OPTION TO PURCHASE AGREEMENT
THIS
AGREEMENT made as of the 4th day of August,
2006.
BETWEEN:
XXXXX
XXXXXXXX XXXXX, businessman, 000-0000 Xxxxxxxxx Xxxxx, Xxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx X0X 0X0 (hereinafter referred to as the
"Vendor")
PARTIES
OF THE FIRST PART
AND:
BLUEBIRD
EXPLORATION COMPANY., a company duly incorporated
under the laws of the State of Delaware, having an office at 000-0000 Xxxxxxxxx
Xxxxx, Xxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx X0X 0X0. (hereinafter referred
to as "BEC")
OF
THE SECOND PART
WHEREAS:
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A.
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Vendor
is the sole beneficial owner of 100% of the mineral claims 512465
and
512466 The
properties are located 9 Kilometers due South of Nelson, in the
Nelson
Mining Division. The properties are adjacent to Apex Creek
across the summit of Evening Ridge to Xxxxxxx 0 xxxxxxx Xxxxxx
xxx Xxxxx
Xxxxxxx Xxxxxxxx, Xxxxxx as described in Schedule "A" attached
hereto and
forming part hereof (hereinafter together with any form of successor
or
substitute mineral tenure called the
"Claim").
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B.
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The
parties now wish to enter into an agreement granting to BEC the
exclusive
right and option to acquire an undivided 100% of the right, title
and
interest in and to the Claim on the terms and conditions as hereinafter
set forth.
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NOW
THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
premises and the mutual promises, covenants and agreements herein contained,
the
parties hereto agree as follows:
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1.
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INTERPRETATION
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1.1
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In
this Agreement:
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(a)
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"Effective
Date" means the date that both parties have signed this
Agreement;
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(b)
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"Mineral
Products" means the products derived from operating the Claim as
a
mine;
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(c)
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"Net
Smelter Returns" means the proceeds received by BEC from any smelter
or
other purchaser from the sale of any ores, concentrates or minerals
produced from the Claim after deducting from such proceeds the
following
charges only to the extent that they are not deducted by the smelter
or
other purchaser in computing the
proceeds:
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(i)
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the
cost of transportation of the ores, concentrates or minerals from
the
Claim to such smelter or other purchaser, including related
transport;
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(ii)
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smelting
and refining charges including penalties;
and
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(iii)
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marketing
costs.
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(d)
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"Option"
means the option granted by Vendor to BEC pursuant to Section
3;
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(e)
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"Operating
the Claim as a mine" or "Operation of the Claim as a mine" means
any or
all of the mining, milling, smelting, refining or other recovery
of ores,
minerals, metals or concentrates or values thereof, derived from
the
Claim;
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(f)
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"Dollars
($)" means legal currency of
Canada.
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2.
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REPRESENTATIONS
AND WARRANTIES
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2.1
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BEC
represents and warrants to Vendor
that:
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(a)
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BEC
is a body corporate duly incorporated, organized and validly subsisting
under the laws of its incorporating
jurisdiction;
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(b)
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BEC
has full power and authority to carry on its business and to enter
into
this Agreement and any agreement or instrument referred to or contemplated
by this Agreement;
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(c)
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neither
the execution and delivery of this Agreement nor any of the agreements
referred to herein or contemplated hereby, nor the consummation
of the
transactions hereby contemplated will conflict with, result in
the breach
of or accelerate the performance required by any agreement to which
BEC is
a party; and
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(d)
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the
execution and delivery of this Agreement and the agreements contemplated
hereby will not violate or result in the breach of laws of any
jurisdiction applicable or pertaining thereto or of BEC's constating
documents.
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2.2
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Vendor
represents and warrants to BEC:
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(a)
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the
Claim consists of the mineral claims 512465 and 512466 The properties
are
located 9 Kilometers due South of Xxxxxx, in the Xxxxxx Mining
Division
which has been duly and validly staked and recorded, as accurately
described in Schedule "A", is presently in good standing under
the laws of
the jurisdiction in which it is located and, except as set forth
herein,
is free and clear of all liens, charges and
encumbrances;
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(b)
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Vendor
is the sole beneficial owner of a 100% interest in and to the Claim
and
has the exclusive right to enter into this Agreement and all necessary
authority to dispose of an undivided 100% interest in and to the
Claim in
accordance with the terms of this
Agreement;
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(c)
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no
person, firm or corporation has any proprietary or possessory interest
in
the Claim other than Vendor and no person is entitled to any royalty
or
other payment in the nature of rent or royalty on any minerals,
ores,
metals or concentrates or any other such products removed from
the
Claim;
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(d)
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neither
the execution and delivery of this Agreement nor any of the agreements
referred to herein or contemplated hereby, nor the consummation
of the
transactions hereby contemplated will conflict with, result in
the breach
of or accelerate the performance required by any agreement to which
Vendor
is a party or by which he is bound;
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(e)
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the
execution and delivery of this Agreement and the agreements contemplated
hereby will not violate or result in the breach of the laws of
any
jurisdiction applicable or pertaining
thereto.
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2.3
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The
representations and warranties hereinbefore set out are conditions
on
which the parties have relied in entering into this Agreement and
will
survive the acquisition of any interest in the Claim by BEC and
each party
will indemnify and save the other party harmless from all loss,
damage,
costs, actions and suits arising out of or in connection with any
breach
or any representation, warranty, covenant, agreement or condition
made by
the other party and contained in this
Agreement.
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3.
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OPTION
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3.1
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Vendor
hereby gives and grants to BEC the sole and exclusive right and
option to
acquire an undivided 100% of the right, title and interest of Vendor
in
and to the Claim, subject only to Vendor receiving the annual payments
in
accordance with the terms of this Agreement for and in consideration
of
the following:
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(a)
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BEC,
or its permitted assigns, incurring exploration expenditures on
the Claims
of a minimum of $7,000 on or before September 30, 2007;
and
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(b)
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BEC,
or its permitted assigns, incurring exploration expenditures on
the Claims
of a further $25,000 (for aggregate minimum exploration expenses
of
$32,000) on or before September 30, 2008;
and
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3.2
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Upon
exercise of the Option, BEC agrees to pay Vendor, commencing January
1,
2009, the sum of $25,000 per annum for so long as BEC, or its permitted
assigns, holds any interest in the Claims. Failure to make any
such annual
payment shall result in termination of this Agreement in accordance
with
Section 5.1.
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4.
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RIGHT
OF ENTRY
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4.1
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Until
such time as the Option has been exercised, BEC, its employees,
agents and
independent contractors, will have the sole and exclusive right
and option
to:
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(a)
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enter
upon the Claims;
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(b)
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have
exclusive and quiet possession
thereof;
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(c)
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do
such prospecting, exploration, development or other mining work
thereon
and thereunder as BEC in its sole discretion may consider advisable;
and
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(d)
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bring
and erect upon the Claims such facilities as BEC may consider
advisable.
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5.
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TERMINATION
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5.1
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Subject
to Section 8, this Agreement and the Option will
terminate:
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(a)
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on
September 30, 2007 at 11:59 P.M., unless on or before that date,
BEC has
incurred exploration expenditures of a minimum of $7,000 on the
Claims;
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(b)
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on
September 30, 2008 at 11:59 P.M., unless BEC has incurred a further
$25,000 of exploration expenditures on the Claims (for an aggregate
of
$32,000); or
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(c)
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at
11:59 P.M. on January 1 of each and every year, commencing on January
1,
2009, unless BEC or its successor or assign has paid to Vendor
the sum of
$25,000 on or before that date.
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6.
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COVENANTS
OF VENDOR
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6.1
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Vendor
will:
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(a)
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not
do any act or thing which would or might in any way adversely affect
the
rights of BEC hereunder;
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(b)
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make
available to BEC and its representatives all records and files
in the
possession of Vendor relating to the Claims and permit BEC and
its
representatives at its own expense to take abstracts therefrom
and make
copies thereof; and
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(c)
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promptly
provide BEC with any and all notices and correspondence from government
agencies in respect of the Claims.
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7.
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COVENANTS
OF BEC
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7.1
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BEC
will:
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(a)
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keep
the Claims free and clear of all liens, charges and encumbrances
arising
from their operations hereunder and in good standing by the doing
and
filing of all necessary work and by the doing of all other acts
and things
and making all other payments which may be necessary in that
regard;
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(b)
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permit
Vendor, or its representatives duly authorized by it in writing,
at their
own risk and expense, access to the Claims at all reasonable times
and to
all records prepared by BEC in connection with work done on or
with
respect to the Claims;
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(c)
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conduct
all work on or with respect to the Claims in a careful and miner-like
manner and in compliance with all applicable Federal, Provincial
and local
laws, rules, orders and regulations, and indemnify and save Vendor
harmless from any and all Claims, suits, actions made or brought
against
it as a result of work done by BEC on or with respect to the Claims;
and
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(d)
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obtain
and maintain, or cause any contractor engaged hereunder to obtain
and
maintain, during any period in which active work is carried out
hereunder,
adequate insurance.
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8.
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EXERCISE
OF OPTION
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8.1
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Once
BEC has incurred the exploration expenditures, and made the payments
set
out in Section 3.1, BEC will, subject to the right of Vendor to
receive
the obligation of BEC to make the annual payments set out in Section
3.2,
own an undivided 100% of Vendor's right, title, and interest in
and to the
Claims.
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9.
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OBLIGATIONS
OF BEC AFTER TERMINATION
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9.1
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In
the event of the termination of the Option, BEC
will:
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(a)
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leave
the Claims in good standing for a minimum of one (1) year under
all
applicable legislation, free and clear of all liens, charges and
encumbrances arising from this Agreement or their operations hereunder
and
in a safe and orderly condition;
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(b)
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deliver
to Vendor within 60 days of its written request a comprehensive
report on
all work carried out by BEC on the Claims (limited to factual matter
only)
together with copies of all maps, drill logs, assay results and
other
technical data compiled by BEC with respect to the
Claims;
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(c)
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have
the right, and obligation on demand made by Vendor, to remove from
the
Claims within six (6) months of the effective date of termination
all
facilities erected, installed or brought upon the Claims by or
at the
instance of BEC provided that at the option of Vendor, any or all
of
facilities not so removed will become the property of Vendor;
and
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(d)
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deliver
to Vendor a duly executed transfer in registrable form of an undivided
100% right, title and interest in and to the Claims in favour of
Vendor,
or its nominee.
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10.
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TRANSFER
OF TITLE
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10.1
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Upon
the request of BEC, Vendor will deliver to BEC a duly executed
transfer in
registrable form of an undivided 100% of Vendor's right, title
and
interest in and to the Claims in favour of BEC which BEC will be
entitled
to register against title to the Claims provided that transfer
of legal
title to the Claims as set forth in this Subsection 10.1 is for
administrative convenience only and beneficial ownership of an
undivided
100% interest in the Claims will pass to BEC only in accordance
with the
terms and conditions of this
Agreement.
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11.
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REGISTRATION
OF AGREEMENT
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12.1
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Notwithstanding
Section 10 of this Agreement, BEC or Vendor will have the right
at any
time to register this Agreement or a Memorandum thereof against
title to
the Claims.
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12.
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DISPOSITION
OF CLAIMS
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12.1
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BEC
may at any time sell, transfer or otherwise dispose of all or any
portion
of its interest in and to the Claims and this Agreement provided
that, at
any time, BEC has first obtained the consent in writing of Vendor,
such
consent not to be unreasonably withheld and further provided that,
at any
time during the currency of this Agreement, any purchaser, grantee
or
transferee of any such interest will have first delivered to Vendor
its
agreement related to this Agreement and to the Claims,
containing:
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(a)
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a
covenant with Vendor by such transferee to perform all the obligations
of
BEC to be performed under this Agreement in respect of the interest
to be
acquired by it from BEC, and
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(b)
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a
provision subjecting any further sale, transfer or other disposition
of
such interest in the Claims and this Agreement or any portion thereof
to
the restrictions contained in this Subsection
12.1.
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12.2
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The
provisions or Subsection 13.1 of this Agreement will not prevent
either
party from entering into an amalgamation or corporate reorganization
which
will have the effect in law of the amalgamated or surviving company
possessing all the property, rights and interests and being subject
to all
the debts, liabilities and obligations of each amalgamating or
predecessor
company.
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13.
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ABANDONMENT
OF PROPERTY
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13.l
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BEC
shall have the unfettered right at any time after the exercise
of the
Option to abandon all or any part of its interest in the Claims
by
delivering a notice in writing of their intention to do so to Vendor,
such
notice to list the part or parts of the Claims to be abandoned,
and if
within 30 days of receipt of such notice Vendor delivers to BEC
a notice
("Reacquisition Notice") stating its intention to reacquire all
or part or
parts of the Claims, BEC will deliver to Vendor duly executed recordable
transfers of its interest in such part or parts of the Claims as
Vendor
has set forth in the Reacquisition Notice, such part or parts to
be in
good standing for at least one year beyond the date of delivery
of such
transfers and to be free and clear of all liens, charges, and encumbrances
arising from the operations of BEC or its agents or subcontractors
hereunder.
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14.
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CONFIDENTIAL
NATURE OF INFORMATION
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15.1
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The
parties agree that all information obtained from the work carried
out
hereunder and under the operation of this Agreement will be the
exclusive
property of the parties and will not be used other than for the
activities
contemplated hereunder except as required by law or by the rules
and
regulations of any regulatory authority having jurisdiction, or
with the
written consent of both parties, such consent not to be unreasonably
withheld. Notwithstanding the foregoing, it is understood and agreed
that
a party will not be liable to the other party for the fraudulent
or
negligent disclosure of information by any of its employees, servants
or
agents, provided that such party has taken reasonable steps to
ensure the
preservation of the confidential nature of such
information.
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16.
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FURTHER
ASSURANCES
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16.1
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The
parties hereto agree that they and each of them will execute all
documents
and do all acts and things within their respective powers to carry
out and
implement the provisions or intent of this
Agreement.
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17.
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NOTICE
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17.1
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Any
notice, direction or other instrument required or permitted to
be given
under this Agreement will be in writing and will be given by the
delivery
or the same or by mailing the same by prepaid registered or certified
mail
in each case addressed as follows:
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(a)
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if
to Vendor
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000-0000
Xxxxxxxxx Xxxxx
Xxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx X0X 0X0
Attention
: Xxxxx Xxxxxxxx Xxxxx
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(b)
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if
to Bluebird Exploration
Company
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000-0000
Xxxxxxxxx Xxxxx
Xxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx X0X 0X0
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l7.2
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Any
notice, direction or other instrument aforesaid will, if delivered,
be
deemed to have been given and received on the day it was delivered,
and if
mailed, be deemed to have been given and received on the fifth
business
day following the day of mailing, except in the event of disruption
of the
postal services in which event notice will be deemed to be received
only
when actually received.
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17.3
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Any
party may at any time give to the other notice in writing of any
change of
address of the party giving such notice and from and after the
giving of
such notice, the address or addresses therein specified will be
deemed to
be the address of such party for the purpose of giving notice
hereunder.
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18.
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HEADINGS
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18.1
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The
headings to the respective sections herein will not be deemed part
of this
Agreement but will be regarded as having been used for convenience
only.
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19.
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DEFAULT
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19.1
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If
any party (a "Defaulting Party") is in default of any requirement
herein
set forth other than the provisions of Section 5 for which notice
of
default need not be given, the party affected by such default will
give
written notice to the defaulting Party specifying the default and
the
Defaulting Party will not lose any rights under this Agreement,
unless
within 30 days after the giving of notice of default by the affected
party
the Defaulting Party has cured the default by the appropriate performance
and if the Defaulting Party fails within such period to cure any
such
default, the affected party will be entitled to seek any remedy
it may
have on account of such default.
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20.
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PAYMENT
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20.1
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All
references to monies hereunder will be in Canadian funds except
where
otherwise designated. All payments to be made to any party hereunder
will
be mailed or delivered to such party at its address for notice
purposes as
provided herein, or for the account of such party at such bank
or banks in
Canada as such party may designate from time to time by written
notice.
Said bank or banks will be deemed the agent of the designating
party for
the purpose of receiving and collecting such
payment.
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21.
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ENUREMENT
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21.1
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Subject
to Section 13, this Agreement will enure to the benefit of and
be binding
upon the parties hereto and their respective successors and permitted
assigns.
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22.
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TERMS
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22.1
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The
terms and provisions of this Agreement shall be interpreted in
accordance
with the laws of British Columbia.
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23.
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FORCE
MAJEURE
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23.1
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No
party will be liable for its failure to perform any of its obligations
under this Agreement due to a cause beyond its control (except
those
caused by its own lack of funds) including, but not limited to
acts of
God, fire, flood, explosion, strikes, lockouts or other industrial
disturbances, laws, rules and regulations or orders of any duly
constituted governmental authority or non- availability of materials
or
transportation (each an "Intervening
Event").
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23.2
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All
time limits imposed by this Agreement, other than those imposed
by Section
5, will be extended by a period equivalent to the period of delay
resulting from an Intervening Event described in Subsection
23.1.
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23.3
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A
party relying on the provisions of Subsection 23.1 will take all
reasonable steps to eliminate an Intervening Event and, if possible,
will
perform its obligations under this Agreement as far as practical,
but
nothing herein will require such party to settle or adjust any
labour
dispute or to question or to test the validity of any law, rule,
regulation or order of any duly constituted governmental authority
or to
complete its obligations under this Agreement if an Intervening
Event
renders completion impossible.
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24.
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ENTIRE
AGREEMENT
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24.1
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This
Agreement constitutes the entire agreement between the parties
and
replaces and supersedes all prior agreements, memoranda, correspondence,
communications, negotiations and representations, whether verbal
or
written, express or implied, statutory or otherwise between the
parties
with respect to the subject matter
herein.
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25.
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TIME
OF ESSENCE
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25.1
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Time
will be of the essence in this
Agreement.
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26.
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ENFORCEMENT
OF AGREEMENT
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26.1
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The
covenants, promises, terms and conditions contained herein will
be binding
upon the parties jointly and severally and may be enforced by each
as
against each other inter se.
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IN
WITNESS WHEREOF the parties hereto have executed this Agreement as of
the day and year first above written.
Xxxxx
Xxxxxxxx Xxxxx
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By: Xxxxx Xxxxxxxx Xxxxx |
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Signature of Witness |
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Printed Name of Witness |
BLUEBIRD
EXPLORATION COMPANY
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Per:
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by its Authorized Signatory: Xxxxx Xxxxxxxx Xxxxx, President |
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Claim
No.
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Document
Description
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Recording
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Expiration
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512465
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August
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August
5, 2005
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August
5, 2006
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512466
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August
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August
5, 2005
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August
5, 2006
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