OPTION AGREEMENT
----------------
THIS AGREEMENT made as of the 6 day of April, 1998
--- -----
BETWEEN:
Xxxxxxx Xxxxxxxxxx, of X.X. Xxx 000, Xxx
Xxxxx, Xxxxxxxxxxxx, X0X 0X0
("Xxxxxxxxxx")
OF THE FIRST PART
AND:
Xxxx Service, of 00 Xxxxx Xxxxxxxx, Xxxxxxxxx,
Xxxxxxxxxxxx
("Service")
OF THE SECOND PART
AND:
Green Fusion Corp., a Nevada corporation with
a registered office at Suite B-169, 7373 N.
Scottsdale Road, Scottsdale, Arizona, U.S.A.
85253
(the "Optionee")
OF THE THIRD PART
WHEREAS:
X. Xxxxxxxxxx is the owner of certain mineral claims located
in the Province of Saskatchewan;
B. The Optionors have agreed to grant an exclusive option to
the Optionee to acquire an interest in and to the Property, subject
to a Royalty, on the terms and conditions hereinafter set forth;
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NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
sum of $1.00 now paid by the Optionee to the Optionors (the receipt
of which is hereby acknowledged), the parties agree as follows:
DEFINITIONS
-----------
1. For the purposes of this Agreement the following words
and phrases shall have the following meanings, namely:
(a) "Commencement of Commercial Production" means:
(i) if a mill is located on the Property, the last
day of a period of 40 consecutive days in which,
for not less than 30 days, the mill processed ore
from the Property at 60% of its rated
concentrating capacity; or
(ii) if a mill is not located on the Property, the
last day of a period of 30 consecutive days
during which ore has been shipped from the
Property on a reasonably regular basis for the
purpose of earning revenues,
but any period of time during which ore or concentrate is
shipped from the Property for testing purposes or during
which milling operations are undertaken as initial tune-
up, shall not be taken into account in determining the
date of Commencement of Commercial Production;
(b) "Option" means the option to acquire a 100% undivided
interest in and to the Property as provided in this
Agreement;
(c) "Option Period" means the period from the date of this
Agreement to and including the date of exercise or
termination of the Option;
(d) "Optionors" means Xxxxxxxxxx and Service;
(e) "Property" means the mineral claims described in Schedule
"A" hereto including any replacement or successor claims,
and all mining leases and other mining interests derived
from any such claims. Any reference herein to any
mineral claim comprising the Property includes any
mineral leases or other interests into which such mineral
claim may have been converted;
(f) "Property Rights" means all licenses, permits, easements,
rights-of-way, certificates and other approvals obtained
by either of the parties either before or after the date
of this Agreement and necessary for the exploration of
the Property, or for the purpose of placing the Property
into production or continuing production therefrom;
(g) "Royalty" means the amount of royalty from time to time
payable to Service hereunder and as defined in Schedule
"B" attached hereto.
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(h) "Shares" means the 50,000 common shares in the capital of
the Optionee to be issued to the Optionor pursuant to the
exercise of the Option.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE OPTIONORS
----------------------------------------------------------
2. (a) The Optionors represent and warrant to and covenant with
the Optionee that:
(i) the Optionors are legally entitled to hold the
Property and the Property Rights and will remain
so entitled until the interest of the Optionors
in the Property which is subject to the Option
has been duly transferred to the Optionee as
contemplated hereby;
(ii) Xxxxxxxxxx is, and at the time of transfer to the
Optionee of an interest in the mineral claims
comprising the Property pursuant to the exercise
of the Option, will be the recorded holder of and
Service is, and at the time of transfer to the
Optionee of an interest in the mineral claims
comprising the Property pursuant to the exercise
of the Option, will be the beneficial owner of,
all of the mineral claims comprising the Property
free and clear of all liens, charges and claims
of any other party, except as noted on Schedule
"A", and no taxes or rentals are or will be due
in respect of any of the mineral claims;
(iii) Xxxxxxxxxx holds all interest in the Property in
trust for Service and holds no beneficial
interest in the mineral claims comprising the
Property;
(iv) the mineral claims comprising the Property have,
to the best of the Optionors' knowledge and
belief, been duly and validly located and
recorded pursuant to the laws of the jurisdiction
in which the Property is situate and, except as
specified in Schedule "A" and accepted by the
Optionee, are in good standing with respect to
all filings, fees, taxes, assessments, work
commitments or other conditions on the date
hereof and until the dates of expiry of the
claims listed in Schedule "A";
(v) there are no adverse claims or challenges against
or to the ownership of or title to any of the
mineral claims comprising the Property, nor to
the knowledge of the Optionors is there any basis
therefor, and there are no outstanding agreements
or options to acquire or purchase the Property or
any portion thereof, and no person other than the
Optionors, pursuant to the provisions hereof, has
any royalty or other interest whatsoever in
production from any of the mineral claims
comprising the Property other than as set out in
Schedule "A";
(vi) no proceedings are pending for, and the Optionors
are unaware of any basis for the institution of
any proceedings leading to the placing of the
-4-
Optionors in bankruptcy or subject to any other
laws governing the affairs of insolvent persons;
(b) The representations and warranties contained in this
section are provided for the exclusive benefit of the
Optionee, and a breach of any one or more thereof may be
waived by the Optionee in whole or in part at any time
without prejudice to its rights in respect of any other
breach of the same or any other representation or
warranty, and the representations and warranties
contained in this section shall survive the execution of
this Agreement and of any transfers, assignments, deeds
or further documents respecting the Property.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE OPTIONEE
---------------------------------------------------------
3. (a) The Optionee represents and warrants to and covenants
with the Optionors that:
(i) it has been duly incorporated, amalgamated or
continued, validly exists and is in good standing
under the laws of the Optionee's state of
residence;
(ii) it has duly obtained all corporate authorizations
for the execution of this Agreement and for the
performance of this Agreement by it, and the
consummation of the transactions herein
contemplated will not conflict with or result in
any breach of any covenants or agreements
contained in, or constitute a default under, or
result in the creation of any encumbrance under
the provisions of the Articles or other
constating documents of the Optionee or any
shareholders' or directors' resolution,
indenture, agreement or other instrument
whatsoever to which the Optionee is a party or by
which it is bound or to which it or the Property
may be subject;
(iii) no proceedings are pending for, and the Optionee
is unaware of any basis for the institution of
any proceedings leading to, the dissolution or
winding up of the Optionee or the placing of the
Optionee in bankruptcy or subject to any other
laws governing the affairs of insolvent
corporations;
(iv) the Shares will, at the time of delivery to
Service, be duly authorized and validly allotted
and issued as fully paid and non-assessable
shares of the Company free of any liens, charges
or encumbrances;
(b) The representations and warranties contained in this
section are provided for the exclusive benefit of the
Optionors and a breach of any one or more thereof may be
waived by the Optionors in whole or in part at any time
without prejudice to its rights in respect of any other
breach of the same or any other representation or
warranty,
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and the representations and warranties
contained in this section shall survive the execution
hereof.
GRANT AND EXERCISE OF OPTION
----------------------------
4. (a) The Optionors hereby grant to the Optionee the sole and
exclusive right and option to acquire a 100% undivided
interest in and to the Property free and clear of all
charges, encumbrances and claims, except for those set
out in Schedule "A" and the Royalty.
(b) The Option shall be exercised by the Optionee:
(i) paying Service $6,000 on the execution of this
Agreement, the receipt of which is hereby
acknowledged by the Optionor;
(ii) paying Service $12,000 as follows:
A. $6,000 on or before the first anniversary of
the date of this Agreement; and
B. an additional $6,000 on or before the second
anniversary of the date of this Agreement.
(iii) allotting and issuing to Service, as fully paid
and non-assessable, the Shares forthwith after
the execution of this Agreement.
(c) If and when the Option has been exercised, a 100%
undivided right, title and interest in and to the
Property shall vest in the Optionee free and clear of all
charges, encumbrances and claims, except for the
obligation of the Optionee hereunder to pay Service the
Royalty.
TRANSFER OF PROPERTY
--------------------
5. (a) Concurrently with the execution of this Agreement, the
Optionors shall deliver to the Optionee duly executed
transfers of the appropriate interest in the Property
which shall be acquired by the Optionee upon exercise of
the Option.
(b) The Optionee shall be entitled to record such transfers
at its own cost with the appropriate government office to
effect legal transfer of such interest in the Property
into the name of the Optionee, provided that the Optionee
shall hold such interest in the Property subject to the
terms of this Agreement, it being understood that the
transfer of such legal title to the Optionee prior to the
exercise of the Option is for administrative convenience
only.
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ESCROW AGREEMENT
----------------
6. The Company and Service agree that they shall forthwith
upon the execution this
agreement to enter into, and the Shares shall be subject to, an
Escrow Agreement on the terms and conditions required by the
Saskatchewan Securities Commission, a copy of which is attached
hereto as Schedule "C".
RIGHT OF ENTRY
--------------
7. Throughout the Option Period the directors and officers
of the Optionee and its servants, agents, employees and independent
contractors, shall have the sole and exclusive right in respect of
the Property to:
1. enter thereon;
2. have exclusive and quiet possession thereof;
3. do such prospecting, exploration, development and other
mining work thereon and thereunder as the Optionee in its
sole discretion may determine advisable;
4. bring upon and erect upon the Property such buildings,
plant, machinery and equipment as the Optionee may deem
advisable; and
5. remove therefrom and dispose of reasonable quantities of
ores, minerals and metals for the purposes of obtaining
assays or making other tests.
OBLIGATIONS OF THE OPTIONEE DURING OPTION PERIOD
------------------------------------------------
7. During the Option Period the Optionee shall:
(a) maintain in good standing those mineral claims comprising
the Property by the doing and filing of assessment work
or the making of payments in lieu thereof, by the payment
of taxes and rentals, and the performance of all other
actions which may be necessary in that regard and in
order to keep such mineral claims free and clear of all
liens and other charges arising from the Optionee's
activities thereon except those at the time contested in
good faith by the Optionee;
(b) record all exploration work carried out on the Property
by the Optionee as assessment work;
(c) permit the directors, officers, employees and designated
consultants of the Optionors, at their own risk and
expense, access to the Property at all reasonable times,
and the Optionors agree to indemnify the Optionee against
and to save it harmless from all costs, claims,
liabilities and expenses that the Optionee may incur or
suffer as a result
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of any injury (including injury causing death) to any
director, officer, employee or designated consultant of the
Optionors while on the Property;
(d) do all work on the Property in a good and workmanlike
fashion and in accordance with all applicable laws,
regulations, orders and ordinances of any governmental
authority;
(e) indemnify and save the Optionors harmless in respect of
any and all costs, claims, liabilities and expenses
arising out of the Optionee's activities on the Property,
but the Optionee shall incur no obligation hereunder in
respect of claims arising or damages suffered after
termination of the Option if upon termination of the
Option any workings on or improvements to the Property
made by the Optionee are left in a safe condition;
(f) permit the Optionors, at their own expense, reasonable
access to the results of the work done on the Property
during the last completed calendar year;
(g) deliver to the Optionors, forthwith upon receipt thereof,
copies of all reports, maps, assay results and other
technical data compiled by or prepared at the direction
of the Optionee with respect to the Property.
TERMINATION OF OPTION BY OPTIONEE
---------------------------------
8. (a) The Option shall terminate:
(i) upon the Optionee failing to incur or make any
expenditure or payment which must be incurred or
made in exercise of the Option; or
(ii) at any other time, by the Optionee giving notice
of such termination to the Optionor.
(b) If the Option is terminated the Optionee shall:
(i) leave in good standing for a period of at least
12 months from the termination of the Option
Period those mineral claims comprising the
Property;
(ii) deliver or make available at no cost to the
Optionors within 90 days of such termination, all
drill core, copies of all reports, maps, assay
results and other relevant technical data
compiled by, prepared at the direction of, or in
the possession of the Optionee with respect to
the Property and not theretofore furnished to the
Optionors.
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(c) Notwithstanding the termination of the Option, the
Optionee shall have the right, within a period of 180
days following the end of the Option Period, to remove
from the Property all buildings, plant, equipment,
machinery, tools, appliances and supplies which have been
brought upon the Property by or on behalf of the
Optionee, and any such property not removed within such
180 day period shall thereafter become the property of
the Optionors.
ROYALTY
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9. (a) Upon the Commencement of Commercial Production, the
Optionee shall pay to Service the Royalty, being equal to
1% of Net Smelter Returns, on the terms and conditions as
set out in this paragraph and in Schedule "B".
(b) Installments of the Royalty payable shall be paid by the
Optionee to Service immediately upon the receipt by the
Optionee of the payment from the smelter, refinery or
other place of treatment of the proceeds of sale of the
minerals, ore, concentrates or other product from the
Property.
(c) Within 120 days after the end of each fiscal year,
commencing with the year in which Commencement of
Commercial Production occurs, the accounts of the
Optionee relating to operations on the Property and the
statement of operations, which shall include the
statement of calculation of Royalty for the year last
completed, shall be audited by the auditors of the
Optionee at its expense. The Optionors shall have 45
days after receipt of such statements to question the
accuracy thereof in writing and, failing such objection,
the statements shall be deemed to be correct and
unimpeachable thereafter.
(d) If such audited financial statements disclose any
overpayment of Royalty by the Optionee during the fiscal
year, the amount of the overpayment shall be deducted
from future installments of Royalty payable.
(e) If such audited financial statements disclose any
underpayment of Royalty by the Optionee during the year,
the amount thereof shall be paid to Service forthwith
after determination thereof.
(f) The Optionee agrees to maintain for each mining operation
on the Property, up-to-date and complete records relating
to the production and sale of minerals, ore, bullion and
other product from the Property, including accounts,
records, statements and returns relating to treatment and
smelting arrangements of such product, and the Optionors
or their agents shall have the right at all reasonable
times, including for a period of 12 months following the
expiration or termination of this Agreement, to inspect
such records, statements and returns and make copies
thereof at its own expense for the purpose of verifying
the amount of Royalty payments to be made by the Optionee
to Service pursuant hereto. The Optionors shall have the
right to have
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such accounts audited by independent
auditors at its own expense once each fiscal year.
POWER TO CHARGE PROPERTY
------------------------
10. At any time after the Optionee has exercised the Option,
the Optionee may grant mortgages, charges or liens (each of which
is herein called a "mortgage") of and upon the Property or any
portion thereof, any mill or other fixed assets located thereon,
and any or all of the tangible personal property located on or used
in connection with the Property to secure financing of development
of the Property, provided that, unless otherwise agreed to by the
Optionors, it shall be a term of each mortgage that the mortgagee
or any person acquiring title to the Property upon enforcement of
the mortgage shall hold the same subject to the right of the
Optionors to receive the Royalty hereunder as if the mortgagee or
any such person had executed this Agreement.
TRANSFERS
---------
11. (a) The Optionee may at any time either during the Option
Period or thereafter, sell, transfer or otherwise dispose
of all or any portion of its interest in and to the
Property and this Agreement provided that any purchaser,
grantee or transferee of any such interest shall have
first delivered to the Optionors its agreement relating
to this Agreement and to the Property, containing:
(i) a covenant to perform all the obligations of the
Optionee to be performed under this Agreement in
respect of the interest to be acquired by it from
the Optionee to the same extent as if this
Agreement had been originally executed by such
purchaser, grantee or transferee; and
(ii) a provision subjecting any further sale, transfer
or other disposition of such interest in the
Property and this Agreement or any portion
thereof to the restrictions contained in this
paragraph (a).
(b) No assignment by the Optionee of any interest less than
its entire interest in this Agreement and in the Property
shall, as between the Optionee and the Optionors,
discharge it from any of its obligations hereunder, but
upon the transfer by the Optionee of the entire interest
at the time held by it in this Agreement, whether to one
or more transferees and whether in one or in a number of
successive transfers, the Optionee shall be deemed to be
discharged from all obligations hereunder save and except
for the payment of the Royalty or other fulfillment of
such commitments hereunder accrued as are due prior to
the date on which the Optionee shall have no further
interest in this Agreement.
SURRENDER OF PROPERTY INTERESTS PRIOR TO TERMINATION OF AGREEMENT
-----------------------------------------------------------------
12. The Optionee may at any time during the Option Period
elect to abandon any one or more of the mineral claims comprised in
the Property by giving notice to the Optionors of such intention.
Any claims so abandoned shall be in good standing under the laws of
the jurisdiction in which they are situate for at least 12 months
from the date of abandonment. Upon any such abandonment, the
mineral claims so abandoned shall for all purposes of this
Agreement cease to form part of the Property.
FORCE MAJEURE
-------------
13. (a) If the Optionee is at any time either during the Option
Period or thereafter prevented or delayed in complying
with any provisions of this Agreement by reason of
strikes, lock-outs, labour shortages, power shortages,
fuel shortages, fires, wars, acts of God, governmental
regulations restricting normal operations, shipping
delays or any other reason or reasons, other than lack of
funds, beyond the control of the Optionee, the time
limited for the performance by the Optionee of its
obligations hereunder shall be extended by a period of
time equal in length to the period of each such
prevention or delay, but nothing herein shall discharge
the Optionee from its obligations hereunder to maintain
the Property in good standing;
(b) The Optionee shall give prompt notice to the Optionors of
each event of force majeure and upon cessation of such
event shall furnish to the Optionors together with such
notice particulars of the number of days by which the
obligations of the Optionee hereunder have been extended
by virtue of such event of force majeure and all
preceding events of force majeure.
(c) After the Commencement of Commercial Production, the
Optionee shall work, mine and operate the Property during
such time or times as the Optionee in its sole judgment
considers such operations to be profitable. The Optionee
may suspend or curtail operations, both before and after
Commencement of Commercial Production, during periods
when the products derived from the Property cannot be
profitably sold at prevailing prices or if an
unreasonable inventory thereof, in the Optionee's sole
judgment, has accumulated or would otherwise accumulate.
CONFIDENTIAL INFORMATION
------------------------
14. No information furnished by the Optionee to the Optionors
hereunder in respect of the activities carried out on the Property
by the Optionee, or related to the sale of minerals, ore, bullion
or other product derived from the Property, shall be published or
disclosed by the Optionors without the prior written consent of the
Optionee, but such consent in respect of the reporting of factual
data shall not be unreasonably withheld, and shall not be withheld
in respect of information
required to be publicly disclosed pursuant to applicable securities,
corporation or tax laws, regulations or policies.
ARBITRATION
-----------
15. (a) All questions or matters in dispute under this Agreement
shall be submitted to arbitration pursuant to the terms
hereof.
(b) It shall be a condition precedent to the right of any
party to submit any matter to arbitration pursuant to the
provisions hereof, that any party intending to refer any
matter to arbitration shall have given not less than 10
days' prior notice of its intention to do so to the other
party, together with particulars of the matter in
dispute. On the expiration of such 10 days, the party
who gave such notice may proceed to refer the dispute to
arbitration as provided in paragraph (c).
(c) The party desiring arbitration shall appoint one
arbitrator, and shall notify the other party of such
appointment, and the other party shall, within 15 days
after receiving such notice, either consent to the
appointment of such arbitrator which shall then carry out
the arbitration or appoint an arbitrator, and the two
arbitrators so named, before proceeding to act, shall,
within 30 days of the appointment of the last appointed
arbitrator, unanimously agree on the appointment of a
third arbitrator to act with them and be chairman of the
arbitration herein provided for. If the other party
shall fail to appoint an arbitrator within 15 days after
receiving notice of the appointment of the first
arbitrator, the first arbitrator shall be the only
arbitrator. If the two arbitrators appointed by the
parties shall be unable to agree on the appointment of
the chairman, the chairman shall be appointed under the
provisions of the Commercial Arbitration Act of British
Columbia. Except as specifically otherwise provided in
this section, the arbitration herein provided for shall
be conducted in accordance with such Act. The chairman,
or in the case where only one arbitrator is appointed,
the single arbitrator, shall fix a time and place in
Vancouver, British Columbia, for the purpose of hearing
the evidence and representations of the parties, and he
shall preside over the arbitration and determine all
questions of procedure not provided for under such Act or
this section. After hearing any evidence and
representations that the parties may submit, the single
arbitrator, or the arbitrators, as the case may be, shall
make an award and reduce the same to writing, and deliver
one copy thereof to each of the parties. The expense of
the arbitration shall be paid as specified in the award.
(d) The parties agree that the award of a majority of the
arbitrators, or in the case of a single arbitrator, of
such arbitrator, shall be final and binding upon each of
them.
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DEFAULT
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16. If at any time during the Option Period the Optionee is
in default of any provision in this Agreement (other than the
provisions of subparagraph 4(b) for which no notice of default need
be given), the Optionor may terminate this Agreement, but only if:
(a) it shall have first given to the Optionee a notice of
default containing particulars of the obligation which
the Optionee has not performed, or the warranty breached;
and
(b) the Optionee has not, within 45 days following delivery
of such notice of default, cured such default or
commenced proceedings to cure such default by appropriate
payment or performance, the Optionee hereby agreeing that
should it so commence to cure any default it will
prosecute the same to completion without undue delay.
Should the Optionee fail to comply with the provision of
subparagraph (b), the Optionors may thereafter terminate this
Agreement by giving notice thereof to the Optionee.
TERMINATION OF MINING OPERATIONS
--------------------------------
17. The Optionee may permanently discontinue mining
operations on the Property at any time after the Commencement of
Commercial Production when in its opinion no further mining
operations can be economically carried out thereon. At such time,
the Optionee shall dispose of all mining plant and equipment used
on the Property, effect all reclamation work as required by law,
and otherwise dispose of the Property as it thinks fit. Any
purchaser of the Property after termination of mining operations on
the Property shall take the Property free and clear of all claims
by the Optionors. The accounts of the Optionee relating to its
mining operations on the Property shall be audited by the auditors
of the Optionee as soon as practicable after the sale or
disposition of all mining plant, equipment and the Property, and
completion of reclamation. Final settlement of any Royalty payable
to Service shall be effected without delay after receipt of the
final audited statements. After receipt of such final audited
statements and payment of Royalty, if any, this Agreement and the
mutual obligations of the Optionee and the Optionors hereunder
shall terminate.
RULE AGAINST PERPETUITIES
-------------------------
18. If any right, power or interest held by or to be acquired
by any party in the Property under this Agreement would violate the
rule against perpetuities, then such right, power or interest shall
terminate at the expiration of 20 years after the death of the last
survivor of all the lineal descendants of Her Majesty, Queen
Xxxxxxxxx XX of England, living on the date of the execution of
this Agreement.
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NOTICES
-------
19. Each notice, demand or other communication required or
permitted to be given under this Agreement shall be in writing and
shall be delivered, or telecopied to such party at the address for
such party specified above. The date of receipt of such notice,
demand or other communication shall be the date of delivery thereof
if delivered or, if given by telecopier, shall be deemed
conclusively to be the next business day. Either party may at any
time and from time to time notify the other party in writing of a
change of address and the new address to which notice shall be
given to it thereafter until further change.
GENERAL
-------
20. (a) This Agreement shall supersede and replace any other
agreement or arrangement, whether oral or written,
heretofore existing between the parties in respect of the
subject matter of this Agreement.
(b) No consent or waiver expressed or implied by either party
in respect of any breach or default by the other in the
performance by such other of its obligations hereunder
shall be deemed or construed to be a consent to or a
waiver of any other breach or default.
(c) The parties shall promptly execute or cause to be
executed all documents, deeds, conveyances and other
instruments of further assurance and do such further acts
which may be reasonably necessary or advisable to carry
out fully the intent of this Agreement or to record
wherever appropriate the respective interest from time to
time of the parties in the Property.
(d) This Agreement shall enure to the benefit of and be
binding upon the parties and their respective successors
and permitted assigns.
(e) This Agreement shall be governed by and construed in
accordance with the laws of the Province of British
Columbia.
(f) Time shall be of the essence in this Agreement.
(g) Wherever the neuter and singular is used in this
Agreement it shall be deemed to include the plural,
masculine and feminine, as the case may be.
-14-
(h) Any reference in this Agreement to currency shall be
deemed to be Canadian currency.
IN WITNESS WHEREOF the parties hereto have executed this Agreement
as of the day and year first above written.
SIGNED, SEALED AND DELIVERED )
BY Xxxxxxx Xxxxxxxxxx )
in the presence of: )
)
/s/ Xxxxxx Xxxxxxxxxx ) /s/ Xxxxxxx Xxxxxxxxxx
------------------------------- ) -------------------------
Signature ) Signature
)
)
Xxxxxx Xxxxxxxxxx )
------------------------------- )
Name )
)
)
Box 202 )
------------------------------- )
Address )
)
)
Air Ronge, SK. SOJ 3G0 )
------------------------------- )
)
SIGNED, SEALED AND DELIVERED
BY Xxxx Service )
in the presence of: )
)
)
/s/ X. Xxxxxx )
------------------------------- )
Signature )
) /s/ Xxxx Service
) -------------------------
) Signature
X. Xxxxxx )
------------------------------- )
Name )
)
)
0000 Xxxxxx Xx )
------------------------------- )
Address )
)
)
Saskatoon, SK. )
------------------------------- )
)
-00-
XXX XXXXXX SEAL OF )
GREEN FUSION CORP. )
was hereunto affixed in the )
presence of: )
)
) c/s
)
/s/ Xxxxx Xxxxxxxx )
------------------------------- )
Authorized Signatory )
)
)
------------------------------- )
Authorized Signatory )
SCHEDULE "A"
------------
Saskatchewan Mineral claim #S105984
SCHEDULE "B"
------------
NET PROFITS ROYALTY
-------------------
1. For the purposes of this Agreement the following words
and phrases shall have the following meanings, namely:
(a) "Net Smelter Returns" shall mean the gross proceeds
received by the Optionee in any year from the sale of
Product from the mining operation on the Property, less
successively:
(i) the cost of transportation and insurance of such
Product to a smelter or other place of treatment,
(ii) smelter, treatment and refining charges and
penalties;
(iii) ad valorem taxes and taxes based upon production,
but not income taxes;
(b) "Ore" shall mean any material containing a mineral or
minerals of commercial economic value mined from the
Property; and
(c) "Product" shall mean Ore mined from the Property and any
concentrates or other materials or products derived
therefrom, but if any such Ore, concentrates or other
materials or products are further treated as part of the
mining operation in respect of the Property, such Ore,
concentrates or other materials or products shall not be
considered to be "Product" until after they have been so
treated.
2. For the purposes of calculating the amount of Royalty
payable to Service hereunder, if, after the Commencement of
Commercial Production, the Optionee sells any Product to one of its
subsidiaries or affiliates, and if the sale price of such Product
is not negotiated on an arm's-length basis, the Optionee shall for
the purposes of calculating Net Smelter Returns only and
notwithstanding the actual amount of such sale price, add to the
proceeds from the sale of such Product an amount which would be
sufficient to make such sale price represent a reasonable net sale
price for such Product as if negotiated at arm's length and after
taking into account all pertinent circumstances including, without
limitation, then current market conditions relating to Ore,
concentrates or products similar to such Product.
3. The Optionee shall by notice inform Service of the
quantum of such reasonable net sale price and, if Service does not
object thereto, within 60 days after receipt of such notice, said
quantum shall be final and binding for the purposes of this
Agreement.
4. The Optionee may remove reasonable quantities of Ore and
rock from the Property for the purpose of bulk sampling and of
testing, and there shall be no Royalty payable to Service with
respect thereto unless revenues are derived therefrom.
5. The Optionee shall have the right to commingle with ores
from the Property, ore produced from other properties, provided
that prior to such commingling, the Optionee shall adopt
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and employ reasonable practices and procedures for weighing,
determination of moisture content, sampling and assaying, as well
as utilize reasonable accurate recovery factors in order to determine
the amounts of products derived from, or attributable to Ore mined and
produced from the Property. The Optionee shall maintain accurate
records of the results of such sampling, weighing and analysis as
pertaining to ore mined and produced from the Property.
SCHEDULE "C"
------------
ESCROW AGREEMENT
----------------
THIS AGREEMENT is made as of the 6 day of April, 1998
-----
BETWEEN:
O'Neill, Ritchie, Xxxxxx Law Corporation, a
British Columbia company with a registered and
records office at Suite 1880 - 1055 Xxxx
Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx,
X0X 0X0
(hereinafter called the "Escrow Agent")
OF THE FIRST PART
AND:
Green Fusion Corp., a Nevada corporation with
a registered office at Suite B - 169, 0000 X.
Xxxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxx, X.X.X.
00000
(hereinafter called the "Company")
OF THE SECOND PART
AND:
THE UNDERSIGNED SHAREHOLDER IN GREEN FUSION
CORP.
(hereinafter individually called "Shareholder" and
collectively call the "Shareholders)
OF THE THIRD PART
WHEREAS:
A. The Shareholder has acquired or is about to acquire shares of
the Company and has agreed to enter into this escrow agreement on
the terms and conditions hereinafter provided;
B. The Escrow Agent has agreed to undertake and perform its
duties according to the terms and conditions hereof:
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration
of the aforesaid agreements and the sum of one dollar ($1.00) now
paid by the parties hereto, each to the other (receipt of which sum
the parties do hereby respectively acknowledge each to the other)
the
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shareholders jointly and severally covenant and agree with the
Company and with the Escrow Agent and the Company and the Escrow
Agent covenant and agree each with the other and with the
shareholders jointly and severally as follows:
1. In this Agreement:
(a) "Shares" shall mean the 50, 000 common shares in the
capital of the Company issued to the Shareholder pursuant
to the Option Agreement, together with any additional
shares issued by way of a dividend paid in shares which
accrues to the shares, and the certificate or
certificates representing such shares; and
(b) "Director" shall mean the director or any Deputy Director
of the Saskatchewan Securities Commission.
2. The Shareholder hereby places and deposits in escrow with the
Escrow Agent the Shares and agrees to deliver forthwith to
the Escrow Agent those Shares (including any replacement
shares or certificates if and when issued) to the Escrow Agent
for deposit in escrow.
3. The parties hereby agree that the shares and the beneficial
ownership or any interest in them shall not be sold, assigned,
hypothecated, alienated, released from escrow, transferred
within escrow, or otherwise in any manner dealt with, without
the express consent in writing of the Director being first
obtained except as may be required by reason of the death or
bankruptcy of the Shareholder, in which case the Escrow Agent
shall hold the Shares subject to this agreement, for whatever
person, firm, or corporation shall be legally entitled to be
or become the registered owner thereof.
4. The Shareholder hereby directs the Escrow Agent to retain the
Shares including any replacement shares or certificates, and
not to do or cause anything to be done to release the same
from escrow or to allow any transfer, hypothecation,
alienation, sale, assignment or release thereof except with,
and as directed by, the written consent of the Director. The
Escrow Agent hereby accepts the responsibilities placed on it
hereby and agrees to perform the same in accordance with the
terms hereof and in accordance with the written consent of the
Director.
5. If, during the period in which any of the Shares are retained
in escrow pursuant hereto, any
dividend, other than a dividend paid in shares of the Company,
is received by the Escrow Agent in respect of the Shares, such
dividend shall be paid or transferred forthwith to the
respective Shareholders entitled thereto. Any shares received
by the Escrow Agent by way of dividend in respect of the
Shares shall be dealt with as if they were Shares hereunder.
6. All voting rights to the Shares may at all times be exercised
by the respective registered owner thereof.
7. The Company hereby acknowledges the terms and conditions of
the agreement and agrees to take all reasonable steps to
facilitate its performance.
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8. The written consent of the Director to release from escrow all
or part of the Shares shall terminate this agreement only in
respect of those Shares so released. For greater certainty, a
transfer within escrow is not a release from escrow.
9. It is acknowledged by the parties that if the Company meets
certain conditions over time, the Shareholders shall be
entitled to a partial or full release by the Director of the
Shares from the terms of this agreement from time to time in
accordance with the policies of the Saskatchewan Securities
Commission.
10. The parties hereto agree and acknowledge that the Shares
subject to escrow shall be released on the following terms:
(a) 30% pro-rata release of the escrowed Shares on the first
anniversary of the date of signing of the Option
Agreement;
(b) 30% pro-rata release for the escrowed Shares on the
second anniversary of the date of signing of the Option
Agreement; and
(c) 40% pro-rata release of the escrowed Shares on the third
anniversary of the date of signing of the Option
Agreement.
11. Notice of any consent of the Director shall be given by the
Escrow Agent to all persons or parties affected thereby at
their last known address.
12. The Shareholders do hereby jointly and severally covenant and
agree to hold harmless and fully indemnify the Escrow Agent
from and against all loss, costs, suits, demands, claims,
damages, and expenses which the Escrow Agent may at any time
or times hereafter suffer as a result of compliance in good
faith with the terms hereof.
13. If the Escrow Agent should wish to resign, it shall give at
least six months' notice to the Company, which may, with the
written consent of the Director, by writing appoint another
Escrow Agent in its place and such appointment shall be
binding on the Shareholders and the New Escrow Agent shall
assume and be bound by the obligations of the Escrow Agent
hereunder.
14. This agreement may be executed in several parts in the same
form and such parts as so executed shall together form one
original agreement, and such parts, if more than one, shall be
read together and construed as if all the signing parties
hereto had executed one copy of this Agreement.
15. This Agreement shall enure to the benefit of and be binding
upon the parties hereto, and upon each of their heirs,
executors, administrators, successors, and permitted assigns.
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IN WITNESS WHEREOF the parties hereto have executed these
presents the day and year first above written.
SIGNED, SEALED AND DELIVERED
BY Xxxx Service )
in the presence of: )
)
)
/s/ X. Xxxxxx )
------------------------------- )
Signature )
) /s/ Xxxx Service
) -------------------------
) Signature
X. Xxxxxx )
------------------------------- )
Name )
)
)
0000 - Xxxxxx Xx. )
------------------------------- )
Address )
)
)
Saskatoon, SK. )
------------------------------- )
)
O'Neill, Ritchie, Xxxxxx Law Corporation
Per:
--------------------------------
Authorized Signatory
Green Fusion Corp.
Per:
---------------------------------
Authorized Signatory
