Document:

EXHIBIT 10.1

	
   

  	
   

  	
   

  
	
  No.

  	
  Description

  	
   

  
	
  

  	
  

  	
   

  
	
   

  	
   

  	
   

  
	
  10.1

  	
  Summary of
  the Compensation of the Directors of AngioDynamics, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
  Annual Cash
  Retainer (payable in quarterly installments):

  
	
   

  	
  All Board Members

  	
                                    $24,000
  
	
   

  	
   

  	
   

  
	
   

  	
  Additional
  Cash Retainer (payable in quarterly installments):

  
	
   

  	
  Audit
  Committee Chair

  	
                                    $12,000
  
	
   

  	
  Chairman of
  the Board

  	
                                    $24,000
  
	
   

  	
   

  	
   

  
	
   

  	
  Board and
  Committee Meeting Fees:

  
	
   

  	
  Board

  	
                                    $1,500/meeting
  
	
   

  	
  Committees

  	
   

  
	
   

  	
  Chairman

  	
                                    $1,500/meeting
  
	
   

  	
  Members

  	
                                    $750/meeting
  
	
   

  	
   

  	
   

  
	
   

  	
  Equity
  Grants:

  
	
   

  	
  Initial
  grant to new directors:

  
	
   

  	
  Option for 25,000 shares (48-month vesting
  period) under the Company’s 2004 Stock and Incentive Award Plan (the “2004
  Plan”)

  
	
   

  	
   

  
	
   

  	
 Annual grant
  to each director:

  
	
   

  	
  Option for 6,000 shares (36-month vesting
  period) under the 2004 PlanExhibit 10.2

                                                                                                            Exhibit
    10.2
    

    FARMOUT
      and OPTION AGREEMENT

    

    Empress
      Area, Alberta

    

    Made
      as
      of the 21st
      day of
      January, 2005

    

    BETWEEN:

    

    HANNA
      OIL AND GAS COMPANY-CANADA, INC.,
      a body
      corporate with an office in the City of Calgary, Alberta (“Hanna”)

     

    -and-

    

    FIREFLY
      RESOURCES LTD. a
      body
      corporate with an office in the City of Calgary, Alberta
      (“Firefly”)

    

    -and-

    

    MORAINE
      RESOURCES LTD. a
      body
      corporate with an office in the City of Calgary, Alberta
      (“Moraine”)

    

    (Hanna,
      Firefly and Moraine are hereinafter collectively referred to as
“Farmor”)

    

    -and-

    

    VEGA
      RESOURCES LTD., a
      body
      corporate with an office in the City of Calgary, Alberta (“Vega”)

    

    

    WHEREAS
      Farmor is prepared to grant Vega the right to earn an interest in the Farmout
      Lands and the Option Lands in which Farmor holds an undivided one hundred
      percent (100%) working interest, on the terms and conditions herein
      provided.

    

    In
      consideration of the mutual covenants contained in this Agreement the Parties
      agree as follows:

    

    

    1. DEFINITIONS

    

    In
      this
      Head Agreement the definitions in the Farmout & Royalty Procedure shall
      apply, unless the context otherwise requires, and, the words below shall have
      the meanings indicated:

    

    “Agreement”
      means
      the Head Agreement and the Schedules attached to it.

    

    “Contract
      Depth”
      means a
      depth sufficient to penetrate fifteen metres (15 m) into the Paleozoic formation
      or nine hundred and fifty meters (950 m) subsurface, whichever first
      occurs;

    

    “Earning
      Well” means
      the
      Test Well and the Option Well(s), as the case may be;

    

    “Effective
      Date”
      means
      January 21, 2005;

    

    “Farmee”means
      Vega;

    

    “Farmor”
      means
      Hanna as to a 56% interest, Firefly as to a 24% interest and Moraine as to
      20%;

    

    “Farmout
      & Royalty Procedure”
      means
      the 1997 CAPL Farmout & Royalty Procedure which is hereby modified by the
      1997 CAPL Farmout & Royalty Procedure election and amendment sheet attached
      hereto as Schedule “B”;

    

    “Farmout
      Lands” means
      the
      areal, stratigraphic and substance rights described as “Farmout Lands” in
      Schedule “A” of the Agreement or so much of those rights as remain subject to
      the Agreement and the Title Documents, excluding any Reserved Formations;

    

    “Head
      Agreement”
      means
      the Agreement, other than the Schedules;

    

    “Lessor
      Royalty”
      means a
      lessor royalty under a Title Document;

    

    “Operating
      Procedure”
      means
      the standard form 1990 CAPL Operating Procedure and 1996 PASC Accounting
      Procedure with elections attached hereto as Schedule “C”;

    

    “Option
      Lands”
      means
      the areal, stratigraphic and substance rights described as “Option Lands” in
      Schedule “A” of the Agreement or so much of those rights as remain subject to
      the Agreement and the Title Documents, excluding any Reserved
      Formations;

    

    “Option
      Well” means
      the
      well or wells, in addition to the Test Well, that the Farmee has the option
      to
      drill, pursuant to clause 6 entitled ROLLING
      OPTION WELL(s) of
      the
      Head Agreement, to earn a Working Interest in the Farmout Lands and/or the
      Option Lands, as the case may be;

    

    “Pre-Farmout
      Working Interests”
      means
      the undivided Working Interests of the Parties the Farmout Lands and Option
      Lands, prior to any earning hereunder, as described in Schedule
“A”;

    

     

    “Test
      Well” means
      the
      first well drilled under the Head Agreement as provided for in clause 4 entitled
      TEST
      WELL
      of
      the Head Agreement;

     

    

    “Title
      Documents” means
      the
      documents of title described as “Title Documents” in Schedule “A” to the
      Agreement, insofar as they relate to the Farmout Lands, the Option Lands and
      all
      renewals, extensions, 

    continuations
      or documents of title issued in substitution or by selection.

     

    “Trust
      Agreement”means
      the
      form of trust agreement attached hereto as Schedule “E”.

    

    “Well
      Requirement Sheet”
      means
      the document specifying the type of information required to be supplied by
      the
      Farmee to the Farmor pursuant to the Farmout & Royalty Procedure and
      attached hereto as Schedule “D”. 

    

    

    

    
      
        
        

      

      
        1

        
          
                                                                                                 Exhibit
          10.2

      

      
        
        

      

    

    

    
      	2.     	
              INCORPORATION
                OF PROVISIONS FROM THE FARMOUT & ROYALTY
                PROCEDURE

            

    

    

    Except
      as
      otherwise set out herein and unless the context otherwise requires, clause
      1.02
      of the Farmout & Royalty Procedure which incorporates certain provisions of
      the Operating Procedure is hereby incorporated into the Head Agreement, except
      that any reference to “Operating Procedure” or “Farmout & Royalty Procedure”
      shall mean the Head Agreement. The following clauses are not incorporated as
      a
      conflicts clause and superseding clause are provided for in the clauses entitled
      “Supersedes Previous Agreements” and “Conflicts” of the Head
      Agreement”:

    

    107
      (Conflicts)

    2801
      (Supersedes Previous Agreements). 

     

    3.     SCHEDULES

    
The
      schedules described below are attached to and form part of this
      Agreement.

     

    Schedule
      “A” describes
      the Farmout Lands, Option Lands, Title Documents, Encumbrances and Pre-Farmout
      Working Interests;

    

    Schedule
      “B” is
      the
      1997 CAPL Farmout & Royalty Procedure and the 1997 CAPL Farmout &
      Royalty Procedure election and amendment sheet; 

    

    Schedule
      “C” is
      the
      Operating Procedure;

    

    Schedule
      “D” is
      the
      Well Requirement Sheet;

     

    Schedule
      "E" is the Trust Agreement.

     

    

    4.    TEST
      WELL

    

    Farmee
      shall, on or before March 15, 2005, subject to surface access, regulatory
      approvals and rig availability, commence drilling a well (hereinafter referred
      to as the “Test Well”) at a location of its choice on the Farmout Lands and
      shall continuously and diligently drill the Test Well to Contract Depth and
      complete, cap or abandon same at its sole cost, risk and expense. Farmee shall
      conduct all operations hereunder in accordance with good oilfield practices
      and
      in strict compliance with the terms of the Title Documents, this Agreement
      and
      the Regulations.

     

     

    5.    INTEREST
      EARNED 

    

    Subject
      to Article 3.00 of the Farmout & Royalty Procedure and Clause 4 herein and
      provided Farmee is not in default under this Agreement, Farmee will earn 100%
      of
      the Farmor’s Pre-Farmout Working Interests in four (4) sections of the Farmout
      Lands from surface to base of the deepest formation fully penetrated and
      evaluated, subject to the Overriding Royalty reserved by Farmor under the
      Farmout & Royalty Procedure. The said four (4) sections shall be selected
      with fourteen (14) days of rig release of the Test Well, which selection must
      conform to the Department of Energy Regulations governing lease selection from
      a
      PNG License.

    

    

     

    
      	6.     	
              ROLLING
                OPTION WELL(s) 

            

    

    

    If
      the
      Farmee has drilled the Test Well, has earned as provided for in clause 5 herein,
      and is not otherwise in default under this Agreement, the Farmee will have
      the
      right and option, for thirty (30) days from rig release of the last Earning
      Well
      drilled on the Farmout Lands or Option Lands, as the case may be, in which
      to
      elect in writing to Farmor to: 

    

    
      	(a)     	
              drill
                a well (hereinafter referred to as the “Option Well”) at a location of its
                choice on four pre-selected unearned sections of the Farmout Lands,
                which
                Option Well must be spudded by Farmee no later than forty five (45)
                days
                after its election, subject to surface access, rig availability and
                regulatory approvals. Farmee
                shall continuously and diligently drill the Option Well to Contract
                Depth
                and complete, cap or abandon same at its sole cost, risk and expense.
                Farmee shall conduct all operations hereunder in accordance with
                good
                oilfield practices and in strict compliance with the terms of the
                Title
                Documents, this Agreement and the Regulations;
                or

            

    

    

    
      	(b)     	
              drill
                an Option Well at a location of its choice on the Option Lands, which
                Option Well must be spudded by Farmee no later than sixty (60) days
                after
                its election, subject to surface access, rig availability and regulatory
                approvals. Farmee
                shall continuously and diligently drill the Option Well to Contract
                Depth
                and complete, cap or abandon same at its sole cost, risk and expense.
                Farmee shall conduct all operations hereunder in accordance with
                good
                oilfield practices and in strict compliance with the terms of the
                Title
                Documents, this Agreement and the
                Regulations.

            

    

    

    Failure
      by Farmee to elect to drill an Option Well in accordance with the provisions
      of
      subclause (a) or (b) above shall
      be
      deemed to be an election to surrender its rights to drill an Option Well and
      to
      earn an interest in the unearned Farmout Lands and Option Lands.

    

    

    
      
        
        

      

      
        2

        
          
Exhibit
          10.2

      

      
        
        

      

    

    7.    OPTION
      WELL EARNING

    

    
      	
              (a)

            	
              In
                the event Farmee elects to drill an Option Well pursuant to clause
                6 (a)
                herein, Farmee will, subject to Article 3.00 of the Farmout & Royalty
                Procedure and clause 6 (a) herein and provided Farmee is not in default
                under this Agreement, will earn 100% of the Farmor’s Pre-Farmout Working
                Interests in four (4) sections of the unearned Farmout Lands from
                surface
                to base of the deepest formation fully penetrated and evaluated,
                subject
                to the Overriding Royalty reserved by Farmor under the Farmout &
                Royalty Procedure. The said four (4) sections shall be selected with
                fourteen (14) days of rig release of the Option Well, which selection
                must
                conform to the Department of Energy Regulations governing lease selection
                from a PNG License.

            

    

    

    
      	
              (b)

            	
              In
                the event Farmee elects to drill an Option Well pursuant to clause
                6 (b)
                herein, Farmee will, subject to Article 3.00 of the Farmout & Royalty
                Procedure and clause 6 (b) herein and provided Farmee is not in default
                under this Agreement, earn one hundred (100%) percent of the Farmor’s
                Pre-Farmout Working Interest from surface to the base of the deepest
                formation penetrated and evaluated, in that section of the Option
                Lands in
                which the Option Well was drilled, subject to the Overriding Royalty
                and
                rights of conversion reserved by Farmor as set out in the Farmout
&
                Royalty Procedure. 

            

    

    

    For
      clarification, the Option Lands earned pursuant to sub-clauses 7(b) above shall
      be held as follows:

    

    
      	 	
              Before
                Payout

            	
              After
                Payout 

            
	
              Farmee
                 

            	
              100%

            	
              60.0%

            
	
              Hanna

            	
              GOR

            	
              22.4%       
                

            
	
              Firefly
                 

            	
              GOR

            	
              9.6%

            
	
              Moraine 

            	
              GOR

            	
              8.0%

            

    

    

    

    8.    AREA
      OF MUTUAL INTERST

    

    The
      Parties hereto agree that Section 8-24-2W4 shall be an Area of Mutual Interest
      (“AMI”). The AMI shall have a term of the later of one (1) year from rig release
      of the last Earning Well drilled hereunder or the termination of earning by
      Farmee as provided for in this agreement. The Parties interest in the AMI shall
      be Farmee 60%, Hanna 22.4%, Firefly 9.6% and Moraine 8.0%.

    

    

    9.    TRUST
      AGREEMENT

    

    Farmor
      shall assign to Farmee the entire interest earned in the Farmout Lands, but
      if
      such assignment is not possible or practical, it shall hold such interests
      in
      trust for Farmee in accordance with the Trust Agreement.

    

    
      
        
        

      

      
        3

        
          
                                                                                                         Exhibit
          10.2

      

      
        
        

      

    

    

    
      	8.     	
              ASSIGNMENT

            

    

    

    
      	(a)     	
              Until
                Farmee has earned the entire interest it is entitled to earn hereunder
                or
                its right to earn any further interest hereunder has terminated or
                expired, Farmee may not assign this Agreement, either in whole or
                in
                part.

            

    

    

    
      	(b)     	
              Once
                Farmee has earned the entire interest it is entitled to earn hereunder
                or
                its right to earn any further interest hereunder has terminated or
                expired, 2401(A) of the standard form 1990 CAPL Operating Procedure
                shall
                apply to all dispositions of Working Interests hereunder and any
                reference
                to “party” therein shall mean
“Party”.

            

    

    

    

    9.    LIMITATIONS

    

    The
      two
      (2) year period for seeking a remedial order under section 3(1)(a) of the
      Limitations Act, 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, and (b) for all other claims, four (4)
      years. 

    
 

    10.    ADDRESS
      FOR NOTICE

    

    The
      address for service of notices hereunder for each Party is:

    

    
      	
               

              Hanna
                Oil and Gas Company-

               

               

              Canada,
                Inc.

               

              1400,
                715 - 5th
                Avenue SW

              Calgary,
                AB T2P 2X6

              Attn:
                Land Department

              Fax:
                (403) 265-1870

            	
              Firefly
                Resources Ltd.

              1400,
                715 - 5th
                Avenue SW

              Calgary,
                AB T2P 2X6

              Attn:
                Ken Havard, President

              Fax:
                (403) 269-2557

            
	 	 
	
              Moraine
                Resources Ltd.

              1411,
                715 - 5th
                Avenue SW

              Calgary,
                AB T2P 2X6

              Attn:
                William Turnbull, President

              Fax:
                (403) 265-1870

            	
              Vega
                Resources Ltd.

              5008
                Varsity Drive NW

              Calgary,
                AB T3A 1A5

              Attn:
                Richard Johnson

              Fax:
                (403) 286-2139

            

    

    

    

    11.    SUPERSEDES
      PREVIOUS AGREEMENTS

    

    This
      Agreement supersedes all other agreements, documents, writings and verbal
      understandings between the Parties with respect to the Farmout Lands and the
      Option Lands and contains the entire agreement between the Parties with respect
      thereto.

    

    

    12.    CONFLICTS

     

    (a)    If
      any
      provision in the Head Agreement conflicts with any provision in an exhibit
      or
      schedule attached hereto (other than any Title Document), the provision of
      the
      Head Agreement shall prevail.

     

    (b)    If
      there
      is a conflict between any provision of the Agreement and the Regulations or
      Title Documents, the Regulations or Title Documents, as the case may be, shall
      govern, except that: (i) as between the Parties in their capacities or as
      Working Interest owners, the Working Interests shall prevail if there is a
      difference between the Working Interests and the registered interests in the
      Title Documents; and (ii) the allocation of responsibility for losses as
      provided herein shall govern the relationship of the Parties. 

     

    (c)    If
      there
      is a conflict as provided in any subclause above, the Agreement (excluding
      Title
      Documents) shall be modified accordingly to the extent necessary to resolve
      such
      conflict, and, as so modified, shall continue in full force and effect.

    

    

    13.    JURISDICTION

    

    This
      Agreement shall be subject to and interpreted, construed and enforced in
      accordance with the laws in effect in the Province of Alberta. Each Party
      accepts the jurisdiction of the courts of the Province of Alberta and all courts
      of appeal therefrom.

    

    
 

    IN
      WITNESS WHEREOF
      the
      parties have executed this Agreement on the date first set out
      above.

    

    

    
      	
              HANNA
                OIL AND GAS COMPANY-CANADA, INC.

               

               

               

              Per:
                ___________________________

              Chuck
                Gusa, Manager

            	
              FIREFLY
                RESOURCES LTD.

               

               

               

               

              Per:
                _________________________

              Kenneth
                Havard, President

            

    

    

    
      	 
	
              MORAINE
                RESOURCES LTD.

               

               

               

              Per:
                ___________________________

              William
                (Bill) Turnbull, President

            	
              VEGA
                RESOURCES LTD.

               

               

               

              Per:
                __________________________

              Name
                & Title

               

            

    

    

    

    

    

    This
      is
      the execution page of a Farmout and Option Agreement dated January 21, 2005
      between
      Hanna Oil and Gas Company-Canada, Inc., Firefly Resources Ltd., Moraine
      Resources Ltd and Vega Resources Ltd.

    

    
      
        
          4

           

        

        
        

      

      
        
        

        
          
                                                                                                         Exhibit
          10.2

      

      
        
        

      

    

    

    

    SCHEDULE
      “A”

    Attached
      to and made a part of a Farmout and Option Agreement dated January 21, 2005
      between Hanna Oil and Gas Company-Canada, Inc., Firefly Resources Ltd., Moraine
      Resources Ltd and Vega Resources Ltd.

    

    

    

    
      	
               

              Farmout
                Lands

               

            	 	
              Title
                Documents

            	 	
              Encumbrances

            	
              Pre-Farmout
                Working Interests

            
	 	 	 	 	 	 
	
              Twp
                24 Rge 2W4M: 

              Section’s
                9, 10, 11, 12, 13, 14, 15, 16, 22 & 23

              All
                PNG Rights

            	 	
              Alberta
                Crown PNG License #5303080787

            	 	
              Alberta
                Crown Royalty

            	
              Hanna
                56%

              Firefly
                24%

              Moraine
                20%

               

            
	 	 	 	 	 	 
	
              Twp
                24 Rge 2W4M: 

              Section
                17

              All
                PNG Rights below base Viking formation

               

              Twp
                24 Rge 2W4M: Section 21

              All
                PNG Rights to base Viking formation

            	 	 	 	 	 
	
              Twp
                24 Rge 2W4M: Section 21

              All
                PNG Rights below base Viking formation to basement

            	 	
              Alberta
                Crown PNG Lease #0400080023

            	 	
              Alberta
                Crown Royalty

            	
              Hanna
                56%                  

              Firefly
                24%

              Moraine
                20%

               

            
	 	 	 	 	 	 
	
               

              Option
                Lands

               

            	 	
              Title
                Documents

            	 	
              Encumbrances

            	
              Pre-Farmout
                Working Interests

            
	
              Twp
                24 Rge 2W4M: 

              Section
                5

              All
                PNG rights below base Medicine Hat formation to basement

            	 	
              Alberta
                Crown PNG Lease #0403010070

            	 	
              Alberta
                Crown Royalty

            	
              Hanna
                56%

              Firefly
                24%

              Moraine
                20%

               

            
	 	 	 	 	 	 
	 	 	 	 	 	 
	
              Twp
                24 Rge 2W4M: Section 6

              All
                PNG rights below base Medicine Hat formation to basement

            	 	
              Alberta
                Crown PNG Lease #0401110453

            	 	
              Alberta
                Crown Royalty

            	
              Hanna
                56%

              Firefly
                24%

              Moraine
                20%

               

            
	 	 	 	 	 	 
	
              Twp
                24 Rge 2W4M: Section 7

              All
                PNG rights 

            	 	
              Alberta
                Crown PNG Lease #0402010037

            	 	
              Alberta
                Crown Royalty

            	
              Hanna
                56%

              Firefly
                24%

              Moraine
                20%

               

            

    

    SCHEDULE
      “B”

    Attached
      to and made a part of a Farmout and Option Agreement dated January 21, 2005
      between Hanna Oil and Gas Company-Canada, Inc., Firefly Resources Ltd., Moraine
      Resources Ltd and Vega Resources Ltd.

     

    1997
      CAPL FARMOUT AND ROYALTY PROCEDURE

     

     

    ELECTIONS
      AND AMENDMENTS

     

    ______________________________________________________________________

     

        1.    EFFECTIVE
      DATE [Subclause
      1.01(f)]:
      January 21, 2005

    

    
      	2. 	
                  PAYOUT
                [Subclause 1.01(t)] Alternate A
                -
                With
                respect to the Option Lands
                only

            

    

     

        3.    INCORPORATION
      OF CLAUSES FROM 1990 CAPL OPERATING PROCEDURE [Clause
      1.02]

    

    Clause
      311 (Insurance) - Alternate A.

    

    Add
      Subclause 311h

    

    “In
      addition to the policies of insurance required under Clause 311A of the
      Operating Procedure, Farmee shall obtain and maintain control of well insurance
      to the extent of a minimum of three million dollars ($3,000,000) with respect
      to
      each well drilled hereunder and each such policy shall also include the waivers
      of subrogation required by Clause 311A of the Operating Procedure. All costs
      of
      insurance maintained by Farmee pursuant to this Clause shall be borne solely
      by
      Farmee and, upon request of Farmor, Farmee shall promptly provide Farmor with
      evidence that such insurance is maintained by Farmee, including a copy of any
      particular policy of insurance if so requested by Farmor.”                                                                                          

     

    4.    OPTION
      WELLS [Article
      4.00]

    

    This
      optional Article 4.00 will X
      / will
      not __ apply herein.

     

    5.    OVERRIDING
      ROYALTY [Article
      5.00]

    

    This
      optional Article 5.00 will X
      / will
      not __ apply herein. 

     

    6.    QUANTIFICATION
      OF OVERRIDING ROYALTY [Clause
      5.01]

    

    for
      crude
      oil, Alternate 1
      will
      apply 

    

    Alternate
      1: 15%
      of
      gross monthly production; or

    Alternate
      2: ___
      (divisor); not less than __%
      and not
      more than __%

    

    for
      all
      other Petroleum Substances, Alternate 1
      will
      apply

    

    Alternate
      1: 15%
      of
      gross monthly production; or

    Alternate
      2: if not taken in kind: ____% of gross monthly production; or if
      taken
      in kind ____% of gross monthly production

    

      7.    ROYALTY
      PAYOR’S ALLOWED DEDUCTIONS OF OVERRIDING ROYALTY NOT TAKEN IN KIND
[Subclause
      5.04B] 

    

    DEDUCTIONS
      (5.04 B) Alternates: 

    1
      only   __

    2
      only   __

    1
      and
      2      X

    neither
      1
      nor 2  __

    

    Alternate
      2 - 20%

    Marketing
      Fees are not an allowed deduction.

    

    

    
      
        
        

      

      
        5

        
          
                                                                                                                Exhibit
          10.2

      

      
        
        

      

    

     8.    ROYALTY
      OWNER’S RIGHTS UPON SURRENDER [Subclause
      5.08] 

    

    Add
      new
      paragraph:

    

    “Surrender
      in this Clause shall include the Royalty Payor’s intention not to make
      application to continue a Title Document beyond its primary term. The Royalty
      Owner shall have the right for fifteen (15) days from the date of such surrender
      notice to request an assignment from the Royalty Payor of the interest that
      it
      desires to surrender. From and after the date of such surrender or assignment
      the Royalty Payor shall be discharged of, from and against any and all
      obligations with respect to the interests so surrendered or assigned to the
      extent that such obligations are attributable to the period commencing with
      the
      date of the surrender or assignment, and the lands and the leases as
      hereinbefore defined, shall thereafter be deemed to exclude the interests so
      surrendered or assigned. The provisions of this Clause shall be subject to
      the
      Title Documents covering the lands and in the event of conflict, the provisions
      of the Title Documents shall prevail.”

    

    9.    CONVERSION
      OF OVERRIDING ROYALTY [Article
      6.00] 

    

    This
      optional Article 6.00 will X
      / will
      not __ apply herein with
      respect to the Option Lands only.

    

    

    10.    OPERATIONS
      AT CONVERSION [Clause
      6.04] 

    

    If
      Article 6.00 applies, conversion will be to 40%
      of the
      Working Interest by Farmor. This Article applies only to the Option
      Lands.

    

    

    11.    AREA
      OF MUTUAL INTEREST [Article
      8.00]

    

    This
      optional Article 8.00 will X/
      will
      not ___ apply herein.

    

    12.    LIABILITY
      AND INDEMNITY [Article
      10.00]

    

    Add:

    “10.03
      Survives Termination

    This
      Article shall survive the termination of the Agreement until Farmee has fully
      and properly abandoned all well sites, surface and subsurface facilities on
      the
      Farmout Lands or used in connection with production from the Farmout Lands
      in
      accordance with the regulations and has fully restored the surface for such
      well
      sites, surface and subsurface facilities in accordance with the
      regulations.”

    

    

    13.    LAND
      MAINTENANCE COSTS [Clause
      11.02]

    

    This
      optional Clause 11.02 will X
      / will
      not __ apply herein.

    The
      Farmee will pay the Farmor $__________ with 30 days of Effective
      Date.

    

    Add:

    

    “Farmee
      shall be responsible for all rentals on a per diem basis payable on the Title
      Documents from the Effective Date until Farmee has earned an interest in the
      Farmout Lands and or the Option Lands or until Farmee’s right to earn any
      further interest is terminated or surrendered. Thereafter Farmee and Farmor
      shall pay all rentals and taxes on those Farmout Lands and Option Lands that
      Farmee has earned an interest in proportionate to the working interests they
      hold in such Farmout Lands and Option Lands.”

    

    
      
        
          6

           

        

        
        

      

      
        
        

        
          
Exhibit
          10.2

      

      
        
        

      

    

    

    SCHEDULE
      “C”

    Attached
      to and made a part of a Farmout and Option Agreement dated January 21, 2005
      between Hanna Oil and Gas Company-Canada, Inc., Firefly Resources Ltd., Moraine
      Resources Ltd and Vega Resources Ltd.

    

    

    OPERATING
      PROCEDURE ELECTIONS

    

    1990
      CAPL OPERATING PROCEDURE

    

    Clause
      311
      -
      Insurance: Alternate A
      __
B
       X 

    

    Clause
      604
      -
      Marketing Fee: Alternate A  X_
      B
      ___

    (if
      'B'
      is selected add specific options for petroleum, NG, NGL &
      sulphur)

    

    Clause
      903
      - Less
      than All Parties Participate: Alternate A _ X_
      B
      ___ 

    

    Clause
      1007
      -
      Penalty Where Independent Well Results in Production:

    1007
      (a)
      (iv) - Development Wells 300% 

    1007
      (a)
      (iv) - Exploratory Wells  500% 

    

    Clause
      1010 (a) iv - exception:
      180
      days

    

    Clause
      2202
      -
      Addresses for Notices:

    

    
      	
              Hanna
                Oil and Gas Company-Canada, Inc.

              1400,
                715 -5th
                Avenue SW

              Calgary
                AB 

              T2P
                2X6

              Attn:
                Land Dept.

            	
              Firefly
                Resources Ltd.

              1400,
                715 -5th
                Avenue SW

              Calgary
                AB 

              T2P
                2X6

              Attn:
                President

            
	
               

              Moraine
                Resources Ltd.

              1411,
                715 - 5th
                Avenue SW

              Calgary,
                AB

              T2P
                2X6

              Attn:
                President

            	
               

              Vega
                Resources Ltd.

              5008
                Varsity Drive NW

              Calgary
                AB

              T3A
                1A5

              Attn:
                Land Dept.

            
	 	 
	 	 

    

    Clause
      2401
      - Right
      to Assign/Sell/Dispose: Alternate A _ X_
      B
      ___
 

    

    Clause
      2404 -
      Recognition upon Assignment: deleted in its entirety and replaced with 1993
      CAPL
      Assignment Procedure 

    

    1996
      PASC ACCOUNTING PROCEDURE

    

    Clause
      105
      -
      Operating Fund:  10% 

    Clause
      110
      -
      Approvals: 2
      or
      more
      parties totalling 75% 

    

    Clause
      112
      -
      Expenditure Limitations: (a)
      excess of $25,000
      (c)
      excess of $25,000

    

    Clause
      202(b)
      Employee
      Benefits: (b) exceed 22%

    

    Clause
      213
      - Camp
& Housing: shall
      not

    

    Clause
      216
      -
      Warehouse Handling: 5%

    

    Clause
      302
      -
      Overhead Rates:

    (a) For
      each
Exploration
      Project:

    (1)  5
      %
      of the
      first $ 50,000;
      plus

    (2)  3 %
      of the
      next $100,000;
      plus

    (3)  1 %
      of cost
      exceeding the sum of (1) and (2)

    (b) For
      each
Drilling
      Well:

    (1)  3
      %
      of the
      first $ 50,000;
      plus

    (2) 
      2 %
      of the
      next $100,000;
      plus

    (3)  1 %
      of cost
      exceeding the sum of (1) and (2)

    (c) For
      each
Initial
      Construction Project:

    (1) 
      5 %
      of the
      first $ 50,000;
      plus

    (2)  3 %
      of the
      next $100,000;
      plus

    (3)  1 %
      of cost
      exceeding the sum of (1) and (2)

    

    (d) For
      each
Subsequent
      Construction Project:

    (1) 5%
      of the
      first $50,000;
      plus

    (2) 3%
      of the
      next $100,000;
      plus

    (3) 1%
      of the
      cost exceeding the sum of (1) and (2)

    (e) For
      Operation
      and Maintenance:

    (1) 
      -
      _%
      of the
      cost; and

    (2) $250.00/producing
      well/month;

    (3) $____Flat
      rate per month.

    Rates
      for
      e(2) and e(3) will
      not
      be
      adjusted each July

    

    Clause
      406
      -
      Dispositions: $25,000

    

    

    

    
      
        
          7

           

        

        
        

      

      
        
        

        
          
                                                                                                             Exhibit
          10.2

      

      
        
        

        
        

      

    

    SCHEDULE
      “D”

    Attached
      to and made a part of a Farmout and Option Agreement dated January 21, 2005
      between Hanna Oil and Gas Company-Canada, Inc., Firefly Resources Ltd., Moraine
      Resources Ltd and Vega Resources Ltd.

    

    

    

     

    WELL
      DATA REQUIREMENT SHEET

     

    

    WELL
      NAME: __________________
      LOCATION ________________________

    

    

    
      	1.     	
              INFORMATION
                REQUIRED PRIOR TO DRILLING:
                PLEASE MAIL THE NOTICES TO: 

            

    

    

    

    
      	
              Hanna
                Oil and Gas Company-Canada, Inc.

              1400,
                715 -
                5th
                Avenue SW

              Calgary,
                AB T2P 2X6

              Attention:
                Chuck Gusa, Manager

            	
              Moraine
                Resources Ltd.

              1411,
                715 - 5th
                Avenue S.W.

              Calgary,
                AB T2P 2X6

              Attention:
                William (Bill) Turnbull, President

            
	
              Firefly
                Resources Ltd.

              1400,
                715 -
                5th
                Avenue SW

              Calgary,
                AB T2P 2X6

              Attention:
                Kenneth Havard, President

            	 

    

    

    

    
      	 	 #
              of Copies to each Company Required
	 Survey Plan	 1
	 Application for Well
              Licence 	 1
	 Well Licence	 1
	 Drilling Program and Geological
              Prognosis 	 1

    

    

    2.    DAILY
      E-MAIL DAILY REPORTS TO:

    

    
      	
              Hanna
                - Chuck Gusa

              hanna@pngland.com

            	
              Moraine
                - William (Bill) Turnbull

              williamturnbull@yahoo.com

            
	
              Firefly
                - Kenneth Havard

              firefly@pngland.com

            	 

    

    

    

    

    3.    INFORMATION
      REQUIRED DURING & AFTER DRILLING:
      PLEASE
      MAIL TO THE ABOVE ADDRESSES 

    

    

    
      	 	 
              # of copies required to each Company
	 Daily Written Reports	 1
	 Logs: Field Prints	 1
	 Final Digits	 1
	 Core and Sample
              Descriptions  	 1
	 Drill Stem Test Reports	 1
	 Core Analyses: Preliminary	 1
	 Final	 1
	 Oil, Water and Gas Analyses	 1
	 Abandonment Report (AEUB
              Forms)	 1
	 Well Status Reports(AEUB
              Forms)	 1
	 Pressure Surveys, Completion
              Reports	 1
	 Production Reports	 1

    

    
           

    Access
      to
      Well Site Operations   
      Yes    
       X
      No

     

    4.    FORMATION
      SAMPLES:
      ACCESS
      TO OPERATOR'S CUTTINGS

    

     

    5.    NOTICES
      REQUIRED:

        24
      hours
      notice of intention to spud

        Immediate
      notice of oil or gas shows  X
      Yes 
      No

        24
      hours
      notice of intention to log, core or test

    
      	24 	
              hours
                notice of completion or abandonment

            

    

    

    Please
      direct all notices to the attention of:

    Chuck
      Gusa, Manager - Hanna Oil and Gas Company-Canada, Inc.

    Kenneth
      Havard, President - Firefly Resources Ltd.

    William
      (Bill) Turnbull, President - Moraine Resources Ltd.

    

    

    6. ADDITIONAL
      REQUIREMENTS AND REMARKS

    

    Chuck
      Gusa Home
      Phone # (403) 288-9652

    Cell
      # (403) 660-9029

    Office
      # (403) 269-4182

    E-Mail:
      hanna@pngland.com

    

    Kenneth
      Havard Office
      # 237-8778

    E-Mail:
      firefly@pngland.com

    

    William
      (Bill) Turnbull Office
      # (403) 263-1933

    E-Mail:
      williamturnbull@yahoo.com

    
      
        8

      

      
        
        

        
          

                                                                                                                           Exhibit
          10.2

      

      
        
        

      

    

    

    SCHEDULE
      “E”

    Attached
      to and made a part of a Farmout and Option Agreement dated January 21, 2005
      between Hanna Oil and Gas Company-Canada, Inc., Firefly Resources Ltd., Moraine
      Resources Ltd and Vega Resources Ltd.

    

    

    

     

    TRUST
      AGREEMENT

     

    

    THIS
      AGREEMENT made the  
      day of
  ,
      19 

    

    BETWEEN:

    

    ,
      a body
      corporate,

    having
      an
      office at the City of Calgary, in the Province of Alberta

    (“Trustee”)

    

    -and-

    

    ,
      a body
      corporate,

    having
      an
      office at the City of Calgary, in the Province of Alberta

    (“Beneficiary”)

    

    

    Trustee
      is the lessee under a lease (the “Lease”) granting to lessee certain petroleum
      or natural gas rights or both which may be found within, upon or under certain
      lands (the” Lands”). The Lease and Lands are described in Schedule “A”
      hereto.

    

    Trustee
      and Beneficiary are parties to an agreement (the “Agreement") described in
      Schedule “A” hereto whereby Beneficiary is entitled to certain interests in the
      Lease and Trustee agrees to hold the interest (the “Trust Interest”) of the
      Beneficiary in the Lease in trust on the terms and conditions set out
      below.

    

    In
      consideration of the mutual promises, covenants and conditions and in
      consideration of the sum of $10.00, receipt of which is hereby acknowledged,
      the
      parties agree as follows:

    

    1. The
      effective date of this Declaration is the date first written above.

    

    2. Trustee
      hereby acknowledges and agrees that from the date of this agreement and for
      the
      balance of the unexpired term of the Lease and subject to the Agreement and
      this
      agreement;

    

    (a) it
      holds
      the Trust Interest in trust for Beneficiary;

    

    (b) all
      benefit accruing to the Trust Interest, if and when received by Trustee, shall
      be held by Trustee, its successors and assigns, for the benefit of Beneficiary;
      and

    

    (c) it
      will
      not transfer, encumber, or in any other way dispose of the Trust Interest except
      with the written consent of Beneficiary or with the prior written consent of
      Beneficiary, which consent shall not be unreasonably withheld, PROVIDED HOWEVER,
      Trustee may dispose of the Trust Interest without Beneficiary’s consent if
      Trustee disposes of all its beneficial interest in the Lease and the party
      acquiring such interest agrees, in writing, to hold the Trust Interest in trust
      for Beneficiary and be bound by the terms of this Agreement in respect
      thereto.

    

    3. Trustee
      does not purport to hold in trust and does not warrant to Beneficiary any better
      title to the Trust Interest than it has now or is entitled to
      receive.

    

    4. Where
      applicable, Trustee shall use its reasonable efforts, notwithstanding any
      restrictions on assignment contained in the Lease, to have the operator under
      the applicable operating agreement recognize and deal directly with
      Beneficiary.

    

    

    5. (a) Beneficiary
      shall forthwith upon being invoiced by Trustee reimburse Trustee for the annual
      rental payments under the Lease, provided that all invoices delivered by Trustee
      to Beneficiary are in respect of annual rental payments that are payable or
      have
      been paid by Trustee.

    

    (b) Trustee
      shall use its reasonable efforts to keep Beneficiary apprised of all notices,
      operations and other matters insofar as they relate to the Trust
      Interest.

    

    
      	
              6.

            	
              When
                requested to do so by Beneficiary Trustee shall, subject to all applicable
                laws and all applicable agreements, assign the Trust Interest to
                an
                assignee specified by Beneficiary or execute a further trust agreement(s)
                in favor of such assignee as Beneficiary may designate in
                writing.

            

    

    

    7. 

    (a) Trustee
      shall not be liable to Beneficiary for any loss or damage arising from any
      act
      or omission of Trustee so long as Trustee acts in good faith and performs its
      obligations diligently and in a timely manner in maintaining the Trust Interest,
      including, but not limited to, making all payments required to maintain the
      Lease in good standing and registering or transferring caveats necessary to
      protect Trustee’s and Beneficiary’s interest in the Lease.

    

    (b) Beneficiary
      hereby agrees to indemnify Trustee against all actions, claims, suits, costs,
      demands, losses, damages and expenses of any nature that may be brought against
      or suffered by Trustee or which Trustee may sustain, pay or incur by reason
      of
      any matter or thing whether directly or indirectly arising out of or in any
      way
      attributable to Trustee holding the Trust Interest in trust pursuant to this
      agreement except where caused by Trustee’s gross negligence or wilful
      misconduct.

    

    8. Each
      party shall without further consideration do all such further acts and execute
      and deliver all such further documents reasonably required to fully perform
      the
      terms of this agreement.

    

    9. This
      agreement shall enure to the benefit of and is binding upon the parties hereto
      and their respective successors and assigns.

    

    10. If
      a term
      of this agreement conflicts with a term of the Agreement the term of the
      Agreement shall prevail and this agreement shall be deemed to be amended
      accordingly.

    

    

    IN
      WITNESS of the foregoing the parties have executed and delivered this agreement
      as of the date first written above.

    

    TRUSTEE:

    

    

    _______________________________________

    

    Per:____________________________________

    

    _______________________________________

    Print
      Name/Title:

    

    

    BENEFICIARY:

    

    

    ________________________________________

    

    Per:_____________________________________

    

    ________________________________________

    Print
      Name/Title:

    

    

    EXECUTION
      PAGE TO TRUST AGREEMENT DATED THE ___ DAY OF ______ 19__ , BETWEEN

    

    _______________________________________
      AND ___________________________________.

    

    
      
        
          

          h:\dept207\landagrmt\ABMA-215

           

        

        
        

      

      
        9

        
          
                                                                                                     Exhibit
          10.2

      

      
        
        

        
        

      

    

    

    

    This
      is Schedule “A” attached to and forming part of the Trust Agreement
      between____________________ and 
      dated ,
      19 .

    

    

    the
      Lease:

    

    

    

    

    

    

    the
      “Agreement”

    

    

    

    

    

    the
      Lands:

    

    

    

    

    

    

    

    

    

    

    

    

    the
      Trust Interest:

    

    

    

    

    

    
      
        
        

      

      
        10

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