	
               MISCELLANEOUS

            

    

    

    
      	
               
      

            	
              a)

            	
              Nothing
      in this Agreement is to be construed as an express or implied covenant by
      the Royalty Payor to develop the Royalty
Lands.

            

    

    

    
      	
               
      

            	
              b)

            	
              This
      Agreement shall be construed and enforced in accordance with the laws in
      effect in the province in which the Royalty Lands are located. Each of the
      parties hereto attorns to the jurisdiction of the Courts of the Province
      of Alberta and all Courts of appeal
therefrom.

            

    

    

    
      	
               
      

            	
              c)

            	
              This
      Agreement and the schedules attached hereto shall terminate when all Title
      Documents have terminated and all Royalty Wells have been
      abandoned.

            

    

    

    
      	
               
      

            	
              d)

            	
              This
      Agreement shall supersede all previous agreements by the parties relating
      to the Royalty Lands.

            

    

    

    
      	
               
      

            	
              e)

            	
              This
      Agreement may be executed in counterpart and, when each party has executed
      a counterpart, all counterparts taken together shall constitute this
      Agreement.

            

    

    

    

    IN WITNESS WHEREOF the parties
hereto have executed this Agreement as of the date first above
written.

     

    
      	 	 	 
	 	      
              CONTACT
      EXPORATION INC.

              

              Per:
      /s/ DARCY SPADY

              

              

              ELMWORTH
      ENERGY CORPORATION

              

              

              Per:
      /s/ HOWARD ANDERSON

            	 
	 	 	 

    

     

    
      
        

      

    

    This is
execution page attached to and forming part of the Overriding Royalty Agreement
dated June 10, 2009 between Contact Exploration Inc. and Elmworth Energy
Corporation.

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    SCHEDULE
“A”

    

    This is
Schedule “A” attached to and forming part of the Overriding Royalty Agreement
dated June 10, 2009 between Contact Exploration Inc. and Elmworth Energy
Corporation.

    

    For a
description of the Title Documents and the Royalty Lands – see attached Schedule
I to Production Lease No. PL #09-04-15-01.

    

    Encumbrances:

    

    Lessor
Royalty of 10% payable to the Province of Nova Scotia

    

    Overriding
Royalty of 3% payable to Devon ARL Corporation on a 90% interest in the Royalty
Lands

    

    

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    

    SCHEDULE
“B”

    

    

    
      This is
Schedule “B” attached to and forming part of the Overriding Royalty Agreement
dated June 10, 2009 between Contact Exploration Inc. and Elmworth Energy
Corporation.

    

    
      
        

      

    

    1997 CAPL OVERRIDING ROYALTY
PROCEDURE

    

    

    Clause
1.01(b) – Effective Date – May 1, 2009

    

    Clause
1.02 – Definitions

    

    Subclause 101 (s) (market price) –
delete everything after “Subclause 2.03”.

    

    Clause
2.01 – quantification of Overriding Royalty

    

    Crude
oil                                5.75%

    

    Other petroleum
substances:

    

    Alternate
1                                5.75%

    

    Clause
2.08 – Surrender

    

    Will apply

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