PROPERTY PURCHASE AGREEMENT
EXHIBIT
10.5
THIS
AGREEMENT (this “Agreement”) is made as of the 1st
day of
August, 2006,
BETWEEN:
MOJAVE
SILVER COMPANY, INC.,
a Nevada
Corporation
(hereinafter
referred to as the “Vendor”)
OF
THE
FIRST PART,
AND:
SILVER
RESERVE CORP.,
a
company incorporated under the laws of the State of Delaware
(hereinafter
referred to as the “Purchaser”)
OF
THE
SECOND PART.
RECITALS
WHEREAS
the Vendor is the recorded and beneficial owner of a 100% interest in certain
mineral claims situated in the State of Nevada (more particularly described
in
Schedule "A" hereto and collectively hereinafter referred to as the “Property”);
WHEREAS
the Vendor has agreed to sell to the Purchaser all of its right, title and
interest in and to the Property.
NOW
THEREFORE, in consideration of the mutual covenants and agreements herein
contained and subject to the terms and conditions hereafter set out, the parties
hereto agree as follows:
1. PURCHASE
AND SALE
1.01 The
Vendor hereby sells and transfers to the Purchaser, and the Purchaser hereby
buys and accepts from the Vendor, all of the Vendor’s right, title and interest
in and to the Property in consideration of the sum of 3,540,600 common shares
in
the capital of the Purchaser (the “Shares”),
to be
paid and delivered to the Vendor on closing.
2. CLOSING
DATE
2.01 In
this
agreement, “Closing
Date”
means
August 31, 2006, or such other date as may be agreed to by the parties
hereto.
3. TRANSFER
OF TITLE
3.01 On
the
Closing Date, the Vendor shall deliver to the Purchaser recordable Bills of
Sale
or other applicable conveyancing documentation sufficient to affect the transfer
of a 100% interest in and to the Property to the Purchaser. Vendor agrees to
execute such further documentation as may be necessary or desirable to evidence
such transfer of title and/or to record such transfer in appropriate registries,
at the request of Purchaser.
3.02 The
parties agree that should the Vendor stake any claims (Staked Claims) contiguous
to any of the claim groups set out in Schedule “A” at any time prior to June
30th,
2007,
100% of the rights, title and interest in the Staked Claims shall be delivered
to the Purchaser at no additional cost.
4. RIGHT
OF ENTRY
4.01 The
Purchaser, its servants, agents and workmen and any persons duly authorized
by
the Purchaser following execution of this Agreement, shall have the exclusive
right to enter upon and take possession of and prospect, explore and develop
the
Property in such manner as the Purchaser in its sole discretion may deem
advisable.
-2-
5. REPRESENTATIONS
AND WARRANTIES OF THE VENDOR
5.01 The
Vendor hereby represents and warrants to the Purchaser that:
|
(a)
|
it
is a company in good standing under the laws of the State of Nevada
and
has the power and authority to enter into this
Agreement;
|
|
(b)
|
immediately
prior to the closing of this Agreement it is the recorded and beneficial
owner of a 100% interest in and to the Property and the Property
is not
subject to any liens or encumbrances of any kind
whatsoever;
|
|
(c)
|
the
mineral claims comprising the Property have been validly located
and are
now duly recorded and in good standing substantially in accordance
with
the laws in effect in the jurisdiction in which they are
situated;
|
|
(d)
|
the
entering into this Agreement does not conflict with any applicable
law nor
does it conflict with, or result in a breach of or accelerate the
performance required by, any contract or other commitment to which
it is a
party or by which it is bound;
|
|
(e)
|
it
has the exclusive right to enter into this Agreement and all necessary
authority to assign to the Purchaser all of its right, title and
interest
in and to the Property in accordance with the terms and conditions
of this
Agreement;
|
|
(f)
|
the
Property is free and clear of all liens and encumbrances and all
claims
are in good standing with the United States Department of the Interior
-
Bureau of Land Management until August 31,
2006;
|
|
(g)
|
there
are no outstanding or, to the best of the Vendor’s information, knowledge
and belief, proposed, threatened or contemplated actions or suits
which,
if successful, would or could affect the market value or ownership
of the
Property or any portion
thereof;
|
-3-
|
(h)
|
conditions
on and relating to the Property are in compliance with all applicable
laws, regulations and orders relating to environmental matters, including,
but not limited to, waste disposal and storage and Vendor is not
aware of
any conditions with respect to the Property that could give rise
to
environmental claims that would impair the Purchaser’s development of the
Property;
|
|
(i)
|
there
are no reclamation liabilities to be carried out in the future,
outstanding work orders or actions required to be taken relating
to the
condition of the Property, or any operations that have been carried
out
thereon; and
|
|
(j)
|
on
the Closing Date the Vendor will deliver to the Purchaser copies
of all
reports, maps and other documents and or materials relating to the
Property in the Vendor’s
possession.
|
|
(k)
|
the
Vendor has been informed as to, and is familiar with, the business
activities of the Purchaser and its affiliates, and has had an opportunity
and proceeded, or waived the opportunity, to (i) review the books
and
records of the Purchaser and its affiliates and to ask questions
of, and
receive answers from, appropriate representatives of the Purchaser
and its
affiliates concerning the Purchaser and its affiliates and the terms
and
conditions of this Agreement, and (ii) obtain and review all additional
information relating to the history and proposed business plan of
the
Purchaser and its affiliates that it deems
necessary.
|
|
(l)
|
the
Vendor fully understands that the Shares have not been registered
under
the Securities Act in reliance upon exemptions therefrom, and,
accordingly, to the extent that it is not supplied with the information
which would have been contained in a registration statement filed
under
the Securities Act, it must rely on its own access to such
information.
|
|
(m)
|
the
Vendor has had an opportunity to obtain and has obtained a general
and
complete understanding satisfactory to it of the Purchaser, its affiliates
and their services, potential assets, finances, and manner of doing
business
|
-4-
sufficient
to permit it to evaluate (i) the Purchaser and its prospects and (ii) the risks
and merits of accepting the Shares on payment for the Property.
|
(n)
|
the
Vendor (i) recognizes that accepting the Shares involves risk, (ii)
has
carefully considered whether accepting he Shares is appropriate,
and (iii)
has obtained such individual financial, tax and legal advice as it
deems
necessary or appropriate to fully understand the risks involved and
to
evaluate accepting the Shares.
|
|
(o)
|
the
Vendor recognizes that it must bear the economic risk involved in
accepting the Shares for an indefinite period of time because, among
other
reasons, the Shares have not been registered under the Securities
Act and
therefore cannot be sold, pledged, assigned or otherwise disposed
of
unless (i) they are subsequently registered under the Securities
Act or
(ii) an exemption from such registration is available and an opinion
of
counsel acceptable to the Purchaser that the transfer is not in violation
of any federal securities act or state securities law is provided
to the
Purchaser.
|
|
(p)
|
the
Vendor recognizes that there is no current market for the Shares;
that
there can be no assurances that such a market will exist any time
in the
future and accordingly it may not be able to sell or dispose of any
of the
Shares even if it had held them for a number of years; that its right
to
transfer the Shares will be restricted by federal and state securities
laws and a legend to this effect will be placed on the certificates
representing the Shares and that such laws impose strict limitations
upon
such transfer; and the Purchaser is under no obligation in connection
with
the subsequent transfer thereof by it or to aid it in obtaining an
exemption from such registration.
|
|
(q)
|
the
Vendor acknowledges that the Share certificate representing the purchase
price shall be legended with a legend substantially in the following
form:
|
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
-5-
UNDER
THE
SECURITIES ACT OF 1933, AS AMENDED OR APPLICABLE STATE SECURITIES LAWS. THESE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE
ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITY UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND QUALIFICATION UNDER ANY APPLICABLE
STATE
SECURITIES LAWS OR (B) AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE
SECURITIES LAWS. ANY PURPORTED TRANSFER OR OTHER DISPOSITION OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IN ANY MANNER WHICH IS IN VIOLATION OF THE
FOREGOING LIMITATIONS IS INVALID AND THE COMPANY WILL NOT TRANSFER SUCH
INVALIDLY TRANSFERRED SECURITY ON THE BOOKS OF THE COMPANY.
5.02 The
representations and warranties hereinbefore set out are conditions upon which
the Purchaser has relied in entering into this Agreement and shall survive
the
Closing Date by a period of 24 months, except that the representation and
warranty of Vendor pursuant to Sections 6.01 (b), (c), (d), (e) and (f) shall
survive indefinitely. The Vendor hereby indemnifies and saves the Purchaser
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 it and
contained in this Agreement.
6. REPRESENTATIONS
AND WARRANTIES OF THE PURCHASER
6.01 The
Purchaser represents and warrants to the Vendor that:
|
(a)
|
it
has full corporate power and authority to enter into this Agreement
and
the entering into of this Agreement does not conflict with any applicable
laws or with its charter documents nor does it conflict with, or
result in
a breach of, or accelerate the performance required by any contract
or
other commitment to which it is party or by which it is
bound;
|
|
(b)
|
the
shares to be delivered to the Vendor upon the Closing Date will be
duly
and validly authorized and issued and
non-assessable.
|
-6-
6.02 The
representations and warranties hereinbefore set out are conditions upon which
the Vendor has relied on entering into this Agreement and shall survive the
Closing Date. The Purchaser hereby indemnifies and saves the Vendor 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 it and contained
in
this Agreement.
6.03 The
Purchaser accepts, as of the date of this Agreement, responsibility for all
ongoing cost of the maintenance of the Property and without limitation shall
include the sustaining fees due August 31, 2006.
7. INDEPENDENT
ACTIVITIES
7.01 No
joint
venture is created by this Agreement. Except as expressly provided herein,
each
party shall have the free and unrestricted right to independently engage in
and
receive the full benefit of any and all business endeavours of any sort
whatsoever, whether or not competitive with the endeavours contemplated herein
without consulting the other or inviting or allowing the other to participate
therein. No party shall be under any fiduciary or other duty to the other which
will prevent it from engaging in or enjoying the benefits of competing
endeavours within the general scope of the endeavours contemplated herein.
The
legal doctrines of "corporate opportunity" sometimes applied to persons engaged
in a joint venture or having fiduciary status shall not apply in the case of
any
party. In particular, without limiting the foregoing, no party shall have an
obligation to any other party as to:
|
(a)
|
any
opportunity to acquire, explore and develop any mining property,
interest
or right presently owned by it or offered to it outside of the Property
at
any time; and
|
|
(b)
|
the
erection of any mining plant, mill, smelter or refinery, whether
or not
such mining plant, mill, smelter or refinery treats ores or concentrates
from the Property.
|
-7-
8. CONFIDENTIALITY
OF
INFORMATION
8.01 The
parties hereto shall, subject to the exceptions set out hereinafter, treat
all
data, reports, records and other information relating to this agreement and
the
Property as confidential. While this Agreement is in effect, no party hereto
shall, without the express written consent of the other, disclose to any third
party any information concerning the results of the operations hereunder nor
issue any press releases concerning this Agreement or its exploration operations
except where such disclosure is mandatory under the law or is deemed necessary
by the disclosing party's counsel for the satisfaction by the disclosing party
of its obligations under applicable securities law, and the disclosing party
has, prior to the public disclosure, given the non-disclosing parties a draft
copy of the disclosure.
9. ARBITRATION
9.01 Any
controversy between the parties hereto involving any claim arising out of or
relating to this Agreement, will be submitted to and be settled by final and
binding arbitration in Las Vegas, Nevada, in accordance with the then current
Commercial Arbitration Rules of the American Arbitration Association (the
“AAA”), and judgment upon the award rendered by the arbitrators may be entered
in any court having jurisdiction thereof. Such arbitration shall be conducted
by
three (3) arbitrators chosen by the Vendor and the Purchaser, or failing such
agreement, an arbitrator experienced in the sale of similar mineral assets
appointed by the AAA. There shall be limited discovery prior to the arbitration
hearing as follows: (a) exchange of witness lists and copies of documentary
evidence and documents relating to or arising out of the issues to be
arbitrated, (b) depositions of all party witnesses, and (c) such other
depositions as may be allowed by the arbitrators upon a showing of good cause.
Depositions shall be conducted in accordance with the Nevada Code of Civil
Procedure, the arbitrator(s) shall be required to provide in writing to the
parties the basis for the award or order of such arbitrator(s), and a court
reporter shall record all hearings, with such record constituting the official
transcript of such proceedings.
-8-
10. NOTICES
10.01 Any
notice, election, consent or other writing required or permitted to be given
hereunder shall be deemed to be sufficiently given if delivered or if mailed
by
registered air mail or by fax, addressed as follows:
In
the
case of the Vendor:
Mojave
Silver Company, Inc.
0000
Xxxxxx Xxxx., Xxxxx 000
Xxxxxx,
Xxxxxx
00000
In
the
case of the Purchaser:
0000
Xxxxx Xxxx Xxxx., Xxxxx 00X
Xxxxxxxx,
Xxxxxxx X0X 0X0
Fax
#000-000-0000
Attention:
Xxxxxxxx Xxxxxx
and
any
such notice given as aforesaid shall be deemed to have been given to the parties
hereto if delivered, when delivered, or if mailed, on the tenth business day
following the date of mailing, or, if faxed, on the next succeeding day
following the faxing thereof PROVIDED HOWEVER that during the period of any
postal interruption in either the country of mailing or the country of delivery,
any notice given hereunder by mail shall be deemed to have been given only
as of
the date of actual delivery of the same. Any party may from time to time by
notice in writing change its address for the purpose of this
paragraph.
11. GENERAL
TERMS AND CONDITIONS
11.01 The
parties hereto hereby covenant and agree that they will execute such further
agreements, conveyances and assurances as may be requisite, or which counsel
for
the parties may deem necessary to effectually carry out the intent of this
Agreement.
11.02 This
Agreement shall represent the entire understanding between the parties with
respect to the Property. No representa-tions or inducements have been
made
-9-
save
as
herein set forth. No changes, alterations, or modifications of this Agreement
shall be binding upon either party until and unless an amendment to this
Agreement or a memorandum in writing to such effect shall have been signed
by
all parties hereto.
11.03 The
titles to the articles to this Agreement shall not be deemed to form part of
this Agreement but shall be regarded as having been used for convenience of
reference only.
11.04 The
schedules to this Agreement shall be construed with and as an integral part
of
this Agreement to the same extent as if they were set forth verbatim
herein.
11.05 This
Agreement shall be governed by and interpreted in accordance with the laws
in
effect in the State of Delaware.
11.06 This
Agreement shall enure to the benefit of and be binding upon the parties hereto
and their respective successors and assigns.
11.07 This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, and all of which together shall constitute one and the
same
instrument. Execution and delivery of this Agreement by exchange of facsimile
copies bearing facsimile signature of a party shall constitute a valid and
binding execution and delivery of this Agreement by such party. Such facsimile
copies shall constitute enforceable original documents.
11.08 Time
shall be of the essence of this agreement.
IN
WITNESS WHEREOF this Agreement has been executed by the parties hereto as of
the
day and year first above written.
MOJAVE
SILVER COMPANY, INC.
By:
s/
Xxxx Xxxxxx
Its: President
By:
s/
Xxxx Xxxxxxxxxx
Its: President
-10-
SCHEDULE
"A"
TO
THAT
CERTAIN AGREEMENT MADE AS OF THE
1ST
DAY OF
AUGUST, 2006 BETWEEN MOJAVE
SILVER
COMPANY, INC., OF THE FIRST PART AND
SILVER
RESERVE CORP., OF THE SECOND PART
THE
“PROPERTY”
KLONDYKE
GROUP
|
NAME
|
NMC
No.
|
LOCATION
DATE
|
|
KD
1-63
(Klondyke
1-63)
|
867448
-867510
|
Feb
23 & 24/04
|
XXXX
GROUP
|
NAME
|
NMC
No.
|
LOCATION
DATE
|
|
DR
1-15
DR
39-42
|
871090-821104
871128-871131
|
Apr.
8/04
|
MONTEZUMA
GROUP
|
NAME
|
NMC
No.
|
LOCATION
DATE
|
|
MR
1-19
Montezuma
1-19
|
871176-871194
|
Apr.10/04
|
NIVLOC
GROUP
|
NAME
|
NMC
No.
|
LOCATION
DATE
|
|
NL
1-15
(Nivloc
1-15)
|
867511-867525
|
Feb.
22/23/04
|
-11-
SYLVANIA
GROUP
|
NAME
|
NMC
No.
|
LOCATION
DATE
|
|
SYLVANIA
1-30
SY
1-30
|
871132-871161
|
Apr.
6/04
|
SANTA
FE GROUP
|
NAME
|
BLM
No.
|
LOCATION
DATE
|
|
SF
1-27
(Santa
Fe 1-27)
|
868203-868229
|
April
2/04
|
SILVER
QUEEN GROUP
|
NAME
|
NMC
No.
|
LOCATION
DATE
|
|
SQ
1-87
(Silver
Queen 1 & 6-87)
|
870453-870535
|
March
20-21/04
April
5/04
|
BLUE
DICK GROUP
|
NAME
|
NMC
No.
|
LOCATION
DATE
|
|
BD
1-26
Blue
Dick 1-26
|
868274-868299
|
Mar
15/04
|
WEEPAH
HILLS GROUP A
|
NAME
|
NMC
No.
|
LOCATION
DATE
|
|
WH
11 - 34
(Weepah
1-34)
|
868310-868333
|
-
|
WEEPAH
HILLS GROUP B
|
NAME
|
NMC
No.
|
LOCATION
DATE
|
|
WH
1-10
|
868300-868309
|
-
|
-12-
XXXX SCHEELITE GROUP
|
NAME
|
NMC
No.
|
LOCATION
DATE
|
|
CP
13-44
|
871213-871244
|
Mar
30-31/04
|
Quailey
- Patented Claims
|
Name:
|
Owner
|
APN
Nos.
|
||
|
Nevada
|
Xxxxx
Xxxxxxxx Estate
|
000-000-00
|
||
|
c/x
Xxxx Enterprises
|
||||
|
Roosevelt
|
“
|
000-000-00
|
||
|
Great
Eastern
|
“
|
000-000-00
|
||
|
Bonanza
|
“
|
000-000-00
|
||
|
Calumet
|
“
|
000-000-00
|
||
|
Central
|
“
|
000-000-00
|
||
|
Butte
|
“
|
000-000-00
|
||
|
Red
Bank
|
“
|
000-000-00
|
||
|
San
Xxxx NE 750
|
Xxxx
Enterprises
|
000-000-00
|
Quailey
-Unpatented Claims
|
Name:
|
Mineral
County File No.
|
BLM
NMC
|
||
|
Q1
|
136857
|
916094
|
||
|
Q2
|
136858
|
916095
|
||
|
Q3
|
136859
|
916096
|
||
|
Q4
|
136860
|
916097
|
||
|
Q5
|
136861
|
916098
|
||
|
Q6
|
136862
|
916099
|
||
|
Q7
|
136863
|
916100
|
||
|
Q8
|
136864
|
916101
|
||
|
Q9
|
136865
|
916102
|
||
|
Q10
|
136866
|
916103
|
||
|
Q11
|
136867
|
916104
|
||
|
Q12
|
136868
|
916105
|
||
|
Q13
|
136869
|
916106
|
||
|
Q14
|
136870
|
916107
|
||
|
Q15
|
136871
|
916108
|
-13-
AMENDMENT
Re: Agreement
dated the 1st
day of
August, 2006,
BETWEEN:
MOJAVE
SILVER COMPANY, INC.,
AND:
1. Paragraph
3.01 shall be amended by adding to the end of the paragraph:
“
A
full
title search shall be provided for the Quailey Patented Claims as described
in Schedule “A”.”
2. All
other
terms and conditions shall remain the same and time shall remain of the
essence.
Dated
this 28th
day of
August, 2006.
MOJAVE
SILVER COMPANY, INC.
By:
s/
Xxxx Xxxxxx
Its:
President
By:
s/
Xxxxxxxx Xxxxxx
Its:
Secretary
-14-
