EXHIBIT 10.1
MINERAL PROPERTY AGREEMENT
This Agreement made as of the 16th day of June, 2004.
BETWEEN:
Xxxxxx X. Xxxxxxxxxx, geologist, residing at
0000 Xxxxxxx Xx., Xxxxxxxxx, XX X0X 0X0
and
Xxxxxxx Xx, businessman, residing at
X.X. Xxx 00000, 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx,
XX X0X 0X0
(herein jointly called "VENDOR")
OF THE FIRST PART
AND:
Xxxx X. Xxxxxxx, businessman, residing at
0000 Xxxxxxxxxx Xxx., Xxxx Xxxxxxxxx, XX X0X 0X0
and
Xxxxx X. Xxxxxxx, businessman, residing at
0000 Xxxx Xxxxxx Xx., Xxxxx Xxxxxxxxx, XX X0X 0X0
(herein jointly called "PURCHASER")
OF THE SECOND PART
WHEREAS:
(a) Vendor owns certain mineral claims located in the Province of
Saskatchewan, Canada (herein called the "PROPERTY"). Particulars of the
Property are attached hereto as Schedule "A"; and
(b) Vendor has agreed to sell and Purchaser has agreed to purchase an 80%
interest in the Property, subject to the terms and conditions
hereinafter set out.
(c) Any previously dated agreements between the Vendor and Purchaser are
now deemed null and void.
NOW, THEREFORE THIS AGREEMENT WITNESSES that in consideration of the payments
and the premises, mutual covenants and agreements herein contained, the parties
agree as follows:
1. REPRESENTATIONS AND WARRANTIES
1.1 Vendor represents and warrants to Purchaser that:
(a) the mining claims and other interests comprising the Property are
accurately described in Schedule A, are presently in good
standing under the laws of the jurisdiction in which they are
located and are free and clear of all liens, charges and
encumbrances;
(b) Vendor has the exclusive right to enter into this Agreement and
to dispose of an interest in the Property in accordance with the
terms of this Agreement;
(c) any mining claims included in the Property as described in
Schedule A have been properly and legally located and recorded;
(d) the execution and delivery of this Agreement and any of the
agreements referred to or contemplated herein, will not conflict
with or result in the breach of any agreement to which he is a
party.
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1.3 The representations and warranties herein set out are conditions on
which the parties have relied in entering into this Agreement and shall
survive the acquisition of any interest in the Property hereunder and
each party will indemnify and save the other harmless from all loss,
damage, costs, actions and suits arising out of or in connection with
any breach of any representation, warranty, covenant, agreement or
condition made by him and contained in this Agreement.
2. PURCHASE PRICE
2.1 The purchase price for the Vendor's 80% interest in the Property will
be as follows:
(a) Work commitment of Cdn$150,000 to be funded and completed by
Newco within 15 months of closing, and an additional work
commitment of Cdn$200,000 to be funded and completed by Newco
within 24 months of closing, the total work commitment being
Cdn$350,000 (herein called the "Work Program");
(b) Cdn$10,000 initial payment. The recipients agree to renew the
claims listed in Schedule A and to stake new claims in the Area
of Influence, paid at the date of this agreement and acknowledged
by the Vendor.
(c) Ten percent (10%) of the initial share capitalization of Newco in
restricted common stock, calculated from the outstanding amount
issued at the end of day July 01, 2004, (called the "Shares"),
issued from treasury upon the completion of the Work Program to
the satisfaction of both parties. These shares will be released
prorated according to the regulations of the relevant exchange.
The Purchaser will use best efforts to obtain 200,000 of the
Shares as free trading, subject to regulatory approval.
3 TRANSFER OF PROPERTY
3.1 The Purchaser is setting up or acquiring control of an incorporated
company (herein called "Newco"). Newco will acquire all or a portion of
the Purchaser's rights hereunder in exchange for financing the Work
Program and issuing the Shares. The acquisition of Newco will take
place on or before July 01, 2004.
3.2 Vendor hereby transfers and assigns to Purchaser an 80% undivided
interest in and to the Property, free and clear of all encumbrances,
upon payment of the purchase price, issuance of the Shares and
completion of the Work Program.
3.3 The parties agree to arrange for a trust or escrow at the completion of
the work program of the restricted Shares and those documents required
to record the transfer of the 80% interest in the Property. Both the
Shares and transfer documents will be released concurrent with the
completion of the Work Program. Should the Purchaser or Newco fail to
fund the Work Program, or the results of the Work Program be
unsatisfactory to the Purchaser or Newco, they may elect to return the
80% interest in the Property to the Vendor and return the restricted
portion of the Shares to Newco.
3.4 The parties agree that the Vendor's 20% interest in the Property will
be carried through to the stage of a positive feasibility study, after
which the Vendor will be required to fund their 20% of mine development
costs. These costs will be loaned by Newco. The interest rate charged
will be at the equivalent rate of interest that Newco is charged for
the development of the mine. The loan will be repaid by the Vendors
from 80% of their proceeds from production.
3.5 Closing shall take place on or before July 01, 2004.
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4 NOTICE
4.1 Any notice, direction or other communication required or permitted to
be given under this Agreement shall be in writing and may be given by
the delivery of the same to the address listed on the first page
hereof. Any notice, direction or other communication aforesaid will be
deemed to have been given and received on the day it was delivered. Any
party may at any time give to the other party notice in writing of any
change of address of the party filing such notice, and from and after
the filing of such notice, the address specified will be the address of
such party for the purposes of filing notice hereunder.
5 GENERAL PROVISIONS
5.1 ARBITRATION: The parties agree that all questions or matters of dispute
as to the interpretation or effect or any provision of this Agreement
or any schedules attached hereto shall be finally settled by
arbitration carried out by a single arbitrator in accordance with the
provisions of the Commercial Arbitration Act of British Columbia. The
parties agree that the award of such arbitrator shall be binding upon
each of them as to law and fact and there shall be no appeal.
5.2 FURTHER ASSURANCES: The parties will execute such further and other
documents and do such further and other things as may be necessary or
convenient to carry out and give effect to the intent of this
Agreement.
5.3 ENTIRE AGREEMENT: This Agreement constitutes the entire agreement
between the parties and replaces and supersedes all prior agreements,
memoranda, correspondence, communications, negotiations and
representations, whether oral or written, express or implied, statutory
or otherwise between the parties with respect to the subject matter
herein. This Agreement may not be amended or modified except by an
instrument in writing signed by each of the parties hereto.
5.4 WAIVER: No consent or waiver, express or implied, by any party to or of
any breach or default by any other party of any or all of its
obligations under this Agreement will be valid unless it is in writing
and stated to be a consent or waiver hereunder.
5.5 MANNER OF PAYMENT: All payments to be made to any party hereunder may
be made by certified check or bank draft delivered to such party at its
address for notice purposes as provided herein
5.7 TIME OF THE ESSENCE: Time is hereby expressly made of the essence with
respect to the performance by the parties of their respective
obligations under this Agreement.
5.8 ENUREMENT: This Agreement shall enure to the benefit of and be binding
on all the parties hereto and their respective heirs, executors,
administrators, personal representatives or successors, as the case may
be and permitted assigns.
5.9 ASSIGNMENT BY PURCHASER: This Agreement and the rights hereunder may
be assigned by Purchaser in whole or in part, without notice to the
Vendor.
5.10 SCHEDULES: The following schedules are incorporated into this Agreement
by reference:
Schedule A Description of Property
5.11 GOVERNING LAW: This Agreement shall be construed and governed by the
laws in force in the Province of British Columbia. This paragraph shall
not be construed to affect the rights of a party to enforce a judgment
or award outside the said Province, including the right to record or
enforce a judgment or award in any jurisdiction in which the Property
is situated.
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5.12 HEADINGS: The headings to the articles, paragraphs, parts or clauses of
this Agreement and the table of contents are inserted for convenience
only and shall not affect the construction hereof.
5.13 CURRENCY: Except as expressly stated herein all dollar amounts
refer to lawful currency of Canada.
5.14 INDEPENDENT LEGAL ADVICE: Each of the parties acknowledges and confirms
that it has been provided sufficient opportunity to obtain the
recommended independent legal advice and understands the terms of, and
its rights and obligations under this Agreement.
5.15 AREA OF INFLUENCE: The parties agree that the Property shall include an
area of influence of ten (10) kilometers surrounding the perimeter
border of the Property. The parties agree to work exclusively with each
other in diamond exploration in the Provinces of Alberta and
Saskatchewan, and the State of Montana. This area of influence applies
to each party.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
SIGNED, AND DELIVERED by )
XXXXXX X. XXXXXXXXXX )
in the presence of: )
)
)
___________________________ ) ___________________________
witness Xxxxxx X. Xxxxxxxxxx
SIGNED, AND DELIVERED by )
XXXXXXX XX )
in the presence of: )
)
)
___________________________ ) ___________________________
witness Xxxxxxx Xx
SIGNED, AND DELIVERED by )
XXXX X. XXXXXXX )
in the presence of: )
)
)
___________________________ ) ___________________________
witness Xxxx X. Xxxxxxx
SIGNED, AND DELIVERED by )
XXXXX X. XXXXXXX )
in the presence of: )
)
)
___________________________ ) ___________________________
witness Xxxxx X. Xxxxxxx
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SCHEDULE A
TO MINERAL PROPERTY AGREEMENT
CLAIM NO. LOCATION NTS AREA RECORDED AREA
S-135705 All of Sections 72-H-05 512 hectares
10 and 15, Township 4
Range 00, Xxxx xx
Xxxxxx Xxxxxxxx
X-000000 All of Sections 72-H-05 1024 hectares
11, 14, 23 and 26,
Township 4 Range 00,
Xxxx xx Xxxxxx Xxxxxxxx
X-000000 All of Sections 72-H-05 768 hectares
24, 25 and 36
Township 4 Range 30,
West of Second Meridian
72-H-05
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