OPTION AGREEMENT
THIS AGREEMENT made as of the 18TH day of May, 2001.
BETWEEN:
XXXX XXXXX XXXXXXXXX X.Xx., Geologist, of #50 - 0000
000xx Xxxxxx, Xxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(the "Optionor")
OF THE FIRST PART
AND:
PRINCETON VENTURES, INC., a company duly
incorporated pursuant to the laws of the state of
Nevada, and having an
office at Xxxxx 000, 000 Xxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxx Xxxxxxxx, X0X 0X0
(the "Optionee")
OF THE SECOND PART
WHEREAS:
(a) The Optionor is the owner of certain mineral claims
located in the Lillooet 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
-----------
(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
/s/ ABH
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 overhead 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
/s/ ABH
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;
/s/ ABH
(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) 50,000 shares upon the completion of the third
phase of an exploration program on the Property on or
before June 30, 2003
/s/ ABH
(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 November 30, 2001
(B) a further $10,000 U.S. on or before June 30, 2002; and
(C) a further $120,000 U.S. on or before June 30, 2003.
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,
/s/ ABH
(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.
/s/ ABH
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
---------
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
/s/ ABH
(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
/s/ ABH
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 claims 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.
/s/ ABH
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
-----------
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
/s/ ABH
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
-------
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
-------
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
-------
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.
/s/ ABH
(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 XXXX XXXXX XXXXXXXXX )
in the presence of: )
)
/S/ Xxxxxx Xxxxxx ) /S/ Xxxx Xxxxx Henmingway
____________________________) _________________________________
Signature ) Signature
Xxxxxx Xxxxxx
_________________________________ )
Name )
0000 -000 X. Xxxxxxx Xx.
Xxxxxxxxx, X.X.
__________________________________)
Address )
THE COMMON SEAL OF
PRINCETON VENTURES, INC.
was hereunto affixed in the
presence of:
/S/ Xxxxxxx X. Xxxxxxxxx
________________________________ C/S
Authorized Signatory
/s/ ABH
SCHEDULE "A"
------------
Located Mineral Claims
Record
ClaimName Number Year of Expiry
--------- ------ --------------
XXXX 1 379151 July 10, 2003
XXXX 2 379152 July 10, 2003
MERRY ME 1 370102 July 10, 2002
MERRY ME 2 370103 July 10, 2002
MERRY ME 3 370104 July 10, 2002
MERRY ME 4 370105 July 10, 2002
MERRY ME 5 370106 July 10, 2002
MERRY ME 6 370107 July 10, 2002
all located in the Lillooet Mining Division, British Columbia
/s/ ABH
