OPTION TO PURCHASE AND ROYALTY AGREEMENT
OPTION TO PURCHASE AND ROYALTY AGREEMENT
THIS AGREEMENT made as of the 7th day of July, 2003.
BETWEEN:
XXXXXXX X. HEARD, businessman, having an office at Suite 3003 – 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, X.X., X0X 0X0
and
XXXXXXXX X. XXXXXX, businessman, having an office at 0000 Xxxxx Xxxx, Xxxxxxxx, X.X. X0X 0X0
(hereinafter jointly referred to as the "Vendors")
PARTIES OF THE FIRST PART
AND:
INVISION CAPITAL, INC., a company duly incorporated under the laws of the State of Nevada, having an office at Xxxx 00, 00000 Xxxxxxx Xxxxxx, Xxxxxxxx, X.X., X0X 0X0
(hereinafter referred to as "Invision")
OF THE SECOND PART
WHEREAS:
| A. |
Vendors is the sole beneficial owner
of 100% of the right, title and interest in and to the Xxxxxx Xxxx property,
which is situated in the Thunder Bay Mining Division, Ontario, which mining
claims are more particularly described in Schedule "A" attached hereto
and forming part hereof (hereinafter together with any form of successor
or substitute mineral tenure called the "Claim"). |
| B. |
The parties now wish to enter into an
agreement granting to Invision the exclusive right and option to acquire
an undivided 100% of the right, title and interest in and to the Claim
on the terms and conditions as hereinafter set forth. |
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and the mutual promises, covenants and agreements herein contained, the parties hereto agree as follows:
| 1. |
INTERPRETATION |
|
| 1.1 | In this Agreement: |
|
| (a) |
"Effective Date" means the date that
both parties have signed this Agreement; |
|
| (b) |
"Mineral Products" means the products
derived from operating the Claim as a mine; |
|
| (c) |
"Net Smelter Returns" means the proceeds
received by Invision from any smelter or other purchaser from the sale
of any ores, concentrates or minerals produced from the Claim after deducting
from such proceeds the following charges only to the extent that they
are not deducted by the smelter or other purchaser in computing the proceeds: |
|
- 2 -
| (i) |
the cost of transportation of the ores,
concentrates or minerals from the Claim to such smelter or other purchaser,
including related transport; |
||
| (ii) |
smelting and refining charges including
penalties; and |
||
| (iii) |
marketing costs. |
||
| (d) |
"Option" means the option
granted by Vendors to Invision pursuant to Section 3; |
||
| (e) |
"Operating the Claim as
a mine" or "Operation of the Claim as a mine" means any or all of the
mining, milling, smelting, refining or other recovery of ores, minerals,
metals or concentrates or values thereof, derived from the Claim; |
||
| (f) |
"Royalty" means the royalty
to be paid by Invision to Vendors pursuant to Subsection 9.1; and |
||
| (g) |
"Dollars ($)" means legal
currency of Canada. |
||
| 2. |
REPRESENTATIONS AND WARRANTIES |
|
| 2.1 | Invision represents and warrants to Vendors that: |
|
| (a) |
Invision is a body corporate duly incorporated,
organized and validly subsisting under the laws of its incorporating jurisdiction; |
|
| (b) |
Invision has full power and authority
to carry on its business and to enter into this Agreement and any agreement
or instrument referred to or contemplated by this Agreement; |
|
| (c) |
neither the execution and delivery of
this Agreement nor any of the agreements referred to herein or contemplated
hereby, nor the consummation of the transactions hereby contemplated will
conflict with, result in the breach of or accelerate the performance required
by any agreement to which Invision is a party; and |
|
| (d) |
the execution and delivery of this Agreement
and the agreements contemplated hereby will not violate or result in the
breach of laws of any jurisdiction applicable or pertaining thereto or
of Invision's constating documents. |
|
| 2.2 | Vendors represents and warrants
to Invision: |
|
| (a) |
the Claim consists of the Xxxxxx Xxxx
Property mining claims which have been duly and validly staked and recorded,
as accurately described in Schedule "A", is presently in good standing
under the laws of the jurisdiction in which they are located and, except
as set forth herein, is free and clear of all liens, charges and encumbrances; |
|
| (b) |
Vendors is the sole beneficial owner
of a 100% interest in and to the Claim and has the exclusive right to
enter into this Agreement and all necessary authority to dispose of an
undivided 100% interest in and to the Claim in accordance with the terms
of this Agreement; |
|
- 3 -
| (c) |
no person, firm or corporation has any
proprietary or possessory interest in the Claim other than Vendors and
no person is entitled to any royalty or other payment in the nature of
rent or royalty on any minerals, ores, metals or concentrates or any other
such products removed from the Claim; |
|
| (d) |
neither the execution and delivery of
this Agreement nor any of the agreements referred to herein or contemplated
hereby, nor the consummation of the transactions hereby contemplated will
conflict with, result in the breach of or accelerate the performance required
by any agreement to which Vendors is a party or by which he is bound; |
|
| (e) |
the execution and delivery of this Agreement
and the agreements contemplated hereby will not violate or result in the
breach of the laws of any jurisdiction applicable or pertaining thereto. |
| 2.3 | The representations and
warranties hereinbefore set out are conditions on which the parties have
relied in entering into this Agreement and will survive the acquisition
of any interest in the Claim by Invision and each party will indemnify
and save the other party harmless from all loss, damage, costs, actions
and suits arising out of or in connection with any breach or any representation,
warranty, covenant, agreement or condition made by the other party and
contained in this Agreement. |
|
| 3. |
OPTION |
|
| 3.1 | Vendors hereby gives and
grants to Invision the sole and exclusive right and option to acquire
an undivided 100% of the right, title and interest of Vendors in and to
the Claim, subject only to Vendors receiving the annual payments and the
Royalty, in accordance with the terms of this Agreement for and in consideration
of the following: |
|
| (a) |
payment of $10,000 by Invision to Vendors
on the Effective Date; |
|
| (b) |
Invision, or its permitted assigns,
incurring exploration expenditures on the Claim of a minimum of $35,000
on or before June 30, 2004; |
|
| (c) |
Invision, or its permitted assigns,
incurring exploration expenditures on the Claim of a further $75,000 (for
aggregate minimum exploration expenses of $110,000) on or before June
30, 2005: and |
|
| (d) |
Invision, or its permitted assigns,
incurring exploration expenditures on the Claim of a further $100,000
(for aggregate minimum exploration expenses of $210,000) on or before
June 30, 2006: and |
|
| (e) |
payment of $50,000 by Invision to Vendors
on or before January 1, 2007 as a prepayment of the Net Smelter Royalty. |
|
| 3.2 | Upon exercise of the Option,
Invision agrees to pay Vendors, commencing January 1, 2008, the sum of
$50,000 per annum as a prepayment of the Net Smelter Royalty for so long
as Invision, or |
|
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its permitted assigns, holds any interest in the
Claim. Failure to make any such annual payment shall result in termination
of this Agreement in accordance with Section 5.1. |
|
| 3.3 | Upon the commencement of commercial production from
the property, Invision or its successor under this agreement agrees to
pay to the Vendors, two hundred fifty thousand (250,000) shares in the
capital of Invision or any successor corporation. |
| 4. |
RIGHT OF ENTRY |
|
| 4.1 | Until such time as the Option
has been exercised, Invision, its employees, agents and independent contractors,
will have the sole and exclusive right and option to: |
|
| (a) |
enter upon the Claim; |
|
| (b) |
have exclusive and quiet possession
thereof; |
|
| (c) |
do such prospecting, exploration, development
or other mining work thereon and thereunder as Invision in its sole discretion
may consider advisable; and |
|
| (d) |
bring and erect upon the Claim such
facilities as Invision may consider advisable. |
|
| 5. |
TERMINATION |
|
| 5.1 | Subject to Section 8, this Agreement and the
Option will terminate: |
|
| (a) |
on June 30, 2004 at 11:59 P.M., unless
on or before that date, Invision has incurred exploration expenditures
of a minimum of $35,000 on the Claim; |
|
| (b) |
on June 30, 2005 at 11:59 P.M., unless
Invision has incurred a further $75,000 of exploration expenditures on
the Claim (for an aggregate of $110,000); or |
|
| (c) |
on June 30, 2006 at 11:59 P.M., unless
Invision has incurred a further $100,000 of exploration expenditures on
the Claim (for an aggregate of $210,000); or |
|
| (d) |
on January 1, 2007 at 11:59 P.M., unless
Invision has paid to Vendors the further sum of $50,000; |
|
| (e) |
at 11:59 P.M. on January 1 of each and
every year, commencing on January 1, 2008, unless Invision or its successor
or assign has paid to Vendors the sum of $50,000 on or before that date. |
|
- 5 -
| 6. |
COVENANTS OF VENDORS |
|
| 6.1 | Vendors will: |
|
| (a) |
not do any act or thing which would
or might in any way adversely affect the rights of Invision hereunder; |
|
| (b) |
make available to Invision and its representatives
all records and files in the possession of Vendors relating to the Claim
and permit Invision and its representatives at its own expense to take
abstracts therefrom and make copies thereof; and |
|
| (c) |
promptly provide Invision with any and
all notices and correspondence from government agencies in respect of
the Claim. |
|
| 7. |
COVENANTS OF INVISION |
|
| 7.1 | Invision will: |
|
| (a) |
keep the Claim free and clear of all
liens, charges and encumbrances arising from their operations hereunder
and in good standing by the doing and filing of all necessary work and
by the doing of all other acts and things and making all other payments
which may be necessary in that regard; |
|
| (b) |
permit Vendors, or its representatives
duly authorized by it in writing, at their own risk and expense, access
to the Claim at all reasonable times and to all records prepared by Invision
in connection with work done on or with respect to the Claim; |
|
| (c) |
conduct all work on or with respect
to the Claim in a careful and miner-like manner and in compliance with
all applicable Federal, Provincial and local laws, rules, orders and regulations,
and indemnify and save Vendors harmless from any and all Claim, suits,
actions made or brought against it as a result of work done by Invision
on or with respect to the Claim; and |
|
| (d) |
obtain and maintain, or cause any contractor
engaged hereunder to obtain and maintain, during any period in which active
work is carried out hereunder, adequate insurance. |
|
| 8. |
EXERCISE OF OPTION |
|
| 8.1 | Once Invision has incurred
the exploration expenditures, and made the payments set out in Section
3.1, Invision will, subject to the right of Vendors to receive the Royalty
and the obligation of Invision to make the annual payments set out in
Section 3.2, own an undivided 100% of Vendors' right, title, and interest
in and to the Claim. |
|
- 6 -
| 9. |
ROYALTY |
|
| 9.1 | Invision will pay to Vendors
an annual royalty equal to four percent (4%) of Net Smelter Returns, subject
to Section 9.4. |
|
| 9.2 | After the exercise of the
Option, payment of the Royalty will be made quarterly within 30 days after
the end of each yearly quarter based upon a year commencing on the 1st
day of January and expiring on the 31st day of December in any year in
which production occurs. Within 60 days after the end of each year for
which the Royalty is payable, the records relating to the calculation
of Net Smelter Returns for such year will be audited by Invision and any
adjustments in the payment of the Royalty will be made forthwith after
completion of the audit. All payments of the Royalty for a year will be
deemed final and in full satisfaction of all obligations of Invision in
respect thereof if such payments or calculations thereof are not disputed
by Vendors within 60 days after receipt by Vendors of the said audit statement.
Invision will maintain accurate records relevant to the determination
of Net Smelter Returns and Vendors, or its authorized agent, shall be
permitted the right to examine such records at all reasonable times. |
|
| 9.3 | The determination of Net
Smelter Returns royalty hereunder is based on the premise that production
will be developed solely on the Claim except that Invision will have the
right to commingle ore mined from the Claim with ore mined and produced
from other properties provided Invision will adopt and employ reasonable
practices and procedures for weighing, sampling and assaying, in order
to determine the amounts of products derived from, or attributable to
commingled ore mined and produced from the Claim. Invision will maintain
accurate records of the results of such sampling, weighing and analysis
with respect to any commingled ore mined and produced from the Claim.
Vendors or its authorized agents will be permitted the right to examine
at all reasonable times such records pertaining to comingling of ore or
to the calculation of Net Smelter Returns. |
|
| 9.4 | Invision shall have the
right at any time to purchase one-half of the Royalty by paying to Vendors
the sum of $500,000 per Royalty percentage point. |
|
| 10. |
OBLIGATIONS OF INVISION AFTER TERMINATION |
|
| 10.1 | In the event of the termination of the Option,
Invision will: |
|
| (a) |
leave the Claim in good standing for
a minimum of one (1) year under all applicable legislation, free and clear
of all liens, charges and encumbrances arising from this Agreement or
their operations hereunder and in a safe and orderly condition; |
|
| (b) |
deliver to Vendors within 60 days of
its written request a comprehensive report on all work carried out by
Invision on the Claim (limited to factual matter only) together with copies
of all maps, drill logs, assay results and other technical data compiled
by Invision with respect to the Claim; |
|
| (c) |
have the right, and obligation on demand
made by Vendors, to remove from the Claim within six (6) months of the
effective date of termination all facilities erected, installed or brought
upon the Claim by or at the instance of Invision provided that at the
option of Vendors, any or all of facilities not so removed will become
the property of Vendors; and |
|
- 7 -
| (d) | deliver to Vendors a duly executed transfer in registrable
form of an undivided 100% right, title and interest in and to the Claim
in favour of Vendors, or its nominee. |
| 11. |
TRANSFER OF TITLE |
|
| 11.1 | Upon the request of Invision,
Vendors will deliver to Invision a duly executed transfer in registrable
form of an undivided 100% of Vendors' right, title and interest in and
to the Claim in favour of Invision which Invision will be entitled to
register against title to the Claim provided that transfer of legal title
to the Claim as set forth in this Subsection 11.1 is for administrative
convenience only and beneficial ownership of an undivided 100% interest
in the Claim will pass to Invision only in accordance with the terms and
conditions of this Agreement. |
|
| 12. |
REGISTRATION OF AGREEMENT |
|
| 12.1 | Notwithstanding Section
11 of this Agreement, Invision or Vendors will have the right at any time
to register this Agreement or a Memorandum thereof against title to the
Claim. |
|
| 13. |
DISPOSITION OF CLAIM |
|
| 13.1 | Invision may at any time
sell, transfer or otherwise dispose of all or any portion of its interest
in and to the Claim and this Agreement provided that, at any time, Invision
has first obtained the consent in writing of Vendors, such consent not
to be unreasonably withheld and further provided that, at any time during
the currency of this Agreement, any purchaser, grantee or transferee of
any such interest will have first delivered to Vendors its agreement related
to this Agreement and to the Claim, containing: |
|
| (a) |
a covenant with Vendors by such transferee
to perform all the obligations of Invision to be performed under this
Agreement in respect of the interest to be acquired by it from Invision,
and |
|
| (b) |
a provision subjecting any further sale, transfer or other disposition of such interest in the Claim and this Agreement or any portion thereof to the restrictions contained in this Subsection 13.1. |
|
| 13.2 | The provisions or Subsection
13.1 of this Agreement will not prevent either party from entering into
an amalgamation or corporate reorganization which will have the effect
in law of the amalgamated or surviving company possessing all the property,
rights and interests and being subject to all the debts, liabilities and
obligations of each amalgamating or predecessor company. |
|
| 14. |
ABANDONMENT OF PROPERTY |
|
| 14.l | Invision shall have the
unfettered right at any time after the exercise of the Option to abandon
all or any part of its interest in the Claim by delivering a notice in
writing of their intention to do so to Vendors, such notice to list the
part or parts of the Claim to be abandoned, and if within 30 days of receipt
of such notice Vendors delivers to Invision a notice ("Reacquisition Notice")
stating its intention to reacquire all or part or parts of the Claim,
Invision will deliver to Vendors |
|
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duly executed recordable transfers of its interest
in such part or parts of the Claim as Vendors has set forth in the Reacquisition
Notice, such part or parts to be in good standing for at least one year
beyond the date of delivery of such transfers and to be free and clear
of all liens, charges, and encumbrances arising from the operations of
Invision or its agents or subcontractors hereunder. |
|
| 15. | CONFIDENTIAL NATURE OF INFORMATION |
| 15.1 | The parties agree that all information obtained from
the work carried out hereunder and under the operation of this Agreement
will be the exclusive property of the parties and will not be used other
than for the activities contemplated hereunder except as required by law
or by the rules and regulations of any regulatory authority having jurisdiction,
or with the written consent of both parties, such consent not to be unreasonably
withheld. Notwithstanding the foregoing, it is understood and agreed that
a party will not be liable to the other party for the fraudulent or negligent
disclosure of information by any of its employees, servants or agents,
provided that such party has taken reasonable steps to ensure the preservation
of the confidential nature of such information. |
| 16. | FURTHER ASSURANCES |
| 16.1 | The parties hereto agree that they and each of them
will execute all documents and do all acts and things within their respective
powers to carry out and implement the provisions or intent of this Agreement.
|
| 17. | NOTICE |
| 17.1 | Any notice, direction or other instrument required
or permitted to be given under this Agreement will be in writing and will
be given by the delivery or the same or by mailing the same by prepaid
registered or certified mail in each case addressed as follows: |
| (a) |
if to Vendors Suite 3003 – 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, X.X., X0X 0X0 Attention: Xxxxxxx X. Heard |
|
| (b) |
if to Invision Capital, Inc. Xxxx 00, 00000 Xxxxxxx Xxxxxx Xxxxxxxx, X.X. X0X 0X0 Attention: Xxxxx. X. Xxxxxx |
| l7.2 | Any notice, direction or other instrument aforesaid
will, if delivered, be deemed to have been given and received on the day
it was delivered, and if mailed, be deemed to have been given and received
on the fifth business day following the day of mailing, except in the
event of disruption of the postal services in which event notice will
be deemed to be received only when actually received. |
| 17.3 | Any party may at any time give to the other notice
in writing of any change of address of the party giving such notice
and from and after the giving of such notice, the address or addresses
|
- 9 -
therein specified will be deemed to be the address
of such party for the purpose of giving notice hereunder. |
|
| 18. | HEADINGS |
| 18.1 | The headings to the respective sections herein will
not be deemed part of this Agreement but will be regarded as having been
used for convenience only. |
| 19. | DEFAULT |
| 19.1 | If any party (a "Defaulting Party") is in default
of any requirement herein set forth other than the provisions of Section
5 for which notice of default need not be given, the party affected by
such default will give written notice to the defaulting Party specifying
the default and the Defaulting Party will not lose any rights under this
Agreement, unless within 30 days after the giving of notice of default
by the affected party the Defaulting Party has cured the default by the
appropriate performance and if the Defaulting Party fails within such
period to cure any such default, the affected party will be entitled to
seek any remedy it may have on account of such default. |
| 20. | PAYMENT |
| 20.1 | All references to monies hereunder will be in Canadian
funds except where otherwise designated. All payments to be made to any
party hereunder will be mailed or delivered to such party at its address
for notice purposes as provided herein, or for the account of such party
at such bank or banks in Canada as such party may designate from time
to time by written notice. Said bank or banks will be deemed the agent
of the designating party for the purpose of receiving and collecting such
payment. |
| 21. | ENUREMENT |
| 21.1 | Subject to Section 13, this Agreement will enure
to the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. |
| 22. | TERMS |
| 22.1 | The terms and provisions of this Agreement shall be
interpreted in accordance with the laws of British Columbia. |
| 23. | FORCE MAJEURE |
| 23.1 | No party will be liable for its failure to perform
any of its obligations under this Agreement due to a cause beyond its
control (except those caused by its own lack of funds) including, but
not limited to acts of God, fire, flood, explosion, strikes, lockouts
or other industrial disturbances, |
- 10 -
laws, rules and regulations or orders of any duly
constituted governmental authority or non-availability of materials or
transportation (each an "Intervening Event"). |
|
| 23.2 | All time limits imposed by this Agreement, other
than those imposed by Section 5, will be extended by a period equivalent
to the period of delay resulting from an Intervening Event described in
Subsection 23.1. |
| 23.3 | A party relying on the provisions of Subsection 23.1
will take all reasonable steps to eliminate an Intervening Event and,
if possible, will perform its obligations under this Agreement as far
as practical, but nothing herein will require such party to settle or
adjust any labour dispute or to question or to test the validity of any
law, rule, regulation or order of any duly constituted governmental authority
or to complete its obligations under this Agreement if an Intervening
Event renders completion impossible. |
| 24. | ENTIRE AGREEMENT |
| 24.1 | This Agreement constitutes the entire agreement between
the parties and replaces and supersedes all prior agreements, memoranda,
correspondence, communications, negotiations and representations, whether
verbal or written, express or implied, statutory or otherwise between
the parties with respect to the subject matter herein. |
| 25. | TIME OF ESSENCE |
| 25.1 | Time will be of the essence in this Agreement.
|
| 26. | ENFORCEMENT OF AGREEMENT |
| 26.1 | The covenants, promises, terms and conditions contained
herein will be binding upon the parties jointly and severally and may
be enforced by each as against each other inter se. |
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IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day and year first above written.
| XXXXXXX X. HEARD | XXXXXXXX X. XXXXXX |
| ________________________ | ________________________ |
| By Xxxxxxx X. Heard | By. Xxxxxxxx X. Xxxxxx |
| ________________________ | ________________________ |
| Signature of Witness | Signature of Witness |
| ________________________ | ________________________ |
| Printed Name of Witness | Printed Name of Witness |
INVISION GROUP VENTURES INC.
Per: ______________________________
by its Authorized Signatory: Xxxxx X.
Xxxxxx, President
This is SCHEDULE "A" to an Agreement made as of the 7th day of July, 2003 between VENDORS and INVISION CAPITAL, INC.
| Record Number | Units | Date of record | Date of Expiry |
| TB 1187566 | 1 (16 hectares) | July 24, 2001 | July 23, 0000 |
Xxxxxxx Xxx Xxxxxx Xxxxxxxx, Xxxxxxx
