OPTION AGREEMENT
----------------
THIS AGREEMENT made as of the 20TH day of November, 2000.
----
BETWEEN:
XXXXX X. XXXXXXXXX Geologist, of Xxxxx 000,0000 Xxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0
(the "Optionor")
OF THE FIRST PART
AND:
SOUTHBORROUGH TECHNOLOGY CORPORATION, a company duly
incorporated pursuant to the laws of the state of
Nevada, and having an office at 0000 Xxxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(the "Optionee")
OF THE SECOND PART
WHEREAS:
(a) The Optionor is the owner of certain mineral claims located
in the Slocan Mining Division of British Columbia;
(b) The Optionor has agreed to grant an exclusive option to the
Optionee to acquire an interest in and to the Property, on
the terms and condtions hereinafter set forth;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of
the sum of $1.00 now paid by the Optionee to the Optionor (the
receipt of which is hereby acknowledged), the parties agree as
follows:
DEFINITIONS
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(a) For the purposes of this Agreement the following words and
phrases shall have the following meanings, namely:
(a) "Exploration Expenditures" means the sum of:
(i) all costs of acquisition and maintenance of the
Property, all expenditures on the exploration and
development of the Property, and all other costs and
expenses of whatsoever kind or nature, including those
of a capital nature, incurred or chargeable by the
Optionee with respect to the explorafion of the
Property, and
(ii) as compensation for general ovahead expenses which the
Optionee may incur, an amount equal to 10% of all
amounts included in subparagraph (i) in each year but
only 5% of such amounts when paid by the Optionee under
any contract involving payments by it in excess of
$100,000 in one year;
(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) "Property" means the mineral claim 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;
(e) "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;
(f) "Shares" means the up to 55,000 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 OPTIONOR
---------------------------------------------------------
2.(a) The Optionor represents and warrants to and covenants
with the Optionee that:
(i) it is legally entitled to hold the Property and the
Property Rights and will remain so entitled until the
interest of the Optionor in the Property which is
subject to the Option has been duly transferred to the
Optionee as contemplated hereby;
(ii) it is, and at the time of each transfer to the Optionee
of an interest in the mineral Claims comprising the
Property pursuant to the exercise of the Option it
will be, the recorded holder and beneficial owner of
all of the mineral claims comprising the Property free
and clear of all liens, charges and claims of others,
and no taxes or rentals are or will be due in respect
of any of the mineral claims;
(a) the mineral claims comprising the Property have been
duly and validly located and recorded pursuant to the
laws of the jurisdiction in which the Property is
situate
and 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
set opposite the respective names thereof in Schedule "A";
(b) there are not any adverse claim 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 Optionor is there any basis therefor, and
there are no outstandng agreements or options to acquire or
purchase the Property or any portion thereof, and no
person has any royalty or other interest whatsoever in
production from any of the mineral claims comprising
the Property;
(c) no proceedings are pending for, and the Optionor is
unaware of any basis for the institution of any
proceedings leading to the placing of the Optionor in
bankruptcy or subject to any other laws goverrung 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 OPTIONEE
-----------------------------------------------------
3. (a) The Optionee represents and warrants to and covenants
with the Optionor that:
(a) it has been duly incorporated, amalgamated or continued
and validly exists as a corporation in good standing
under the laws of its jurisdiction of incorporation,
amalgamation or continuation;
(ii) it is lawfully authorized to hold mineral claims and
real property under the laws of the jurisdiction in
which the Property is situate;
(iii) 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 the 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;
(iv) 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;
(v) the Shares will, at the time of delivery to the Optionor,
be duly authorized and validly allotted and issued as fully
paid and non-assessable free of any liens, charges or encumbrances;
(b) The representations and warranties contained in this section
are provided for the exclusively benefit of the Optionor and
a breach of any one or more thereof may be waived by the
Optionor 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 hereof.
(c) The parties acknowledge and agree that the certificates
representing the Shares shall be endorsed with the foflowmg
legend pursuant to the Umted States Securities Act of 1933:
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), AND ARE
BEING OFFERED AND SOLD ONLY TO ACCREDITED INVESTORS IN
RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF THE ACT. SUCH SECURITIES MAY NOT BE
REOFFERED FOR SALE OR RESOLD OR OTHERWISE TRANSFERRED
UNLESS THEY ARE REGISTERED UNDER THE APPLICABLE
PROVISIONS OF THE ACT OR ARE EXEMPT FROM SUCH
REGISTRATION.
GRANT AND EXERCISE OF OPTION
----------------------------
4. (a) The Optionor bereby grants 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.
(b) The Option shall be exercised by the Optionee:
(i) paying the Optionor $1,000 U.S. on the execution of
this Agreement, the receipt of which is hereby
acknowledged by the Optionor;
(ii) allotting and issuing to the Optionor, as fully paid
and non-assesable, the Shares as follows:
(A) 5,000 shares forthwith upon execution of this
Agreement;
(B) 25,000 shares upon the completion of the second
phase of an exploration program on the Property on
or before October 31, 2001; and
(C) 25,000 shares upon the completion of the third
phase of an exploration program on the Property on or
before October 31, 2002
(iii) incurring Exploration Expenditures of $135,000 U.S. on
the Property on a three-phase exploration program as
follows:
(A) $5,000 U.S. on or before July 31, 2001
(B) a further $10,000 U.S. on or before October 31, 2001; and
(C) a further $120,000 U.S. on or before October 31, 2002.
In the event that the Optionee spends, in any of the above
periods, less than the specified sum, it may pay to the
Optionor the difference between the amount it actually spent
and the specified sum before the expiry of that penod in full
satisfaction of the Exploration Expenditures to be incurred.
In the event that the Optionee spends, in any period, more
than the specified sum, the excess shall be carried forward
and applied to the Exploration Expenditures to be incurred in
succeeding periods.
The Option shall be deemed to be exercised upon the Optionee
making all payments, issuing all shares and incurring all
Exploration Expenditures in accordance with this
Paragraph 4(b).
(a) 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.
TRANSFER OF PROPERTY
--------------------
5. The Optionor shall, forthwith after the exercise of
the Option by the Optionee, deliver to the Optionee duly executed
transfers of the appropriate interest in the Property which shall
have been acquired by the Optionee upon exercise of the Option.
RIGHT OF ENTRY
--------------
6. Throughout the Option Period the directors and officers of
the Optionee and its servants, agents and independent contractors,
shall have the sole and exclusive right in respect of the Property to:
(a) enter thereon;
(b) have exclusive and quiet possession thereof,
(c) do such prospecting, exploration, development and other
mining work thereon and thereunder as the Optionee in its
sole discretion may determine advisable;
(d) bring upon and erect upon the Property such buildings, plant,
machinery and equipment as the Optionee may deem advisable;
and
(e) 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 minerals 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 the regard and in order to keep such minerals
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) permit the directors, officers, employees and designated
consultants of the Optionor, at their own risk and expense, access
to the Property at all reasonable times, and the Optionor agrees
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 of any injury (including
injury causing death) to any director, officer, employee
or designated consultant of the Optionor while on the
Property;
(c) 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;
(d) indemnify and save the Optionor 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;
(e) permit the Optionor, at its own expense, reasonable
access to the results of the work done on the Property
during the last completed calendar year,
(f) deliver to the Optionor, 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 issuance of shares
which must be incurred or made or issued
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 Optionor 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
Optionor.
(c) Notwithstandmg 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
afl 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 Optionor.
TRANSFERS
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9. (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 Optionor its agreement
relating to this Agreernent 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 Optionor,
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 nunber of
successive transfer, the Optionee shall be deemed to be
discharged from all obligations hereunder save and except
for the fulfillment of contractual commitment accrued
due prior to the date on which the Optionee shall have no
further interest in this Agreement.
(c) If the Optionor should receive a bona fide offer from an
independent third party (the "Proposed Purchaser")
dealing at arms's length with the Optionor to purchase
all or a part of its interest in the Property, which
offer the Optionor desires to accept, or if the Optionor
intends to sell all or a part of its interest in the
Property:
(i) The Optionor shall first offer (the "Offer) such
interest in writing to the Optionee upon terms no less
favourable than those offered by the Proposed Purchaser
or intended to be offered by the Optionor, as the case
may be.
(ii) The Offer shall specify the price, terms and conditions
of such sale, the name of the Proposed Purchaser and
shall, in the case of an intended offer by the Optionor,
disclose the personn or persons to whom the Optionor
intends to offer its interest and, if the offer received
by the Optionor from the Proposed Purchaser provides for
any consideration payable to the Optionor otherwise than
in cash, the Offer shall include the Optionor's good
faith estimate of the cash equivalent of the non-cash
consideration.
(iii) If within a period of 60 days of the receipt of the
Offer the Optionee notifies the Optionor in writing that
it will accept the Offer, the Optionor shall be bound to
sell such interest to the Optionee on the terms and
conditions of the Offer. If the Offer so accepted by
the Optionee contains the Optionor's good faith estimate
of the cash equivalent of the non cash consideration as
aforesaid, and if the Optionee disagrees with the
Optionor's best estimate, the Optionee shall so notify
the Optionor at the time of acceptance and the Optionee
shall, in such notice, specify what it considers, in
good faith, the fair cash equivalent to be and the
resulting purchase price. If the Optionee so notifies
the Optionor, the acceptance by the Optionee shall be
effective and binding upon the Optionor and the
Optionee, and the cash equivalent of any such non-cash
consideration shall be determinated by binding
arbitration and shall be payable by the Optionee,
subject to prepayment as hereinafter provided, within 60
days following its determination by arbitration. The
Optionee shall in such case pay to the Optionor, against
receipt of an absolute transfer of clear and
unencumbered title to the interest of
the Optionor being sold, the total purchase price which
is specified in its notice to the Optionor and such
amount shall be credited to the amount determinated
following arbitration of the cash equivalent of any non-
cash consideration.
(iv) If the Optionee fails to notify the Opfionor before the
expiration of the time limited therefor that it will
purchase the interest offered, the Optionor may sell and
transfer such interest to the Proposed Purchaser at the
price and on the terms and conditions specified in the
Offer for a period of 60 days, but the terms of this
paragraph shall again apply to such interest if the sale
to the Proposed Purchaser is not completed within such
60 days.
(v) Any sale hereunder shall be conditional upon the
Proposed Purchaser delivering a written undertaking
to the Optionee, in form and substance satisfactory to its
counsel, to be bound by the terms and conditions of
this Agreement.
SURRENDER OF PROPERTY INTERESTS
PRIOR TO TERMINATION OF AGREEMENT
---------------------------------
10. 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 Optionor 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
and, if title to such clairns has been transferred to the
Optionee the Optionee shall retransfer such title to the Optionor
at the Optionee's expense.
FORCE MAJEURE
-------------
11.(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 Optionor
of each event of force majeure and upon cessation of
such event shall furnish to the Optionor with notice to
that effect together with 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.
CONFIDENTIAL INFORMATION
------------------------
12. No information fumished by the Optionee to the
Optionor 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 Optionor
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 or corporation laws, regulations or
policies.
ARBITRATION
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13.(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 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
xxxxx, 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 Bntish
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, Bntish 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.
DEFAULT
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14. 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 perfomance, the Optionee hereby agreeing that
should it so commence to cure any default it will
prosecute the satne to completion without undue delay.
Should the Optionee fail to comply with the provision of
subparagraph (b), the Optionor may thereafter terminate this Agreement
by giving notice thereof to the Optionee.
NOTICES
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15. Each notice, demand or other communication required or
permitted to be given under this Agreement shall be in writing and
shall be delivered, telegraphed 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 telegraphed or, if given
by telecopier, shall be deemed conclusively to be the next
business day. Either party may at any time and fiom 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
further change.
GENERAL
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16.(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 Agreernent.
(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 and
other 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 Bntish Columbia.
(f) Titne 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.
(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 XXXXX X. XXXXXXXXX )
in the presence of: )
)
/s/ Xxxxx Xxxxxx ) /s/ Xxxxx X. Xxxxxxxxx
_________________________________ ) __________________________________
Signature ) Signature
Xxxxx Xxxxxx
_________________________________ )
Name )
00000 - 00 Xxx
Xxxxxx, X.X.
__________________________________ )
Address )
THE COMMON SEAL OF
SOUTHBORROUGH TECHNOLOGY CORPORATION
was hereunto affixed in the
presence of:
/s/ Xxxx X. Xxxxxx
________________________________ C/S
Authorized Signatory
SCHEDULE "A"
------------
Located Mineral Claims
Record
ClaimName Number Year of Expiry
--------- ------ --------------
XXXXX 000000 November 20, 2001
all located in the Slocan Mining Division, British Columbia
