Document:

ex101.htm

Hotstone Gold Property

OPTION AGREEMENT

THIS AGREEMENT made as of the 6th day of January 2012,   by and between

 

Gibson and Associates Inc.        And       Coastal Pacific Mining Corp. (Coastal)

David L. Gibson (Gibson)                          927 Drury Ave. N.E.

222 Main Street                                           Calgary, AB T2E 0M3

Airdrie, AB T4B 2J3

 

Gibson and Coastal are hereinafter sometimes referred to as the Optionor

AND

Trio Gold Corp (Trio  or the optionee )

Suite 145 251 Midpark Blvd.S.E.

Calgary AB  T2X 1S3

WHEREAS Gibson is the recorded and beneficial holder of a 100% un-divided interest in certain mining claims/property (the “Property”) situated in Greenlaw Township located south-east of Chapleau, Ontario as outlined in attached Schedule “A” appended hereto;

 AND WHEREAS Gibson and Coastal entered into an Option Agreement dated the 16th day of October 2010 which was amended on the 29th day of March 2011, copies of these agreements are attached hereto for reference only.

AND WHEREAS Trio wishes to earn a 50% undivided interest in the “Property” through the exercised and entire completion of the terms of this Option Agreement (the “Agreement”).

AND WHEREAS Gibson and Coastal wish to  enter into This Agreement with Trio, which agreement shall supersede all prior agreements between Coastal and Gibson, subject to Trio fulfilling the terms and conditions of This Agreement, the October 10, 2010 and March 29th, 2011 agreements shall be of no further force or effect;

 

NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged by each of the Parties) the Parties hereto covenant and agree each with the other as follows:

Coastal and Gibson hereby grant Trio the right to earn a 50% undivided working interest in the “Property”

  

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1. Interpretation

Definitions. The following terms, wherever used in this Agreement, shall have the meanings set forth below:

	
A.  

	
“Acts” means all legislation, as amended from time to time, of the jurisdiction in which the Property is located, applicable to the Property, including all Mining Exploration Operations.

	
B.  

	
“Affiliate” “shall have the meaning attributed to it in the Canada Business Corporations Act, R.S.C. 1985, c. C-44, as amended;

	
C.  

	
“Assets” means all tangible and intangible goods, chattels, improvements, or other items including, without limiting the generality of the foregoing, land, buildings, and equipment.

	
D.  

	
“Costs” means all items of outlay and expense whatsoever, direct or indirect, with respect to mining exploration operations, recorded by the Operator in accordance with this Agreement.

	
E.  

	
“Currency” means all dollar amounts expressed in this Agreement in lawful currency of Canada.

	
F.  

	
“Expenditures” means all costs, expenses and charges, direct and indirect, of or incidental to the Mining Exploration Operations incurred by the Optionee including, without limiting the generality of the foregoing, a charge for administrative services of the Option Agreement not exceeding [10%] of the amount of the costs, expenses and charges of the $1.5 million dollar expenditure budget.

	
G.  

	
“Interest” means the undivided beneficial percentage interest of each party retained or earned as a result of this Agreement in the Property.

	
H.  

	
“Minerals” shall mean the end products derived from the operations of mining processes and mining operations upon the Property as a mine;

	
I.  

	
“Mining Exploration Operations” means every kind of work done on or in respect of the Property, during the subsistence of the Option by or under the direction of the Optionee/Operator including, without limiting the generality of the foregoing, the work of assessment, geophysical, geochemical and geological surveys, studies and mapping, investigating, drilling, designing, examining, equipping, improving, surveying, searching for, digging, trucking, sampling, working and procuring mineral ores and metals, surveying and all other work usually considered to be prospecting, exploration, resource development and mining exploration.

	
J.  

	
“Operator” means the party appointed as the Operator in accordance with this Agreement, as being Trio Gold Corp or assigns of the Operator.

	
K.  

	
“Optionor” means Gibson and Coastal Pacific Mining Corp

	
L.  

	
“Optionee” means Trio Gold Corp..

  

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M.  

	
“Program” means any program to carry out work and incur Costs on the Property and includes as the context requires:

	
i.  

	
a document or documents wherein there is specified in reasonable detail an outline of any and all research, prospecting and exploration and development work proposed to be carried out during the program, the estimated Costs as to be incurred in carrying out the work is to be undertaken and

	
ii.  

	
the preparation of any feasibility report, and shall include any amendments to a program as may be agreed upon by the Optionor and Optionee.

	
N.  

	
“Property” means all of the mineral claims outlined and described in schedule “A”.

	
O.  

	
“This Option Agreement” refers to and collectively includes this Agreement and every schedule attached (hereinafter the “Agreement”).

	
P.  

	
“MNDM” refers to the Ministry of Northern Development and Mines.

 

	
2.  

	
Authority. All transactions, contracts, employments, purchases, operations, negotiations with third parties and any other matter or act undertaken on behalf of or in connection with the Property shall be done, transacted, undertaken or performed in the name of and by the Operator only.

	
3.  

	
Grant of Option to earn Interest. The Optionor grants to the Optionee the right to earn a 50% interest in the Property, as outlined in Schedule “A”, through the entire completion of the terms of This Agreement, on or before December 31, 2012. No partial interest will be incurred or earned through partial completion of this Agreement.

	
4.  

	
Exercise of Option. In order to maintain in force the working right of the option granted to it, and to exercise the Option, the Optionee must complete in full all of the following terms on or before December 31, 2012:

	
(i)  

	
On or before April 30, 2012 Trio must have evidence that it has a minimum of $700,000.00 in CDN funds available for expenditure on the property.

	
(ii)  

	
After a total of $600,000.00 has been spent on the property Trio must make a cash payment to Gibson of one hundred thousand dollars ($100,000.00) In the event that Trio elects not to continue to earn its interest in the property it should have no further rights or obligation to earn an interest in the property and this agreement will become null and void and the October 16th, 2010 and March 29th, 2011 agreements between Coastal and Gibson shall be in full force and effect.

	
(iii)  

	
If Trio elects to continue to earn its 50% interest in the property it must spend an additional $700,000.00 before December 31, 2012 to earn its 50% interest in addition it must pay to Gibson a final cash payment of $100,000.00 on or before December 31, 2012.

	
(iv)  

	
In the event that Trio elects not to continue to earn its interest in The Property as per clause 4 (ii) then all monies spent by Trio on The Property will be deemed to have been spent by Coastal and will be credited to

  

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(v)  

	
the account of Coastal pursuant to the Coastal Gibson agreement dated October 16th, 2010 and amended on March 29, 2011.

	
5.  

	
Headings. The headings of this Option Agreement and the schedules are solely for convenience of reference and do not affect the interpretation of it or define, limit or construe the contents of any provision of this Option Agreement.

	
6.  

	
Governing Law.  This Agreement and the rights and obligations and relations of the parties shall be governed by and construed in accordance with the laws of the Province of Alberta and the federal laws of Canada applicable therein (but without giving effect to any conflict of law rules). The parties agree that the courts of Alberta shall have exclusive jurisdiction to entertain any action or other legal proceedings based on any provisions of this Agreement.

	
7.  

	
Initial Operator.Trio shall be entitled to act as the Operator of the exploration programs upon the Property for the duration of this Agreement.

 

	
(a)  

	
Exploration Program Expenditures. Trio agrees under the terms of this Agreement to fund a $1.3 million dollar exploration program on or before December 31, 2012 upon the Property through a prepared mining exploration work program. Costs shall only be incurred under and pursuant to Programs prepared by the Operator. The Operator shall be entitled to a 10% administration fee for the work programs and an allowance for cost overruns of 10% in addition to any budgeted costs.

	
(b)  

	
Preparation of Programs.  The Operator shall prepare, or have prepared, a designated work program, containing a statement in reasonable detail of the proposed mining exploration operations to be conducted along with estimates of all costs to be incurred.

	
(c)  

	
Commencement of Program.  The Operator will proceed with the work upon selection of an approved exploration program design and budget.

	
(d)  

	
Program Update.  The Operator will supply progress and program updates to the Optionor and as results and events dictate.

	
8.  

	
Title to and Option of the claims.

Gibson and Coastal’s representations and warranties.

 Gibson and Coastal represent and warrant to the Optionee that:

	
(A)  

	
Gibson is the beneficial and registered or recorded owner of a 100% interest in the Property, subject to the Option Agreement with Coastal.

	
(B)  

	
The Property is in good standing, free and clear of all encumbrances.

  

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(C)  

	
All of the claims comprising the Property have been validly and properly located, staked, tagged and recorded in accordance with the Ontario Mining Act.

	
(D)  

	
Gibson and Coastal have the full and undisputed right to deal with the Property as provided in this Agreement.

 

Trio’s representations and warranties.

 

Trio represents, warrants and covenants to the Optionor that:

 

	
  

	
(a)

	
Trio is a corporation duly incorporated, organized and subsisting under the laws of the Province of Alberta with the corporate power to own its assets and to carry on its business in the jurisdiction in which the Property is located;

 

	
  

	
(b)

	
Trio has all necessary power and authority to own or lease its assets and carry on its business as presently carried on, to carry out its obligations herein and to enter into This Agreement and any agreement or instrument referred to in or contemplated byThis Agreement and to do all such acts and things as are required to be done, observed or performed by it, in accordance with the terms of This Agreement and any agreement or instrument referred to in or contemplated by This Agreement;

 

	
  

	
(c)

	
the execution, delivery and performance of This Agreement by Trio, and the consummation of the transactions herein contemplated will not (i) violate or conflict with any term or provision of any of the articles, by-laws or other constating documents of Trio; (ii) violate or conflict with any term or provision of any order of any court, Government or Regulatory Authority or any law or regulation of any jurisdiction in which Trio’s business is carried on; or (iii) conflict with, accelerate the performance required by or result in the breach of any agreement to which it is a party or by which it is currently bound;

 

	
  

	
(d)

	
This Agreement has been duly authorized, executed and delivered by Trio and constitutes a valid and binding obligation of Trio enforceable against Trio in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and except as limited by the application of equitable principles when equitable remedies are sought;

 

	 	
  

	
(e) Trio shall promptly apply for and use it reasonable best efforts to obtain all approvals, orders or acceptances required in connection with this Agreement, including, but not limited to those required by any Government or Regulatory Authorities,or the shareholders of Trio.

 

	
9.  

	
Grant of Option to earn Interest. The Optionor grants to the Optionee the right to earn a 50% interest in the Property subject only to the terms of This Agreement No partial interest will be granted, earned or incurred through any partial completion of this Agreement.

	
10.  

	
Lapse or Acceleration of the Option. The Optionee may let the working right lapse by failing to make any of the payments referred to in Item 4, or may accelerate any or all of these payments or expenditures as outlined in Item 4 to complete the terms of this Agreement.

  

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11.  

	
Maintenance of the Property.  The Optionee agrees that during the currency of the Option, it shall file all work from the designated work program(s), in the form of assessment work, to maintain the Property in good standing and pay all taxes, assessment fees, and other charges lawfully levied or assessed against the Property from the 1.3 million dollar work expenditure budget, except for any part of the Property abandoned pursuant to Item 13. The Optionor shall transmit promptly to the Optionee any notices pertaining to the taxes, assessments and other charges.

	
12.  

	
Abandonment.  The Optionee may at any time, during the currency of the Option, abandon any one or more of the claims, which comprise the Property.  The Optionee shall give the Optionor notice in writing of any abandonment.  In the event that any of the claims comprising the Property are abandoned (including the termination of this Agreement without the Optionee having exercised the Option), the Optionee will ensure that the claims are in good standing for a period of at least 6 months from the notice of abandonment and the Optionee agrees to pay all invoices to complete or wind-down the programs in full.

	
13.  

	
Assessment work.  The work programs conducted upon the Property will be deemed to be of and for the benefit of the Optionor and the Optionee shall file, in whole or in part, the assessment credits, as may become available, to Property with the MNDM, from the mining exploration operations conducted upon the Property during the currency of this Agreement.

	
14.  

	
Indemnity.  The Optionee shall indemnify and save the Optionor harmless from and against all losses, liabilities, claims, demands, damages, expenses, suits, injury or death in any way referable to the formation of this Agreement, provided, that the Optionor shall not be indemnified for any losses, liabilities, claims, demands, damages, expenses, suits, injury or death resulting from negligence or willful misconduct of the Optionor or its employees, agents, directors, officers, or contractors. The Optionee will indemnify and save the Optionor and the Optionee harmless from and against all losses, liabilities, claims, demands, damages, expenses, suits, injury or death arising from the conducted work program(s).

	
15.  

	
Interest Earned.  If the Optionee has, on or before December 31, 2012, fulfilled the terms and conditions of this Agreement.  The Optionee shall have the right, by giving written notice to the Optionor on or before one year from the execution date of this Agreement, to become the owner of a 50% undivided interest in all or part(s) of the Property as outlined in Schedule “A”, as the Optionee elects and will be registered upon title of the Property.

	
16.  

	
Joint Venture After Earn In.  Provided Trio has complied with the terms and conditions to earn its 50% interest. The parties to this Agreement shall own the following interest in the property.

Trio Gold Corp.                                                               50%

David L.Gibson                                                                25%

Coastal Pacific Mining Corp.                                       25%

David L. Gibson hereby acknowledges that Coastal, subject only to the fulfillment of the terms of this Agreement by Trio has earned their 25% working interest and no further payments or expenditures shall be required to be made by Coastal pursuant to the October 16th, 2010 and amended on March 29th, 2011 agreements between Coastal and Gibson.  Gibson hereby grants to Trio and Coastal the exclusive right to purchase his entire 25%  interest for a cash consideration of Two million dollars. Trio and Coastal

  

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agree that each has the exclusive right to acquire 50% of Gibson’s interest, unless otherwise assigned. Trio and Coastal further agree to grant Gibson a one percent (1%) net smelter return on their interest. Coastal and Trio will have the exclusive right to buy the net smelter interest for 1 million dollars, unless otherwise assigned. The net smelter interest will be registered with the MNDM on The Property. It is further agreed and understood by all parties hereto that in the event a joint venture is formed between Trio and Coastal that Gibson will not become a party to the joint venture and will revert to a buy out or carried interest.

 

 

	
17.  

	
Assignment of Interest.  During the currency of the Optionee and Optionor shall not, except as set out, sell, transfer nor assign this Agreement or their right or beneficial interest in the Property without the consent of the other party.  Either party shall be permitted to assign this Agreement to an Affiliate on the assigning party providing a guarantee, in form satisfactory to the other party to this Agreement. Any assignment shall be subject to the assignee entering into an agreement, in forma and substance satisfactory to counsel for the other party.

	
18.  

	
Encumbrances.  During the currency of the Agreement the Optionor and Optionee shall not pledge, mortgage, charge, or otherwise encumber their beneficial interest in the Property or their rights under this Agreement.

	
19.

	
Limitations of Obligations of Optionee. It is understood and agreed that:

	
(a)  

	
Subject to the terms of this Agreement, the Optionee may at any time abandon the working right in the option as in Item 13.

	
(b)  

	
In the event that the Optionee abandons the Agreement or fails to complete the terms of the Agreement then no fractional or partial interest in the Property will be granted.

 

	
20.  

	
Obligations of Gibson to Coastal.  It is understood and agreed that:

(a) Should Trio default on this Agreement then the agreements between Coastal and Gibson shall remain in full force and effect and Gibson shall agree to amend the dates of the Agreement with Coastal.

	
21.  

	
Equipment. In the event that the Optionee abandons the working right and Agreement all buildings, plant, equipment, machinery, tools, appliances and supplies which the Optionee may have brought on the Property, either before or during the period of the Agreement, may be removed by the Optionee at any time not later than six months after the abandonment of the Agreement.  Under this Agreement, any buildings, plant, equipment, machinery, tools, appliances and supplies left on the Property during the six month period shall be at the Optionee’s sole risk and, if not removed after the six-month period, shall be removed by the Optionor at the expense of the Optionee.

	
22.  

	
Information.  All information in the form of maps, plans, drill logs, and surveys will become the property of the Optionor, and shall be delivered by the Optionee upon completion of the Agreement.

	
23.  

	
Time. Time shall be of the essence of this Agreement and of every part of it and no extension or variation of this Agreement shall operate as a waiver of this provision.

  

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24.  

	
Confidentiality of information.  All information and data concerning or derived from the mining exploration operations shall be kept confidential and, except to the extent required by law, regulation or policy of any Securities Commission or Stock Exchange, or in connection with the filing of an annual information form, or prospectus or statement of material facts by any party or any of its affiliates, shall not disclose to any person other than an affiliate without the prior consent of the Operator any information related to the exploration of the Property.

	
25.  

	
Entire Agreement.  With respect to the subject-matter of this Agreement, this Agreement:

	
(a)  

	
Sets forth the entire agreement between the parties and any person who have in the past or who are now representing either of the parties;

	
(b)  

	
Supersedes all prior understandings and communications between the parties or any of them, oral or written and

	
(c)  

	
Supersedes and replaces the October 16, 2010 Hotstone Gold Property Option Agreement between David L. Gibson (The Optionor) and Coastal Pacific Mining Corp. (The Optionee)  The Amendment to the Agreement dated March 29, 2011.

	
(d)  

	
Constitutes the entire agreement between the parties.

Each party acknowledges that this Agreement is entered into after full investigation and that no party is relying on any statement or representation made by any other, which is not embodied in this Agreement.  Each party acknowledges that it shall have no right to rely on ay amendment, promise, modification, statement or representation made or occurring subsequent to the execution of this Agreement unless it is in writing and executed by each party.

By initialing each page and signing below the parties representing the Optionor and Optionee agree to the terms and conditions of this Agreement:

Gibson and Associates

David Lawrence Gibson                                          Coastal Pacific Mining Corp.

David Lawrence Gibson                                          Joseph Bucci, President                                           

 

/s/ David L. Gibson                                                   /s/ Joseph Bucci                                           

Signature                                                                    Signature

Trio Gold Corp.

Harry Ruskowsky, President                                                      

/s/Harry Ruskowsky                                           

Signature

  

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Schedule “A”

 

PORCUPINE Mining Division - 136325 - GIBSON, DAVID LAWRENCE

 

	
Township/Area

	
Claim Number

	
Recording Date

	
Claim Due Date

	
Status

	
Percent Option

	
Work Required

	
Total Applied

	
Total Reserve

	
Claim Bank

	
GREENLAW

	
1163944

	
1996-Jun-05

	
2010-Jun-05

	
A

	
100 %

	
$ 800

	
$ 9,600

	
$ 9,761

	
$ 0

	
GREENLAW

	
1163945

	
1996-Jun-05

	
2011-Jun-05

	
A

	
100 %

	
$ 400

	
$ 5,200

	
$ 9,042

	
$ 0

	
GREENLAW

	
1163946

	
1996-Jun-17

	
2010-Jun-17

	
A

	
100 %

	
$ 1,200

	
$ 14,400

	
$ 9,043

	
$ 0

	
GREENLAW

	
1206533

	
1996-Jun-17

	
2011-Jun-17

	
A

	
100 %

	
$ 400

	
$ 5,200

	
$ 9,043

	
$ 0

  

9ex101.htm

PURCHASE AND SALE AGREEMENT

BETWEEN

Imperial Oil & Gas, Inc., as Seller

and

Husky Ventures, Inc., as Buyer

Effective Date: January 1, 2012

  

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INDEX TO PURCHASE AND SALE AGREEMENT

ARTICLE I: Purchase and Sale.

1.01 Purchase and Sale

1.02 Interests

1.03 Effective Date

ARTICLE II: Purchase Price.

2.01 Purchase Price

2.02 Payment Schedule

ARTICLE III: Representations and Warranties.

3.01 Representations and Warranties of Seller

3.02 Representations and Warranties of Buyer

ARTICLE IV: Covenants.

4.01 Covenants of Seller

4.02 Covenants of Buyer

ARTICLE V: Conditions to Closing.

5.01 Conditions to Obligations of Seller

5.02 Conditions to Obligations of Buyer

5.03 Conditions to Obligations of Both Parties

ARTICLE VI: Closing.

6.01 Date of Closing

6.02 Place of Closing

6.03 Closing Obligations

ARTICLE VII: Obligations after Closing.

7.01 Post-Closing Adjustments

7.02 Sales Tax and Recording Fees

7.03 Indemnification

7.04 Proceeds of Production

  

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7.05 Further Assurances

7.06 Survival

ARTICLE VIII: Termination.

8.01 Termination

8.02 Return of Information

8.03 Liabilities Upon Termination

8.04 Default and Liquidated Damages

ARTICLE IX: Miscellaneous.

10.01 Expenses

10.02 Notices

10.03 Amendment

10.04 Assignment

10.05 Announcements

10.06 Generality of Provisions

10.07 Headings

10.08 Counterparts

10.09 References

10.10 Governing Law

10.11 Entire Agreement

10.12 Parties in Interest

EXHIBIT "A" Interests, Leases, and Lands

EXHIBIT "B" Balancing Status

EXHIBIT "C" Opinion of Buyer's Counsel

EXHIBIT "D" Opinion of Seller's Counsel

EXHIBIT "E" Form of Assignment, Bill of Sale, and Conveyance

  

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PURCHASE AND SALE AGREEMENT

Seller: Imperial Oil and Gas, Inc.

Buyer: Husky Ventures, Inc.

For the consideration, mutual promises, and agreements, and the benefits to be derived by Seller and Buyer, the receipt and sufficiency of which are acknowledged, Buyer and Seller have entered into this Purchase and Sale Agreement (the "Agreement") and agree as follows:

ARTICLE I

PURCHASE AND SALE

1.01 Purchase and Sale. Seller agrees to sell and convey to Buyer and Buyer agrees to purchase from and pay Seller for the Interests, described in §1.02, subject to the terms and conditions of this Agreement.

1.02 Interests. All of the following shall be referred to as the "Interests":

(a) The undivided interests described in Exhibit "A" and all of Seller's interests in the estates created by the leases, licenses, permits, and other agreements described in Exhibit "A" (collectively the "Leases"), insofar as the Leases cover and relate to the lands described in Exhibit "A" (the "Lands"), together with like undivided interests in and to all the property and rights incident to the Leases and Lands, including all rights in, to, and under all agreements, oil and/or purchase and sale contracts, leases, permits, rights-of-way, easements, licenses, farmouts, options, and orders in any way relating to the Lands and Leases;

(b) A like undivided interest in and to all of the personal property, fixtures, and improvements now, or as of the Effective Date as defined in §1.03, on the Lands, or used or obtained in connection with the Lands and Leases or with the production, treatment, sale or disposal of all produced or attributable hydrocarbons or water and all other appurtenances; and,

(c) All other leasehold interests, overriding royalty interests, mineral interests and other interests, if any, whether now owned or to be later acquired by Seller by operation of law or under the terms of any agreement(s), in and to the Lands and the Leases, and in or attributable to all production from the Lands and Leases.

1.03 Effective Date. The purchase and sale of the Interests shall be effective for all purposes as of the date of their assignment to Imperial Oil and Gas, Inc., at 7 a.m., local time (the "Effective Date"). The Effective Date is determined for each locality described in Exhibit "A" in accordance with the time generally observed in said locality.

  

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ARTICLE II

PURCHASE PRICE

2.01 Purchase Price. The purchase price for the Interests shall be $540,000.00 (the "Purchase Price") plus additional consideration described in a mutually agreed Area of Mutual Interest (“AMI”) between Buyer and Seller dated contemporaneously herewith to be executed at closing.

2.01 Payment Schedule. The purchase price will be $540,000.00 due at Closing (Payment).

ARTICLE III

REPRESENTATIONS AND WARRANTIES

3.01 Representations and Warranties of Seller. Seller makes the following representations and warranties to Buyer:

(a) Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.

(b) Seller has all requisite power and authority to carry on its business as presently conducted, to enter into this Agreement, and to perform its obligations under this Agreement. The consummation of the transactions contemplated by this Agreement will not violate or be in conflict with any provision of Seller's charter, bylaws or governing documents, or any contracts, agreements, or instruments to which Seller is a party or is bound, or any judgment, decree, order, statute, rule or regulation applicable to Seller.

(c) The execution, delivery, and performance of this Agreement and the transactions contemplated by this Agreement have been duly and validly authorized by all requisite action, corporate and otherwise, on the part of Seller.

(d) This Agreement has been duly executed and delivered on behalf of Seller, and at Closing all documents and instruments required by this Agreement, to be executed and delivered by Seller, shall have been duly executed and delivered. This Agreement does, and the documents and instruments shall, constitute legal and valid obligations of Seller.

3.02 Representations and Warranties of Buyer. Buyer makes the following representa­tions and warranties to Seller:

(a) Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of ____ and is duly qualified to carry on its business in each of the states in which the Lands and Leases are located.

  

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(b) Buyer has all requisite power and authority to carry on its business as presently conducted to enter into this Agreement, to purchase the Interests on the terms described in this Agreement and to perform its other obligations provided for in this Agreement. The consummation of the transactions contemplated by this Agreement will not violate, nor be in conflict with, any provision of Buyer's charter, bylaws or governing documents, or any agreement or instrument to which Buyer is a party or is bound, or any judgment, decree, order, statute, rule or regulation applicable to Buyer.

(c) The execution, delivery, and performance of this Agreement and the transactions contemplated by this Agreement have been duly and validly authorized by all requisite action, corporate and otherwise, on the part of Buyer.

(d) This Agreement has been duly executed and delivered on behalf of Buyer, and at Closing all documents and instruments required by this Agreement to be executed and delivered by Buyer shall have been duly executed and delivered. This Agreement does, and the documents and instruments shall, constitute legal and valid obligations of Buyer.

(e) Buyer has incurred no liability, contingent or otherwise, for Brokers' or finders' fees relating to the transactions contemplated by this Agreement for which Seller shall have any responsibility.

ARTICLE IV

COVENANTS

4.01 Covenants Of Seller. Seller covenants and agrees with Buyer as follows:

(a) Seller shall not propose any operations for the drilling of any new well or the redrilling of any existing well on the Interests after the date of this Agreement without the prior written consent of Buyer.

(b) Seller shall carry on its business with respect to the Interests in substantially the same manner as Seller has prior to the date of this Agreement and shall not introduce any new method of management, operation or accounting with respect to the Interests.

(c) Without the prior written consent of Buyer, Seller shall not enter into any new agreements or commitments with respect to the Interests which extend beyond Closing, shall not abandon any well located on the Interests nor release or abandon all or any portion of any of the Leases, shall not modify or terminate any of the agreements relating to the Interests, and shall not encumber, sell or otherwise dispose of any of the Interests other than personal property that is replaced by equivalent property or consumed in the normal operation of the Interests.

  

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(d) Seller shall cause Buyer to remain duly designated Operator of all wells included in the Interests which Seller operates, and allow Buyer to take over operations of those wells as of 7 a.m. local time on the day after the Closing.

(e) Seller grants Buyer and its employees and agents the right of access to the Interests and the right to witness and conduct well tests on the Interests.

(f) Seller shall use its best efforts to take or cause to be taken all such actions as may be necessary or advisable to consummate and make effective the sale of the Interests and the transactions contemplated by this Agreement and to assure that as of the Closing Date Seller will not be under any material corporate, legal or contractual restriction that would prohibit or delay the timely consummation of such transactions.

(g) Seller shall cause all of its representations and warranties contained in this Agreement to be true and correct on and as of the Closing Date. To the extent the conditions precedent to the obligations of Buyer are within the control of Seller, Seller shall cause such conditions to be satisfied on or prior to the Closing Date and, to the extent the conditions precedent to the obligations of Buyer are not within the control of Seller, Seller shall use its best efforts to cause such conditions to be satisfied on or prior to the Closing Date.

(h) Seller shall promptly notify Buyer if any representation or warranty of Seller contained in this Agreement is discovered to be or becomes untrue, or if Seller fails to perform or comply with any covenant or agreement contained in this Agreement or it is reasonably anticipated that Seller will be unable to perform or comply with any covenant or agreement contained in this Agreement.

4.02 Covenant of Buyer. Buyer covenants and agrees with Seller as follows:

(a) Buyer shall use diligent efforts to take or cause to be taken all such actions as may be necessary or advisable to consummate and make effective the purchase of the Interests and the transactions contemplated by this Agreement and to assure that as of the Closing Date Buyer will not be under any material corporate, legal or contractual restriction that would prohibit or delay the timely consummation of such transactions.

(b) Buyer shall cause all of its representations and warranties contained in this Agreement to be true and correct on and as of the Closing Date. To the extent the conditions precedent to the obligations of Seller are within the control of Buyer, Buyer shall cause such conditions to be satisfied on or prior to the Closing Date and, to the extent the conditions precedent to the obligations of Seller are not within the control of Buyer, Buyer shall use diligent effort to cause such conditions to be satisfied on or prior to the Closing Date.

(c) Buyer shall promptly notify Seller if any representation or warranty of Buyer contained in this Agreement is discovered to be or becomes untrue, or if Buyer fails to perform or comply with any covenant or agreement contained in this Agreement or it is reasonably anticipated that Buyer will be unable to perform or comply with any covenant or agreement contained in this Agreement.

  

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(d) Buyer shall use its best efforts in safeguarding and maintaining in a secure manner all engineering, geological and geophysical data, reports and maps, and all other confidential data provided by Seller, in the possession of Buyer, relating to the Interests.

ARTICLE V

CONDITIONS TO CLOSING

5.01 Conditions to Obligations of Seller. The obligations of Seller to consummate the transactions contemplated by this Agreement are subject to the satisfac­tion, or waiver by Seller, of the following conditions:

(a) All representations and warranties of Buyer contained in this Agreement shall be true in all material respects at and as of Closing as if such representations and warranties were made at and as the Closing, and Buyer shall have performed and satisfied all covenants and agreements required by this Agreement to be performed and satisfied by Buyer at or prior to Closing.

(b) Buyer has demonstrated that Husky has the ability to make the Payment timely at Closing.

5.02 Conditions to Obligations of Buyer. The obligations of Buyer to consummate the transactions contemplated by this Agreement are subject to the satisfaction, or waiver, by Buyer, of the following conditions:

(a) All representations and warranties of Seller contained in this Agreement shall be true in all material respects at and as of Closing as if such representations and warranties were made at and as of Closing, and Seller shall have performed and satisfied all agreements required by this Agreement to be performed and satisfied by Seller at or prior to Closing.

(b) Seller shall have obtained all needed or necessary consents to this transaction.

5.03 Conditions to Obligations of Both Parties. The obligations of Seller and Buyer to consummate the transactions contemplated by this Agreement are subject to the satisfaction, or waiver, by both parties, of the following conditions:

(a) Buyer and Seller have executed the AMI

(b) There shall not be pending or instituted, threatened or proposed, any action or proceeding by or before any court, administrative agency, or any other person challenging, complaining of, or seeking to collect damages or other relief in connection with the transactions contemplated by this Agreement.

  

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(b) No state or federal statute, rule, regulation or action shall exist or shall have been adopted or taken and no judicial or administrative decision shall have been entered, whether on a preliminary or final basis, that would prohibit, restrict, or delay the consummation of the transactions contemplated by this Agreement, or make the payments due by the terms of this Agreement to be illegal.

ARTICLE VI

CLOSING

6.01 Date of Closing. Subject to the conditions stated in this Agreement, the consummation of the transactions contemplated by this Agreement (the "Closing Date") shall be held on January 4, 2012, or such other date as the Buyer and Seller agree to in writing. This date, as amended if amended, shall be referred to as the "Closing Date."

6.02 Place of Closing. The Closing shall be held at the offices of Husky Ventures, Inc., or at such other place as Buyer and Seller may agree upon in writing.

6.03 Closing Obligations. At the Closing the following events shall occur, each being a condition precedent to the others and each being deemed to have occurred simultaneously with the others:

(a) Seller shall execute, acknowledge and deliver (in sufficient counterparts to facilitate recording) the assignment, bill of sale and conveyance in the form attached as Exhibit "B," conveying the Interests to Buyer. As appropriate, Seller shall also execute, acknowledge and deliver separate assignments of the Interests on officially approved forms in sufficient counterparts to satisfy applicable statutory and regulatory requirements.

(b) Buyer shall deliver to Seller or to Seller's account a certified or bank cashier's check or direct bank wire transfer for the Payment.

(d) Seller shall deliver to Buyer exclusive possession of the Interests.

(e) Seller and Buyer shall execute, acknowledge, and deliver division or transfer orders or letters in lieu of division and transfer orders directing all purchasers of production to make payment of proceeds attributable to production from the Interests, after the Effective Date, to Buyer.

(f) Seller shall deliver to Buyer all files and records relating to the Interests, including, without limitation, all information and material referred to in §4.01(a) and 4.01(b) not previously delivered to Buyer.

  

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ARTICLE VII

OBLIGATIONS AFTER CLOSING

7.01 Sales Taxes and Recording Fees. Buyer shall pay all sales taxes occasioned by the sale of the Interests. Buyer shall pay all documentary, filing, and recording fees required in connection with the filing and recording of the assignments described in §6.03 (a) above.

7.02 Indemnification. After the Closing, Buyer and Seller shall indemnify each other as follows:

(a) Buyer shall defend, indemnify, save, and hold Seller harmless against all claims, costs, expenses, and liabilities with respect to the Interests, which accrue or relate to times after the Effective Date, excluding those incurred by Seller with respect to the sale of the Interests to Buyer or the negotiations leading to such sale and excluding those that result from or are attributable to the negligence or willful misconduct of Seller, its employees or agents with respect to the operation and maintenance of the Interests, and excluding those that result from or are attributable to any representation of Seller contained in this Agreement being untrue or a breach of any warranty or covenant of Seller contained in this Agreement.

(b) Seller shall defend, indemnify, save, and hold Buyer harmless against all claims, costs, expenses, and liabilities with respect to the Interests, which accrue or relate to times prior to the Effective Date, excluding those incurred by Buyer with respect to the purchase of the Interests by Buyer or the negotiations leading to such purchase, and excluding those that result from or are attributable to any representation of Buyer contained in this Agreement being untrue or a breach of any warranty or covenant of Buyer contained in this Agreement.

7.03 Proceeds of Production. Buyer shall be entitled to receive all proceeds of production, attributable to the Interests after the Effective Date. Seller shall be entitled to receive all proceeds of production attributable to the Interests prior the Effective Date.

7.04 Further Assurances. Seller and Buyer shall execute, acknowledge, and deliver or cause to be executed, acknowledged, and delivered such instruments and take such other action as may be necessary or advisable to carry out their obligations under this Agreement and under any Exhibit, document, certificate, or other instrument delivered pursuant to this Agreement.

7.05 Survival. The representations, warranties, covenants, agreements and indemnities provided in this Agreement shall survive Closing and the close of this transaction and shall remain in full force and effect and binding on Seller and Buyer for a period of 3 years following the Closing Date.

  

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ARTICLE VIII

TERMINATION

8.01 Termination. This Agreement and the transactions contemplated by this Agreement may be terminated in the following instances:

(a) By either Buyer or Seller if any condition set forth in §6.03 above shall not be satisfied at the Closing.

(b) By Buyer if any condition set forth in §5.02 above shall not be satisfied on or before January 3, 2012.

(c) By Seller if any condition set forth in §5.01 above shall not be satisfied on or before January 3, 2012.

(d) By the mutual written agreement of Buyer and Seller.

This Agreement shall terminate without any further action by Seller or Buyer if the Closing has not occurred on or before January 15, 2012.

8.02 Return of Information. If this Agreement is terminated Buyer shall return to Seller all information and material delivered to Buyer by Seller pursuant to the terms of this Agreement.

8.03 Liabilities Upon Termination. If this Agreement is terminated for any reason or is breached, nothing contained in this Agreement shall be construed to limit Seller's or Buyer's legal or equitable remedies including, without limitation, damages for the breach or failure of any representation, warranty, covenant or agreement contained in this Agreement and the right to enforce specific performance of this Agreement.

ARTICLE IX

MISCELLANEOUS

9.01 Expenses. Except as otherwise specifically provided in this Agreement, all fees, costs, and expenses incurred by Buyer or Seller in negotiating this Agreement or in consummating the transactions contemplated by this Agreement shall be paid by the party incurring the same, including with limitation, legal and accounting fees, costs and expenses.

9.02 Notices. All notices and communications required or permitted under this Agreement shall be in writing and shall be effective when delivered addressed as follows:

  

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If to Seller: 

  

Husky Ventures, Inc.

201 North Robinson, Suite 1800

Oklahoma City, OK 73102

Attention: Charles V. Long, Jr. 

	
  

	
If to Buyer:

  

Imperial Oil & Gas, Inc.

106 E. 6th St., Ste 900

Austin, TX 78701

Attention: Robert R. Durbin

  

Either party may, by written notice delivered to the other, change the address to which delivery shall thereafter be made.

9.03 Amendment. This Agreement may not be altered or amended, nor any rights provided for in this Agreement waived, except by an instrument in writing executed by the party or parties to be charged with such amendment or waiver. No waiver of any term, provision, or condition of this Agreement, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, provision, or condition or as a waiver of any other term, provision, or condition of this Agreement.

9.04 Assignment. Seller and/or Buyer may not assign any portion of its rights or delegate any portion of its duties or obligations under this Agreement without the prior written consent of the other party.

9.05 Announcements. Seller and Buyer shall consult with each other with regard to all press releases and other announcements concerning this Agreement or the transaction contemplated by this Agreement and, except as may be required by applicable laws or regulations of any governmental agency, Buyer and/or Seller shall not issue any press release or any other announcement without the prior written consent of the other party. Said consent shall not be unreasonably withheld. Buyer understands Seller is required to file and 8K disclosing the sale of this acreage and the acquisition of the AMI it is receiving as compensation. Seller will file an 8K describing but not attaching the agreements which will not give the location of the acreage. However, Buyer understands that in the event of a complaint or demand by the SEC additional disclosures may be necessary.

9.06 Generality of Provisions. The specificity of any representation, warranty, covenant, agreement, or indemnity included in or provided in this Agreement, or in any Exhibit, document, certificate, or other instrument delivered pursuant to this Agreement, shall in no way limit the generality of any other representation, warranty, covenant, agreement, or indemnity included or provided in this Agreement, or in any Exhibit, document, certificate or other instrument delivered pursuant to the terms of this Agreement.

  

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9.07 Headings. The headings of the articles and sections of this Agreement are for guidance, convenience and reference only and shall not limit or otherwise affect any of the terms or provisions of this Agreement.

9.08 Counterparts. This Agreement may be executed by Buyer and Seller in any number of counterparts, each of which shall be deemed an original instrument, but all together shall constitute but one and the same instrument. This Agreement shall become operative when each party has executed at least one counterpart of this Agreement.

9.09 References. References made in this Agreement, including use of a pronoun, shall be deemed to include, where applicable, masculine, feminine, singular or plural, individuals, partnerships, or corporations. As used in this Agreement, "person" shall mean any natural person, corporation, partnership, trust, estate, or other entity. As used in this Agreement, "affiliate" of a person shall mean any partnership, joint venture, corporation, or other entity in which such person has an interest or which controls, is controlled by or is under common control with such person.

9.10 Governing Law. This Agreement and the transactions contemplated by this Agreement shall be construed in accordance with, and governed by, the laws of the State of Oklahoma.

9.11 Entire Agreement. This Agreement (including all Exhibits) constitutes the entire understanding between Buyer and Seller with respect to the subject matter of this Agreement, and supersedes all negotiations, prior discussions, prior agreements, and understandings relating to such subject matter. No material representation, warranty, covenant, agreement, promise, inducement or statement, whether oral or written, has been made by Seller or Buyer and relied upon by other that is not set forth in this Agreement or in the instruments referred to in this Agreement, and Seller and/or Buyer shall not be bound by or liable for any alleged representation, warranty, covenant, agreement, promise, inducement, or statement not set forth in this Agreement.

9.12 Parties in Interest. This Agreement shall be binding on and inure to the benefit of the parties to this Agreement and, except as otherwise prohibited, their respective successors and assigns. Nothing contained in this Agreement, express or implied, is intended to confer upon any other person or entity any benefits, rights or remedies.

  

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This Purchase and Sale Agreement is signed by Seller and Buyer as of the date of their signatures below, but is deemed effective for all purposes as of the Effective Date provided in §1.03.

Date: January 10, 2012

	
Buyer: Husky Ventures, Inc.

/s/Charles V. Long, Jr.

	 	
Seller: Imperial Oil & Gas, Inc.

/s/Robert R. Durbin

	
By: Charles V. Long, Jr.

	 	
By: Robert R. Durbin, CEO

  

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