<PAGE> 4
Date 9 October 2000
Parties
AMG OIL (NZ) LIMITED
(the Transferor)
ORION EXPLORATION LIMITED
(the Transferee)
AGREEMENT FOR TRANSFER OF PETROLEUM EXPLORATION
INTEREST RELATED TO PETROLEUM EXPLORATION PERMIT NO 38256
<PAGE> 5
1 DEFINITIONS AND CONSTRUCTION 1
1.1 Defined Terms 1
1.2 Construction 5
1.3 Terms defined in the JVOA 5
2 TRANSFER OF THE ASSIGNED INTEREST 5
2.1 Transferor to transfer 5
2.2 Transferee to take 6
2.3 No Encumbrances 6
2.4 Consent to transfer 6
3 CONSIDERATION FOR TRANSFER 6
3.1 Amount 6
3.2 Time and manner of payment 6
4 CONTRIBUTION TO OPERATING COSTS 6
4.1 Amount 6
4.2 Time and manner of payment 7
5 PAYMENT OF MONEY UNDER THIS AGREEMENT 7
5.1 Time and manner of payment 7
5.2 Default Interest 7
6 CONDITIONS 8
6.1 Conditions 8
7 SATISFACTION OF CONDITIONS 8
7.1 Date for satisfaction 8
7.2 Satisfaction of conditions 8
7.3 Best endeavours 8
7.4 Effect of failure of conditions: 8
8 INTERIM PERIOD 9
8.1 Rights/obligations of Transferee
during the Interim Period 9
9 PARTIES' OBLIGATIONS 10
9.1 Conduct of the Joint Operations
during the Interim Period 10
<PAGE> 6
10 SETTLEMENT 10
10.1 Place of Settlement 10
10.2 Transferor's obligations 10
10.3 Transferee's obligations 11
10.4 Insurance 11
11 THE TRANSFEREE'S CONTRIBUTIONS
FOR CERTAIN WELL COSTS 11
11.1 Agreed contribution for Ealing
- 1 well costs 11
11.2 Agreed contribution for Arcadia-1 well costs 12
11.3 GST 13
11.4 Other costs 13
12 WARRANTIES 13
12.1 Transferor gives Warranties 13
12.2 Operation of Warranties 13
12.3 Obligation to disclose 13
12.4 Cancellation 13
12.5 Repayment of money on cancellation 14
13 ARBITRATION 14
14 NOTICES 15
14.1 Written notice 15
15 MISCELLANEOUS CLAUSES 15
15.1 No merger 15
15.2 Confidentiality 15
15.3 Further assurances 16
15.4 Announcements 16
15.5 Governing law/jurisdiction 16
15.6 Costs 16
15.7 Counterpart and facsimile execution 16
<PAGE> 7
SCHEDULE 1: PARTY DIRECTORY 18
SCHEDULE 2: TRANSFEROR'S WARRANTIES 19
1 Full authority 19
2 Financial standing 19
3 Full disclosure 19
4 Accounts and records 19
5 Territorial/Government
authority requisitions 19
6 Statutory compliance 19
7 Encumbrances 20
8 Insurance 20
9 No proceedings, pending proceedings,
unsatisfied judgments 20
10 Environmental matters 20
11 Outside material circumstances 21
12 Development 21
SCHEDULE 3: Deed of Assignment 22
<PAGE> 8
Date 9 October 2000
PARTIES
(1) AMG OIL (NZ) LIMITED, an incorporated company having its
registered office at Wellington (the Transferor)
(2) ORION EXPLORATION LIMITED, an incorporated company having its
registered office at Christchurch (the Transferee)
BACKGROUND
A. The Transferor holds a Participating Interest including the
Assigned Interest.
B. The Transferor wishes to transfer, and the Transferee wishes to
acquire, the Assigned Interest on the terms and conditions set out in
this Agreement.
The Parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION
1.1 Defined Terms
In this agreement, unless the context requires otherwise:
Act means the Crown Minerals Act 1991;
Agreement means this Agreement, including the Background and
the Schedules;
Assigned Interest means a 10% Participating Interest;
Approvals means all current licences, approvals (including
Governmental Approvals), permits (including the Permit),
authorisations and consents which are required to enable the
Joint Venture to carry on the Joint Operations fully and
effectively and, where the context requires, to enable the
Assigned Interest to be transferred to the Transferee;
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Assumed Obligations means the obligations and liabilities under
the Permit and the JVOA in respect of the Assigned Interest,
which accrue on or after, or arise from work undertaken on or
after, the Effective Date;
Budget has the meaning given to that term in the JVOA;
Business Day means any day on which registered banks are open
for general banking business in Wellington;
Casing Point has the meaning given to that term in the JVOA;
Confirmation Date means the date which is 18 months on and from
the Effective Date or such later date as the Transferor and the
Transferee may agree upon in writing;
Deed of Assignment means the deed of assignment and assumption
between IPENZ, the Transferor and the Transferee to be executed
pursuant to clause 6.1 substantially in the form and substance
attached as Schedule 3;
Default Rate means a rate per annum equivalent to 2% above the
average buying rate for 90 day bank bills published on Reuters
page BKBM or a reasonable analogue of it, fixed for each month
in which the rate is to apply at or about 10.45am on the first
day of that month;
Effective Date means 29 September 2000;
Encumbrance includes a royalty (other than royalty payable to
the Government Agency under the Permit and the Act), mortgage,
lien, charge, pledge, security interest, or other encumbrance;
Environment has the meaning given to it in section 2 of the
Resource Management Act 1991;
Environmental Approvals means Governmental Approvals that must
be obtained under Environmental Laws in relation to the Joint
Operations;
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Environmental Laws means:
(a) the Resource Management Act 1991 and any regulations,
orders, rules, decisions, declarations or notices made or given
under that Act; and
(b) any other laws relating to the Environment, public health
or occupational safety and health;
Governmental Agency includes the New Zealand government, any
department or agency of the New Zealand government, any
statutory or regulatory agency or authority in New Zealand, and
any local government entity in New Zealand;
Governmental Approvals means all approvals, authorisations,
consents, clearances, dispensations, exemptions, licences and
waivers granted by any Governmental Agency;
GST Act means the Goods and Services Tax Act 1985, and GST means
goods and services tax chargeable in accordance with the GST
Act;
Inland Revenue Acts has the meaning given to that term in the
Tax Administration Act 1994;
Interim Period means the period from the date of this Agreement
to Settlement (both dates inclusive);
IPENZ means Indo-Pacific Energy (NZ) Limited;
Joint Operations means all activities of the joint Venture
conducted on behalf of the Joint Venture parties pursuant to the
JVOA;
Joint Property means:
(a) all petroleum, prior to its distribution or allocation in
kind to the Joint Venture parties,
(b) all other property of any nature or kind, whether real or
personal, (including without limitation, any extraction,
transportation, processing, treatment, storage or other
facility or chose in action and any estate or interest
therein) acquired by the Joint Venture parties in the
conduct, or for the purposes of, Joint Operations, and
<PAGE> 11
(c) all other estate, right, title or interest of the Joint
Venture parties arising under or by virtue of the JVOA;
Joint Venture means the unincorporated joint venture between the
Parties in accordance with the JVOA;
JVOA means the agreement entitled the "Joint Venture Operating
Agreement" in respect of PEP38256 originally entered into
between Indo-Pacific Energy (NZ) Limited and Trans-Orient
Petroleum (NZ) Limited and dated 10 July 1998;
Participating Interest means the obligations, benefits and
rights of a party, expressed as a percentage and determined in
accordance with the JVOA and PEP 38256; PEP 38256 or Permit
means the Petroleum Exploration Permit known as "PEP 38256"
granted to the IPENZ and Trans-Orient Petroleum (NZ) Limited (by
operation of assignment now held by the IPENZ and the
Transferor) pursuant to the Act in respect of the area
designated in the permit and includes:
(a) any renewals, extensions or variations of that permit; and
(b) any petroleum mining permit which:
(i) is granted to the holders of PEP 38256 or any one or
more of those holders in accordance with the
provisions of the Act;
(ii) is a mining permit issued pursuant to or in
substitution for PEP 38256; and
(iii) is issued in respect of the whole or any part of
the area comprised in that permit;
Settlement means the settlement of the transfer of the Assigned
Interest by the Transferee and, where the context requires,
means the time at which such settlement takes place or is to
take place;
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Settlement Date means the earlier of the date falling 2
Business Days after all the conditions specified in clause 6.1
have been satisfied;
Warranties means the warranties and representations given by
the Transferor under clause 12.1 and any implied warranties;
Wells means the wells known as at the date of this Agreement, as
"Ealing-1" and "Arcadia-1".
1.2 Construction
In the construction of this agreement, unless the context
requires otherwise:
Business Days: anything required by this agreement to be done
on a day which is not a Business Day may be done effectually on
the next Business Day;
Close of business: references to the close of business are to 5
p.m.;
Headings: headings appear as a matter of convenience and do not
affect the construction of this agreement;
Parties: a reference to a party to this agreement or any other
document includes that party's personal
representatives/successors and permitted assigns;
1.3 Terms defined in the JVOA
In the event of any conflict between the definition of terms
defined in the JVOA and also defined in this Agreement those
terms shall have for the purposes of this Agreement the meaning
defined in this Agreement.
2 TRANSFER OF THE aSSIGNED INTEREST
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2.1 Transferor to transfer
On Settlement, the Transferor agrees to assign and transfer the
Assigned Interest to the Transferee on the terms and conditions
set out in this Agreement with effect on and from the Effective
Date.
2.2 Transferee to take
On Settlement, the Transferee agrees to take the Assigned
Interest and assume the Assumed Obligations on the terms and
conditions set out in this Agreement with effect on and from the
Effective Date.
2.3 No Encumbrances
The Assigned Interest must pass to the Transferee free of all
Encumbrances (except as may otherwise arise under or pursuant to
the Act).
2.4 Consent to transfer
The Transferee acknowledges that it has been notified that the
Transferor has an option to acquire up to a 50% further
Participating Interest from IPENZ, and the Transferee
acknowledges that the transfer of that interest to the
Transferor would be an assignment between related parties under
Clause 17 of the JVOA and that it may be effected without the
need for consent of the Transferee.
3 CONSIDERATION FOR TRANSFER
3.1 Amount
The consideration for the transfer of the Assigned Interest is
$1 (exclusive of GST if any) payable by the Transferee to the
Transferor.
3.2 Time and manner of payment
The consideration for the transfer of the Assigned Interest
payable under this clause 3 shall be paid in accordance with
clause 5.
<PAGE> 14
4 CONTRIBUTION TO OPERATING COSTS
4.1 Amount
The Transferee agrees to pay to the Joint Venture $255,000.00
being a contribution to the operating costs of the Joint Venture
in the nature of a cash call payable by the Transferee only and
calculated by reference to past costs as follows:
4.1.1 in respect of the Ealing-1 well, $175,000.00, being
10% of "Past Ealing Costs"; and
4.1.2 in respect of the Arcadia-1 well, $80,000.00, being
10% of the "Past Arcadia Costs".
For the purposes of this clause 4.1:
"Past Ealing Costs" and "Past Arcadia Costs" mean the costs
previously expended on each of Ealing-1 and Arcadia-1
respectively for the Joint Operations undertaken prior to the
date of this Agreement (being the closed AFE's 001 - 004 as
determined in accordance with the JVOA) as advised by the
Transferor to the Transferee prior to the date of this
Agreement.
If after the date of this Agreement it is shown in respect of
either well that the total of all costs and expenses actually
paid or accrued in accordance with generally acceptable
accounting practice in respect of the Joint Operations
undertaken prior to the date of this Agreement (being the closed
AFE's 001 - 004 as determined in accordance with the JVOA) and
as advised by the Transferor to the Transferee prior to the date
of this Agreement, is less than the "Past Ealing Costs" or the
"Past Arcadia Costs" as the case may be, then the Joint Venture
shall immediately reimburse the Transferee $1 for each $10
difference.
4.2 Time and manner of payment
The contribution to the operating costs of the Joint Venture
payable under this clause 4 shall be paid in accordance with
clause 5.
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5 PAYMENT OF MONEY UNDER THIS AGREEMENT
5.1 Time and manner of payment
The consideration for the transfer of the Assigned Interest
payable to the Transferor under clause 3, and the contribution
towards operating costs payable to the Joint Venture under
clause 4, shall be paid by the Transferee on the Settlement Date
free of all deductions. Unless otherwise agreed by the Parties
the contribution towards operating costs payable to the Joint
Venture under clause 4 shall be paid by bank cheque.
5.2 Default Interest
If any amount required to be paid under clause 3 or clause 4 is
not paid when due, the amount unpaid shall accrue interest at
the Default Rate until the amount and all accrued interest is
paid.
6 CONDITIONS
6.1 Conditions
This Agreement is conditional upon the Transferor obtaining:
6.1.1 the consent of the Minister of Energy for New Zealand
for the assignment of the Assigned Interest to the
Transferee pursuant to section 41 of the Crown
Minerals Act 1991; and
6.1.2 the execution of the Deed of Assignment by IPENZ and
the Transferor and delivering a certified executed
copy of the Deed of Assignment to the Transferee.
7 SATISFACTION OF CONDITIONS
7.1 Date for satisfaction
The latest date for satisfaction of the conditions in clause 6.1
will be the Confirmation Date. Upon the satisfaction of the
conditions in clause 6.1, this Agreement will take effect on and
from the Effective Date.
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7.2 Satisfaction of conditions
The Transferor acknowledges that the conditions contained in
clause 6.1 have been inserted solely for the benefit of the
Transferee and that the Transferee may waive such conditions.
7.3 Best endeavours
The Transferor and the Transferee will each use their best
endeavours to procure the satisfaction of the conditions in
clause 6.1 and each will from time to time upon request from the
other keep the other fully informed as to progress in procuring
this satisfaction of conditions.
7.4 Effect of failure of conditions:
7.4.1 If:
7.4.1.1 any of the conditions in clause 6.1 is not
satisfied by the Confirmation Date; or
7.4.1.2 any consent, approval, clearance, or
authorisation that is to be obtained under any of
those conditions, is not obtained or is obtained
subject to conditions which the Transferee
reasonably considers to be unacceptable;
then this Agreement shall be voidable at the election of
the Transferee by notice in writing to the Transferor.
7.4.2 On this Agreement becoming void for any reason:
7.4.2.1 the Parties will execute all documents and do all
things necessary or desirable to place each other
in the same position as they would have been in
had this agreement not been executed or acted
upon including (without limitation):
7.4.2.1.1 the Transferor shall immediately refund in
full any deposit and other part of the
consideration for the transfer paid by the
Transferee, without any form of deduction;
<PAGE> 17
7.4.2.1.2 the Transferor shall ensure that all cash
calls paid by the Transferee under the JVOA
shall be fully refunded to the Transferee;
and
7.4.2.1.3 the Transferee will not be liable for any
involvement it has had in the operation of
the Joint Venture including (without
limitation) any decisions it has made on the
Operating Committee; and
7.4.2.2 subject to 7.4.2.1, neither Party will have any
rights against or obligations to the other.
8. INTERIM PERIOD
8.1 Rights/obligations of Transferee during the Interim Period
During the Interim Period and notwithstanding clause 6.1.1, the
Transferee shall be entitled to participate fully in Joint
Operations as if it were a party to the JVOA on the Effective
Date, so that it:
8.1.1 may exercise all the rights to which a Joint
Venture party is entitled, including the right to
appoint a representative to the Operating
Committee and the right to vote; and
8.1.2 subject to clause 11 and the Parties and IPENZ
having entered into the Deed of Assignment, is
liable to perform all obligations binding on a
Joint Venture party including the obligation to
pay cash calls pursuant to the JVOA.
9. PARTIES' OBLIGATIONS
9.1 Conduct of the Joint Operations during the Interim Period
During the Interim Period the Transferor will:
<PAGE> 18
9.1.1 Entry into Deed of Assignment: enter into, and
will procure IPENZ to enter into, the Deed of
Assignment and deliver such Deed of Assignment
to the Transferee as soon as practical after the
date of this Agreement;
9.1.2 Seek Ministerial Consents: apply for and obtain
the consent of the Minister of Energy for New
Zealand to the assignment of the Assigned
Interest to the Transferee forthwith after the
execution of this Agreement but in any event
within 1 month from the date of this Agreement.
10. SETTLEMENT
10.1 Place of Settlement
Subject to this Agreement becoming unconditional,
Settlement shall take place on the Settlement Date at 3.00
p.m. at Christchurch or any other time or place agreed
upon between the Transferor and the Transferee.
10.2 Transferor's obligations
At Settlement on the Settlement Date the Transferor will
deliver to the Transferee evidence, satisfactory to the
Transferee, of the satisfaction of those conditions in
clause 6.1 to be satisfied by the Transferor.
10.3 Transferee's obligations
At Settlement on the Settlement Date and subject to the
Transferor's compliance with clause 10.2, the Transferee
will pay the consideration for the transfer of the
Assigned Interest in accordance with clause 3 and will pay
the contribution to operating costs in accordance with
clause 4.
10.4 Insurance
If, before Settlement, any of the Joint Property is lost,
destroyed or damaged and such loss, destruction or damage
has not been made good by repair or replacement by
Settlement, then the following provisions shall apply:
<PAGE> 19
10.4.1 if the loss, destruction or damage is at
Settlement sufficient to affect the Joint
Venture materially in the carrying on of the
Joint Operations as it was before the occurrence
of the loss, destruction or damage, the
Transferee may cancel this Agreement by serving
on the Transferor notice in writing whereupon
the Transferee shall be entitled to the return
of the deposit and any other money paid by the
Transferee and neither Party shall have any
right or claim against the other; and
10.4.2 if the loss, destruction or damage is at
Settlement insufficient to affect the Transferee
materially in the carrying on of the Joint
Operations the Transferee shall complete the
transfer at the agreed price.
11. THE TRANSFEREE's CONTRIBUTIONS FOR CERTAIN WELL COSTS
11.1 Agreed contribution for Ealing-1 well costs
On and from the date of this Agreement, the Transferee
will, subject to the Parties and IPENZ having entered into
the Deed of Assignment, pay to the Joint Venture in
respect of Ealing-1 well only, 20% of the "Actual Well
Costs for Ealing-1" up to the "Maximum Budgeted Costs for
Ealing-1" in accordance with the procedure for the payment
of Cash Calls (as defined in Schedule 1 of the JVOA). For
the purposes of this provision:
11.1.1 "Actual Well Costs for Ealing-1" means the total
of all costs and expenses payable or accrued in
accordance with generally acceptable accounting
principles in respect of drilling the Ealing-1
well to Casing Point;
11.1.2 "Maximum Budgeted Costs for Ealing-1" means a
maximum of up to $2,412,300.00, which comprises
an amount equal to $2,193,000.00, being the
total of all costs and expenses budgeted as
being payable in respect of
<PAGE> 20
drilling the Ealing-1 well to Casing Point plus
an amount equal to $219,300.00, being the margin
for approved cost overruns to drill that well to
Casing Point; and
11.1.3 this calculation will not apply to the
Transferee's contribution to any well other than
Ealing-1.
11.2 Agreed contribution for Arcadia-1 well costs
On and from the date of this Agreement, the Transferee
will, subject to the Parties and IPENZ having entered into
the Deed of Assignment, pay to the Joint Venture in
respect of Arcadia-1 well only, 20% of the "Actual Well
Costs for Arcadia-1" up to the "Maximum Budgeted Costs for
Arcadia-1" in accordance with the procedure for the
payment of Cash Calls (as defined in Schedule 1 of the
JVOA).. For the purposes of this provision:
11.2.1 "Actual Well Costs for Arcadia" means the total
of all costs and expenses payable or accrued in
accordance with generally acceptable accounting
principles in respect of drilling the Arcadia-1
well to Casing Point;
11.2.2 "Maximum Budgeted Costs for Arcadia-1" means a
maximum of up to $2,752,200.00, which comprises
an amount equal to $2,502,000.00, being the
total of all costs and expenses budgeted as
being payable in respect of drilling the
Arcadia-1 well to Casing Point plus an amount
equal to $250,200.00, being the margin for
approved cost overruns to drill that well to
Casing Point; and
11.2.3 this calculation will not apply to the
Transferee's contribution to any well other than
Arcadia-1.
11.3 GST
The parties agree that the amounts referred to in clauses
4.1 and 11.1 and 11.2 above are cash calls towards the
operating expenses of the Joint Venture and are therefore
not a supply in respect of which GST is payable.
<PAGE> 21
11.4 Other costs
The Transferee will, subject to the Parties and IPENZ
having entered into the Deed of Assignment, meet all
costs, other than those or in excess of those specified in
clauses 11.1 and 11.2, in respect of the Joint Operations
to the extent of the Assigned Interest in accordance with
the provisions of the JVOA.
12. WARRANTIES
12.1 Transferor gives Warranties
The Transferor gives the Warranties set out in Schedule 2
to the Transferee with effect on and from the Effective
Date.
12.2 Operation of Warranties
The Warranties are:
12.2.1 essential terms which are relied upon by the
Transferee; and
12.2.2 shall be deemed to be repeated at Settlement
with reference to the facts then existing, and
each of the Warranties is to be construed
independently of the others and is not limited
by reference to any of the others.
12.3 Obligation to disclose
The Transferor will immediately disclose to the Transferee
any matter or thing which arises or becomes known to the
Transferor during the Interim Period which is inconsistent
with any of the Warranties or which it considers renders
any of them misleading to a purchaser for value of the
Assigned Interest.
12.4 Cancellation
If, on or before Settlement, it is found that any of the
Warranties is in any material respect, untrue, incorrect
or unfulfilled, then the Transferee may by notice in
writing to the Transferor cancel this Agreement. However:
<PAGE> 22
12.4.1 the failure to exercise this right shall not
constitute a waiver of any other rights of the
Transferee arising from a breach of any such
Warranty; and
12.4.2 the exercise of this right shall be without
prejudice to any other rights or remedies
available to the Transferee under this
Agreement, at law or in equity.
12.5 Repayment of money on cancellation
On the cancellation of this Agreement:
12.5.1 the Transferor shall immediately refund in full
any part of the consideration for the transfer
of the Assigned Interest paid in accordance with
clause 3; and
12.5.2 the Transferor shall cause the Joint Venture to
refund in full any part of the contribution to
operating costs paid in accordance with clause 4
or clause 11;
paid by the Transferee without any form of deduction and
with interest on such sum/s at the Default Rate calculated
on a daily basis from the date/s of payment by the
Transferee until repayment.
13. ARBITRATION
Except as otherwise provided in this Agreement every
dispute that arises out of or in connection with this
Agreement shall, on notice by one party to the other, be
determined by a single arbitrator in accordance with the
Arbitration Act 1996 but with the following amendments:
13.1 First Schedule:
13.1.1 to the extent that the notice provisions in this
Agreement are inconsistent with article 3 of the
First Schedule, the notice provisions of this
Agreement apply;
<PAGE> 23
13.1.2 for the purposes of article 15(3) of the First
Schedule, any order or ruling of an arbitrator
made prior to the replacement of that arbitrator
under article 13 of the First Schedule shall be
invalid;
13.1.3 the parties agree that either party may request
the arbitral tribunal under article 33(1)(b) of
the First Schedule to give an interpretation of
a specific point or part of an award.
13.2 Second Schedule:
13.2.1 clauses 1(4), 1(5), 3.1(a), 5 and 7 of the
Second Schedule shall not apply; and
13.2.2 (ii) clauses 4(2)(a) and 4(2)(b) of the Second
Schedule shall apply in the alternative, not
cumulatively.
However, where the parties to the dispute fail to agree on
the appointment of an arbitrator within 14 Business Days
of referral of the dispute to arbitration, the appointment
will be made by the President for the time being of the
Wellington District Law Society.
14. NOTICES
14.1 Written notice
Any notice produced under this Agreement shall be in
writing addressed to the Party to whom it is to be sent at
the address or facsimile number from time to time
designated by that Party in writing to the other Party.
Until any other designation is given the address and
facsimile number of each Party is as set out in Schedule 1
<PAGE> 24
15. MISCELLANEOUS CLAUSES
15.1 No merger
The agreements, obligations, warranties and undertakings
of the Parties shall not merge with the transfer of the
Assigned Interest but (to the extent that they have not
been completed by performance at Settlement) shall remain
enforceable to the fullest extent notwithstanding any rule
of law to the contrary.
15.2 Confidentiality
The contents of this Agreement is confidential, except for
the Deed of Assignment and its contents.
15.3 Further assurances
Each of the Parties agrees to execute and deliver any
documents, including transfers of title, and to do all
things as may reasonably be required by the other Party or
Parties to obtain the full benefit of this Agreement
according to its true intent. This obligation continues
after Settlement and survives the termination of this
Agreement.
15.4 Announcements
The Parties will not (except as may be required by law or
by any Stock Exchange) make any announcement or disclosure
regarding this Agreement or its subject matter except in a
form and manner and at such time as the Parties shall
agree upon.
15.5 Governing law/jurisdiction
This Agreement shall be governed by, and construed in
accordance with, the laws of New Zealand.
15.6 Costs
Except as otherwise provided in this Agreement, the
Parties will meet their own costs relating to the
negotiation, preparation and implementation of this
Agreement.
<PAGE>
15.7 Counterpart and facsimile execution
The parties may execute this Agreement by executing
counterpart copies of this Agreement. The transmission by
facsimile by each party of a signed counterpart copy of
the execution provisions of this Agreement to the other
parties shall be deemed proof of signature of the original
Agreement and the signed facsimile so transmitted shall be
deemed an original for the purposes of this Agreement.
SIGNED AS AN AGREEMENT
AMG OIL (NZ) LIMITED by its duly authorised attorney:
/s/ Jennifer Lean
Attorney
/s/ Jennifer Lean
Attorney
in the presence of:
/s/ Keren Witt
Name: Keren Witt
Occupation: Office Manager
Address: Wellington, New Zealand
ORION EXPLORATION LIMITED by:
/s/ Linda Susan Constable
Director
/s/ Christopher Stephen Laurie
Director/Authorised Person
in the presence of:
Name:
Occupation:
Address:
<PAGE> 26
SCHEDULE 1: PARTY DIRECTORY
(Clause 12)
TRANSFEROR: 284 Karori RdWellington
Facsimile: 64 4 476 0120
Attention: Manager Corporate Affairs
TRANSFEREE: 218 Manchester Street Christchurch
Facsimile : 64 3 363 9899
Attention: Manager, New Zealand Exploration
<PAGE> 27
SCHEDULE 2: TRANSFEROR'S WARRANTIES
(Clauses 1.1 and 10)
1. Full authority
The Transferor has been duly authorised by its directors to
enter into and perform this Agreement, and has the necessary
power to bind itself in the manner contemplated by this
Agreement.
2. Financial standing
The Transferor has sufficient financial resources to meet all
its financial and other obligations under this Agreement.
3. Full disclosure
All material information relating to the Assigned Interest,
Joint Operations and Joint Venture for the evaluation of the
financial condition of the Joint Venture and Joint Operations
and the trading prospects of the Joint Venture, has been fully
disclosed to the Transferee in a manner which would not mislead
a reasonable transferee as to the state of the Assigned
Interest, Joint Operations and Joint Venture.
4. Accounts and records
All the accounts, books, ledgers and financial and other
material records of the Joint Venture have been maintained fully
and accurately in accordance with generally accepted accounting
practices and standards in New Zealand. There are no material
inaccuracies or discrepancies in any of them, and they give a
true and fair view of the financial, contractual and trading
position of the Joint Operations.
5. Territorial/Government authority requisitions
The Transferor has not received any notice nor has the
Transferor any knowledge of any requisition or outstanding
requirement of any territorial or government authority in
respect of the Joint Property or of any pending or threatened
requisition or requirement.
6. Statutory compliance
6.1 The Transferor and the Joint Venture has not failed to
comply in any material way with applicable laws, orders,
rules, regulations and by-laws which would adversely affect
the Joint Operations to a material extent.
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6.2 The Transferor holds, or will by the Settlement Date
(unless waived by the Transferee), hold all Approvals.
6.3 The Transferor is not carrying on operations in breach of
the provisions of any of the Approvals or of any conditions
attaching to them, and has had no notice that any of the
Approvals have been or are likely to be cancelled, refused
or qualified in any way.
6.4 The transfer of the Assigned Interest will not invalidate
or in any other way adversely affect any of the Approvals
except as disclosed to the Transferee.
7. Encumbrances
Subject to the requirements of the Act, the Transferor is or
will be entitled to assign the Assigned Interest to the
Transferee and the Assigned Interest are not subject to any
Encumbrances (except as may arise under or pursuant to the Act).
8. Insurance
8.1 All insurance policies required by the JVOA (Insurance Policies)
have been obtained and no claim under the Insurance Policies is
outstanding and, so far as the Transferor is aware, there are no
circumstances likely to give rise to such a claim.
9. No proceedings, pending proceedings, unsatisfied judgments
9.1 No prosecution, legal action, proceedings or arbitration of
material importance is threatened against the Joint Venture in
connection with the Joint Operations.
9.2 The Joint Venture is not a party to any long-term contracts
which may become binding on the Transferee as a result of
signing this Agreement, otherwise than as disclosed to the
Transferee.
10. Environmental matters
The Transferor warrants:
10.1 the Joint Operations comply and have always complied with
all Environmental Laws;
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10.2 the Joint Venture has obtained all Environmental Approvals
and is not and has never been in breach of any of them;
10.3 no Environmental Approval held by the Joint Venture is
likely to be cancelled, suspended, changed or not renewed;
10.4 the Transferor has always dealt with any contaminant (if
any) strictly in accordance with the requirements of all
Environmental Laws;
10.5 the Transferor is not involved in any legal proceeding,
arbitration or investigation relating in any way to the
ownership, use or maintenance of the Joint Property (as the
case may be);
11. Outside material circumstances
The Transferor is not aware of any material circumstance arising
outside the normal course of operations since the establishment
of the Joint Venture of which a transferee could not reasonably
be expected to be aware, and which might reasonably be expected
to affect materially and adversely the financial position,
profitability or prospects of the Joint Venture or the Joint
Operations.
12. Development
12.1 The Transferor warrants that there are no current or past Sole
Risk Operations of the Joint Venture or the Permit.
