PURCHASE AGREEMENT
------------------
THIS AGREEMENT dated as of the 30th day of April, 2001
BETWEEN:
XXXX XXXXXXXXX, of #303 - 0000 Xxxxxxx Xxxxxx,
Xxxxxxxxx, XX, Xxxxxx, X0X 0X0
(hereinafter called the "vendor")
AND:
NORMARK VENTURES CORP., a Nevada corporation,
having its registered office at 0000 Xxxx
Xxxxxx Xxxxxx, Xxxxx 000, Xxx 00, Xxx Xxxxx,
XX, 00000
(hereinafter called the "Purchaser")
WHEREAS:
A. The Vendor is the sole recorded and beneficial owner of
the property described in Schedule "A" hereto (the "Property");
B. The Vendor wishes to sell an undivided 100% interest in
and to the Property to the Purchaser and the Purchaser wishes to
acquire such interest pursuant to the terms and conditions
hereinafter set out;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
premises and of the mutual covenants and agreements hereinafter
contained, the parties hereto agree as follows:
2
VENDOR'S REPRESENTATIONS AND WARRANTIES
---------------------------------------
1. The Vendor represents and warrants to the Purchaser that:
(a) It is the sole recorded and beneficial owner of an
undivided l00% interest in and to the Property;
(b) The claims comprising the Property have been, to the best
of the information and belief of the Vendor, properly
located and staked and recorded in compliance with the
laws of the jurisdiction in which they are situate, are
accurately described in Schedule "A" and are valid and
subsisting mineral claims as at the date of this
Agreement;
(c) The Property is in good standing under all applicable
laws and regulations, all assessment work required to be
performed and filed has been performed and filed, all
taxes and other payments have been paid and all filings
have been made;
(d) The Property is free and clear of any encumbrances, liens
or charges and neither the Vendor nor, to the best of the
Vendor's knowledge, any of its predecessors in interest
or title, have done anything whereby the Property may be
encumbered; and
(e) It has the right to enter into this Agreement and to deal
with the Property in accordance with the terms of this
Agreement, there are no disputes over the title to the
Property, and no other party has any interest in the
Property or the production therefrom or any right to
acquire any such interest.
3
PURCHASER'S REPRESENTATIONS AND WARRANTIES
------------------------------------------
2. The Purchaser represents and warrants to the Vendor that:
(a) it has been duly incorporated, amalgamated or continued
and validly exists as a corporation in good standing
under the laws of its jurisdiction of incorporation,
amalgamation or continuation;
(b) it has duly obtained all corporate authorizations for the
execution of this Agreement and for the performance of
this Agreement by it, and the consummation of the
transactions herein contemplated will not conflict with
or result in any breach of any covenants or agreements
contained in, or constitute a default under, or result in
the creation of any encumbrance under the provisions of
the Articles or the constating documents of the Purchaser
or any shareholders= or directors= resolution, indenture,
agreement or other instrument whatsoever to which the
Purchaser is a party or by which it is bound or to which
it or the Property may be subject; and
(c) no proceedings are pending for, and the Purchaser is
unaware of any basis for the institution of any
proceedings leading to, the dissolution or winding up of
the Purchaser or the placing of the Purchaser in
bankruptcy or subject to any other laws governing the
affairs of insolvent corporations.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
------------------------------------------
3. The representations and warranties in this Agreement
shall survive the closing of this transaction and shall apply to
all assignments, conveyances, transfers and documents delivered in
connection with this Agreement and there shall not be any merger of
any representations and warranties in such assignments,
conveyances, transfers or documents notwithstanding any rule of
law, equity or statute to the contrary and all such rules are
hereby waived. The Vendor shall have the right to waive any
representation and warranty made by the Purchaser in the Vendor=s
favour without
4
prejudice to any of its rights with respect to any
other breach by the Purchaser and the Purchaser shall have the same
right with respect to any of the Vendor=s representations in the
Purchaser=s favour.
PURCHASE AND SALE
-----------------
4. The Vendor hereby sells and assigns and the Purchaser
hereby purchases an undivided 100% interest in and to the Property
for the sum of $10,000 the receipt of which is hereby acknowledged.
ROYALTY
-------
5. (a) The Purchaser shall pay to the Vendor a royalty equal to
2% of Net Smelter Returns on the terms and conditions as
set out in this paragraph and in Schedule "B".
(b) Instalments of the Royalty payable shall be paid by the
Purchaser to the Vendor immediately upon the receipt by
the Purchaser of the payment from the smelter, refinery
or other place of treatment of the proceeds of sale of
the minerals, ore, concentrates or other product from the
Property.
(c) Within 120 days after the end of each fiscal year,
commencing with the year in which production from the
Property occurs, the accounts of the Purchaser relating
to operations on the Property and the statement of
operations, which shall include the statement of
calculation of Royalty for the year last completed, shall
be audited by the auditors of the Purchaser at its
expense. The Vendor shall have 45 days after receipt of
such statements to question the accuracy thereof in
writing and, failing such objection, the statements shall
be deemed to be correct and unimpeachable thereafter.
5
(d) If such audited financial statements disclose any
overpayment of Royalty by the Purchaser during the fiscal
year, the amount of the overpayment shall be deducted
from future instalments of Royalty payable.
(e) If such audited financial statements disclose any
underpayment of Royalty by the Purchaser during the year,
the amount thereof shall be paid to the Vendor forthwith
after determination thereof.
(f) The Purchaser agrees to maintain for each mining
operation on the Property, up-to-date and complete
records relating to the production and sale of minerals,
ore, bullion and other product from the Property,
including accounts, records, statements and returns
relating to treatment and smelting arrangements of such
product, and the Vendor or its agents shall have the
right at all reasonable times, including for a period of
12 months following the expiration or termination of this
Agreement, to inspect such records, statements and
returns and make copies thereof at its own expense for
the purpose of verifying the amount of Royalty payments
to be made by the Purchaser to the Vendor pursuant
hereto. The Vendor shall have the right to have such
accounts audited by independent auditors at its own
expense once each fiscal year.
(g) Upon the Vendor receiving a total of $1,000,000 from
payments of Royalty the Royalty shall terminate. The
Purchaser shall always have the right to prepay such
amount before it is actually due.
RECORDING OF AGREEMENT
----------------------
6. The Purchaser shall be entitled to record this Agreement
or a memorandum in respect of this Agreement against the title to
the Property.
6
ABANDONMENT OF THE PROPERTY
---------------------------
7. The Purchaser may at any time determine to abandon the
property. In the event of abandonment, the Purchaser will:
(a) leave the claims in good standing for a minimum of one
(1) year under all applicable legislation, free and clear
of all liens, charges and encumbrances arising form this
Agreement or their operations hereunder and in a safe and
orderly condition;
(b) deliver to the Vendor within 60 days of its written
request a comprehensive report on all work carried out by
the Purchaser on the Claims (limited to factual matters
only) together with copies of all maps, drill logs, assay
results and other technical data compiled by the
Purchaser with respect to the Claims;
(c) have the right and obligation on demand made by the
Vendor, to remove from the Claims within six months of
the effective date of termination all facilities erected,
installed or brought upon the Claims by or at the
instance of the Purchaser provided that at the option of
the Vendor any or all of the facilities not so removed
will become the property of the Vendor; and
(d) deliver to the Vendor a duly executed transfer in
registrable form of 100% right, title and interest in and
to the Claims in favour of the Vendor.
FURTHER ASSURANCES
------------------
8. Concurrently with the execution of this Agreement the
Vendor shall execute or cause to be executed a Xxxx of Sale or such
other documents as the Purchaser may reasonable require
transferring a 100% interest in and to the Property to the
Purchaser which the Purchaser shall be at liberty to record
forthwith. The parties shall execute all further documents or
assurances as may be required to carry out the full intent of this
Agreement.
7
NOTICE
------
9. Each notice, demand or other communication required or
permitted to be given under this Agreement shall be in writing and
shall be delivered, telegraphed or telecopied to such party at the
address for such party specified above. The date of receipt of such
notice, demand or other communication shall be the date of delivery
thereof if delivered or telegraphed or, if given by telecopier,
shall be deemed conclusively to be the next business day. Either
party may at any time and from time to time notify the other party
in writing of a change of address and the new address to which
notice shall be given to it thereafter until further change.
PAYMENT
-------
10. All references to monies hereunder will be in Canadian
funds. All payments to be made to any party hereunder may be made
by cheque mailed or delivered to such party to its address for
notice purposes as provided herein, or for the account of such
party at such bank in Canada as such party may designate from time
to time by written notice. Such bank will be deemed the agent of
the designating party for the purpose of receiving, collecting and
receipting such payment.
REGULATORY APPROVAL
-------------------
11. This Agreement shall be subject to the approval of all
regulatory authorities having jurisdiction.
ENTIRE AGREEMENT
----------------
12. This Agreement constitutes the entire agreement between
the parties and replaces and supercedes all agreements, memoranda,
correspondence, communications, negotiations and representations,
whether verbal or express or implied, statutory or otherwise,
between the parties with respect to the subject matter herein.
8
GENDER
------
13. Wherever the singular or neuter are used herein the same
shall be deemed to include the plural, feminine or masculine.
ENUREMENT
---------
14. This Agreement shall enure to the benefit of and be
binding upon the parties hereto and their respective successors and
permitted assigns.
IN WITNESS WHEREOF this Agreement has been executed by the parties
hereto as of the day and year first above written.
THE COMMON SEAL OF
NORMARK VENTURES CORP.
was hereunto affixed in the presence of:
/s/ X. Xxxxxxx
--------------------------------------------
Authorized Signatory
--------------------------------------------
Authorized Signatory
SIGNED, SEALED AND DELIVERED
BY XXXX XXXXXXXXX
in the presence of:
/s/ X. X'Xxxxx /s/ X. XxxXxxxxx
--------------------------------------------
Signature
X. X'Xxxxx
--------------------------------------------
Name
1880 - 0000 X. Xxxxxxx Xx. Xxx, XX
--------------------------------------------
Address
SCHEDULE "A"
------------
THE PROPERTY
------------
A. Located Mineral Claims
Grant
Claim Name Number Year of Expiry
---------- ------ --------------
AVA 1 YC18994 November 27, 2001
AVA 2 YC18995 November 27, 2001
AVA 3 YC18996 November 27, 2001
AVA 4 YC18997 November 27, 2001
all located in the Whitehorse Mining District of the Yukon
Territory, Canada
SCHEDULE "B"
------------
NET SMELTER RETURNS
-------------------
1. For the purposes of this Agreement:
(a) "Net Smelter Returns" shall mean the actual proceeds
received from any mint, smelter or other purchaser for
the sale of bullion, concentrates or ores produced from
the Property and sold, after deducting from such proceeds
the following charges to the extent that they are not
deducted by the purchaser in computing payment:
(i) in the case of the sale of bullion, refining
charges only;
(ii) in the case of the sale of concentrates, smelting
and refining charges, penalties and the cost of
transportation of such concentrates from the
Property to any smelter or other purchaser; and
(iii) in the case of ores shipped to a purchaser,
refining charges for bullion and charges for
smelting, refining and the cost of transportation
from the mill to any smelter or other purchaser for
concentrates.
(b) "Commencement of Commercial Production" means:
(i) if a mill is located on the Property, the last day
of a period of 40 consecutive days in which, for
not less than 30 days, the mill processed ore from
the Property at 60% of its rated concentrating
capacity; or
(ii) if a mill is not located on the Property, the last
day of a period of 30 consecutive days during which
ore has been shipped from the Property on a
reasonably regular basis for the purpose of earning
revenues,
but any period of time during which ore or concentrate is
shipped from the Property for testing purposes or during
which milling operations are undertaken as initial tune-
up, shall not be taken into account in determining the
date of Commencement of Commercial Production.
2. The Purchaser shall have the right to commingle with ore
from the Property, ore produced from other properties owned or
controlled by the Purchaser, provided the Purchaser shall 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, ore mined and produced from the Property.
The Purchaser shall maintain accurate records of the results of
such sampling, weighing and assaying with respect to any ore mined
and produced from the Property. The Vendor or its authorized agent
shall be permitted the right to examine at all reasonable times
such records pertaining to commingling of ores or to the
calculations of Net Smelter Returns.
3. Commencing on the third anniversary of this Agreement and
every year thereafter until Commencement of Commercial Production
from the Property unless the Purchaser shall have abandoned the
Property, the Purchaser shall pay the Vendor an advance on Net
Smelter Returns of $5,000 per calendar quarter. Any advances on
Net Smelter Returns paid under this paragraph shall be accumulated
and be deductible from any Net Smelter Returns to the Vendor to the
extent such Net Smelter Returns payments exceed $20,000 for any
calendar year.
4. If, after Commencement of Commercial Production from the
Property, Net Smelter Returns payable to the Vendor for any
calendar year are less than $20,000, the Purchaser shall pay to the
Vendor on or before May 1 of the following year the difference
between the $20,000 and the amount of Net Smelter Returns payable
for the said calendar year.
