Exhibit 10.27
AGREEMENT
THIS AGREEMENT is effective this 23rd day of July,
2001 (the "Effective Date"), between CROWN RESOURCES CORPORATION,
a Washington corporation ("Crown Resources"), CROWN RESOURCE CORP.
OF COLORADO, a Colorado corporation ("Crown Colorado"), GOLD TEXAS
RESOURCES U.S., INC., a Texas corporation ("Gold Texas")
(collectively "Crown"), and BATTLE MOUNTAIN GOLD COMPANY,
a Nevada corporation ("Battle Mountain").
RECITALS
A. Crown and Battle Mountain entered into the Crown Jewel
Venture Agreement, effective as of January 4, 1991, a Memorandum
of which was recorded in the Okanogan County records on April 2,
1993, at Volume 109, Page 2132, as amended by the First Amendment
to Crown Jewel Venture Agreement, effective May 13, 1991, and
Second Amendment to Crown Jewel Venture Agreement, effective
April 27, 1994 (collectively the "Venture Agreement").
B. Crown and Battle Mountain desire to terminate the
Venture Agreement, and provide for a settlement of the liabilities
of the Participants and for the distribution of Assets under the
Venture Agreement.
THEREFORE, in consideration of the mutual covenants
contained herein, Crown and Battle Mountain agree as follows:
TERMS
1. Termination of Venture Agreement. Pursuant
to the terms of this Agreement, Crown and Battle Mountain
terminate the Venture Agreement as of the Effective Date.
The parties hereto shall have no further obligations arising
under the Venture Agreement.
2. Disposition of Assets.
a. Immediately following the execution of this
Agreement terminating the Venture Agreement, Battle Mountain
shall execute and deliver the following:
(i) Deeds, in the form of Exhibits 1 and 2 hereto,
conveying to Crown Resources, Battle Mountain's interest in the
property identified in Exhibit "A" thereto;
(ii) An Assignment and Agreement, in the form of
Exhibit 3 hereto, conveying to Crown Resources, Battle Mountain's
interest in the leases and agreements identified in Exhibit "A"
thereto; and
(iii) An Assignment and Xxxx of Sale, in the form of
Exhibit 4 hereto, conveying to Crown, Battle Mountain's interest
in the personal property identified in Exhibit "A" thereto. Crown
shall take possession of such personal property, including the
files and records, within thirty (30) days from the Effective Date.
Battle Mountain may, in its sole discretion, retain for its own use
or dispose of any such personal property that Crown fails to take
possession of within thirty (30) days from the Effective Date.
b. Battle Mountain represents and warrants to
Crown that there are no outstanding liens, claims, or amounts payable
to third parties with respect to the Assets, other than (i) the
Reclamation obligations described in Section 4 below; and (ii) such
annual filing fees, lease payments and other payments that become
due after the Effective Date (including such fees or payments that
accrued prior to the Effective Date, but are not yet due) as required
to maintain ownership of unpatented Federal mining claims, real
property leases, or other Assets.
3. Battle Mountain Royalty.
a. Concurrent with execution of this Agreement, Crown
shall execute a Royalty Deed in the form of Exhibit 5 hereto,
conveying to Battle Mountain a royalty in gold and silver produced
from the properties identified on Exhibit "A" to the Royalty Deed.
b. For a period of five years from the Effective Date, Crown shall
have the option to purchase from Battle Mountain the royalty interest
conveyed pursuant to Section 3(a), for the sum of $2,000,000.00 cash. Crown
may exercise this option by providing written notice to Battle
Mountain of its intent to
exercise the option and paying to Battle Mountain the purchase
price in full,
prior to the expiration of five years from the Effective Date. Upon
Battle Mountain's
receipt of such payment by Crown, Battle Mountain shall deliver to
Crown a Royalty
Reconveyance Deed in the form of Exhibit 6 hereto, conveying the
royalty interest to
Crown.
4. Reclamation.
a. Battle Mountain agrees to reclaim or cause to be
reclaimed at its own cost, in accordance with applicable regulatory
standards, the disturbance existing on the Properties as of the
Effective Date and arising from Operations ("Existing Disturbance"),
including conducting any monitoring required by the responsible
regulatory agencies relating to that disturbance (the "Reclamation").
Except as expressly set forth in this Section 4, Battle Mountain
shall have no obligation to reclaim, remediate, or otherwise address
any environmental conditions on the Properties or relating to
Operations.
b. Except as expressly set forth in Section 4(c), the timing,
manner, scope and method of the Reclamation shall be determined by
Battle Mountain in its sole discretion, acting reasonably and in
compliance with applicable laws and regulations, with the objectives
to efficiently complete the Reclamation in a timely and cost-effective
manner, and to obtain a full and complete release of Battle Mountain's
financial sureties. Battle Mountain may, in its sole discretion,
seek to obtain partial releases of the financial sureties as
Reclamation proceeds.
c. On or before December 31, 2001, Crown shall notify Battle
Mountain in writing of any Existing Disturbance for which it desires
to have Battle Mountain defer Reclamation. Such notice shall
specifically identify the features and areas for which deferred
Reclamation is desired. To the extent allowable under applicable
law, regulations and regulatory authorizations, Battle Mountain
will postpone the initiation of such identified Reclamation
("Deferred Reclamation") for a period of 18 months from the
Effective Date (the "Deferral Period"). Unless Crown has obtained
approval from the responsible agencies to fully assume such Deferred
Reclamation and has obtained a full release of Battle Mountain's
financial sureties relating to the Deferred Reclamation on or before
that date, Battle Mountain shall thereafter complete the Deferred
Reclamation necessary to obtain such a release in accordance with
Section 4(b). If, during the Deferral Period, Battle Mountain
receives a notice or order from any agency, requesting it to complete
any part of the Deferred Reclamation, or requesting additional
sureties if the Deferred Reclamation is not initiated or completed,
Battle Mountain shall promptly notify Crown, and Crown shall be given
a reasonable time, consistent with the agency notice or order, to
obtain written approval from the agency to postpone the Deferred
Reclamation at no additional cost to Battle Mountain. If such written
agency approval is not obtained, Battle Mountain may complete the
subject Deferred Reclamation in accordance with Sections 4(a) and 4(b).
d. For any Existing Disturbance other than Deferred Reclamation
determined pursuant to Section 4(c), Battle Mountain will conduct the
Reclamation in accordance with Sections 4(a) and 4(b).
e. For purposes of this Agreement, Reclamation will be deemed to
be completed as of the date that the responsible agencies release in
full Battle Mountain's sureties intended to cover the Reclamation.
f. Unless and until transferred to Crown, in accordance with
Section 8 below, none of the existing permits covering the Properties
or Operations may be used for any new disturbance or activities by or
on behalf of Crown. Under no circumstance shall any of the financial
sureties listed on Exhibit 9 be used to cover any new disturbance or
activities by or on behalf of Crown. Crown shall be solely responsible
for obtaining the necessary permits and posting financial sureties
for any subsequent disturbance or activities on the Properties, and
for reclaiming any disturbance occurring after the Effective Date.
Any subsequent activities or disturbance shall not increase or affect
the amount of the Reclamation to be conducted by Battle Mountain, nor
delay the completion of the Reclamation. Until Reclamation is
completed under this Section 4, Crown shall provide Battle Mountain
with thirty (30) days advance written notice, prior to conducting any
additional surface disturbing activities on the Properties.
5. Right of Entry. Until Reclamation is completed under
Section
4(e), Crown hereby grants to Battle Mountain, and its employees,
affiliates, agents and contractors, a right to access and utilize the
Properties for any purposes reasonably relating to completing the
Reclamation and obtaining a full release of Battle Mountain's
financial sureties. Until the Reclamation is completed, and the
responsible agencies have released Battle Mountain's sureties in full,
Crown, and its agents, employees, affiliates, contractors, partners,
co-venturers and representatives shall conduct any activities on the
Properties in a manner that will not materially interfere with or
adversely affect Battle Mountain's Reclamation activities, including
any monitoring that the responsible agencies require Battle Mountain
to undertake. Unless inconsistent with regulatory requirements or
orders, in which case reasonable notice consistent therewith shall be
provided, Battle Mountain shall provide Crown with thirty (30) days
advance written notice of its planned Reclamation activities on the
Properties, and shall coordinate with Crown to avoid unreasonable
interference with Crown's activities on the Properties. Battle
Mountain's rights under this Section 5 shall not be affected by the
conveyance instruments executed pursuant to Section 2 above.
6. Final Settlement, Release and Indemnity.
a. Other than their respective obligations under this
Agreement, neither Battle Mountain nor Crown shall have any further
obligations or liabilities to the other under or relating to the
Venture Agreement or Assets. Notwithstanding the terms of the Venture
Agreement, Crown shall be solely liable for any continuing obligations
arising under or relating to the Venture Agreement or the Assets,
whether accruing before or after the Effective Date; provided that
Battle Mountain shall pay all required fees, lease payments and other
payments with respect to the Properties that were due prior to the
Effective Date, and all third party invoices for goods and services
provided or conducted prior to the Effective Date, and for goods and
services obtained by Battle Mountain after the Effective Date in
connection with Reclamation or Battle Mountain's other activities
on, or with respect to, the Properties. The conveyances prescribed
by this Agreement constitute the final settlement of the distribution
of all Assets, including the Properties. Fulfillment of the
obligations set forth in this Agreement shall constitute full
satisfaction of any and all obligations of Battle Mountain or Crown
under the Venture Agreement.
b. Other than the rights and liabilities expressly set forth in this
Agreement, Crown and Battle Mountain each waives any rights, claims,
or liabilities against the other, and covenants not to xxx the
other for any rights, claims, or liabilities, arising under, or
relating to the Venture Agreement, Operations, the Assets, or the
Properties, and releases the other from any and all obligations
or liabilities arising under or relating to the Venture Agreement,
Operations, the Assets, or the Properties, whether known or unknown,
notwithstanding any provisions in the Venture Agreement. Except
as provided in Section 4 of this Agreement, Crown assumes any
obligations or liabilities relating to environmental conditions on
or relating to the Properties or Operations, whether known or
unknown, and whether existing or hereafter occurring, and waives
any rights, claims or liabilities against Battle Mountain and releases
Battle Mountain from any such obligations or liabilities.
c. Except for Battle Mountain's obligation to
complete the Reclamation under Section 4 of this Agreement, Crown
shall indemnify and hold harmless Battle Mountain, its affiliates
and successors, and their respective officers, directors, agents,
and employees from and against all loss, costs, penalties, expense,
damage and liability (including, without limitation, loss due to
injury or death, reasonable attorneys fees, and experts' fees)
arising out of, or relating to, any claim or cause of action relating
in any way to conditions or activities (including Operations) on or
in connection with the Properties or the Venture Agreement, whether
relating to previous, existing, or subsequent activities or conditions, and
whether known or unknown, including, but not limited to, any environmental
conditions on, or relating to, the Properties. The indemnity provided
under this
Section 6(c) shall not apply to any claims for personal injury relating
to or arising
from activities or events occurring prior to the Effective Date.
7. Pending Litigation. The parties acknowledge that the judicial
matters identified on Exhibit 7 hereto are currently pending. Battle
Mountain may, at its sole
discretion and own cost, take whatever steps it deems appropriate to
terminate, withdraw
from, or settle these matters. Neither Crown nor Battle Mountain shall
have any obligation to
pursue or defend any judicial or administrative proceeding, currently
pending or hereafter
arising, relating to or arising from the Venture Agreement, the
Assets, including
the Properties,
or any Operations, including, but not limited to the Protest filed by Okanogan
Highlands
Alliance et al. with the Bureau of Land Management on May 30, 2000,
challenging Patent
Application No. OR 49312 WA.
8. Permits and Applications. To the extent allowed by law, Battle Mountain
shall reasonably cooperate with Crown to transfer to Crown the permits
and applications identified on
Exhibit 8 hereto, provided that: (i) the issuing agency provides
written confirmation
that Battle
Mountain is released from all obligations or liabilities under such
permit, and (ii)
such transfer
does not delay or otherwise adversely affect Battle Mountain's
ability to obtain
a full release of
the sureties identified on Exhibit 9 hereto. Battle Mountain may, in its sole
discretion and at its
sole cost, take whatever steps it deems appropriate to terminate, cancel or
withdraw any other
applications, permits, approvals or other authorizations relating to the Assets
or Operations.
Battle Mountain shall have no obligation to take any actions to apply for,
pursue, or maintain
any permits or other government authorizations relating to Operations or
Assets, including the
Properties.
9. Financial Sureties. Subject to Section 4(c), which relates only to the
$500,000.00
currently held by the United States Forest Service, and notwithstanding
Section 8 above,
Battle Mountain may, in its sole discretion and at its own cost, take whatever
steps are
appropriate to obtain a release of the financial sureties identified
on Exhibit 9
hereto,
including, but not limited to, termination of any permits or
government approvals
requiring
such financial sureties.
10. Memorandum. Concurrent with execution of this Agreement, the
parties shall
execute a memorandum in the form attached hereto as Exhibit 10.
11. Recording. Upon execution of the instruments and documents
identified in Sections 2, 3
and 10 of this Agreement, the parties shall promptly record the following
instruments and documents
in the records of Okanogan County, in the following order: (i) Memorandum
of Agreement (Exhibit 10);
(ii) Deeds (Exhibits 1 and 2); (iii) Assignment and Agreement
(Exhibit 3); and (iv)
Royalty Deed (Exhibit 5).
Crown shall, at or prior to the time of recording, execute the
necessary affidavit
or notice, pursuant to
RCW 84.34, to continue the current classification of the fee lands
identified on
Exhibit "A" to the Deed
attached hereto as Exhibit 1. Crown agrees to pay any taxes, interest
or penalties
arising from the
failure to execute such documents or any change in the use classification of
those lands.
12. Access to Files. Upon reasonable notice, Crown shall allow Battle
Mountain access
to review, and copy at Battle Mountain's own cost, all files, documents and
records transferred or
assigned to Crown pursuant to this Agreement, provided that Battle Mountain
shall no longer have
a proprietary interest in such information. Unless otherwise required by law,
Battle Mountain
shall keep all such information confidential and shall not disclose such
information to any third
party without the prior written approval of Crown.
13. Non-Compete Covenant. For a period of 24 months after the Effective
Date,
Battle Mountain shall not directly or indirectly acquire any interest in the
Properties. If Battle
Mountain breaches this Section 13, it shall be obligated to offer to convey
to Crown, without
cost, any such property or interest so acquired. Such offer shall be made
in writing and can be
by Crown in writing at any time within 45 days after it has received such
offer.
14. Highland Lease. The parties have agreed that Battle Mountain may,
prior to the
Effective Date, terminate that Lease and Purchase Option dated effective
November 28, 1983
between Highland Mining Co. and Minvent Partnership, for which a Notice
of Mining Lease
was recorded March 29, 1984 in Book 51, Page 1077, for which a ratification
was recorded
October 30, 1990 in Book 89, Page 682, and for which an additional ratification
and clarification
was recorded May 7, 1996, in Book 143, Page 1569, of the real property
records of Okanogan
.
15. Entire Agreement. This Agreement contains the entire understanding
of the parties
and supersedes all prior agreements and understandings between the parties
relating to the
subject matter hereof.
16. Assignability. This Agreement may be assigned by any party upon
the written consent
of the other parties, which consent shall not be unreasonably withheld. This
Agreement shall be
binding upon and inure to the benefit of the respective successors and permitted
assigns of the parties.
17. No Implied Covenants. Except for the implied covenants of good faith and
fair dealing,
there shall be no implied covenants under this Agreement.
18. Notices. All notices, payments and other required communications
("Notices") to the
parties shall be in writing, and shall be addressed respectively as follows:
Battle Mountain: Battle Mountain Gold Company
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attn: Legal Department
Fax: (000) 000-0000
261: Crown: Crown Resources Corporation
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx Xxxxx, XX 00000
Attn: President
Fax: (000) 000-0000
All Notices shall be given (i) by personal delivery to the party, or (ii)
by electronic c
ommunication, with a confirmation sent by registered or certified mail,
return receipt requested,
or (iii) by registered or certified mail, return receipt requested. All
Notices shall be effective and
shall be deemed delivered (i) if by personal delivery, on the date of delivery,
f delivered during
normal business hours, and if not delivered during normal business hours,
on the next business
day following delivery, (ii) if by electronic communication, on the next
business day following
receipt of the electronic communication, and (iii) if solely by mail,
on the next
business day after
actual receipt. A party may change its address from time to time by written
notice to the other party.
19. Modification. No modification of this Agreement shall be valid unless
made in writing
and executed by the parties hereto.
20. Waiver. No waiver of any provision of this Agreement, or waiver of any
breach of this
Agreement, shall be effective unless the waiver is in writing and is signed by
the party against whom
the waiver is claimed. No waiver of any breach shall be deemed to be a
waiver of any other or
subsequent breach.
21. Definitions. As used in this Agreement, the terms "Assets," "Operations,"
"Participants"
and "Properties" shall have the meanings ascribed to them in the Venture
Agreement.
22. Further Assurances. Crown and Battle Mountain agree to take such actions
and execute
such additional instruments as may be reasonably necessary or convenient to
implement and carry
out the intent and purpose of this Agreement.
23. Governing Law. This Agreement shall be governed by and interpreted in
accordance
with the laws of the State of Colorado, without giving effect to the
principles of
conflicts of law of
such state.
24. Press Releases. None of the parties to this Agreement, nor their agents,
employees
or representatives, shall issue any press release relating to, or referencing
this Agreement
without the prior consent of the other party, which consent shall not be
unreasonably withheld.
CROWN RESOURCES CORPORATION
By:_________________________________
Title:_________________________
CROWN RESOURCE CORP. OF COLORADO
By:_________________________________
Title:_________________________
GOLD TEXAS RESOURCES U.S., INC.
By:________________________________
Title:________________________
BATTLE MOUNTAIN GOLD COMPANY
By:_________________________________
Title:_________________________
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