JOINT VENTURE AGREEMENT
AMONG:
TRIPLE 7 ENERGY INC.,
WEST PEAK VENTURES OF CANADA LTD.,
DR. MICHAEL RANGER
(collectively the "TRIPLE 7 JOINT VENTURE")
- and -
TOWNSHIP PETROLEUM CORPORATION ("Township")
CANWEST PETROLEUM CORPORATION ("CanWest")
Dated as of June 1, 2005
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1
INTERPRETATION........................................1
1.1
Definitions...............................................1
1.2
Schedules.................................................5
1.3
Headings..................................................5
1.4
Currency..................................................5
ARTICLE 2
FORMATION OF THE JOINT VENTURE........................5
2.1
Formation.................................................5
2.2
Maintenance of Documents of Title.........................6
2.3
Representations and Warranties............................6
ARTICLE 3
PURPOSE OF THE JOINT VENTURE..........................7
3.1 Purpose of
Joint Venture..................................7
ARTICLE 4
BIDDING ON POSTED LANDS...............................8
4.1 Inclusion
in Alberta Crown Sale...........................8
4.2 Bid
Recommendation........................................8
4.3 Bid
Determination.........................................8
4.4 Engagement
of Pioneer.....................................8
4.5 Payment of
Crown Rental and Pioneer Fees..................8
4.6 Return of Unused
Initial Funding..........................8
4.7 Land held
in Trust........................................8
ARTICLE 5
OWNERSHIP OF ACQUIRED LANDS...........................9
5.1
Ownership.................................................9
5.2 Issuance
of Shares........................................9
5.3 Ongoing
Fees..............................................9
5.4
Registration and Piggy Back Rights........................9
5.5
Anniversary Date Payments.................................9
5.6 Allocation
of Payments...................................10
5.7 Annual
Reports...........................................10
5.8 Access to
Data...........................................10
ARTICLE 6
GRANT OF ROYALTY.....................................10
6.1 Grant of
Royalty.........................................10
ARTICLE 7
COMMERCIAL PROJECT...................................11
7.1
Independent Engineering Study............................11
7.2 Commercial
Projects......................................11
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TABLE OF CONTENTS
(continued)
Page
7.3 Commercial
Payments......................................11
7.4 Equal
Payments...........................................11
ARTICLE 8
AREA OF EXCLUSION....................................11
8.1
Acquisition..............................................11
8.2
Acquisition Notice.......................................12
8.3 Surrender
of Area of Exclusion Lands.....................12
ARTICLE 9
FORCE MAJEURE........................................12
9.1 Effect of
Force Majeure..................................12
ARTICLE 10
DISPUTE RESOLUTION...................................13
10.1
Definitions..............................................13
10.2
Disputes Initially Referred To Mediation.................13
10.3
Arbitration Proceedings..................................13
10.4
Rules....................................................13
10.5
Location of and Representation at Mediation and
Arbitration..............................................14
10.6
Interim Relief...........................................14
ARTICLE 11
DISPOSITION OF INTERESTS.............................14
11.1
No Transfers.............................................14
11.2
Recognition Upon Assignment..............................14
11.3
Effect of Assignment.....................................14
ARTICLE 12
TERM.................................................15
12.1
Term.....................................................15
ARTICLE 13
CONFIDENTIALITY......................................15
13.1
Confidential Information.................................15
13.2
Public Disclosure........................................16
13.3
Press Releases...........................................16
13.4
Other Agreements.........................................17
ARTICLE 14
DEFAULT AND REMEDIES.................................17
14.1
Default..................................................17
14.2
Remedies.................................................17
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<PAGE>
TABLE OF CONTENTS
(continued)
Page
ARTICLE 15
GENERAL PROVISIONS...................................18
15.1
Notices..................................................18
15.2
Entire Agreement.........................................19
15.3
Waiver...................................................19
15.4
Severability.............................................19
15.5
Governing Law............................................19
15.6
No Partnership...........................................19
15.7
Further Assurances.......................................20
15.8
Successors and Assigns...................................20
Schedule "A" -
Royalty Procedure
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<PAGE>
JOINT VENTURE AGREEMENT
THIS JOINT
VENTURE AGREEMENT entered into as of the 1st day of June, 2005.
AMONG:
TRIPLE 7 ENERGY INC. ("Triple 7"), WEST PEAK VENTURES OF CANADA
LTD.
("West Peak"), and DR. MICHAEL RANGER ("Ranger") (collectively
the
"Triple 7 Joint Venture")
OF THE FIRST PART
- and -
TOWNSHIP PETROLEUM CORPORATION, a corporation, organized under
the
laws of
the Province of Alberta (hereinafter referred to as
"Township"), and
CANWEST PETROLEUM CORPORATION ("CanWest"), a corporation
organized
under the laws of the State of Colorado,
OF THE SECOND PART
WHEREAS
the Triple 7 Joint Venture, Township and CanWest wish to enter
into a joint venture to, among other
things, acquire, develop and produce oil
sands deposits located in the Athabasca Oil
Sands region of Alberta.
NOW,
THEREFORE, THIS AGREEMENT WITNESSETH THAT in consideration of
the
premises and of the mutual covenants and
agreements hereinafter set forth, the
Parties hereto covenant and agree as
follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions
In this Agreement, the expressions
following shall have the following meanings:
"Acceptance Period" has the meaning ascribed to that term in
Article 10
hereof.
"Acquired Lands"
means those parcels of Posted Lands purchased by Township
at the
Alberta Crown Sale, any Area of Exclusion Lands or any other
Oil
Sands
Interests which Township acquires pursuant to the terms of this
Agreement.
"Agreement", "this Agreement",
"herein", "hereof", "hereunder" mean or
refer to
this Agreement and any amendments thereto.
<PAGE>
"Alberta
Crown Sale" means the August 24, 2005 Alberta Crown sale of
petroleum
and natural gas rights at which the Posted Lands are to be
included.
"Anniversary Date" means August 31, 2006 and each August 31
thereafter
until the
termination or expiration of this Agreement.
"Area of
Exclusion Lands" has the meaning ascribed that term in Article
8
hereof.
"Business
Day" means any day other than a Saturday, Sunday or statutory
holiday in
the Province of Alberta.
"Commercial Payment" means a payment which Township shall pay to
the
Triple 7
Joint Venture at the time which it elects to commence
construction of a commercial project on a parcel of the Acquired
lands,
which
payment shall be $6,000,000 CDN.
"Crude
Bitumen" means a naturally occurring viscous mixture, mainly of
hydrocarbons heavier than pentane, that may contain sulphur
compounds and
that, in
its naturally occurring viscous state, will not flow to a well;
"Day"
means a period commencing at 8:00 a.m. on any calendar day and
ending at
8:00 a.m. on the immediately next succeeding calendar day or
such other
time as may be set by the Management Committee.
"Defaulting Party" has the meaning ascribed to that term in Article
14.
"Documents
of Title" means the documents by virtue of which Township is
entitled
to drill for, win, take or remove Oil Sands Products and all
renewals
or extensions thereof or further documents of title issued
pursuant
thereto.
"Effective
Date" means the date of execution of this Agreement.
"Event of Default" has the meaning
ascribed to that term in Article 14.
"Event of
Insolvency" means, with respect to a Party:
(a) a court
having jurisdiction has entered a decree or order
adjudging that Party bankrupt or insolvent under applicable
bankruptcy or insolvency laws;
(b) bankruptcy,
insolvency or receivership proceedings shall have
been instituted against that Party with its consent, or
without its consent and such proceedings have not been
discharged within thirty (30) Days;
(c) that Party
shall apply for or consent to the appointment of a
receiver, a trustee in bankruptcy or a liquidator, of itself
or of all or a substantial part of its assets;
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(d) proceedings
under the Companies Creditors Arrangement Act
(Canada) or any equivalent legislation, or under any analogous
statute of any other jurisdiction to which that Party is
subject, are commenced in respect of that Party and not
discharged within ninety (90) Days; or
(e) that Party
makes a proposal to its creditors under the
Bankruptcy and Insolvency Act (Canada) or any equivalent
legislation, or under any analogous statute of any other
jurisdiction to which that Party is subject.
"Force
Majeure" means any event or occurrence which is beyond the
reasonable
control of the Party affected thereby, provided such event or
occurrence
is not due to the affected Party's sole negligence, and may
include
but is not limited to:
(a) floods,
earthquakes, storms, lightning, fires, epidemics,
wars, explosions, riots, acts of public enemy, acts of civil
or military authority, civil disturbances, disobedience,
blockades, strikes, lockouts, or other similar events;
(b) accidents,
vandalism, sabotage, ruptures, and breakage of or
damage to any facilities, machinery or equipment; and
(c) inability to
obtain or the curtailment of supplies of any
materials or equipment, shortage of labour and government
restraint, action, delay or inaction, material changes to or
application of the Regulations or other lawful requirements of
governmental bodies or agencies.
provided that lack of finances will not be considered an event
or
occurrence outside of a Party's control.
"Initial
Funding" means an amount estimated to be $4,000,000 USD, which
shall be
used for the acquisition of the Acquired Lands, the payment of
the first
year's rentals for the Acquired Lands and the fees charged by
Pioneer to
acquire the Acquired Lands.
"Lenders"
means any Person or Persons providing debt financing or debt
refinancing to a Party in connection with this joint venture.
"Offer
Notice" has the meaning ascribed to that term in Article 10
hereof.
"Offer
Purchase Notice" has the meaning ascribed to that term in
Article
10
hereof.
"Offered
Rights" has the meaning ascribed to that term in Article 10
hereof.
"Offeror"
has the meaning ascribed to that term in Article 10 hereof.
"Oil
Sands" means
(a) sands and
other rock materials containing Crude Bitumen,
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<PAGE>
(b) the Crude
Bitumen contained in those sands and other rock
materials, and
(c) any other
mineral substances, other than natural gas, in
association with that Crude Bitumen or those sands and other
rock materials;
"Oil Sands
Interests" means the rights, however derived, to explore for,
drill for,
win, take, remove or share in Crude Bitumen and includes a
working
interest, royalty interest or other arrangement of whatever
kind.
"Oil Sands
Products" means any products obtained by (i) processing Oil
Sands, or
producing from Oils Sands; Crude Bitumen or derivatives of
Crude
Bitumen,
or (ii) by reprocessing a product referred to in subsection
(i),
and
includes any products obtained by any subsequent reprocessing of
the
products;
"Parcel
Maintenance Payment" means the payment to be made by Township
to
the Triple
7 Joint Venture on the 3rd, 4th and 5th Anniversary Dates as
more
particularly set forth in Section 5.5 hereof.
"Parties"
means all those Persons who become parties to this Agreement
which
initially are the Triple 7 Joint Venture, Township and CanWest,
and
"Party"
means any one of them.
"Person"
means any individual, corporation, partnership, joint venture,
trust,
government or governmental body or other incorporated or
unincorporated
entity.
"Pioneer"
means Pioneer Land Services Ltd., carrying on business under
the
firm name
and style of Pioneer Land & Environmental Services.
"Pioneer
Agreement" means the agreement between Pioneer and Township
dated
[Note to
Draft: Insert date]
"Positive
Feasibility Study" means an independent engineering report
which
has been
generated at the direction of Township and which determines
that
the
construction of a commercial project for production of Crude
Bitumen,
whether in
situ or mining, from one or more of the Acquired Lands is
economic.
"Posted
Lands" means the parcels of oil sands rights which the Triple 7
Joint
Venture, and Township have agreed to post for sale.
"Prime
Rate" means the prime rate for Canadian dollar commercial loans
made by
the Royal Bank of Canada as that rate is in effect at the time
of
determination and as that rate may be adjusted from time to
time
thereafter.
"Proposed
Disposition" has the meaning ascribed to that term in Article
10
hereof.
"Regulations" means all statutes, laws, rules, orders, directions
and
regulations in effect from time to time and made by governments
or
governmental boards or agencies having jurisdiction over the
operations
conducted
pursuant to this Agreement.
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<PAGE>
"Royalty"
means the non-convertible royalty granted by Township to the
Royalty
Owners pursuant to this Agreement and calculated on Oil Sands
Products
produced from the Royalty Lands, and paid in accordance with
the
provisions
of the Royalty Procedure.
"Royalty
Lands" means the Acquired Lands, which become subject to this
Agreement.
"Royalty
Owner(s)" means each of Triple 7, West Peak, and Ranger.
"Royalty
Procedure" means the procedure attached hereto as Schedule "A"
which sets
forth the terms and conditions of the Royalty.
1.2 Schedules
The following schedule is attached hereto
and made a part hereof:
Schedule
"A" - Royalty Procedure
Appendix "A" - Royalty Lands
Appendix "B" - Assignment Procedure
1.3 Headings
The headings used throughout this Agreement
are solely for the convenience of
the Parties and are not to be used as an
aid in the interpretation of this
Agreement. "Section", "Article" or
"Schedule" followed by a number or a letter
means or refers to the specified section,
article or schedules to this
Agreement. This Agreement is to be read
with all changes of gender or number
required by the context.
1.4 Currency
Unless other wise indicated, all references
to dollar amounts contained in this
Agreement shall be in Canadian funds.
ARTICLE 2
FORMATION OF THE JOINT VENTURE
2.1 Formation
Triple 7, West Peak, Ranger and Township
hereby form the joint venture in
accordance with the laws of the Province of
Alberta for the purposes set forth
in Section 3.1.
2.2 Maintenance of Documents of Title
Except as otherwise provided herein
Township shall comply with, or cause to be
complied with, all terms and conditions of
the Documents of Title including the
payment of rentals, and the performances of
all things necessary to maintain the
Documents of Title in good standing and in
full force and effect.
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<PAGE>
2.3 Representations and Warranties
Triple 7 Energy Inc. represents, warrants,
covenants and agrees with Township
that it:
(a)
is a corporation
incorporated under the laws of the Province of
Alberta and is validly subsisting under the laws of the Province
of
Alberta;
(b)
is not a
"non-resident" of Canada for the purposes of the Tax Act;
[Note to Draft: Confirm with Brent Walter] and
(c)
has the capacity
and corporate authority to enter into this
Agreement and to perform its obligations under this Agreement,
and
such obligations do not conflict with nor do they result in a
breach
of any of its constating documents, by-laws or any agreement by
which it is bound.
West Peak Ventures represents, warrants,
covenants and agrees with Township that
it:
(a)
is a corporation
incorporated under the laws of Canada and is
validly subsisting under the laws of Canada, and is
extra-provincially registered in Alberta;
(b)
is not a
"non-resident" of Canada for the purposes of the Tax Act;
and
(c)
has the capacity
and corporate authority to enter into this
Agreement and to perform its obligations under this Agreement,
and
such obligations do not conflict with nor do they result in a
breach
of any of its constating documents, by-laws or any agreement by
which it is bound.
Dr. Ranger represents, warrants, covenants
and agrees with Township that he is:
(a)
acting in his
personal capacity;
(b)
has sought and
obtained independent legal advice concerning this
Agreement, and his obligations and rights hereunder; and
(c)
is not prevented
from entering into this Agreement by any previous
or current agreements with any other third parties by which he
is
bound.
Township represents, warrants, covenants
and agrees with the Triple 7 Joint
Venture that:
(a)
it is a
corporation incorporated under the laws of the Province of
Alberta, and is subsisting under the laws of the Province of
Alberta;
(b)
is not a
"non-resident" of Canada for the purposes of the Tax Act;
and
(c)
it has the
capacity and authority to enter into this Agreement and
to perform its obligations under this Agreement and such
obligations
do not conflict with its constating documents or any agreement
by
which it is bound.
CanWest represents, warrants, covenants and
agrees with the Triple 7 Joint
Venture that:
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<PAGE>
(a)
it is a
corporation incorporated under the laws of the State of
Colorado, and is subsisting under the laws of the State of
Colorado;
and
(b)
it has the
capacity and authority to enter into this Agreement and
to perform its obligations under this Agreement and such
obligations
do not conflict with its constating documents or any agreement
by
which it is bound.
ARTICLE 3
PURPOSE OF THE JOINT VENTURE
3.1 Purpose of Joint Venture
The joint venture is formed for the
following business purposes:
(a)
identify and
post for sale at the Alberta Crown Sale the Posted
Lands;
(b)
agree on a bid
for each parcel of the Posted Lands and to submit the
agreed upon bids at the Alberta Crown Sale;
(c)
to have Township
acquire Oil Sands Interests located within the
Joint Venture Area which may be agreed upon or which may be
required
by the terms of this Agreement;
(d)
to have Township
own and administer Oil Sands Interests acquired
pursuant to this Agreement, including permits, licences, leases
and
all other types of rights and interests of every nature and
character in connection therewith and incidental thereto;
(e)
to have Township
explore and evaluate, or cause to be explored and
evaluated, the Acquired Lands to determine the quantity and
quality
of reserves of bitumen located on Acquired Lands;
(f)
to have Township
grant the Royalty to Triple 7, West Peak and Ranger
with respect to the Acquired Lands; and
(g)
to engage in any
of the foregoing or related operations by itself or
in association with others.
ARTICLE 4
BIDDING ON POSTED LANDS
4.1 Inclusion in Alberta Crown Sale
The Parties acknowledge that the Posted
Lands have been included for sale at the
Alberta Crown Sale.
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<PAGE>
4.2 Bid Recommendation
Triple 7, West Peak, Ranger and Township
shall meet on or before July 15, 2005
to review and receive the recommendation
from the Triple 7 Joint Venture and
Pioneer, with respect to the amount to be
bid for each parcel of Posted Lands,
provided however that the total amount to
be paid for the Posted Lands,
including the acquisition cost and first
year's rental payment, shall not exceed
the Initial Funding.
4.3 Bid Determination
Township shall determine, after the meeting
contemplated by Clause 4.2 is held,
in its sole discretion, the bid which is to
be submitted for each parcel of
Posted Lands at the Alberta Crown Sale.
4.4 Engagement of Pioneer
Township shall engage Pioneer to provide
land services and advice with respect
to the bidding on the Posted Lands and
shall pay or cause to be paid, to
Pioneer, by wire transfer, the Initial
Funding.
4.5 Payment of Crown Rental and Pioneer
Fees
The fees for the services of Pioneer in
bidding for the Acquired Lands and the
Crown rental for the first year of any oil
sands licenses acquired with respect
to the Acquired Lands will be paid from the
Initial Funding.
4.6 Return of Unused Initial Funding
Any portion of the Initial Funding which is
not used for the acquisition of the
Posted Lands, including the amounts needed
for the first year's rental and
payment to Pioneer for its services, will
forthwith after the results of the
Alberta Crown Sale are finalized, be
forwarded by Pioneer to Township's US
Attorney Trust Account by wire transfer,
for distribution to its fundors as per
the terms of the Pioneer Agreement.
4.7 Land held in Trust
The bid for the Posted Lands shall be made
in the name of Pioneer and Pioneer
shall initially hold the interest acquired
in trust for Township.
ARTICLE 5
OWNERSHIP OF ACQUIRED LANDS
5.1 Ownership
Any Acquired Lands shall be owned One
Hundred Percent (100%) by Township subject
to the Royalty granted to the Triple 7
Joint Venture and the payments by
Township to the Triple 7 Joint Venture as
herein set forth. Within thirty (30)
days after Township acquires Acquired
Lands, or surrenders Acquired Lands, it
shall prepare a revised Appendix "A" for
attachment to the Royalty Procedure
which shall list the permit, license or
lease which it has acquired, the term of
the permit, license or lease and the lands
and petroleum substances granted by
the document and it shall attach a copy of
the revised Appendix "A" to its copy
of this Agreement and it shall forward a
copy of the revised Appendix "A" to
each of the other Parties for attachment by
them to their copies of this
Agreement.
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<PAGE>
5.2 Issuance of Shares
Should Township acquire one or more parcels
of Acquired Lands, then CanWest
agrees that it shall pay to the Triple 7
Joint Venture $150,000 which shall be
paid by the issuance of common shares of
CanWest to be priced at the closing bid
price on the day of the Alberta Crown Sale.
In calculating the conversion from
US$ to CDN$ of the closing price, the
cheque exchange rate posted by the Bank of
Montreal for the close of business on the
day of the Alberta Crown Sale shall be
used. The common shares issued pursuant to
this Section shall be issued equally
to each of Triple 7, West Peak and
Ranger.
5.3 Ongoing Fees
Township shall pay to the Triple 7 Joint
Venture $150,000, on the first and
second Anniversary Dates of this Agreement
(provided that it still owns one or
more parcels of Acquired Lands acquired at
the Alberta Crown Sale) such amount
to be paid, at Township's sole election, in
cash or by the issuance of common
shares of CanWest, to be priced at the
closing bid price on the applicable
Anniversary Date. In calculating the
conversion from US$ to CDN$ of the closing
price, the cheque exchange rate posted by
the Bank of Montreal for the close of
business on the applicable Anniversary Date
shall be used. If common shares are
issued pursuant to this Section 5.3 they
shall be issued equally to each of
Triple 7, West Peak and Ranger.
5.4 Registration and Piggy Back Rights
The CanWest shares to be issued pursuant to
Section 5.2 or 5.3 (the "Shares")
shall have piggyback registration rights
pursuant to which CanWest will register
the Shares for resale, as follows: if
CanWest files a resale registration
statement on Form SB-2 after [Note to
Draft: August 1, 2005 - confirm date] of
the Shares, then CanWest shall include the
Shares in such registration
statement, subject to customary underwriter
cutbacks and receipt by CanWest of
appropriate information and representations
from holders of the Shares. This
piggyback registration right shall expire
once holders of the Shares are
eligible to sell the Shares pursuant to
Rule 144 under the Securities Act of
1933.
5.5 Anniversary Date Payments
On the 3rd Anniversary Date, and each
subsequent Anniversary Date, Township
shall pay to the Triple 7 Joint Venture a
payment equal to $450,000 CDN per
parcel of Acquired Lands which were
acquired by Township at the Alberta Crown
Sale and which have not been surrendered at
the applicable Anniversary Date, or
for which a Commercial Notice (as
hereinafter defined) has not been issued.
5.6 Allocation of Payments
All payments which are payable to the
Triple 7 Joint Venture pursuant to this
Article shall be paid equally to Triple 7,
West Peak and Ranger.
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<PAGE>
5.7 Annual Reports
Within thirty (30) days of each Anniversary
Date Township shall provide a report
to the Triple 7 Joint Venture which shall
describe all of the operations which
have been conducted on the Acquired Lands
during the preceding year, including
without limitation, a description of the
seismic programs which were conducted
and evaluation wells which were drilled and
details of the tests undertaken in
the evaluation and the results thereof. The
report will also contain a forecast
with respect to the operations which
Township envisions will take place on the
Acquired Lands during the ensuing year.
5.8 Access to Data
Triple 7, West Peak and Ranger will each
have the right, at its sole discretion
and cost, with reasonable notice to
Township to:
(a)
review all raw
data from the operations;
(b)
obtain hard
copies of all raw data from the operations; and
(c)
re-process any
proprietary seismic data owned or licensed by
Township.
ARTICLE 6
GRANT OF ROYALTY
6.1 Grant of Royalty
Township hereby grants to each Royalty
Owner the Royalty on the Acquired Lands.
The Royalty will be CDN$0.03, payable to
each Royalty Owner and calculated on
each barrel of Crude Bitumen produced,
saved and sold from the Royalty Lands,
and governed by the Royalty Procedure, or
$450,000 per parcel per year which
ever is greater.
For the purposes of this Agreement, a
barrel of Crude Bitumen means an amount of
Crude Bitumen that would equal 0.159 cubic
metres if such Crude Bitumen measured
in the state at which it exists in the
geological formation prior to the
commencement of any recovery or conversion
processes.
ARTICLE 7
COMMERCIAL PROJECT
7.1 Independent Engineering Study
Prior to commencing the construction of a
project for the production of Crude
Bitumen from a parcel of Acquired Lands,
Township shall cause an independent
engineering study to be conducted and a
report generated.
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<PAGE>
7.2 Commercial Projects
If at any time after a Positive Feasibility
Study is received by Township with
respect to one or more parcels of Acquired
Lands, Township wishes to construct a
commercial project for the production,
treating and transportation of Crude
Bitumen from one or more parcels of
Acquired Lands ("Commercial Parcel"),
Township shall deliver a written notice to
the Triple 7 Joint Venture
("Commercial Notice") which notice will
include:
(a)
the description
of the Commercial Parcel on which the project is to
be constructed;
(b)
a detailed
description of the proposed commercial project and the
production to be obtained;
(c)
a copy of the
Positive Feasibility Study; and
(d)
an estimate of
the costs and the time to construct the proposed
commercial project.
7.3 Commercial Payments
Forthwith upon commencing construction of a
commercial project on the Commercial
Parcel Township shall pay to the Triple 7
Joint Venture the Commercial Payment.
7.4 Equal Payments
Any payments to be made to the Triple 7
Joint Venture pursuant to this Article
shall be made equally to Triple 7, Township
and Ranger.
ARTICLE 8
AREA OF EXCLUSION
8.1 Acquisition
If at any time before August 31, 2016 the
Triple 7 Joint Venture, or any
participant of the Triple 7 Joint Venture
(the "Acquiring Party") acquires Oil
Sands Interests, fifty percent (50%) or
more of the surface area of which are
located within two (2) miles of the
boundary of any parcel of Acquired Lands
which were acquired at the Alberta Crown
Sale (the "Area of Exclusion Lands"),
then the Acquiring Party shall offer
Township the opportunity to purchase the
Area of Exclusion Lands at the price the
Acquiring Party paid for such lands,
pursuant to Section 8.2 hereof.
8.2 Acquisition Notice
The Acquiring Party shall provide a notice
to Township ("Acquisition Notice")
providing a description of the Area of
Exclusion Lands acquired, the purchase
price and any salient terms and conditions
relating to the acquisition. Township
shall have twenty (20) days from the
receipt of the Acquisition Notice to elect
to purchase the Area of Exclusion Lands for
the consideration paid by the
Acquiring Party. If Township does not
respond to the Acquisition Notice within
twenty (20) days from the receipt of the
Acquisition Notice Township shall be
deemed to have elected not to purchase the
Area of Exclusion Lands. If Township
purchases the Area of Exclusion Lands then
the Area of Exclusion Lands will
become Acquired Lands for the purposes of
the Agreement and the Royalty will
automatically apply to the Area of
Exclusion Lands, provided however that the
Area of Exclusion Lands shall not be
included or considered with respect to the
payments to be made by Township pursuant to
Article 5.
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8.3 Surrender of Area of Exclusion
Lands
In the event that any entire parcel of Area
of Exclusion Lands is surrendered,
this Article 8 shall immediately cease to
apply to such surrendered parcel.
ARTICLE 9
FORCE MAJEURE
9.1 Effect of Force Majeure
If by reason of Force Majeure a Party to
this Agreement is unable, wholly or
partially, to perform or comply with its
covenants and obligations hereunder,
then the Party so affected by Force Majeure
shall be relieved of its obligations
or liability and shall suffer no prejudice
for failing to perform or comply
during the continuance and to the extent of
the inability so caused from and
after the happening of the event of Force
Majeure, provided that the Party
invoking Force Majeure gives to each other
Party prompt notice, written or oral
(but if oral, promptly confirmed in
writing) of such inability and reasonably
full particulars of the cause thereof. If
notice is not promptly given, then the
Party suffering the Force Majeure shall
only be relieved from such performance
or compliance from and after the giving of
such notice. The Party invoking Force
Majeure shall use all reasonable efforts to
remedy the situation and remove, so
far as possible and with reasonable
dispatch, the cause of its inability to
perform or comply, provided that settlement
of strikes and other labour disputes
shall be wholly within the discretion of
the Party involved and such Party shall
not be required to accede to demands of its
opponents in any such strike or
labour dispute. The Party invoking Force
Majeure shall give prompt notice of the
cessation of the event of Force Majeure.
Notwithstanding anything contained in
this Article 9 an event of Force Majeure
shall not suspend any obligation for
the payment of money under this Agreement
unless the Force Majeure Event is one
which prevents the Party invoking Force
Majeure from making the payment. If
payments are not made when due because an
event of Force Majeure has directly
effected the power of a Party to make the
payments, then the Party not making
the payments shall, at such time that the
Force Majeure is corrected and the
Party recommences payment, pay interest on
all of the unpaid amounts from the
date that payment was due until the date
paid at the Prime Rate plus two percent
(2%) per annum.
ARTICLE 10
DISPUTE RESOLUTION
10.1 Definitions
In this Article, in addition to all terms
defined in the Agreement, the
following words and phrases shall have the
following meaning namely:
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"Dispute" means any dispute or controversy
amongst any of the Parties concerning
any matter arising out of the
Agreement.
10.2 Disputes Initially Referred To
Mediation
The Parties will attempt to resolve any
Dispute through consultation and
negotiation in good faith. If those
attempts fail, a Party may, by notice to the
other Parties at any time during those
negotiations, request the other Parties
to attempt to resolve that Dispute through
mediation, including with that notice
sufficient detail to enable the other
Parties to understand the issues that
remain in dispute. The Parties will attempt
to agree on the selection of a
mediator within ten (10) days of receipt of
that notice, unless a Party gives
notice to the other Parties within that
period that it is not prepared to
proceed with mediation respecting that
Dispute. If the Parties are proceeding
with a mediation and are unable to select a
mediator within that period, any
Party may deliver a written request to the
Canadian Foundation for Dispute
Resolution to select, within two (2)
Business Days of the receipt of that
request, a mediator qualified by education
and experience to resolve that
Dispute, and the Parties agree that the
person so selected will be the mediator
for the Dispute. Unless otherwise
unanimously agreed, the Parties will commence
a mediation within twenty (20) days of the
selection of the mediator. The
mediation will continue until the Dispute
is resolved, or a Party serves notice
to the other Parties that it wishes to
terminate the mediation, or the mediator
makes a written determination that the
Dispute cannot be resolved through
mediation, or sixty (60) days pass after
the receipt of the original notice,
whichever occurs first. All Parties which
participate in or are affected by the
mediation will each bear their own costs
associated with a mediation, but will
share the common costs of a mediation
equally, including, without limitation,
the cost of the mediator.
10.3 Arbitration Proceedings
In the event a Dispute has not otherwise
been resolved, the Dispute shall be
submitted to binding arbitration in
accordance with the provisions of this
Article.
10.4 Rules
Any such arbitration and any other
arbitration the Parties agree to conduct
hereunder will be conducted under the
Commercial Arbitration Rules of The
Canadian Foundation for Dispute
Resolution.
10.5 Location of and Representation at
Mediation and Arbitration
The place for mediation and arbitration
shall be Calgary, Alberta. Any Party may
have another Party, provided that other
Party agrees to same in writing,
represent its interests in the Dispute
resolution.
10.6 Interim Relief
All limitation periods respecting the
commencement of an action will be stayed
during the period that the Parties are
attempting to resolve a Dispute. A Party
may, at any time it believes is necessary
to protect its interest, seek interim
or provisional relief, in the form of a
temporary restraining order, preliminary
injunction or other interim equitable
relief concerning a Dispute under this
Agreement, notwithstanding anything to the
contrary in the Article.
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ARTICLE 11
DISPOSITION OF INTERESTS
11.1 No Transfers
Except as otherwise expressly provided for
herein and in the Royalty Procedure,
no Party shall sell, assign, transfer,
mortgage, encumber, hypothecate, pledge
or alienate in any way all or any portion
of the control or ownership of its
interest in this Agreement, the Acquired
Lands or the Royalty.
11.2 Recognition Upon Assignment
Other than as required and allowed one
Party to another elsewhere in this
Agreement, a Party which proposes that an
assignment of its interest, or a
corresponding interest in this Agreement or
the Royalty Procedure, shall be
effective against the party who is not
party to the assignment (in this Section
called the "Other Party") shall serve a
notice of the assignment to the Other
Party. The assignment shall not be
effective until the assignor and the assignee
have entered into an agreement with the
Other Party, to ensure the assumption of
and compliance with the obligations of the
assignor by the assignee with respect
to the interest assigned to the assignee,
provided that the Other Party shall be
deemed to have executed that agreement
unless, within ninety (90) days of the
receipt of that agreement, the Other Party
has advised the assignor and
assignee, by notice, that they are not
prepared to execute that agreement and
the reasonable objections they have to that
agreement.
The assignor shall forthwith give notice to
the Parties respecting the status of
that agreement upon the earliest of
execution of that agreement by the Other
Party, the receipt of notices of the Other
Party that they are not prepared to
execute that agreement or the expiry of
such ninety (90) day period, as the case
may be.
11.3 Effect of Assignment
(a)
Subject to
subsection (b), if an assignment is effected in the
manner prescribed in this Article, the assignment shall be
effective
against the Other Party at the time specified in the agreement
provided to the Other Party.
(b)
Until the
agreement provided to the Other Party has been executed,
or deemed to have been executed by the Other Party, the
assignor
shall continue to remain liable to the Other Party for
performance
of the obligations applicable to the assigned interest un
