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Title: |
Royalty Agreement |
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Date: |
2006 |
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Preview shows 13KB of 107KB total |
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$44 |
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ID: |
#1717957 |
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AMENDED AND RESTATED
PRIMEWEST
ROYALTY AGREEMENT
----------------------------------------------------
MAY 5, 2005
<PAGE>
TABLE OF CONTENTS
ARTICLE 1
INTERPRETATION
1.1 Definitions.......................................................1
1.2 1990 CAPL Terms - Additional Definitions.........................15
1.3 Number and Gender................................................15
1.4 References.......................................................16
1.5 Choice of Law....................................................16
1.6 Attornment.......................................................16
1.7 Monetary Sums....................................................16
1.8 Amendments to Agreements and Laws................................16
1.9 Meaning of "accrued" and "incurred"..............................16
1.10 Effect of Restatement............................................17
ARTICLE 2
ROYALTY
2.1 Grant of Royalty.................................................18
2.2 Payment for Royalty..............................................18
2.3 Deferred Purchase Price Obligation...............................19
2.4 Royalty..........................................................20
2.5 Right to Take In Kind............................................20
2.6 Royalty Share of Production not Taken in Kind....................22
2.7 Petroleum Substances Lost or Used in Operations..................22
2.8 Not an Interest In Land..........................................22
2.9 Reimbursement of Non-Deductible Crown Royalties..................22
ARTICLE 3
ACCOUNTING
3.1 Payments.........................................................23
3.2 Statements.......................................................23
3.3 Overpayments.....................................................24
3.4 Carry Forward of Deductible Production Costs.....................24
3.5 Collection of Production Revenues and Other Revenues.............24
3.6 Payment of Production Costs......................................24
ARTICLE 4
INSURANCE
4.1 Insurance........................................................24
(i)
<PAGE>
ARTICLE 5
BOOKS AND RECORDS
5.1 Examination......................................................25
5.2 Audit............................................................25
5.3 Confidentiality..................................................25
ARTICLE 6
OPERATIONS
6.1 Generally........................................................26
6.2 No Obligation to Develop.........................................27
6.3 Compliance with and Maintenance of Properties Agreements.........27
6.4 Rights and Obligations...........................................27
6.5 Marketing........................................................28
6.6 Additional Title and Operating Documents.........................28
6.7 Restriction on Capital Expenditures..............................28
6.8 No Exploratory Operations........................................28
6.9 No Other Businesses..............................................29
6.10 Credit Facilities Unaffected.....................................29
6.11 Grant and Assignment of Security.................................29
6.12 Restrictions on Future Acquisitions..............................29
ARTICLE 7
RESERVES
7.1 Establishment....................................................30
7.2 Contributions to the Reserves....................................30
7.3 Use of the Reserves..............................................31
7.4 Termination of the Reserves......................................31
7.5 Reclamation Trust................................................32
ARTICLE 8
POOLING, UNITIZATION, SURRENDER AND ABANDONMENT
8.1 Pooling and Unitization..........................................33
8.2 Surrender........................................................33
8.3 Abandonment......................................................33
ARTICLE 9
ASSIGNMENT
9.1 Assignment.......................................................33
9.2 Multiple Royalty Owners..........................................34
9.3 Dispositions Subject to This Agreement...........................34
(ii)
<PAGE>
ARTICLE 10
TERM OF AGREEMENT
10.1 Term.............................................................34
ARTICLE 11
DISPOSITIONS
11.1 Restrictions on Disposition of Properties........................35
11.2 Dispositions of Tangibles and Miscellaneous Assets...............35
11.3 Dispositions of Petroleum and Natural Gas Rights.................35
11.4 Concurrent Disposition Documentation.............................36
11.5 Merger on Concurrent Disposition.................................36
11.6 Proceeds of a Concurrent Disposition.............................36
11.7 Merger upon Farmout..............................................37
ARTICLE 12
NOTICES AND PAYMENTS
12.1 Addresses for Service and Payments...............................37
12.2 Giving and Deemed Receipt of Notices.............................37
12.3 Addresses........................................................38
12.4 Change of Address................................................38
ARTICLE 13
MISCELLANEOUS
13.1 Enurement........................................................38
13.2 Waivers in Writing...............................................38
13.3 Time of Essence..................................................39
13.4 No Partnership...................................................39
13.5 Severability.....................................................39
13.6 Amendments.......................................................39
ARTICLE 14
CONCERNING THE TRUSTEE
14.1 Acknowledgment...................................................40
(iii)
<PAGE>
AMENDED AND RESTATED PRIMEWEST ROYALTY AGREEMENT
THIS AGREEMENT is made as of the 16th day of October, 1996 and
amended and restated as of the 5th day of May, 2005.
BETWEEN:
PRIMEWEST ENERGY INC.
a body corporate amalgamated pursuant to the laws of
Alberta (hereinafter called the "GRANTOR")
- and -
COMPUTERSHARE TRUST COMPANY OF CANADA
a trust company incorporated under the laws of Canada,
in its capacity as trustee of PrimeWest Energy Trust,
a trust formed under the laws of the Province of
Alberta pursuant to the Declaration of Trust
(hereinafter called the "ROYALTY OWNER")
WHEREAS the Grantor has agreed to grant the Royalty to the Royalty
Owner and the Royalty Owner has agreed to purchase and accept the Royalty from
the Grantor, on the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the covenants hereinafter set
forth, the Parties hereby agree as follows:
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS
In this Agreement, including this Article, the following words and
expressions shall have the following meanings:
"ACQUISITION" means an acquisition by the Grantor of Petroleum and Natural Gas
Rights or interests therein, whether directly or indirectly through the
acquisition by the Grantor of all of the outstanding securities of an entity
which owns Petroleum and Natural Gas Rights or interests therein; provided
that in respect of such indirect acquisition the Petroleum and Natural Gas
Rights owned by the entity become subject to the Royalty, either by themselves
or together with interests in related Tangibles and Miscellaneous Assets;
"ACQUISITION COSTS" means costs and expenses incurred by the Grantor in making
an Acquisition including, without limitation, the purchase price paid pursuant
thereto (net
<PAGE>
-2-
of all adjustments thereto), brokers fees and commissions, costs of
registration of conveyances of title and fees and expenses of consultants
(including lawyers, landmen and engineering and other technical and financial
advisors);
"AFFILIATE" means, with respect to the relationship between corporations, that
one of them is controlled by the other or that both of them are controlled by
the same Person and for this purpose a corporation shall be deemed to be
controlled by the Person who owns or effectively controls, other than by way
of security only, sufficient voting shares of the corporation (whether
directly through the ownership of shares of the corporation or indirectly
through the ownership of shares of another corporation or otherwise) to elect
the majority of its board of directors, provided that a partnership which is
comprised solely of corporations which are Affiliates, as described above,
shall be deemed to be an Affiliate of each such corporation and its other
Affiliates;
"AGREEMENT", "HEREIN", "HERETO", "HEREOF" and similar expressions refer to
this Royalty Agreement, and any agreement amending this Royalty Agreement;
"AMOCO" means Amoco Canada Petroleum Company Ltd.;
"AMOCO SALE AGREEMENT" means the Agreement of Purchase and Sale dated as of
the 1st day of August, 1996 between Amoco Canada Petroleum Company Ltd. and
3061434 Canada Ltd., as vendor, and the Grantor, as purchaser, as amended;
"AMOCO TAX INDEMNITY" means the tax indemnity granted by Amoco in favour of
the Grantor and the Trust pursuant to the Amoco Sale Agreement;
"ARTC" means credits or rebates in respect of Crown Royalties which are paid
or credited by the Crown, including those paid or credited under the ALBERTA
CORPORATE TAX ACT which are commonly known as "Alberta Royalty Tax Credits";
"BUSINESS DAY" means a day other than a Saturday, Sunday or statutory holiday
in Alberta;
"CAPITAL EXPENDITURES" means:
(a) drilling costs, completion costs and equipping costs; and
(b) other costs relating to the Properties which would be classified as
capital costs in accordance with GAAP;
but does not include Acquisition Costs;
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