MINERAL PROPERTY EXPLORATION AND PURCHASE OPTION AGREEMENT BETWEEN LLOYD A. CLARK AND TREND MINING COMPANY Dated and Effective as of September 2, 2004
EXHIBIT
10.24
MINERAL
PROPERTY
BETWEEN
XXXXX
X. XXXXX
AND
TREND
MINING COMPANY
Dated
and
Effective as of September 2, 2004
TABLE
OF CONTENTS
RECITALS
|
4
|
ARTICLE
I DEFINITIONS
|
4
|
ARTICLE
II REPRESENTATIONS AND WARRANTIES
|
7
|
2.1 CAPACITY
OF THE PARTIES
|
7
|
2.2 DISCLOSURES
|
7
|
2.3 COMPANY
REPRESENTATION AND WARRANTIES
|
7
|
2.4 OWNER
REPRESENTATIONS AND WARRANTIES
|
7
|
2.5 SURVIVAL
OF REPRESENTATIONS AND WARRANTIES
|
7
|
ARTICLE
III PURPOSE
|
8
|
3.1 GENERAL
|
8
|
3.2 PURPOSES
|
8
|
ARTICLE
IV RELATIONSHIP OF THE PARTIES
|
8
|
4.1 NO
PARTNERSHIP
|
8
|
4.2 OTHER
BUSINESS OPPORTUNITIES
|
8
|
4.3 TRANSFER
OR TERMINATION OF RIGHTS
|
9
|
4.4 IMPLIED
COVENANTS
|
9
|
ARTICLE
V TERMS
|
9
|
5.1 EFFECTIVE
DATE AND TIME PERIOD TERM
|
9
|
5.2 GENERAL
TERMS
|
9
|
5.3 WORK
OBLIGATIONS
|
9
|
DEFAULT
|
10
|
PRODUCTION
ROYALTY
|
10
|
ARTICLE
VI DUTIES OF OPERATOR
|
10
|
6.1 POWERS
AND DUTIES OF COMPANY
|
10
|
6.2 STANDARD
OF CARE
|
11
|
ARTICLE
VII WITHDRAWAL AND TERMINATION
|
11
|
7.1 TERMINATION
BY EXPIRATION OR AGREEMENT
|
11
|
7.2 WITHDRAWAL
|
12
|
7.3 CONTINUING
OBLIGATIONS AND ENVIRONMENTAL LIABILITIES
|
12
|
7.4 DISPOSITION
OF ASSETS UPON TERMINATION
|
12
|
7.5 RIGHT
TO DATA AFTER TERMINATION
|
12
|
7.6 CONTINUED
AUTHORITY
|
12
|
ARTICLE
VIII ADDITIONAL ACQUISITIONS
|
12
|
8.1 ACQUISITIONS
WITHIN AREA OF INTEREST
|
12
|
8.2 ACQUISITIONS
OUTSIDE OF AREA OF INTEREST
|
13
|
ARTICLE
IX ABANDONMENT AND SURRENDER OF PROPERTIES
|
13
|
9.1 ABANDONMENT
AND SURRENDER OF PROPERTIES
|
13
|
ARTICLE
X TRANSFER OF INTEREST
|
13
|
10.1 GENERAL
|
13
|
10.2 LIMITATIONS
AND FREE TRANSFERABILITY
|
13
|
TABLE
OF CONTENTS
|
|
ARTICLE
XI CONFIDENTIALITY
|
14
|
11.1 General
|
14
|
11.2 Exceptions
|
14
|
11.3 Press
Release Draft for Comment
|
15
|
11.4 Notice
Required
|
15
|
11.5 Duration
of Confidentiality
|
15
|
ARTICLE
XII GUARANTEE
|
15
|
12.1 OWNER
Guarantees of its Affiliates
|
15
|
12.2 Company
Guarantees of its Affiliates
|
15
|
ARTICLE
XIII GENERAL PROVISIONS
|
15
|
13.1 Notice and Payment |
16
|
13.2 Binding Effect |
16
|
13.3
Waiver
|
16
|
13.4 Modification
|
16
|
13.5 Force
Majeure
|
16
|
13.6 Governing
Law
|
16
|
13.7 Arbitration
|
17
|
13.8 Further
Assurances
|
17
|
13.9 Survival
of Terms and Conditions
|
17
|
13.10 Entire
Agreement; Successors and Assigns
|
17
|
13.11 Dollars
|
17
|
13.12 Counterparts
|
17
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WITNESS
AND EXECUTION
|
17
|
ACKNOWLEDGEMENTS
|
18
|
EXHIBIT
"A" THE PROPERTY
|
19
|
EXHIBIT
"B" GROSS ROYALTY
|
20
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3
MINERAL
PROPERTY
THIS
AGREEMENT is made, entered into and effective this 2nd
day of
September, 2004, herein referred to as the “Effective Date" between Xxxxx
X. Xxxxx,
referred
to herein as “OWNER”
whose
address is 0000-000 Xxxxxx, Xxxxxxx, XX X0X 0X0, and Trend
Mining Company,
a
Delaware Corporation, herein referred to as “Company”whose
address is 0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX
00000.
WHEREAS,
OWNER
controls or owns the Property (herein referred to as the “Property”)
known
as the Diabase Peninsula, Cree Lake Area, Saskatchewan (Saskatchewan Mineral
Claim #S-106843). The Property is comprised of such surface and mineral rights
as more particularly described in Exhibit “A” hereto.
WHEREAS,
Company
desires to enter into an Exploration and Purchase Agreement with OWNER for
the
Property.
NOW,
THEREFORE,
OWNER
and Company agree to enter into an exclusive Exploration and Purchase Option
Agreement, herein referred to as the “Agreement”,
and in
consideration of the mutual covenants and agreements contained herein, the
Parties mutually agree as follows:
ARTICLE
I
"Accounting
Procedure"
means
the procedures set forth in Section 6.1 h and 7.2.
"Acquiring
Party"
means
the Party who has acquired additional interests within the Area of Interest
as
more particularly described in Section 9.1, 12.1 and 12.2 of this
Agreement.
"Affiliate’(s)"
means in
respect of a party, any individual’(s), partnership’(s), corporation’(s),
representative’(s), consultant’(s), joint venture’(s), corporation’(s) or other
form of enterprise that directly or indirectly controls, is controlled by,
or is
under common control with, OWNER or Company. For purposes of the preceding
sentence, "control" means possession, directly or indirectly, of the power
to
direct or cause direction of management and policies through OWNERship of
voting
securities, contract, voting trust or otherwise.
"Agreement"
means
this Mineral Exploration and Purchase Agreement, including all amendments
and
modifications thereof, and all schedules and exhibits, which are hereby
incorporated herein by reference.
“Anniversary
Date”shall
mean the date following one or more years after the Effective Date.
"Assets"
means
the assets of the Mineral Property and includes without limitation the Property,
Minerals and all other real and personal property, tangible and intangible,
held
or to be held for the benefit of the Property.
"Budget"
means a
detailed estimate of all costs to be incurred by Company with respect to
a
Program.
"Company"
means
Trend Mining Company, a company incorporated under the laws of Delaware and
its
“Affiliates”, successors and assigns.
4
"Deemed
Expenditures"
means
the amount determined in accordance with the provisions in Section 5.2 of
this
Agreement.
"Development"
means
all preparation other than Exploration for the removal and recovery of Minerals,
including the construction or installation of a mill or any other improvements
to be used for the mining, handling, milling, processing or other beneficiation
of Minerals.
“Dollars”
or
“$”
means
Canadian Dollars throughout this agreement.
"Effective
Date"
means
September 2, 2004.
"Exploration"
means
all activities directed toward ascertaining the existence, location, quantity,
quality or commercial value of deposits of Minerals.
"Exploration
Expenditures"
means
all cash, expenses and obligation spent or incurred by Company on Operations
and
shall include, but not be limited to, all rentals, fees, option payments,
taxes
and assessment work required to keep the Mineral Lease Agreement and the
Property in good standing, all expenditures for Corporate, Exploration Field
Office, and all office and field related exploration activities including,
with
out limitations, geophysical, geological, geochemical, analytical and laboratory
work, all surveys, drilling, assaying, metallurgical testing, engineering,
and
all other expenditures directly benefiting the Property.
"Force
Majeure"
shall
have the meaning described to it in Section 14.5.
“Environmental
Compliance”
means
actions taken in connection with activities or operations on the Property
to
comply with the requirements of all Environmental Laws or contractual or
governmentally mandated commitments related to reclamation of the Property,
or
other compliance with Environmental Laws.
“Environmental
Law”means
the
applicable Canadian environmental statutes and any provincial law counterparts,
together with all other laws (including rules, regulations, codes, plans,
injunctions, judgements, orders, decrees, rulings, and charges thereunder)
of
federal, provincial and local governments (and all agencies thereof) concerning
pollution or protection of the environment, reclamation, public health and
safety, or employee health and safety, including laws relation to emissions,
discharges, releases, or threatened releases of pollutants, contaminants,
or
chemical, industrial, hazardous, or toxic materials or wastes into ambient
air,
surface water, ground water or lands or otherwise relating to the existence,
manufacture, processing distribution, use, treatment, storage, disposal,
recycling, transport, or handling or reporting or notification to any
governmental authority in the collection, storage, use, treatment or disposal
of
pollutants, contaminants, or chemical, industrial, hazardous, or toxic materials
or wastes.
"Lease"
means
the
(“Mineral Exploration and Purchase Option Agreement”) granted by OWNER to
Company as described in Section 5.
"Lease
Payments" means
the
payment to be made during the term of Lease described in Section
5.2.
"Mineral
Interest"
means
the property, any applicable mining easement and other mining rights or
interests more particularly set out in Exhibit “A” hereto as at the date of this
Agreement and shall include all lands acquired in the Area of Interest and
those
additional Mineral Interest which may be substituted, supplemented or acquired
to form part of the Mineral Property during the term of the
Agreement.
"Mining"
means
the
mining, extracting, producing, handling, milling or other processing of
Minerals.
"Minerals"
means
Uranium, PGE, gold, silver, antimony, mercury, copper, lead, zinc, and all
other
metals, mineral elements, mineral resources, mineral compounds, mineral
materials, rock substances, concentrates and all other saleable or leaseable
materials which exist on the Property or which are discovered on the Property
and which can be extracted, mined or processed by any method presently known
or
developed or invented.
5
"Mineral
Products" means
the
precipitates, cathodes, xxxxx solutions and any other primary, secondary
or
final product derived from operating the mine during the term of this Agreement
including all Minerals and Ore mined or removed from the Property.
"Ore"
means
material from the Property, the nature and composition of which, in sole
judgement of Company, justifies either: (1) mining or removing from the property
during the term of this Agreement, shipping and selling the same, or delivering
the same, to a processing plant for physical or chemical treatment; (2)
treatment, including leaching, on the Property during the term of this
Agreement.
"Operations"
means
the activities on or in relation to the Property carried out under this
Agreement including, without limitation, Exploration, Development, Financing,
Mining, and acquisition of additional Properties in the Area of Interest,
and
marketing of Minerals.
"Operator"
means
Company or any and all “Affiliates,” successor operators, whether during the
Lease Period or thereafter.
“OWNER”
means
Xxxxx X. Xxxxx.
"Party"
and "Parties"
mean the
Parties to this Agreement, OWNER and Affiliates and Company and
Affiliates.
"Program"
means a
description in reasonable detail of Operations to be conducted and objectives
to
be accomplished by Company for a specified period.
"Project"
means
the
conduct of work relating to the Property for the purpose of
Operations.
"Project
Account"
shall
mean for the account of the Mineral Property as funded by Company during
the
Lease Period.
"Property"
or
"Properties"
means an
undivided one hundred percent (100%) right, title and interest in and to
the
mining properties, interests, minerals, metals, mineral rights, mill sites
and
other rights more particularly described in Exhibit “A” and shall include any
Properties, Claims, and all and any Interests acquired within the Area of
Interest. For greater certainty, it is agreed and acknowledged that within
the
Property there may be geographic areas that are owned by third
parties.
"Property
Payments"
means
all payments or expenditures required pursuant to this Mineral Lease Agreement
and all payments or expenditures required to maintain title to the Property
or
Mineral Interest in the Property, including without limitation to the
government.
"Royalty"
means
the 3% Gross Royalty payable to OWNER in accordance with Section 5.5 and
Exhibit
“B” attached hereto.
"Terms"
means
the
payments, production royalty, stock, and all other monetary interests outlined
in accordance with Section 5.2.
"Transfer"
means
sell, grant, assign, encumber, pledge, quit claim or otherwise commit or
dispose
of.
6
ARTICLE
II
Each
of
the Parties represents and warrants as of the Effective Date and as of the
date
this Agreement is actually signed as follows:
a) |
That
it is an individual or corporation duly incorporated and in good
standing
in its jurisdiction of incorporation and that it is qualified to
do
business and is in good standing in those jurisdictions where necessary
in
order to carry out the purposes of this
Agreement;
|
b) |
That
it has the capacity to enter into and perform this Agreement and
all
transactions contemplated herein and that all corporate and other
actions
required to authorize it to enter into and perform this Agreement
have
been properly taken;
|
c) |
That
this Agreement has been duly executed and delivered by it and is
valid and
binding upon it in accordance with its
terms.
|
2.2 Disclosures
Each
of
the Parties represents and warrants to the best of their knowledge and as
of the
Effective Date and as of the date this Agreement is actually signed that
it is
unaware of any material facts or circumstances which have not been disclosed
in
this Agreement, which should be disclosed to any other Party in order to
prevent
the representations in this Agreement from being materially
misleading.
a) |
Company
or its Affiliates shall not commit any act or acts, which will
encumber or
cause a lien to be placed on the property.
|
b) |
Company
or its Affiliates will at its sole cost and expense, remove or
take
remedial action with regards to any materials released by Company
or its
Affiliates, contractors and agents into the environment at, on
or near the
Property after the date of this Agreement for which any removal
or
remedial action is required pursuant to any law, regulations or
governmental action, whether enacted, made or declared in force
before or
after the date of this Agreement.
|
c) |
Company
will at all times retain any and all liabilities arising from the
handling, treatment, storage, transportation or disposal of environmental
or similar contaminants on or near the Property by Company or by
Company’s
Affiliates, contractors or agents and conduct all activities in
compliance
with environmental laws and
regulations.
|
OWNER
represents and warrants to the best of its knowledge as of the Effective
Date
and as of the date that this Agreement is actually signed that:
a) |
OWNER
has paid all rentals, taxes, assessments, charges, fees and other
levies
imposed upon or required with respect to the
Property.
|
The
above
representations and warranties are conditions on which the parties have relied
in entering into this Agreement and each party will indemnify and hold harmless
from all loss, damage, costs, actions and suits arising out of or in connection
with any breach of any representation or warranty made by them and contained
in
this Agreement (including, without limitations, lawyer’s fees and
disbursements).
7
ARTICLE
III
3.1 General
This
Agreement is to set forth requirements of Company to maintain and exercise
the
Exploration and Purchase Option Agreement.
3.2 Purposes
The
purpose and scope of this Agreement is for Company to undertake Operations
with
a view to initially conducting exploration of the area covered by the Property
to fully delineate all mineral showings and ultimately to delineate one or
more
ore deposits containing uranium, precious metals or other metals amenable
to
commercial development, to thereafter undertake further exploration drilling
and
sampling to confirm the size and extent of the potential ore deposits and
undertake development and mining and metallurgical test work to analyze
alternative mining and milling methods, recovery rates, and grades of minerals
for commercial exploitation of the ore deposits delineated.
ARTICLE
IV
4.1 No
Partnership
Nothing
contained in this Agreement shall be deemed to constitute either Party the
partner of the other, or, except as otherwise herein expressly provided,
to
constitute either Party the agent or legal representative of the other, or
to
create any fiduciary relationship between them. The Parties do not intend
to
create, and this Agreement shall not be construed to create, any mining,
commercial or other partnership or joint venture. Neither Party, nor any
of its
directors, officers, employees, agents and attorneys, or Affiliates, shall
act
for or assume any obligation or responsibility on behalf of the other Party,
except as otherwise expressly provided herein, and any such action or assumption
by a Party's directors, officers, employees, agents and attorneys, or Affiliates
shall be a breach by such Party of this Agreement. The rights, duties,
obligations and liabilities of the Parties shall be several and not joint
or
collective. Each Party shall be responsible only for its obligations as herein
set out and shall be liable only for its share of the costs and expenses
as
provided herein, and it is the express purpose and intention of the Parties
that
their ownership of Assets and the rights acquired hereunder shall be as tenants
in common.
Except
as
expressly provided in this Agreement, each Party shall have the right
independently to engage in and receive full benefits from business activities,
whether or not competitive with the Operations, without consulting any other
Party. The doctrines of "corporate opportunity" or "business opportunity"
shall
not be applied to any other activity, venture, or operation of any Party,
and no
Party shall have any obligation to any other Party with respect to any
opportunity
to acquire any property.
8
Except
as
otherwise provided in this Agreement, neither OWNER nor Company shall transfer
all or any part of its interest in the Property, the Properties, the Assets
or
this Agreement or otherwise permit or cause such interests to terminate without
approval by written
consent by both Parties.
There
are
no implied covenants contained in this Agreement other than those of good
faith
and fair dealing.
ARTICLE
V
The
Effective Date of this Agreement shall be September 2, 2004. Unless sooner
terminated as provided in this Agreement, the term of this Exploration and
Purchase Agreement shall be for a primary period of eight years from the
effective date.
5.2 General
Terms
General
Terms of this Exploration and Purchase Agreement are as follows:
a) |
Payments:
Payment schedule beginning as of the effective date due the OWNER
payable
annually.
|
Year
1 $5,000
cash due on signing and 37,500 shares of common stock of the Company (valued
at
$10,000).
Year
2 $20,000
due on first anniversary date in cash or stock.
Year
3 $30,000
due on anniversary date in cash or stock
b) |
Buyout:
$1
million at any time up to eight years, less any preceding annual
payments,
for 100%
interest.
|
5.3 Work
Obligations
Company
shall be obligated during this Agreement to:
a) |
Conduct
activities as a prudent operator in accordance with Section
6.2.
|
b) |
Perform
geologic test work or other qualifying activities of a minimum
of $C25,000
per year, or such levels as required to meet Saskatchewan statutes
to
maintain Property in good standing, and to be completed, or bonded
for
completion during the following season,by December 30th
of
each year
|
9
5.4 Default
Subject
to the terms of Section 5, if Company fails to perform any of the obligations
specified in Sections 5.2 and 5.3 required to maintain this Agreement on
the
date called for such performance hereunder, OWNER may give a written notice
(the
"Default Notice") specifying the due date and the obligation not performed
and
if performance or payment in full is not received within thirty (30) days
of the
Default Notice, this Agreement shall expire upon the expiration of five (5)
days
after the receipt by Company of a termination notice. Upon Termination, Company
shall have no right, title or interest of any kind whatsoever in the
Property,
the
Royalty or any other rights or assets obtained or governed by this Agreement
during the term from and after that date, unless during such thirty (30)
day
notice period Company cures any default and keeps this Agreement in good
standing.
Company
shall pay to OWNER a Gross Production Royalty described in this Section and
further described in Exhibit “B” during the time which Company produces any
Minerals, Ore or Mineral Products. Payment of the Royalty shall be determined
and paid in accordance with the provisions of Exhibit “B”. The Royalty payable
by Company to OWNER under this Agreement shall be defined as a percentage
of
actual metal/mineral sales, with no deductions for refining or transportation
expenses, by the Company or other operator.
b. |
Royalty
Buyout:
In
accordance with the following schedule, the Operator may purchase
OWNER’s
underlying royalty interest for $C 1 million at any time up to
but no
later than 8 years from the Effective Date of this
agreement.
|
$1mm
for
the first percent;
$3mm
for
the second percent; and
$7mm
for
third percent.
Buyout
terms defined in Section 5.5b are separate from any production royalty payments;
in other words, royalty payments made from production shall not be credited
against Buyout Payments; however, any of the annual payments made before
a
buyout of the production royalty shall be deducted from the Buyout Price.
In the
event that Operator exercises its right to purchase any or all of the royalty
interest under the above terms, the royalty interest that Owner is selling,
whether the first, second, or third percent, will pertain to the entire Area
of
Interest.
ARTICLE
VI
a) |
Company
shall keep the Assets free and clear of all liens and encumbrances
and
mechanic’s or material men’s liens.
|
b) |
In
no event shall Company permit or allow title to the Assets to be
lost as
the result of the non-payment of any taxes, assessments or like
charges;
and shall do all other acts reasonably necessary to maintain the
Assets.
|
c) |
Company
shall: (i) apply for all necessary permits, licenses and approvals;
(ii)
comply with all applicable laws and regulations; (iii) notify promptly
OWNER of any allegations of substantial violation thereof; and
(iv)
prepare and file all reports or notices required by Company. Company
shall
not be in breach of this provision if a violation has occurred
in spite of
the Company’s good faith efforts to comply, and Company has timely cured
or disposed of such violation through performance, or payment of
fines and
penalties. For greater certainty, in respect of Subsections 6.1
(b) during
the Lease Period, Company shall be responsible for title, property
and
permitting issues.
|
10
d) |
Company
shall prosecute and defend, but shall not initiate without consent
of
OWNER, all litigation or administrative proceedings arising out
of
Operations. OWNER shall have the right to participate in such litigation
or administrative proceedings. OWNER shall approve in advance any
settlement involving payments, commitments or obligations in excess
of
fifty thousand dollars (US$50,000) in cash or
value.
|
e) |
Company
shall not: (i) dispose of Assets or begin a liquidation of the
Property;
or (ii) dispose of all or a substantial part of the
Assets.
|
f) |
Company
shall perform or cause to be performed during the term of this
Agreement
all work necessary to comply with agreements, concessions or other
instruments constituting and governing the Property and Operations
and
shall take measures necessary to maintain same in full force and
effect.
|
g) |
At
the request of OWNER, Company shall keep OWNER advised of all Operations
by submitting in writing to OWNER: (i) quarterly progress reports
which
include statements of expenditures; (ii) copies of reports concerning
Operations; (iii) a detailed final report within forty-five (45)
days
after completion of each Program and Budget which shall describe
the
results of each said Program; and (iv) such other reports as OWNER
may
reasonably request. At all reasonable times Company shall provide
OWNER
access to, and the right to inspect and copy all maps, drill logs,
core
tests, reports, surveys, assays, analyses, production reports,
operations,
technical, accounting and financial records, and other information
acquired in Operations.
|
h) |
Company
shall undertake all other activities reasonably necessary to fulfil
the
foregoing.
|
6.2 Standard
of Care
Company
shall conduct all Operations in a good, workmanlike and efficient manner,
in
accordance with sound mining and other applicable industry standards and
practices, and in accordance with the terms and provisions of the Property,
the
Mineral Exploration and Purchase Agreement, any mineral interest, claims,
leases, licenses, permits, contracts and other agreements pertaining to the
Assets. Company shall not be liable for any act or omission resulting in
damage
or loss except to the extent caused by or attributable to Company’s negligence.
The Operator shall timely post any bonding requirement in accordance with
applicable government regulations for any operation conducted for the Property.
Company shall have the obligation to apply such Standard of Care at all time
during the Lease Period.
ARTICLE
VII
This
Agreement shall terminate as expressly provided herein, unless earlier
terminated by written agreement.
11
7.2 Withdrawal
Company
may withdraw from the Property in accordance with the provision of this
Agreement. Upon such withdrawal, this Agreement shall terminate, and Company
shall be deemed to have transferred to OWNER all of its rights and interests
in
the Property, Assets and Properties, without cost, free and clear of all
encumbrances arising by, through or under such withdrawing Party, except
those
to which both Parties have agreed. Company shall execute and deliver all
instruments as may be necessary in the reasonable judgement of OWNER to affect
the transfer of its interests in the Property, Assets and Properties to OWNER.
During
the term of this Agreement and after termination of the Property or this
Agreement under Sections 8.1 and 8.2, Company shall remain liable for its
liabilities to third parties (whether such arises before or after such
withdrawal), including environmental liabilities and related bonding
requirement. Company's liabilities shall include environmental damage and
liabilities, which are caused by or as a result of work done on the Mineral
Property.
Promptly
after termination under Sections 8.1 and 8.2, Company shall take all action
necessary to wind up the activities of the Property. All costs and expenses
incurred in connection with the termination of the Business shall be expenses
chargeable to Company.
After
termination of the Property pursuant to Sections 8.1 and 8.2, each Party
shall
be entitled to make copies of all applicable information acquired hereunder
before the effective date of termination not previously furnished to it,
but a
terminating or withdrawal Party shall not be entitled to any such copies
after
any other termination or withdrawal.
On
termination of the Property under Sections 8.1 and 8.2, OWNER (or Company
in the
event of a withdrawal by OWNER) shall have the power and authority to do
all
things which are reasonably necessary or convenient to: (a) wind up operations
and (b) complete any transaction and satisfy any obligation, unfinished or
unsatisfied, at the time of such termination or withdrawal, if the transaction
or obligation arises out of operations prior to such termination or withdrawal.
OWNER shall have the power and authority to grant or receive extensions of
time
or change the method of payment of an already existing liability or obligation,
prosecute and defend actions on behalf of both Parties and the Property,
and
take any other reasonable action.
ARTICLE
VIII
The
Area
of Interest is defined as all of the area located within 10km of the outer
boundaries of Saskatchewan Mineral Claim #S-106843. Any acquisitions of property
within this boundary by either the OWNER or the Company shall be considered
subject to this agreement unless both parties agree in writing to exclude
a
specific parcel of property from this agreement.
12
If
either
party should undertake an acquisition outside of the Area of Interest, as
defined above, such parcel shall be not subject to the terms of this agreement
unless both parties agree in writing to include the specific parcel within
this
agreement.
ARTICLE
IX
OWNER
may
authorize Company to cause the surrender or abandonment of part or all of
the
Properties. If OWNER authorizes any such surrender or abandonment, then Company
shall so notify OWNER during this Agreement, and if there is an objection
within
thirty (30) days, there shall be an assignment to OWNER by the appropriate
conveyance document and without cost, of that interest in the Property to
be
abandoned or surrendered, and the abandoned or surrendered Property shall
cease
to be part of the Property, the Parties shall remain obligated for liabilities
arising prior to abandonment.
ARTICLE
X
10.1 General
The
transfer by either party of any interest in this Agreement or any rights
hereunder, shall be subject to the non-transferring parties pre-emptive right
in
accordance with this Article.
The
Transfer right of Company or for OWNER in Section 11.1 shall be subject to
the
following terms and conditions:
a) |
A
Party wishing to transfer an Interest shall promptly notify the
other of
its intentions, by written notice stating the price and other
pertinent
terms of the intended transfer and shall be accompanied by a
copy of the
offer or contract for sale.
|
b) |
The
other Party shall have thirty (30) days from the date of delivery
and
receipt of the notice to state whether it elects to acquire the
offered
Interest at the same price and on the same terms and conditions
as set
forth in the notice.
|
c) |
If
the other Party so elects, the transfer shall be consummated as
promptly
as possible after the election notice is delivered to the transferring
Party.
|
d) |
If
the non-transferring Party does not so elect to exercise its right,
the
transferring Party shall have one hundred and eighty (180) days
to
consummate the proposed transaction with the third party on terms
no less
favourable that made to the non-transferring
Party.
|
e) |
If
the transaction is not consummated within the said one hundred
and eighty
(180) days, the non-transferring Party’s pre-emptive right shall be
revived.
|
f) |
Any
transfer made without obtaining the non-transferring Party’s waiver of
such right or compliance with the subsections of this Section will
be null
and void.
|
13
g) |
No
transferee of all or any part of the Interest of a Party shall
have the
rights of that Party unless and until the transferee, as of the
effective
date of the Transfer, has committed in writing to be bound by this
Agreement as if an original Party thereto to the same extent as
the
transferring Party.
|
h) |
No
Transfer permitted by this Section shall relieve the transferring
Party of
its share of any liability, whether accruing before or after such
Transfer, which arises out of Operations conducted prior to such
Transfer.
|
i) |
The
transferring Party and the transferee shall bear all tax consequences
of
the Transfer.
|
j) |
In
the event of a Transfer of less than all of a Party’s Interest, the
transferring Party and its transferee shall act and be treated
as
one.
|
k) |
If
the Transfer is the grant of a security interest by mortgage, deed
of
trust, pledge, lien or other encumbrance of any interest in this
Agreement, any Party’s Interest or the Assets to secure a loan or other
indebtedness of a Party in a bona fide transaction, such security
interest
shall be subordinate to the terms of this Agreement and the rights
and
interests of the other Party hereunder. Upon any foreclosure or
other
enforcement of rights in the security interest the acquiring third
party
shall be subject to the pre-emptive right described in this Article
and it
shall comply with and be bound by the terms and conditions of this
Agreement.
|
l) |
No
transfer, sale or disposition shall in any way modify the non-transferring
rights in the Property.
|
ARTICLE
XI
11.1 General
The
financial terms of this Agreement and all information obtained in connection
with the performance of this Agreement shall be the exclusive property of
the
Parties and, except as provided in Section 12.2, shall not be disclosed to
any
third party or the public without the prior written consent of the other
Party,
which consent shall not be unreasonably withheld.
11.2 Exceptions
The
consent required by Section 11.1 shall not apply to a disclosure:
a) |
To
an Affiliate, consultant, contractor or subcontractor that has
a bona fide
need to be informed provided such person agrees to maintain the
confidentiality of such
information;
|
b) |
To
any third party to whom the disclosing Party contemplates a Transfer
of
all or any part of its interest in or to this Agreement, its Participating
Interest, or the Assets provided such party agrees to maintain
the
confidentiality of such information;
or
|
c) |
To
a governmental agency or to the public, which the disclosing Party
believes in good faith is required by pertinent law or regulation
or the
rules of any stock exchange provided that the pertinent disclosure
is
given to the other party and no objection is received within twenty-four
(24) hours.
|
14
In
the
event that either Company or OWNER wishes or is required to issue a press
release or public statement, it will first provide the other Party with
a draft
copy for review and comment. In the event that the other Party fails to
comment
on the release within twenty-four (24) hours of its receipt, or such earlier
deadline as may be necessary to permit the Party issuing the release to
satisfy
all regulatory requirements, they will be deemed to have approved of the
release
in its entirety.
11.4 Notice
Required
In
any
case in which Section 11.3 is applicable, the disclosing Party shall give
notice
to the other Party concurrently with the making of such disclosure. As to
any
disclosure pursuant to Section 11.2 (a) or (b), only such confidential
information as such third party shall have a legitimate business need to
know
shall be disclosed and such third party shall first agree in writing to protect
the confidential information from further disclosure to the same extent as
the
Parties are obligated under this Section.
The
provisions of this Section shall apply during the term of this Agreement
and for
two years following termination of this Agreement pursuant to Section 8.1,
and
shall continue to apply to any Party who Transfers its Participating Interest,
for two (2) years following the date of such occurrence.
ARTICLE
XII
OWNER
hereby guarantees the performance by its Affiliates of their respective
obligations under this Agreement.
The
Company hereby guarantees the performance by its Affiliates of their respective
obligations under this Agreement.
ARTICLE
XIII
13.1 Notices
and Payment
All
notices, payments and other required communications ("Notices") to the Parties
shall be in writing, and shall be addressed respectively as
follows:
OWNER’s
Authorized Representative:
|
Xxxxx
X. Xxxxx
|
||
0000-000
Street
|
Telephone
No:
|
000-000-0000
|
|
Xxxxxxx,
XX X0X 0X0
|
Facsimile
No:
|
000-000-0000
|
15
Company’s
Authorized Representative:
|
Xxxxxx
Xxxxxx, President, Trend Mining Company
|
||
0000
Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
|
Telephone
No:
|
000-000-0000
|
|
Xxxxxxxxx,
XX 00000
|
Facsimile
No:
|
000-000-0000
|
All
Notices shall be given (i) by personal delivery to the Party, or (ii) by
electronic communication, 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 if 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 to
this
Agreement may change its address by Notice to the other Party to this Agreement.
Any payment called for shall be made at the place designated in this Section
14.1. Any payment shall be made in Canadian funds, or as otherwise permitted
by
the receiving Party.
Notification
or changes of authorized representatives for Company or OWNER shall be provided
in writing, in advance, in accordance with Section 14.1.
13.2 Binding
Effect
Company
and OWNER agree to be bound by this Agreement from the Effective Date and
that
this Agreement shall replace any prior understandings or agreements. Each
Party
agrees to bear its own costs for the negotiation of this Agreement.
13.3 Waiver
The
failure of a Party to insist on the strict performance of any provision of
this
Agreement or to exercise any right, power or remedy upon a breach hereof
shall
not constitute a waiver of any provision of this Agreement or limit the Party’s
right thereafter to enforce any provision or exercise any right.
13.4 Modification
No
modification of this Agreement shall be valid unless made in writing and
duly
executed by the Parties..
13.5 Force
Majeure
If
performance of this Contract or any obligation under this Contract is prevented,
restricted, or interfered with by causes beyond either party's reasonable
control ("Force Majeure"), and if the party unable to carry out its obligations
gives the other party prompt written notice of such event, then the obligations
of the party invoking this provision shall be suspended to the extent necessary
by such event. The term Force Majeure shall include, without limitation,
acts of God, fire, explosion, vandalism, storm or other similar occurrence,
orders or acts of military or civil authority, or by national emergencies,
insurrections, riots, or wars, or strikes, lock-outs, work stoppages, or
other
labor disputes, or supplier failures.
13.6 Governing
Law
It
is
mutually understood and agreed that the rights and obligations of the parties
under or related to this Agreement shall be governed in accordance with and
by
the Laws of the Province of British Columbia, both as to interpretation and
performance, and that any action at law, suit in equity or judicial proceeding
for the enforcement of this Agreement or any provision thereof shall be
instituted only in the courts of British Columbia and maintained only in
any
court of competent jurisdiction in British Columbia.
In the
event suit or action is filed by any party to enforce this Agreement or respect
to a breach of this Agreement, the prevailing party shall be entitled to
recover, in addition to all other costs, damages and rewards, its reasonable
attorney fees at trial, upon any appeal and petition for review.
16
13.7 Arbitration
An
arbitration procedure for the interpretation of this Agreement and any dispute
arising between the Parties will be implemented under arbitration proceedings
all parties agreed in advance. It is expressly agreed and acknowledged that
Company and OWNER will cause their subsidiaries and their representatives
involved in the Property, whether directly or indirectly, to act in accordance
with any arbitration result and to cause them to take all reasonable steps
to
confirm or carry out any ruling or order made in the arbitration proceedings
or
as a result of any arbitration proceedings or results.
13.8 Further
Assurances
Each
of
the Parties to take from time to time 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.
The
following Sections shall survive the termination of this Agreement to the
full
extent necessary for their enforcement and the protection of the Party in
whose
favor they run: Sections 2.2, 5.4, 8.2, 8.3, 12.3 and 12.5.
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. This Agreement shall be binding upon and inure to the benefit
of
the respective successors and permitted assigns of the Parties. In the event
of
any conflict between this Agreement and any Exhibit attached hereto, the
terms
of this Agreement shall be controlling.
13.11 Dollars
The
references to "Dollars" or "$" in this Agreement shall mean Canadian
dollars.
13.12 Counterparts
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed to be an original and all of which taken together shall constitute
one
and the same instrument.
17
WITNESS AND EXECUTION | |||
Property OWNER | |||
By: /s/ Xxxxx X. Xxxxx | |||
Xxxxx X. Xxxxx |
And | ||
COMPANY | |||
By: /s/ Xxxxxx Xxxxxx | |||
Xxxxxx Xxxxxx |
|||
President | |||
Trend Mining Company | |||
ACKNOWLEDGEMENTS | |||
BRITISH COLUMBIA | |||
This Agreement to the Exploration and Purchase Agreement was acknowledged | |||
before me on ____________________________________, 2005. | |||
/s/ Xxxxx X. Xxxxx | |||
By: Xxxxx X. Xxxxx, Property OWNER |
|||
Notary Public |
|||
My Commission Expires On: __________________________ | |||
This Agreement to the Exploration
and
Purchase Agreement was acknowledged before me on ____________________________________, 2005. |
|||
/s/Xxxxxx Xxxxxx | |||
By: Xxxxxx Xxxxxx, President, Trend Mining Company |
|||
Notary Public |
|||
My Commission Expires On: __________________________ | |||
18
EXHIBIT
“A”
“THE
PROPERTY”
Mineral
Exploration and Purchase Agreement
The
Property herein shall mean, be defined and include all lands, claims and
interests described in and made apart of this Agreement and shall include
an
“Area of Interest”
attached
to and made part of the Mineral Exploration and Purchase Agreement made between
OWNER and Company in respect to Saskatchewan Mineral Claim S-106843,
Saskatchewan, dated September 2, 2004.
Description
of the Property and Area of Interest
Saskatchewan
Mineral Claim S-106843, located in the Northern Mining District, Province
of
Saskatchewan, and more particularly described as the “Cree Lake area,” on NTS
Sheet 74-G-7, with the center of the claim located approximately at Longitude
106 degrees 53’ 56” and Latitude 57 degrees 26’ 34”, containing approximately
1.681 hectares and located effective December 30, 2002.
19
EXHIBIT
“B”
“GROSS
ROYALTY”
Attached
to and made part of that certain Exploration and Purchase Agreement made
between
Company and OWNER in respect of the Mineral Property dated as of September
2,
2004.
Where
used herein:
Agreement
means
the above-referenced and attached Agreement, including any amendments thereto
or
renewals or extensions thereof.
Fiscal
Period
means
the Company fiscal year which ends on September 30th
each
year.
shall
mean OWNER.
Product
means
Ore, Minerals or Mineral Products as defined in Article 1, Definitions of
the
Agreement.
Royalty
Interest
means
the share of Gross Sales payable under the Agreement, which is specified
in
Section 2) of the Agreement.
Seller
shall
mean Company.
Note:
other words and expressions defined in the Agreement shall have the same
meaning
in this Schedule.
In
the
event that Company sells Product derived from the Property, “Gross Royalty”
shall mean a percentage of the actual mineral or metal sales made by the
Company
with NO deductions for refining, transportation or other charges.
In
the
event that Company retains title to PGE, gold, silver, copper and other metals
derived from the Property that is refined by any mint, smelter or refinery,
“Gross Royalty” shall mean a percentage of the number of ounces or pounds of
metals derived from Product during a fiscal quarter multiplied by the average
London Bullion Market Association P.M. fixing for the fiscal quarter of
production with NO deductions for refining, transportation or other charges.
3) Payment
The
Royalty Interest shall be paid on a quarterly basis within forty-five (45)
days
after the end of each fiscal quarter in respect of the actual proceeds received
in such fiscal quarter.
Each
payment under the preceding paragraph shall be accompanied by a statement
indicating the calculation of Gross Royalty. The of the Royalty Interest
shall
be entitled to audit, inspect, and copy during normal business hours, such
books
and records as are necessary to determine the correctness of the payment
of the
Royalty Interest, provided, however, that such audit shall be made only on
an
annual basis and within twelve (12) months of the end of the Fiscal Period
in
respect of which such audit is made.
Company
shall pay OWNER interest on late Royalty payments at the Prime Rate plus
three
percent (3%) for the time period after the forty-fifth (45th)
day
after the end of a fiscal quarter for which a Royalty payment is due OWNER
and
the date Company makes that Royalty payment to OWNER.
20
For
the
purposes of calculating the amount of Royalty payable if the sales of any
Product are to a company or enterprise associated with the seller, and if
the
sale price is not negotiated on an arm’s length basis, the seller shall, for the
purposes of calculating the Gross Royalty and notwithstanding the actual
amount
of such sale price, add to any moneys actually received with respect to such
sale an amount which represents a reasonable net sale price for such sale
as if
negotiated at arm’s length and after taking into account all pertinent
circumstances (including, without limitation, then current market conditions
relating to products similar to such Product; terms of agreements between
arm’s
length parties for the purchase and sale of similar products in similar
quantities for delivery over similar periods of time; and physical and/or
chemical characteristics of such Products).
The
seller shall by notice inform the OWNER of the Royalty Interest of the quantum
of such reasonable net sale price and if the OWNER of the Royalty Interest
does
not object thereto within 180 days after receipt of such notice, said quantum
shall be final and binding upon the OWNER of the Royalty Interest.
If
the
OWNER of the Royalty Interest objects to such quantum by notice delivered
to the
seller within said 180 days, then the quantum of such reasonable net sale
price
shall be decided by arbitration with a single arbitrator to be appointed
in
accordance with the provisions of the Agreement and the arbitrator shall
have
reference first to the Agreement, and then, if necessary, to practices used
in
mining operations that are of a similar nature. The arbitrator shall be entitled
to retain such independent mining consultants as OWNER considers necessary.
The
decision of the arbitrator shall be final and binding on the parties and
will
not be subject to appeal.
The
determination of Gross Royalty is based on the premise that production will
be
developed solely on the Property. Other mining properties may be incorporated
with the Property into a single mining project and the metals, ores or
concentrates pertaining to each may be blended or commingled at the time
of
mining or at any time thereafter, provided however, that the respective mining
properties (including the Property) shall have allocated to them the
proportionate share of the Gross Royalty realized from such single operation,
all as determined in accordance with the commingling provisions of the Agreement
and generally accepted accounting principles. The OWNER or representative
appointed by OWNER of the Royalty Interest shall have the right, during
reasonable business hours and upon prior notice to Company to enter upon
the
mining properties and to inspect the plant and procedures followed with respect
to allocations made under this paragraph provided that such entry shall be
at
the sole risk and cost of the OWNER of the Royalty Interest. If the parties
disagree on the allocation of actual proceeds received and deductions, such
disagreement shall be referred to arbitration in the manner provided in the
Agreement and the arbitrator shall have reference first to the Agreement,
and
then, if necessary, to practices used in mining operations that are of a
similar
nature. The arbitrator shall be entitled to retain such independent mining
consultants and financial advisors as the arbitrator considers necessary.
The
decision of the arbitrator shall be final and binding on the
parties.
21