Exhibit 10.4
AGREEMENT
BETWEEN:
SLATE CREEK MINING COMPANY LTD.
a company incorporated in the Province of British Columbia,
in the Dominion of Canada, with its mailing address at
Box 2BC9, Coalmont, B C. VOX IGO
(hereinafter referred to as "Slate Creek")
AND:
GOLDEN SPIKE EXPLORATION LTD.
a company incorporated in the Province of British Columbia,
in the Dominion of Canada, with its mailing address
at Xxx0XX0, Xxxxxxxx, X.X. VOX IGO
(hereinafter referred to as "Golden Spike")
AND:
FIRSTLINE ENVIRONMENTAL SOLUTIONS INC.
a company incorporated in the State of Florida, in the United
States of America, with its corporate offices at
203, 00000 - 00 Xxxxxx, Xxxxxxx, X.X. X0X0X0
(hereinafter referred to as "FESI")
AND:
FIRSTLINE RECOVERY SYSTEMS INC.
a company incorporated in the Province of British Columbia,
in the Dominion of Canada, with its mailing address at
#203,20189 - 56 Avenue, Xxxxxxx, X.X. V3A 3Y6
(hereinafter referred To as the Mining Operators at
Slate Creek Claims or as the "Claims Operators")
WHEREAS Golden Spike is the sole owner and operator of a deposit of magnetite
ore and other placer claims of undetermined commercial value located in the area
of Princeton, British Columbia and more particularly described in Schedule "A"
attached hereto, which magnetite ore and placer claims, together with all
improvements thereto, are known hereinafter as "the placer deposits".
AND WHEREAS FESI is desirous of acquiring an interest in the placer deposits and
of purchasing an interest in Slate Creek through acquiring common shares in
Slate Creek's capital stock and farther is desirous of acting as the exclusive
marketer and distributor of the placer deposits, all on the terms and conditions
contained in this Agreement.
AND WHEREAS the Claims Operator has agreed to operate and manage the mining and
processing of the placer deposits on the terms contained in this Agreement.
AND WHEREAS Golden Spike and Slate Creek and FESI have agreed, one with another
and with each other, that the placer deposits will be transferred to Slate Creek
and that shares in Slate Creek will be issued to FESI in accordance with the
terms contained in this Agreement.
THEREFORE, in consideration of the mutual covenants and agreements herein
contained, and other good and valuable consideration, Golden Spike and Firstline
agree as follows:
1. State Creek and Golden Spike and the Directors of Slate Creek and Golden
Spike represent and warrant that Slate Creek is a company duly incorporated
in Province of British Columbia with general mining objects out with no
existing business interests and no existing assets or liabilities. Golden
Spike represents and warrants that Golden Spike can and will take all
necessary steps to cause the sale and transfer of its legal and beneficial
interest in the Placer deposits to Slate Creek pursuant to this Agreement.
2. Golden Spike and the Directors of Golden Spike represent and warrant that
it has all necessary and final regulatory approvals to immediately commence
commercial mining operations of the placer deposits in their entirety,
particulars of which approvals are more particularly described in Schedule
"B".
3. Golden Spike and the Directors of Golden Spike represent and warrant that
it can and win transfer its legal and beneficial interests in the placer
deposits to Slate Creek free and clear of any claims or demands by any
other party pursuant to the terms of this Agreement. Golden Spike agrees to
make full disclosure of any fact or circumstance which might reasonably
interfere with full, immediate and unimpeded use of the placer deposits by
Slate Creek upon the transfer of the same to Slate Creek.
4. At any time within five (5) years of the date of execution of this
Agreement, FESI shall have the right, but not the obligation, to purchase
from Golden Spike 49% of the issued and outstanding shares of Slate Creek
upon the terms contained in this Agreement for the purchase price of one
million dollars ($1,000,000) of lawful money of Canada, which purchase
price shall be payable as follows:
i. A payment of Twenty Thousand Dollars ($20,000.00) upon registration of
the placer claims into Slate Creek Mining Company Ltd's name and a
further Fifty Thousand Dollars ($50,000.00) to be derived from the
first payment or paymentsby OCL Industrial Materials ("OCL") for an
existing order of magnetite ore to be supplied by Slate Creek for a
total contract price of $175,000,00, of which the sum of $50,000.00 is
payable upon the fulfilment of that order by Slate Creek under the
terms of this contract with OCL. It is agreed that the aforesaid
payments on account of the purchase price, namely, the $20,000 00
payment and the $50,000.00 payment derived from the OCL transaction,
shall be assigned and paid to Golden Spike. It is understood and
agreed that the balance of the proceeds from the aforesaid OCL
purchase order, namely, $125.000.00, will be paid to Slate Creek as
the owner of the placer deposit but the full balance of $125,000.00
will be used as working capital to finance the mining and processing
of the placer deposits which work, hereinafter known as the "mining
operations", will be conducted by the Claims Operator and the Claims
Operator shall have full and immediate access to the full working
capital sum of $125,000.00 for the purpose of conducting such mining
operations effectively and expeditiously.
ii Golden Spike represents and warrants that the aforesaid payments of
$20.000.00 and $50,000.00 described in paragraph 4 i above will be
applied as follows:
a. in full payment of monies owing to Contractors of Golden Spike,
which unpaid contracts are warranted to not exceed $20,000.00 in
total as at the date of execution of this Agreement, and
b. to pay off the balance due of the purchase price of a model 120
magnetite separator purchased by Golden Spike, said balance being
payable to Xxxxxx Xxxxxxx Ltd. and is warranted to not exceed
$50,000.00, after which payment Golden Spike represents and
warrants that the said magnetite separator will be owned by
Golden Spike free and dear of any claims or encumbrances.
iii Upon payment of $20,000.00 to Golden Spike described in paragraph 4i,
Golden Spike will immediately cause its interests in the placer
deposits, owned by Golden Spike to be transferred to Slate Creek
without limitation or encumbrance and Golden Spike mil furnish proof
lo FESI forthwith that such transfer has been accomplished in
accordance with the terms of this Agreement.
iv Upon payment of the $50,000.00 paid to Golden Spike as described in
this paragraph 4i and payment of the balance owing on the magnetite
separator as described in xxxxxxxxx 0xx, Golden Spike will immediately
transfer ownership of the said magnetite separator to Slate Creek
without limitation or encumbrance and Golden Spike will thereupon
furnish proof to FESI that such transfer has been accomplished in
accordance with the terms of this Agreement.
v At any time within a five (5) year period, starting from the date when
Golden Spike has transferred its interest in the placer deposits to
Slate Creek and the magnetite separator as provided for herein,
whichever of the two transfer dates is the earlier, FESI shall have
the right, but not the obligation, at any time or times as it may
decide, to issue to Golden Spike sufficient free trading shares of
FESI to make up the balance of the purchase price of One Million
Canadian Dollars (CAD $1,000,000 00) then outstanding, or any part of
that balance outstanding, such shares to be valued at the average
closing price of a FESI share for the 60 trading days immediately
preceding the date of the issuance of such shares to Golden Spike. In
the event that the value of a FESI share so calculated is less than
U.S. $1.00, then Golden Spike shall have the right, at its option, to
reject the issuance of FESI shares on that occasion as payment against
the balance of the purchase price of one million dollars then
outstanding.
vi FESI shall have the option of paying down the balance of the One
Million Dollar ($1,000,000.00) purchase price at any time or times
within the aforesaid 5 year option period by directing in writing that
50% of the net income of mining operations of the placer deposits be
paid to Golden Spike in reduction of the said One Million Dollar
($1,000,000.00) purchase price, such 50% being FESI's share of the net
income of Slate Creek's mining operations as further described in
paragraph 14.
vii. FESI shall further have the option of paying down the balance of the
one million dollar ($1,000,000.00) purchase price at anytime within
the 5 year option period by transferring to Golden Spike, free and
clear of any encumbrance, the mining equipment described in Schedule
"C" hereof at fair market value.
5. Immediately following the transfer of the placer deposits to Slate Creek as
provided for herein. Golden Spike and Slate Creek agree to enter into a
contract with the Operator, on the terms contained hi Schedule "D" attached
hereto, whereunder the Operator will be solely responsible for the mining
and processing of the placer deposits throughout the 5 year option period.
This exclusive raining operations period shall be known hereinafter as the
"Mining Operations Period". It is understood and agreed, as further
described in Schedule "D", that the Operator's exclusive management
responsibilities during the Mining Operations Period shall extend to all
aspects of the mining and processing of the placer deposits owned by Slate
Creek, including the hiring of plant managers and employees, equipment
purchases, negotiations and contracts with suppliers, management and
administration, subject to the Board of Directors of Slate Creek'sapproval.
6. Each director of Golden Spike and Slate Creek agrees that he or she will
not sell or pledge any shares in Slate Creek during FESI 5 year purchase
option period without making any such sale or pledge specifically subject
to FESI's rights under this Agreement. Further, each of the Directors of
Golden Spike and Slate Creek specifically agree that he or she will net
enter into any new contracts for the sale of any of the placer deposits
owned by Slate Creek, or for the transfer or assignment of an interest in
such placer deposits, without obtaining FESI's prior approval in writing.
7. It is agreed that Slate Creek Mining Company Ltd. will change its Articles,
by Resolution, to provide that it will have five (5) Directors, elected or
appointed to its Board of Directors, during the five year option agreement
and that two of the five Directors shall be appointed by FESI.
8. Golden Spike and Slate Creek agree that Xxx Xxxxxx, a key employee of the
Operator, will be the Manager of the mining operations described in
paragraph 5 and Schedule "D", subject to any change directed by FESI at any
time at its sole discretion. FESI agrees to finance necessary raining
operations, upon the recommendation of Xxx Xxxxxx and the Board of
Directors of Slate Creek or any substitute for Xxx Xxxxxx appointed in
writing by FESI, until such time as Slate Creek is generating sufficient
cash flow to fund such mining operations itself. Golden Spike and Slate
Creek agree that any monies advanced by FESI from time to time to finance
Slate Creek's mining operations will be advanced on a loan basis with no
fixed repayment period but the monies so advanced will be repaid on a
progressive basis once Slate Creek achieves a positive cash flow position
and all such loans will be secured by a chattel mortgage against equipment
supplied by FESI used for its mining operation.
9. Golden Spike and Slate Creek and the directors thereof agree that FESI and
the Claims Operator may, at any time at its or their sole discretion,
terminate all mining operations together with all management and
administration responsibilities provided under the Mining Operations
contract described in Schedule "D" and all other commitments in relation to
mining operations described in this Agreement, and Upon giving written
notice to Slate Creek of such termination, FESI and the Operator may remove
all equipment, chattels and improvements supplied or arranged by FESI in
connection with the mining and processing of the placer deposits owned by
Slate Creek, and, furthermore, FESI and the Operator may cancel all
insurance and bonding applicable to such mining operations and otherwise
terminate operations completely subject only to B.C. Mining Regulations.
Termination by FESI and the Claims Operator will not give rise to any
claims or any liability actionable on behalf of Slate Creek or Golden Spike
or the directors or shareholders of Slate Creek or Golden Spike for such
discontinuance as it is agreed absolutely that it is the responsibility of
the Claims Operator and FESI to make such decisions and they may so do
without incurring liability. In the event that FESI shall elect to
terminate the mining operations as aforesaid, Slate Creek, Golden Spike and
FESI shall not have any further obligation or liability to one another in
respect of such mining operations nor otherwise under the terms of this
Agreement, but, upon such termination, FESI shall have no further right to
acquire a further interest in State Creek during the 5 year option period,
nor shall it be entitled to the return of its original payment of
$20,000.00, but other than as stated in this paragraph, FESI shall retain
the ownership interest it has acquired in Slate Creek as at the date of its
termination of the mining operations.
10. Golden Spike and Slate Creek agree that FESI shall have the right of first
refusal on any shares of Slate Creek which the Directors and Shareholders
of Golden Spike and Slate Creek may wish to sell.
11. As further described in paragraph 5 and Schedule "D" all management and
administration for the Slate Creek mining operations will be conducted by
the Operator at a reasonable monthly fee, to be approved by the Board of
directors of Slate Creek, to be paid in progressive payments once Slate
Creek produces sufficient cash flow to meet that obligation.
12. Slate Creek and Golden Spike agree that throughout the 5 year term of
FESI's purchase option as described in paragraph 4, FESI shall be the
exclusive marketer and distributor of the placer deposits to be transferred
to Slate Creek pursuant to this Agreement upon the terms described in this
paragraph. As the exclusive distributor of Slate Creek's placer deposits,
FESI agrees to purchase, and Slate Creek and Golden Spike agree to sell
such magnetite produce which meets FESI's specifications and which may be
ordered by FESI from time to time at a total price of $145.00 per ton,
exclusive of taxes, delivered at Xxxxxxx, X.X. The price per ton is to be
reviewed after the first year of operations. As the exclusive marketer of
Slate Creek's placer deposits, FESI agrees to undertake such marketing
efforts as if may determine are desirable at its own expense.
13. Golden Spike, Slate Creek and FESI agree that the board of Directors of
Slate Creek must approve any capital expenditure or equipment purchase to
be made by Slate Creek other than day to day expenditures made in the
ordinary course of mining operations. Any hands advanced by FESI to finance
any new capital expenditures or equipment purchases required by Slate Creek
will be dealt with under the terms of a separate agreement to be negotiated
by the parties at the time and to be approved by the Board of Directors of
Slate Creek.
14. Upon receipt of payment of FESI's monies in the sum of $20,000.00 under
paragraph 4iii and commencement of mining operations by the Operator under
the terms of paragraph 5 and Schedule "D", whichever event occurs first,
FESI shall be entitled to 50% of the net profits of all sales of placer
deposits and other precious metals and gem stones owned by Slate Creek
during the 5 year purchase option period.
15. It is agreed that all present tenure numbers being prepared for LPM in
connection with the placer deposits, along with relating mapping, will be
attached to and become part of this Agreement as a new Schedule. Relevant
extracts from any Placer deposit studies undertaken by Golden Spike will
also be attached and become part of this Agreement as a new Schedule.
16. Schedules "A", "B", "C" and "D" and ail other Schedules produced under the
terms of this Agreement constitute part of this Agreement.
17. It is agreed that FESI, as the Marketers and Distributors, shall have world
wide rights to market the magnetite products produced as a result of the
operations, save and except for British Columbia. Should OCL Industrials
not proceed with its arrangement with Golden Spike and Slate Creek, then
the marketing rights for British Columbia shall become the property of
FESI. In any event, FESI agrees that in the event that OCL Industrials
should make any claim to any rights to market magnetite products produced
as a result of the operations, FESI will indemnify and save Slate Creek and
Golden Spike harmless from any such claims including, but not limited to,
any claims for damages, breach of contract, costs or claims for injunctive
and other relief which may be made by OCL Industrial against Slate Creek
and Golden Spike. Golden Spike and Slate Creek warrant that, other than the
unfulfilled purchase order attached to this agreement, there is no contract
between OCL Industrials and Slate Creek and/or Golden Spike.
18. Any notice provided under this Agreement shall be sufficient given if sent
by first class regular mail addressed to the parties as follows:
To Golden Spike or to Slate Creek:
Golden Spike Exploration Ltd.
or Slate Creek Mining Company Ltd. (as the case may be)
Box 2BC9, Coalmont, B.C. VOX 1G0
TO OPERATORS:
Firstline Recovery Systems Inc.
#000, 00000 - 00 Xxxxxx
Xxxxxxx, X.X. X0X 0X0
TO FESI:
Firstline Environmental Solutions Inc.
#000, 00000-00 Xxxxxx
Xxxxxxx, X.X. X0X0X0
19. The representatives and warranties herein made by the Directors of Golden
Spike and Slate Creek shall survive the closing of this Agreement.
20. This agreement may be executed and delivered in any number of counterparts
with the same effect as if all parties had all signed and delivered the
same document and all counterparts and adopting instruments will be
construed together to be an original and will constitute one and the same
agreement.
DATED at Langley, this 26th day of March 2002.
IN WITNESS WHEREOF the signing officers of the corporate parties, duly
authorized behalf, have executed this Agreement on behalf of their respective
corporations and have affixed their corporate seals, and individuals have
executed this Agreement personally.
SLATE CREEK MINING COMPANY LTD.
Per: /S/ XXXXXXX XXXXX
-------------------------------
Authorized Signatory
Xxxxxxx Xxxxx, President
GOLDEN SPIKE EXPLORATION LTD.
Per: /S/ XXXXXXX XXXXX
-------------------------------
Authorized Signatory
Xxxxxxx Xxxxx, President
FIRSTLINE RECOVERY SYSTEMS INC.
Per: /S/ XXXXX XXXXXXXX
-------------------------------
Authorized Signatory
Xxxxx Xxxxxxxx, President
