Contract
EX-10.4
2
exhibit_10-4.htm
PURCHASE AND SALE AGREEMENT
Exhibit
10.4
Purchase
and Sale Agreement
CANDAK
AREA, NORTH DAKOTA
This
Agreement made January 16, 2008
BETWEEN:
XXX
OIL (USA) INC.,
a
body
corporate, registered to carry on business in the State of Nevada
and
having an office in the town of Didsbury, Alberta
(hereinafter
called the “Transferor”)
-
and
-
JAYHAWK
ENERGY INC.,
a
body
corporate, registered to carry
on
business in the State of Colorado and having an office in the town of
Broomfield
(hereinafter
called the “Transferee”)
Whereas
Transferor wishes to sell and the Transferee wishes to purchase the Assets,
the
Parties agree as follows:
1
2
**(Note
that Parties will have to examine the GST issue where any fee simple/freehold
interests or other real
property
interests are to be purchased by Transferee prior to finalizing this Clause
and
Clause 2.03 A of the
Property
Transfer Procedure).
follows:
Transferee
under Clause 10.02(d) of the Property Transfer Procedure:
(i)
Environmental Review: The Transferee will have completed
a review of
the
environmental condition of the Assets prior to January 15, 2008,
through
which
the Transferee is satisfied, acting reasonably, with the
environmental
condition
of the Assets.
3
In
witness whereof the Parties have duly executed this Agreement.
This
is
the execution page of that certain Purchase and Sale Agreement dated January
16,
2008 between XXX OIL (USA) INC., as Transferor, and JAYHAWK ENERGY INC., as
Transferee.
4
This
is SCHEDULE "A" to a Purchase and Sale Agreement dated
January
16, 2008
between
XXX OIL (USA) INC. and JAYHAWK ENERGY INC.
(1)
162
pages constitute the Land Schedule for the Agreement.
(2) see
item (1)
(3) see
item (1)
(4) see
item (1)
(5) no
Rights of First Refusal
(6) See
attachment dated August 25, 2006 between SemCrude and Xxx Oil
USA Contract Number SC060032.
(7)
C
01245 Lease Acquisition and Exploration Agreement with attached AAPL
Form 610 – 1989 Operating Agreement
(8)
See
attachment labeled Surface Lease Equipment
(9)
Xxxxxxx 4-25H-T164N R97W5PM
Xxxxxxxx
1-27H T164N R97W5PM
Xxxxxxxxx 1-33H
T164N R97W5PM
Xxxxxx
0-00X X000X X00X0XX
Xxxxxxx
5-26H T164N R97W5PM
(10)
$3.6
million against Xxx Oil Inc. by Portside Growth and Opportunity Fund, breach
of
10% convertible note
(contact
Xxxxxx Xxxxxxxx V.P. legal and Corporate affairs, at
0-000 000-0000)
(11)
No
Default Notices
(12)
No
Outstanding A.F.E.’s
(13)No
knowledge of any environmental concerns
(14)
Yes,
AMI contained in Contract 01245
(15)
None
5
This
is Schedule “B” to a Purchase and Sale Agreement dated
January
16, 2008
between
XXX OIL (USA) INC. and JAYHAWK ENERGY INC.
SUMMARY
SHEET OF ELECTIONS AND RATES FOR THE
PROPERTY
TRANSFER PROCEDURE
1. GST
(Subclause 2.03A): (i) GST
Election: Alternate __NA (USA
Properties)_
(ii) GST Business #: NA
2. Interest
Accrual (Clause 2.04): Alternate 1
.
3. Place
of Closing (Clause 3.01): Office of: Western Divestments,
2020, 000- 0xx
Xxxxxx
X.X Xxxxxxx, XX X0X 0X0
4. Access
to Transferee’s Files (Subclause 3.04B): 60
months
5. Distribution
of Specific Conveyances (Clause 3.05): Alternate
__2___
6. Final
Statement of Adjustments (Paragraph
4.02A(b)) _180_day period
7. Treatment
of Income During Interim Period (Clause 4.03): Alternate
1
Income
Tax Adjustment if Alternate 1 applies: ___% NOT
APPLICABLE
Exception
to 4.03A if Alt. 1 applies (Subclause
4.03B): will__X_/ will
not_____
apply
NOT APPLICABLE
9.
Survival of Representations and Warranties (Clause
6.04) __12___ months.
10. Option
to Terminate Re ROFR Exercises (Subclause 7.01D): will___/ will
not__X__apply
11.
Delivery of Title Defects Notice (Subclause
8.02A): _5_ Business Days.
12.
Title Defects Mechanism (Subclause
8.02B): Alternate:__1__
If
Alternate
2 applies (i) $ Value threshold (Sublclause
8.02B):
ten percent (10%) of the Purchase Price
6
(ii) Transferor’s
termination threshold (Paragraph 8.02B(c))):
Not Applicable
(iii) Transferee’s termination threshold (Paragraph 8.02B(d)):
Not Applicable
13. Responsibility
of Transferor (Clause 13.01):
(i)
Subclause 13.01A: Alternate __2__
(ii) Subclause
13.01B: _12_ months
14.
Limit of Transferor’s Responsibility (Subclause
13.03A): will _X_ / will not__apply.
15. Minimum
Claim Threshold (Subclause 13.03B): will ___ / will
not__X__
apply.
$
Threshold if Subclause B applies: $____________.
16. Address
for Service (Clause 15.02):
7
SURFACE
LEASE EQUIPMENT
Burner
1-34
1 HG
000-000-000 Pumping
unit 2005
1 32
HP C-106 Gas Engine
1 12’X12’
Engine
House 0000
0 00#
WP 6’x32’ Vertical
Treater 2005
1 10’x12’
Treater
House 2005
1 Solar
Ignitor at pit
1 400
BBL Fibreglass Water
Tank 2005
2 400
BBL welded cone bottom oil
tanks 2005
1 Monel
35601 recycle pump w/5.5 hp Honda
1 Superior
Beam chemical pump
Xxxxxxxxx 1-33
1 HG
000-000-000 Pumping
Unit 2005
1 Ajax
Gas Engine
1 12’X12’
Engine
House 2005
1 75#WP
6’x20’ Vertical
Treater 2005
1 12’x12’
Treater
House 2005
1 Solar
Ignitor at pit
1 400
BBL Fibreglass Water
Tank 2005
2 400
BBL steel welded Oil
Tanks 2005
1 Monel
35601 recycle pump w/5.5 hp Honda
Xxxxxxx 4-24
1 HG
000-000-000 Pumping
Unit 2005
1 32HP
C-106 Gas Engine
1 12’X12’
Engine
House 2005
1 75#WP
6’x20’ Vertical
Treater 2005
1 12’x12’
Treater
House
2005
1 Solar
Ignitor at pit
1 400
BBL Fibreglass Water
Tank 2005
2 400
BBL steel welded Oil
Tanks 2005
1 Monel
35601 recycle pump w/5.5 hp Honda
8
Xxxxxx
5-26H
1 HG
000-000-000 Pumping
Unit 2005
Ser#
QB050808.16109
1 32HP
C-106 Gas Engine
Ser#
302981
1 12’X12’
Engine
House 2005
1 75#WP
6’x20’ Vertical Treater
coated 2005
1 12’x12’
Treater
House
2005
1 Solar
Ignitor at pit
1 400
BBL Fibreglass Water Tank
Ser#1178
2005
2 400
BBL steel welded Oil
Tanks 2005
Ser#
7273,7262, 7263
1 Monel
35601 recycle pump w/5.5 hp Honda
Ser#
ZM1541605
1 Superior
Beam chemical pump
Xxxxxxxx
1-27
1 HG
000-000-000 Pumping
Unit 2005
1 Ajax
Gas Engine
1 12’X12’
Engine
House 2005
1 75#WP
6’x20’ Vertical
Treater 2005
1 12’x15’
Treater
House
2005
1 Solar
Ignitor at pit
1 400
BBL Fibreglass Water
Tank 2005
3 400
BBL welded cone bottom oil
tanks 2005
1 Monel
35601 recycle pump w/5.5 hp Honda
1 Superior
Beam chemical pump
GENERAL
AREA EQUIPMENT
H2S
personal monitoring device
2
Portable Xxxxx Air Packs
Trailer
Mounted Portable Gas Meter
Centrifuge
Fax/Copier
Office
Trailer and Lot located at Xxxxxx City – Xxxxxx Acres Xxx 0X Xxxxx
0
0
Xxx
Xxxxx
Any
remaining material is property of Jayhawk
1
Fluid
Level Gun (Xxx invoice # 13331 for $9,000.00)
1. | Definitions |
Each capitalized term used in this Head Agreement will have the meaning given to it in the 2000 CAPL Property Transfer Procedure (hereinafter referred to as the “Property Transfer Procedure”). In addition: |
(a) | “Closing Date” means 3:00 p.m. on January 25th, 2008, or such other time and date as may be agreed upon in writing by the Parties. |
(b) | “Effective Date” means January 1, 2008. |
2. | Schedules |
The following Schedules are attached hereto and made part of this Agreement: |
(a) | Schedule “A”, which is the Land Schedule, and identifies: |
(i) | the Lands; |
(ii) | the Leases; |
(iii) | any other agreements, documents or data that are to be excluded from the Miscellaneous Interests under that definition; |
(iv) | any encumbrances; |
(v) | any Rights of First Refusal; |
(vi) | production sale agreements; |
(vii) | other agreements, penalties or restrictions by contract on the use of the Assets required to be included in the Land Schedule under the definition of Permitted Encumbrances or the definition of Title and Operating Documents; |
(viii) | any Facilities required to be included in the Land Schedule under the definition of Facilities, any other Tangibles described in Paragraph (c) of the definition of Tangibles and any assets otherwise falling within the definition of Tangibles that are specifically excluded therefrom; and |
(ix) | the Xxxxx; |
(x) | any lawsuits and claims; |
(xi) | any default notices; |
(xii) | any outstanding AFE’s; |
(xiii) | any knowledge of environmental matters under Clause 6.02(k) of the Property Transfer Procedure; |
(xiv) | any areas of mutual interest; and |
(xv) | any commitments to deliver under Clause 6.02(t) of the Property Transfer Procedure. |
(b) | Schedule “B”, which is the Property Transfer Procedure, including the Exhibit thereto that is the form of the General Conveyance. For clarity, this Schedule “B” to the Agreement includes a summary sheet that indicates the elections and rates in the Property Transfer Procedure that have been agreed to by the Parties. A blank copy of the Property Transfer Procedure, including the Exhibit thereto that is the form of the General Conveyance, is attached to such summary sheet of the elections and rates for the Property Transfer Procedure. The Parties shall deem that such summary sheet of the elections and rates of the Property Transfer Procedure shall operate as having the same effect as if such elections and rates were physically typed into the copy of the Property Transfer Procedure included in Schedule “B”. |
3. | Purchase and Sale |
(a) | The Transferor agrees to dispose of the Assets to the Transferee and the Transferee agrees to purchase the Assets from the Transferor on the terms and conditions set forth in this Agreement. |
(b) | Subject to the modifications that may be made under the Property Transfer Procedure, the consideration payable by the Transferee to the Transferor for the Assets is $ 3,500,000.00, plus any interest that accrues under Clause 2.04 of the Property Transfer Procedure. The Purchase Price shall be allocated among the Assets as follows: |
(i) To Petroleum and Natural Gas Rights | $ 2,799,990.00 | |
(ii) (ii) To Tangibles | $ 700,000.00 | |
(iii) (iii) To Miscellaneous Interests | $ 10.00 | |
Total | $3,500,000.00 |
The GST payable on the Tangibles and Miscellaneous Interests totals | |
$ NOT APPLICABLE |
(c) | The Transferee will pay the Purchase Price to the Transferor as |
(i) | the delivery of ten percent (10%) of the Purchase Price, representing a Deposit towards the Purchase Price, payable on or before January 18, 2008; and |
(ii) | at Closing, the delivery of the remainder of the Purchase Price (ie. the Purchase Price less the Deposit made under Clause 3(c)(i) hereof), any interest that accrues under Clause 2.04 of the Property Transfer Procedure. |
4. | Additional Conditions |
(a) | The following additional condition precedent is included for the benefit of the |
XXX OIL (USA) INC. Per:____________________ Per:____________________ | JAYHAWK ENERGY INC. Per:____________________ Per:____________________ |
8. | Transferor’s Representations and Warranties (Clause 6.02). Those representations and warranties in that Clause that apply are indicated by a Y below. |
__ (a) Residency for Tax Purposes _Y_ (b) Lawsuits and Claims _Y_ (c) No Default Notices _Y_ (d) Compliance with Leases _Y_ (e) Payment of Royalties _Y_ (f) Encumbrances _Y_ (g) No Reduction _Y_ (h) Sale Agreements _Y_ (i) Provision of Documents _Y_ (j) Authorized Expenditures _Y_ (k) Environmental Matters _Y_ (l) Condition of Xxxxx | _Y_ (m) Abandonment of Xxxxx _Y_ (n) Condition of Tangibles _Y_ (o) Well/Tangibles Lic. Transfers _ _ (p) Reg. Production Penalties __ (q) Reg. Production Allowables _Y_ (r) Area of Mutual Interest ___ (s) No Offset Obligations _Y__ (t) Commitment to Deliver ___ (u) ARTC _Y_ (v) Quiet Enjoyment ___ (w) Additional Representations |
XXX OIL (USA) INC. Box 0000 0000-00xx Xxxxxx Xxxxxxxx, Xxxxxxx X0X 0X0 Attention: Land Department Fax No. (000) 000-0000 | Jayhawk Energy Inc. 000 Xxxxxxxxxxx Xxxx Xxxxx 000 Xxxxxxxxxx, XX 00000 Attention: Land Department Fax No. (000) 000-0000 |