GEOLOGICAL, MANAGEMENT AND ADMINISTRATION SERVICES AGREEMENT
GEOLOGICAL, MANAGEMENT AND
ADMINISTRATION SERVICES AGREEMENT
THIS AGREEMENT dated for reference the 31st day of December, 1996
BETWEEN:
XXXXXX XXXXXXXXX INC., a company incorporated under the federal
laws of Canada having a registered office at Xxxxx 0000, 0000 Xxxx Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0 |
|
| (herein "HDI") |
OF THE FIRST PART
AND:
XXXXX MOUNTAIN GOLD LIMITED, a British Columbia company having
a business office at Suite 1020, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx
Xxxxxxxx, X0X 0X0 |
|
| (herein "Xxxxx Mountain") |
OF THE SECOND PART
WHEREAS:
| (A) | HDI is a company established to provide geological, corporate development,
administrative and management services for public companies involved in
the acquisition and exploration of natural resource properties; |
| (B) | Xxxxx Mountain and HDI have agreed that HDI will provide the services
more particularly described herein on the terms and conditions of this
Agreement and that Xxxxx Mountain will assist HDI by requiring one of Xxxxx
Mountain's directors to
serve on the board of directors of HDI. |
NOW THEREFORE in consideration of the premises and mutual covenants herein contained, the parties hereto agree as follows:
ARTICLE 1
ADMINISTRATION SERVICES
| 1.1 | During the term of this Agreement HDI shall provide Xxxxx Mountain
and/or Xxxxx Mountain's affiliates with the following administration services: |
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| (a) | use of HDI's business premises located at Suite 1020, 000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, xx a non-exclusive basis with access
to the reception area, the boardroom and other offices as available and
agreed to from time to time; |
|
| (b) | use of HDI's reception and telephone answering personnel; |
|
| (c) | reasonable use of office equipment including telephone systems,
photocopying, telecopier and computers, and other equipment as required; |
|
| (d) | administration service personnel including accounting,
purchasing, secretarial and like support staff on an "as needed" and "as available" basis. |
|
| 1.2 | The administration fee payable by Xxxxx Mountain
to HDI for the administration services shall be invoiced by HDI on a monthly
basis based on a fee which
represents a full cost recovery basis to HDI and which fee will be reasonably
described in the invoice. The fee shall represent a reasonable pro-rationing
of HDI's costs amongst all its client companies with regard to the level
of service requirements of each such company. The fee will be reviewed
from time to time and the basis may be changed on notice by HDI in the
event Xxxxx Mountain's use of the administration services is in excess
of historical experience or HDI's costs change or in the event a greater
or lesser number of other public companies are using HDI's services. |
|
| 1.3 | Xxxxx Mountain acknowledges
that HDI has or intends to enter into substantially identical agreements
with other
public companies and HDI
may add, delete or vary such arrangements with such other companies in
HDI's sole discretion. As of the date hereof such other companies are
more particularly described
on Schedule "A" hereto. |
|
ARTICLE 2 |
||
| GEOLOGICAL AND MANAGEMENT SERVICES |
||
| 2.1 | In addition to the administration
services, HDI shall supply technical, geological, management and corporate
development
services to Xxxxx Mountain
on a non exclusive and on an "as needed" and "as available" basis. HDI
shall, at least annually, review the resource property portfolio of Xxxxx
Mountain together with Xxxxx Mountain's board of directors and such other
independent consultants as Xxxxx Mountain desires to involve with a view
to recommending and implementing programs of
exploration. |
|
| 2.2 | Such recommendations shall be accompanied by
reasonable details of programs including scheduling, description of activities
and related
budgets. Upon acceptance (with or without variations) of such recommendations
by Xxxxx Mountain (which acceptance is in the sole discretion of Xxxxx
Mountain) HDI shall generally carry out the program as the agent of Xxxxx
Mountain and shall: |
|
| (a) | retain and/or itself provide the necessary technical and support
staff; |
|
| (b) | negotiate third party service contracts and provide them to Xxxxx
Mountain for execution or execute same as agent for Xxxxx Mountain. Such
third party contracts shall |
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generally include geophysical and geochemical surveys,
sampling, line cutting, diamond drilling, engineering, environmental,
independent analyses and reporting and such other work as has been recommended
by HDI and approved by Xxxxx Mountain; |
||
| (c) | apply for necessary government exploration or work
permits and licences; |
|
| (d) | provide field staff to s`upervise and oversee the
work of HDI staff and other contractors and subcontractors; |
|
| (e) | obtain insurance and assist in making application
and relevant filings pertaining to the maintenance of titles to the property
as well as filing of assessment work respecting exploration work carried
out and paid for by Xxxxx Mountain; |
|
| (f) | general administration of the exploration program
including accounting, payment of third party invoices and reporting thereon;
and |
|
| (g) | provide assistance with corporate awareness programs
regarding Xxxxx Mountain. |
|
| 2.3 | For purposes of administration
of any exploration program Xxxxx Mountain shall be deemed to be the operator
of all of Xxxxx Mountain's joint venture agreements and HDI's function
shall be as general advisor and agent. |
|
| 2.4 | The fee to HDI for the
above technical services shall be included with and agreed as part of
budgets which are provided to and subject to the approval of Xxxxx Mountain.
Except for overruns, significant variations (greater than 50%) in the
planned programs shall require the prior approval of Xxxxx Mountain but
the costs incurred with respect to such overruns and variations shall
notwithstanding, be for the account of Xxxxx Mountain. |
|
| ARTICLE 3 |
||
| ADDITIONAL RIGHTS AND
DUTIES OF HDI |
||
| 3.1 | Xxxxx Mountain agrees to
indemnify and hold harmless HDI (and any subsidiary), their officers,
directors, employees and agents, from any and all claims, suits or demands
arising out of the performance of HDI hereunder. Without restricting the
generality of the foregoing Xxxxx Mountain agrees to promptly pay HDI
invoices and to advance funds against written cash calls wherever reasonably
required by HDI to pay for or secure services, to secure equipment, contractors,
deposits and the like and to honour all agreements which HDI enters into
in good faith as agent on behalf of Xxxxx Mountain with third parties.
The foregoing indemnity shall not apply to losses, claims or suits arising
out of HDI's negligence or wilful misconduct. |
|
| 3.2 | HDI agrees to carry out
its advisory, administrative and operating activities hereunder in a competent
and workmanlike manner, in good faith with a view to the best interests
of Xxxxx Mountain. |
|
| 3.3 | HDI shall take reasonable
precautions to ensure that only authorized personnel of HDI and Xxxxx
Mountain are provided with information respecting the business affairs,
|
|
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exploration results and properties of Xxxxx Mountain.
HDI shall limit access to information respecting exploration developments
to its own staff
on a need to know basis and shall ensure that its personnel acknowledge
the need to protect confidentiality of information respecting Xxxxx Mountain
which is developed by or comes into the possession of HDI and that they
are in a "special relationship" with Xxxxx Mountain as contemplated by
securities legislation. HDI shall generally maintain confidentiality
of Xxxxx Mountain's affairs and shall take reasonable precautions to
protect
the integrity and security of information developed for Xxxxx Mountain. |
|
| 3.4 | HDI shall not compete with Xxxxx Mountain and will not endeavour
to acquire any interest in any property of Xxxxx Mountain or related to
or which can reasonably be said to be derived from any property of Xxxxx
Mountain, without the prior written consent of Xxxxx Mountain which consent
shall be in Xxxxx Mountain's sole discretion. |
| 3.5 | HDI shall not be obligated whatsoever to provide any information
or advice to Xxxxx Mountain respecting resource property prospects and
opportunities which come to the attention of HDI personnel unless such
prospects and opportunities can be clearly demonstrated to be presented
primarily as a result of the provision of services by HDI to Xxxxx Mountain
under the terms of this Agreement. Xxxxx Mountain acknowledges that HDI
is entering into substantially identical agreements with other resource
companies and as a consequence HDI will be exposed to resources property
opportunities in the ordinary course and may receive resource property
prospects and opportunities as a consequence of services to such other
resource companies in the ordinary course. As well, Xxxxx Mountain acknowledges
that HDI may receive unsolicited proposals and opportunities from sources
wholly unrelated to Xxxxx Mountain or any of the other client companies
of HDI and those opportunities are acknowledged by Xxxxx Mountain to be
the sole property of HDI. |
| 3.6 | HDI may be retained by other client companies or terminate its relationship
with any client company in its sole discretion and without notice to any
client company. |
ARTICLE 4 |
|
| OTHER RIGHTS AND DUTIES OF XXXXX MOUNTAIN |
|
| 4.1 | So long as this Agreement is in effect Xxxxx Mountain shall require
one of Xxxxx Mountain's directors to be a director of HDI who shall by
virtue of such appointment have the right to review all aspects of HDI's
operations. Xxxxx Mountain shall obtain an agreement from such nominee
director that he shall not seek confidential information respecting any
other client company of HDI (unless such director is also a director of
such other client company) and shall in any event maintain appropriate
confidentiality with respect to any HDI information provided to or obtained
by such director and particularly with respect to any other client company
or where such information about another client company or its exploration
prospects is inadvertently acquired by the director. Such nominee shall
further agree to promptly resign from the board of HDI in the event this
Agreement is terminated for any reason. Such nominee shall not use any
information acquired by virtue of his directorship in HDI for the purpose
of competing with HDI or competing with any other client company of HDI.
Such nominee shall |
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be in a "special relationship" with any other client company of which
he is not already an "insider". |
|
| 4.2 | Any authorized representative of Xxxxx Mountain shall at all reasonable
times have full access to all of the records or information of HDI pertaining
to the affairs of Xxxxx Mountain. Such access shall be extended to the
auditors and other
professional advisors of Xxxxx Mountain. |
| 4.3 | HDI shall indemnify and save harmless Xxxxx Mountain from any claim,
suit or demand which may arise by virtue of any improper act or gross negligence
of HDI occurring as a result of the performance by HDI of this Agreement. |
| 4.4 | On execution hereof Xxxxx Mountain shall subscribe
for a single common share of HDI for $1.00 and shall resell such share to HDI for $1.00
on termination of this Agreement. Xxxxx Mountain shall in no event sell,
transfer or otherwise dispose of or encumber such share during the currency
of this Agreement. The parties acknowledge that HDI shall be owned by
its client companies and that each client company shall own one common
share
of HDI and that HDI shall not allow any other person to subscribe or
be issued shares in HDI nor will HDI otherwise authorize, create or issue
any other shares or any other securities in its capital stock without
the
consent of all of its client companies. |
ARTICLE 5 |
|
| TERMINATION |
|
| 5.1 | This Agreement may be terminated by either party hereto on 30 days
written notice to the other party. From the date of notice to the date
of termination, HDI shall not enter into any new arrangements on behalf
of Xxxxx Mountain (unless already legally committed to do so) without Xxxxx
Mountain's prior consent. |
| 5.2 | In the event of termination during the course of implementation
of any exploration or other program the parties shall negotiate in good
faith to minimize any interruption of such program and to ensure that the
costs related thereto are properly accounted for and duly discharged by
Xxxxx Mountain. Notwithstanding any termination of this Agreement Xxxxx
Mountain shall continue to be bound by any agreements contracted for on
its behalf by HDI prior to termination. |
| 5.3 | The confidentiality and non-competition provisions of this Agreement
shall survive any termination of this Agreement and continue in full force
and effect for three years thereafter. |
| 5.4 | Upon termination hereof Xxxxx Mountain shall cease to use the HDI
premises, phone number, etc. and shall make arrangements for the orderly
transition of administrative and accounting responsibilities by advice
letter to HDI. HDI shall turn over all business, technical, and like records
pertaining to the affairs and properties of Xxxxx Mountain as may be in
the possession of HDI although HDI may retain copies for its own records
where reasonably required. |
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ARTICLE 6
MISCELLANEOUS
| 6.1 | This Agreement is not assignable by the parties and any purported assignment thereof is void ab initio. |
| 6.2 | This Agreement shall be binding upon and enure to the benefit of
the parties hereto and their respective successors. |
| 6.3 | This Agreement shall be construed in accordance with the laws of
the province of British Columbia and the parties agree to attorn to such
jurisdiction in the event of a dispute hereunder. |
| 6.4 | Notices shall be considered effectively given hereunder when personally
delivered to a party by personal service or by fax, in each case addressed
to the President. |
IN WITNESS WHEREOF the parties have caused this Agreement to be executed as of the date and year first above written.
XXXXXX XXXXXXXXX INC.
| Per: | ||
| Authorized Signatory | ||
| XXXXX MOUNTAIN GOLD LIMITED | ||
| Per: | ||
| Authorized Signatory | ||
SCHEDULE "A"
| Other Client Companies | Nominee HDI Director |
| Amarc Resources Ltd. | Xxxxx Xxxxxxxx |
| Anooraq Resources Corporation | Xxxxx Xxxxxxx |
| Farallon Resources Ltd. | Xxxxxxx Xxxxx |
| Pacific Sentinel Gold Corp. | Xxxxxx Xxxxxxxxx |
| Taseko Mines Limited | Xxxxxx Xxxxxx |
| Quartz Mountain Gold Corp. | Xxxxx Xxxxxxxx |
| Consolidated North Coast Industries Ltd. | Xxx Xxxxxxxx |
| Casamiro Resource Corporation | Xxx Xxxxxxxx |
| Northern Dynasty Minerals Limited | Xxxxx Xxxxxxxx |
| Xxxxx Mountain Gold Limited | Xxxxxxx Xxxxx |
(The foregoing Schedule is subject to change from time to time.)
