PROPERTY OPTION AGREEMENT
Dated March 24, 1999
Between:
URANIUM POWER CORPORATION
and:
PACIFIC AMBER RESOURCES LTD.
INDEX
1. GRANT OF OPTION............................................................2
2. ISSUANCE OF OPTIONOR SHARES................................................3
3. EXERCISE OF OPTION.........................................................3
4. REPRESENTATIONS AND WARRANTIES OF THE OPTIONOR.............................4
5. REPRESENTATIONS AND WARRANTIES OF THE OPTIONEE.............................6
6. COVENANTS OF THE OPTIONOR..................................................7
7. TERMINATION................................................................7
8. INDEPENDENT ACTIVITIES.....................................................8
9. CONFIDENTIALITY OF INFORMATION.............................................9
10. ARBITRATION...............................................................9
11. DELAYS...................................................................10
12. ASSIGNMENT...............................................................10
13. NOTICES..................................................................11
14. REGULATORY APPROVALS.....................................................12
15. GENERAL TERMS AND CONDITIONS.............................................12
SCHEDULE "A": Initial Program and Expenditures
1
PROPERTY OPTION AGREEMENT
THIS AGREEMENT is made as of the 24th day of March, 1999,
BETWEEN:
URANIUM POWER CORPORATION, a company duly
incorporated under the laws of the State of Colorado and
having its head office at Xxxxx 000, 000 Xxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxx
Xxxxxxxx, X0X 0X0
(hereinafter referred to as the "Optionor")
OF THE FIRST PART,
AND:
PACIFIC AMBER RESOURCES LTD., a company
incorporated under the laws of British Columbia and having a
head office at Suite 1818, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxx Xxxxxxxx, X0X 0X0
(hereinafter referred to as the "Optionee")
OF THE SECOND PART.
RECITALS
WHEREAS the Optionor has entered into an exploration option and operations
joint venture agreement with Xxxxxx Dodge Corporation of Canada, Limited
("PDC"), dated December 16, 1998 (the "Underlying Agreement");
AND WHEREAS any terms defined in the Underlying Agreement and used herein
shall have the meaning assigned to them in the Underlying Agreement;
AND WHEREAS the Underlying Agreement grants to the Optionor the sole and
exclusive right and option to earn on or before December 31, 2002, a 100%
undivided interest subject to the Royalty and the Earn Back Option, in the
Properties free of all liens, charges, encumbrances and conflicting claims by
(i) completing by December 31, 1999, the Initial Program and incurring
Expenditures of $500,000; and (ii) incurring an aggregate of not less than
$2,500,000 in Expenditures (cumulative aggregate Expenditures of $3,000,000)
prior to December 31, 2002;
AND WHEREAS the Optionor has agreed to grant to the Optionee an option to
acquire 50% of the Optionor's right, title and interest in the Property and the
Underlying Agreement (hereinafter collectively called the "Property");
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual
covenants and agreements herein contained and subject to the terms and
conditions hereafter set out, the parties hereto agree as follows:
1. GRANT OF OPTION
1.01 The Optionor, in consideration of the sum of $10, the receipt and
sufficiency of which is hereby acknowledged, hereby grants to the Optionee the
exclusive right and option (the "Option") to acquire a 50% interest in and to
the Property and all of the Optionor's rights, licences and permits appurtenant
thereto or held for the specific use and enjoyment thereof by completing the
Initial Program and incurring $500,000 in Expenditures on or before December 31,
1999, as set out in Schedule "A" attached hereto.
2
1.02 The Optionor and the Optionee shall immediately establish a management
committee (the "Management Committee") to determine all actions to be taken in
respect to the carrying out of the Initial Program on the Properties pursuant to
the provisions of the Underlying Agreement. The Management Committee shall
consist of four members and each of the Optionor and Optionee shall appoint two
members as their representatives and each member may appoint one or more
alternatives to act in the absence of a regular member. The Management Committee
shall determine all matters coming before it by the affirmative vote of members
having voting interests in the aggregate of more than 50%. In the event the
members of the Management Committee cannot agree on any matter coming before
them and in the further event the interest of each party is 50%, then the
Optionee shall have an additional casting or deciding vote.
1.03 If the Optionee fails to incur any of the Expenditures listed in paragraph
1.01 by the end of the last day on which the same was due to be incurred by
reason of paragraph 1.01 or as deferred by reason of paragraph 11.01, the
Optionee may, at any time within 15 days of such date, make a cash payment to
PDC in an amount equal to the deficiency in the Expenditures. Any cash payment
so made shall be deemed to have been Expenditures duly and properly incurred in
an amount equal to the cash payments.
1.04 If the Optionor receives a notice of default from the PDC under the
Underlying Agreement, and if in the opinion of the Optionee the Optionor is not
taking curative or corrective action adequate to rectify such default, the
Optionee may, at its sole election, and after having given prior notice to the
Optionor, take such curative or corrective action as may be necessary in order
to preserve the Option. In such circumstance, the Optionee shall be entitled to
recover from the Optionor the full cost of such curative or corrective action,
whether or not such action is successful in curing the default under the
Underlying Agreement.
2. ISSUANCE OF OPTIONOR SHARES
2.01 The Optionor shall immediately issue to the Optionee 200,000 common shares
in the Optionor's capital stock as fully paid and non-assessable shares, subject
only to applicable securities laws' resale restrictions.
3. EXERCISE OF OPTION
3.01 The Optionee shall have exercised the Option, and shall have acquired a 50%
interest in and to the Property, by having incurred Expenditures of $500,000 in
accordance with paragraph 1.01.
3.02 Upon the Optionee having exercised the Option, all further work on and with
respect to the Property, and the subsequent relationship between the Optionor
and the Optionee, shall be governed by a joint venture agreement (the "Joint
Venture Agreement") between the parties in a form to be agreed upon by the
parties as soon as practicable but in any event not later than 60 days of the
date hereof. The Joint Venture Agreement shall contain a dilution clause and
each of the party's contributions shall be deemed to be $500,000 and the
interest of each party will be determined by the contribution made or deemed to
be made by a party divided by the aggregate contributions made or deemed to be
made by all parties multiplied by 100% and if the interest of any party is
reduced to less than 15%, such interest shall be deemed to have been converted
to a 5% net profit interest. If such party has not contributed in the aggregate
$1,500,000, it shall have no further interest in the Underlying Agreement and
the Property. All interests will be subject to the Royalty and Earn Back Option.
The Management Committee decisions will be determined by votes represented by
each party's interest provided that if there is a tied vote, the Optionee shall
have the casting vote.
3
4. REPRESENTATIONS AND WARRANTIES OF THE OPTIONOR
4.01 The Optionor hereby represents and warrants to the Optionee that:
(a) it is not in breach or violation of or default under (and no
event has occurred and is continuing which with the giving of
notice or lapse of time or both would constitute an event of
default under) the Underlying Agreement;
(b) it is not aware of any adverse claim asserted or threatened as to
the validity or rights of the Optionor in and to the Property,
and except as set out in the Underlying Agreement, the Optionor
is not aware of any liens, charges, encumbrances, or conflicting
claims or rights of whatsoever nature or kind, recorded or
unrecorded, against the Properties, and the Optionor is not aware
of any factual basis for any such liens, charges, encumbrances,
conflicting claims or rights against the Properties;
(c) to the best of its knowledge, the Properties have been validly
located and are now duly recorded and in good standing in
accordance with the laws of the jurisdiction in which the mining
claims are situated;
(d) it has full corporate power and authority to enter into this
agreement;
(e) it is a company validly existing and in good standing under the
laws of the State of Colorado and is up to date with respect to
its filings with the applicable governmental corporate agency;
(f) the entering into this agreement does not conflict with any
applicable laws or with its charter documents nor does it
conflict with, or result in a breach of or accelerate the
performance required by any contract or other commitment to which
it is party or by which it is bound;
(g) it has the exclusive right to enter into this agreement and all
necessary authority to assign to the Optionee a 50% right, title
and interest in and to the Property in accordance with the terms
and conditions of this agreement, and the Optionee shall be
treated as an Authorised Party for the purpose of carrying out
the Initial Program and incurring Expenditures;
(h) reclamation and rehabilitation of those parts of the Properties
which have been previously worked by the Optionor have been
properly completed in compliance with all applicable laws and the
Optionor hereby covenants and agrees to save the Optionee
harmless from and against any loss, liability, claim, demand,
damage, expense, injury or death arising out of or in connection
with the operations or activities which were carried out on the
Properties by the Optionor prior to the date of this agreement;
(i) to the best of its knowledge and belief after having made
reasonable enquiry, reclamation and rehabilitation of those parts
of the Properties which have been previously worked by persons
other than the Optionor have been properly completed in
compliance with all applicable laws by such other persons, or if
not so completed, the Optionor has used its best efforts to
mitigate the damage to the environment resulting from such
previous work;
4
(j) without limiting the generality of sub-paragraphs 4.01(h) and
(i), to the best of the Optionor's knowledge, its contractors
(i) have operated the Properties and have at all times received,
handled, used, stored, treated, shipped and disposed of all
environmental or similar contaminants in strict compliance
with all applicable environmental, health or safety laws,
regulations, orders or approvals, and
(ii) have removed from and off the Properties all environmental
or similar contaminants;
(k) to the best of the Optionor's knowledge there are no orders or
directions relating to environmental or similar matters requiring
any work, repairs, construction or capital expenditures with
respect to the Properties and the conduct of the business related
thereto, nor has the Optionor received any notice of such;
(l) to the best of the Optionor's knowledge no hazardous or toxic
materials, substances, pollutants, contaminants or wastes have
been released by the Optionor's contractors into the environment,
or deposited, discharged, placed or disposed of at, on or near
the Properties as a result of the contractor's operations carried
out on the Properties;
(m) to the best of the Optionor's knowledge
(i) no notices of any violation or apparent violation of any of
the matters referred to in subparagraphs 4.01(i) through
6.01(l) relating to the Properties or its use have been
received by the Optionor or PDC and
(ii) there are no writs, injunctions, orders or judgements
outstanding, no law suits, claims, proceedings or
investigations pending or threatened, relating to the use,
maintenance or operation of the Properties, whether related
to environmental or similar matters, or otherwise, nor, to
the knowledge of the Optionor, is there any basis for such
law suits, claims, proceedings or investigations being
instituted or filed; and
(n) it has advised the Optionee of all of the material information
relating to the mineral potential of the Properties of which the
Optionor has knowledge.
4.02 The representations and warranties hereinbefore set out are conditions upon
which the Optionee has relied on entering into this agreement and shall survive
the exercise of the Option, and the Optionor hereby forever indemnifies and
saves the Optionee harmless from all loss, damage, costs, actions and suits
arising out of or in connection with any breach of any representation or
warranty made by it and contained in this agreement.
5. REPRESENTATIONS AND WARRANTIES OF THE OPTIONEE
5.01 The Optionee represents and warrants to the Optionor that:
(a) it has full corporate power and authority to enter into this
agreement;
5
(b) the entering into of this agreement does not conflict with any
applicable laws or with its charter documents nor does it
conflict with, or result in a breach of, or accelerate the
performance required by any contract or other commitment to which
it is party or by which it is bound.
5.02 The representations and warranties hereinbefore set out are conditions upon
which the Optionor has relied on entering into this agreement and shall survive
the exercise of the Option, and the Optionee hereby indemnifies and saves the
Optionor harmless from all loss, damage, costs, actions and suits arising out of
or in connection with any breach of any representation or warranty made by it
and contained in this agreement.
6. COVENANTS OF THE OPTIONOR
6.01 The Optionor hereby covenants with and to the Optionee that it shall:
(a) within 10 days of the execution and delivery of this agreement,
provide the Optionee with all of the data and information in its
possession or under its control relating to the Optionor's
exploration activities on and in the vicinity of the Properties;
(b) until such time as the Option is exercised or otherwise
terminates, not deal, or attempt to deal with its right, title
and interest in and to the Property in any way that would
adversely affect the right of the Optionee to become absolutely
vested in a 50% interest in and to the Property, free and clear
of any liens, charges and encumbrances other than the Underlying
Agreement;
(c) maintain the Underlying Agreement in good standing at all times;
(d) forward to the Optionee, within 24 hours of receipt, any notice
or demand which it may receive from PDC relating to the
Underlying Agreement; and
(e) promptly forward to the Optionee copies of all correspondence in
connection with the Underlying Agreement.
7. TERMINATION
7.01 If the Optionee fails to do any thing on or before the last day provided
for such performance under this agreement, the Optionor may terminate this
agreement but only if:
(a) it shall have first given to the Optionee written notice of the
failure containing particulars of the payment which the Optionee
has not made or the act which the Optionee has not performed; and
(b) the Optionee has not within 30 days following delivery of the
Optionor's notice given notice to the Optionor that it has cured
such failure or commenced proceedings to cure such failure by
appropriate payment or performance (the Optionee hereby agreeing
that should it so commence to cure any failure it will prosecute
the same to completion without undue delay).
Should the Optionee fail to deliver the notice provided for in sub-paragraph
7.01(c) within the said 30 days, this agreement shall be deemed to have
terminated on the day following the last day provided for the performance the
failure of which by the Optionee caused the Optionor to issue the notice
referred to in subparagraph 7.01(a) hereof.
6
7.02 Upon termination of this agreement the Optionee:
(a) shall deliver to the Optionor, within 60 days of the effective
date of termination, copies of all factual maps, reports, assay
results and other factual data and documentation relating to its
operations on the Properties;
(b) forfeits any and all interest in the Property hereunder and shall
cease to be liable to the Optionor in debt, damages or otherwise
save for the performance of those of its obligations which were
not satisfied on the effective date of termination; and
(c) shall vacate the Properties within a reasonable time after such
termination, but shall have the right of access to the Properties
for a period of six months thereafter for the purpose of removing
its chattels, machinery, equipment and fixtures therefrom.
8. INDEPENDENT ACTIVITIES
8.01 Except as expressly provided herein, each party shall have the free and
unrestricted right to independently engage in and receive the full benefit of
any and all business endeavours of any sort whatsoever, whether or not
competitive with the endeavours contemplated herein without consulting the other
or inviting or allowing the other to participate therein. No party shall be
under any fiduciary or other duty to the other which will prevent it from
engaging in or enjoying the benefits of competing endeavours within the general
scope of the endeavours contemplated herein. The legal doctrines of "corporate
opportunity" sometimes applied to persons engaged in a joint venture or having
fiduciary status shall not apply in the case of any party. In particular,
without limiting the foregoing, no party shall have an obligation to any other
party as to:
(a) any opportunity to acquire, explore and develop any mining
property, interest or right presently owned by it or offered to
it outside the Properties at any time; and
(b) the erection of any mining plant, mill, smelter or refinery,
whether or not such mining plant, mill, smelter or refinery
treats ores or concentrates from the Properties.
9. CONFIDENTIALITY OF INFORMATION
9.01 Except as otherwise provided in this paragraph, both parties shall treat
all data, reports, records and other information relating to this agreement and
the Property as confidential. The text of any news release or any other public
statements, other than those required by law or regulatory bodies or stock
exchanges, which a party desires to make shall be sent to the other party for
its comments not less than 48 hours prior to publication and shall not include
references to the other party unless such party has given its prior consent in
writing. The text of any disclosure which a party is required to make by law, by
regulatory bodies or stock exchanges shall be sent to the other party prior to
filing. For all public disclosure, whether required to be made or not, any
reasonable changes requested by the non-disclosing party shall be incorporated
into the disclosure document.
10. ARBITRATION
10.01 If there is any disagreement, dispute or controversy (hereinafter
collectively called a "dispute") between the parties with respect to any matter
arising under this agreement or the construction hereof, then the dispute shall
be determined by arbitration in accordance with the following procedures:
7
(a) the parties to the dispute shall appoint a single mutually
acceptable arbitrator. If the parties cannot agree upon a
single arbitrator, then the party on one side of the dispute
shall name an arbitrator, and give notice thereof to the party
on the other side of the dispute;
(b) the party on the other side of the dispute shall within 14 days
of the receipt of notice, name an arbitrator; and
(c) the two arbitrators so named shall, within seven days of the
naming of the later of them, name a third arbitrator.
If the party on either side of the dispute fails to name its arbitrator within
the allotted time, then the arbitrator named may make a determination of the
dispute. The arbitration shall be conducted in Vancouver, B.C. and in accordance
with the Commercial Arbitration Act (British Columbia). The decision shall be
made within 30 days following the naming of the latest of them, and shall be
conclusive and binding upon the parties. The costs of arbitration shall be borne
equally by the parties to the dispute unless otherwise determined by the
arbitrator(s) in the award.
11. DELAYS
11.01 If any party should be delayed in or prevented from performing any of the
terms, covenants or conditions of this agreement by reason of a cause beyond the
control of such party, whether or not foreseeable, including fires, floods,
earthquakes, subsidence, ground collapse or landslides, interruptions or delays
in transportation or power supplies, First Nations land claims and blockades,
strikes, lockouts, wars, acts of God, government regulation (including currency
control) or interference or the inability to secure on reasonable terms any
private or public permits or authorizations, then any such failure on the part
of such party to so perform shall not be deemed to be a breach of this agreement
and the time within which such party is obliged to comply with any such term,
covenant or condition of this agreement shall be extended by the total period of
all such delays. In order that the provisions of this article may become
operative, such party shall give notice in writing to the other party, forthwith
and for each new cause of delay or prevention and shall set out in such notice
particulars of the cause thereof, and the day upon which the same arose, and
shall take all reasonable steps to remove the cause of such delay or prevention,
and shall give like notice forthwith following the date that such cause ceased
to subsist.
12. ASSIGNMENT
12.01 Neither party may dispose of all or any part of its interest in and to the
Property and this agreement to any third party without the prior written consent
of the other party and PDC.
13. NOTICES
13.01 Any notice, election, consent or other writing required or permitted to be
given hereunder shall be deemed to be sufficiently given if delivered or if
mailed by registered air mail or by fax, addressed as follows:
In the case of the Optionor:
URANIUM POWER CORPORATION
206 - 000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx, X0X 0X0
Attention: President
Fax No.: (000) 000-0000
8
In the case of the Optionee:
PACIFIC AMBER RESOURCES LTD.
X.X. Xxx 00000 Xxxxxxx Xxxxxx
0000 - 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0
Attention: President
Fax No: (000) 000-0000
With a copy to:
XXXXX, XXXXXXX
Barristers and Solicitors
Suite 1040, 000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxxx X. Xxxxxxx
Fax No: (000) 000-0000
and any such notice given as aforesaid shall be deemed to have been given to the
parties hereto if delivered, when delivered, or if mailed, on the third business
day following the date of mailing, or, if faxed, on the next succeeding business
day following the faxing thereof PROVIDED HOWEVER that during the period of any
postal interruption in either the country of mailing or the country of delivery,
any notice given hereunder by mail shall be deemed to have been given only as of
the date of actual delivery of the same. Any party may from time to time by
notice in writing change its address for the purpose of this paragraph.
14. REGULATORY APPROVALS
14.01 This agreement shall be subject to the Optionee receiving any required
approvals from the Vancouver Stock Exchange.
15. GENERAL TERMS AND CONDITIONS
15.01 The parties hereto hereby covenant and agree that they will execute such
further agreements, conveyances and assurances as may be requisite, or which
counsel for the parties may deem necessary to effectually carry out the intent
of this agreement.
15.02 This agreement shall represent the entire understanding between the
parties with respect to the subject matter hereof. No representations or
inducements have been made save as herein set forth. No changes, alterations, or
modifications of this agreement shall be binding upon either party until and
unless a memorandum in writing to such effect shall have been signed by both
parties hereto.
15.03 The titles to the articles to this agreement shall not be deemed to form
part of this agreement but shall be regarded as having been used for convenience
of reference only.
15.04 The schedules to this agreement shall be construed with and as an integral
part of this agreement to the same extent as if they were set forth verbatim
herein.
15.05 All references to dollar amounts contained in this agreement are
references to Canadian funds.
15.06 This agreement shall be governed by and interpreted in accordance with the
laws in effect in British Columbia, and is subject to the exclusive jurisdiction
of the Courts of British Columbia.
9
15.07 This agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF this agreement has been executed by the parties hereto
as of the day and year first above written.
The COMMON SEAL of URANIUM POWER )
CORPORATION was hereunto affixed in the )
presence of: )
)
) c/s
//s// Xxxxxxxx X. Xxxxxxxxx )
-----------------------------------------------------
)
)
//s// Xxxxxxx X. Xxxxxxx
The COMMON SEAL of PACIFIC AMBER )
RESOURCES LTD. was hereunto affixed in )
the presence of: )
)
)
//s// Xxxx Xxxxx ) c/s
)
)
//s// Xxxxxx X. Xxxxx )
This is page 13 of that certain agreement dated March 24, 1999, between Uranium
Power Corporation of the first part and Pacific Amber Resources Ltd. of the
second part.
SCHEDULE "A"
TO THAT PROPERTY OPTION AGREEMENT MADE AS OF
MARCH 24, 1999 BETWEEN URANIUM POWER
CORPORATION OF THE FIRST PART AND PACIFIC AMBER
RESOURCES LTD. OF THE SECOND PART
INITIAL PROGRAM AND EXPENDITURES
Property Prior PD Initial Program - Proposed Estimated Minimum
Expenditure Work Cost Required
Expenditures*
-------- ----------- ----------------------------- --------- ------------
Xxxxxxxx $1,618,263 Lithogeochem boulder sampling $3,000 -
Perpete 118,601 Drill 155,000 $86,978.14
Jasper 59,472 Gridding, Detail Lithogeochem 26,000 -
Xxxxx 28,989 Gridding, TDEM, Mag/VLF, 180,000 113,808.29
Lithogeochem, Drill
Xxxxx 8,395 Lithogeochem, Gridding, TDEM 82,000 81,677.57
Xxxxxx 20,205 Gridding, TDEM, Lithogeochem 54,000 53,818.66
54,652 Expenditures on previously held - -
properties in area
Total $1,908,577 $500,000 $336,282.66
----------------- ------------------- ------------------------------------------ ------------------- --------------------
* Minimum required expenditures for recovery of PDC Payments in lieu of work.
