EX-10.1
NPK Resources Ltd
PO Box 1417
Kampala, Uganda
Uranium Hunter Corporation
First Canadian Place
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Attention ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Dear ▇▇ ▇▇▇▇▇▇▇▇▇
May 23, 2007
Re: Option agreement between NPK Inc ("NPK" or "Optionor")
and Uranium Hunter Corporation ("Hunter" or
"Optionee,").
This option agreement (the "Agreement") sets out the terms
and conditions by which the Optionor, a corporation
incorporated under the laws of Uganda, agrees to grant to
Hunter, a company incorporated under the laws of the State
of Nevada, the sole and exclusive right and option to
acquire up to a 75% undivided right, title and interest in
and to the Nkoko and Kagadi Uranium Properties (the
"Option"), ") located in Kiballe District, Uganda and
contains approximately 820 square kilometers , the EPLs
are set out in Schedule A attached hereto (the "Property").
This Agreement shall replace any previous agreements between
the parties and shall constitute the full agreement between
the parties.
1. THE OPTION
.1. The Optionor hereby grants to Hunter the sole,
exclusive and irrevocable right and option (Option) to
acquire an undivided 75% right, title and interest in and to
the Property by:
▇.▇▇▇▇▇▇ making, in favor of NPK a cash payment of
$25,000.00 US dollars within 5 days of signing this
agreement.
▇.▇▇▇▇▇▇ further agrees to be responsible for making,
through the offices of NPK or Hunter's subsidiary
if Hunter Incorporates a subsidiary in Uganda , all
necessary property payments and taxes to keep and
do whatever is required to keep the property in good
standing during the earn in period. ▇▇▇▇▇▇ shall
further agree to be bound by the terms and
conditions of the Underlying EPLs,
NPK shall be responsible for advising Hunter what
it must do to keep the property in good standing.
The property shall remain in the name of NPK until
such time as Hunter has earned its 75% interest by
paying the $25,000.00 as set out above at which time
the property shall be transferred into the name of
Hunter.
▇.▇▇▇▇▇▇ covenants that it will at all times conduct
its operations on the property to conform with the
mining act of Uganda and other applicable
legislation.
.01 Hunter shall maintain its 75% interest in the
property after it pays the $25,000.00 as set out
above by completing the following cumulative
exploration expenditures on the property totaling
$150,000 US over a 36 month period:
i) $50,00.00 in cumulative exploration expenditure within
the first 12 months after signing the definitive agreement;
ii) $100,00.00 in cumulative exploration expenditures
within 24 months of signing of the definitive agreement;
iii) $150,000.00 in cumulative exploration expenditures
within 36 months of signing of the definitive agreement.
.02 If 36 months after the date of the definitive
agreement, ▇▇▇▇▇▇ has not completed exploration
expenses of $150,000.00, Hunter may still maintain
its 75% interest in the property if Hunter issues,
in favor of NPK payments totaling up to $150,000
common shares of Hunter or cash of up to
$150,000.00 us at Hunter's sole option less the
cumulative explorations expenditures already paid
and/or met on the property. The value of the
shares shall be determined as the average share
price of the shares over the 30 business days of
trading prior to the 36 month period as set out
herein however shall not be valued at less then
$1.00 per share. The shares shall be subject to
restrictions imposed by any exchange or trading
system on which the shares are traded as well or
any other appropriate government or other
appropriate authority. All share certificates
issued pursuant to this definitive agreement shall
have a 1 year hold period from date of issue. For
example if Hunter has paid $150,000.00 in
cumulative exploration expenditures on the
property, Hunter shall not be required to issue
any stock or cash to NPK to maintain its 75%
interest in the property. IF however, ▇▇▇▇▇▇ has
spent $100,000.00 in cumulative exploration
expenditures within 36 months, then ▇▇▇▇▇▇ has the
sole option of paying NPK $50,000.00 us in cash or
issue shares in Hunter and provide them to NPK.
D. A management committee consisting of two
representatives of each Company shall be formed upon
acceptance of the terms of this Agreement. ▇▇▇▇▇▇ shall
be responsible for proposal of exploration programs to
the management committee. ▇▇▇▇▇▇ as the funding partner
shall be responsible for funding, in full, any and all
exploration programs approved by the management
committee in advance of the commencement of exploration
subject to sharing costs proportionally after the earn
in period
E. Once Hunter has vested and maintained its 75% interest
in the project (ie by spending $150,000.00 on the
project within 3 years see 1.01) the parties shall
enter into the joint venture agreement as to be set out
in Schedule B and shall share proportionally in all
exploration costs and payments subject to standard
dilution terms.
F. i. Once Hunter has earned its 75% interest in
the property, for a 1 year period from date of
earn in NPK shall be entitled to convert its 25%
ownership of the property into common shares of
Hunter at the fair market value for NPK's 25%
ownership of the property. The fair market value
of the property shall be determined by the parties
and if they cannot agree, shall be determined by 3
experts. Each party shall elect one expert and the
parties shall attempt to agree on a third expert.
If the parties cannot agree on a third expert then
either party may apply to a court of competent
jurisdiction for the appointment of a third
expert. The experts shall attempt to set a fair
value and if same cannot be agreed upon then
either party may apply to a court of competent
jurisdiction to set a fair price based on the
opinions of the three experts.
ii. Should NPK convert its 25% ownership into Hunter common
shares, then Hunter shall own 100% of the property. The
value of the shares shall be determined as the average share
price of the shares over the 30 business days of trading
prior to the election period as set out herein however shall
not be valued at less then $1.00 per share. The shares shall
be subject to restrictions imposed by any exchange or
trading system on which the shares are traded as well or any
other appropriate government or other appropriate authority.
All share certificates issued pursuant to this definitive
agreement shall have a 1 year hold period from date of
issue.
2. RIGHT OF ENTRY
Provided this Agreement is in good standing, Hunter, its
servants and agents (persons authorized by ▇▇▇▇▇▇) and
any assigns, shall have the right of access to and from
the Property and the right to enter upon, examine all
work completed, sample as may be required to confirm the
work completed, explore and develop the Property and
fund the Exploration Expenditures and undertake such
other activities as may be required to vest its
interests hereunder in such a manner as Hunter, in its
sole discretion, may deem advisable.
3. REPRESENTATIONS AND WARRANTIES OF THE OPTIONOR
The Optionor represents and warrants to, and covenants
with Hunter that to the best of its knowledge and where a
party acting reasonably should have known:
.1 the Property is accurately described in Schedule A,
and is presently in good standing under the
applicable laws of Uganda;
.2 there are no encumbrances, royalties or liens of any
kind associated in any way with the Property;
.3 the Optionor has the exclusive right to enter into
this Agreement and to dispose of an interest in the
Property in accordance with the terms and conditions
of this Agreement together with the applicable laws
of Uganda;
.4 the Optionor is validly subsisting corporation in
Uganda;
.5 All applicable regulatory approvals have been
received in respect of the Property;
.6 there is no adverse claim or challenge against or to
the ownership of the Property, nor is there any
outstanding agreements or options to acquire or
purchase the Property or any portion thereof and no
person, firm or corporation has any proprietary or
possessory interest in the Property other than the
Optionor and as provided for under this Agreement;
.7 there are no reclamation or rehabilitation
requirements outstanding on the Property of which
▇▇▇▇▇▇ has not or will not be advised and all work
has been carried out in accordance with all
applicable laws of the federal mining law of Uganda;
.8 The Optionor is not aware of any material fact or
circumstance which has not been disclosed to Hunter
which should be disclosed in order to prevent the
representations and warranties of the Optionor
provided in this Agreement from being misleading;
and
.9 the Optionor has, or will throughout the term of
this agreement, advised Hunter of all of the
material information about the Property generally
and specifically as to its mineral potential.
The representations and warranties of the Optionor herein
before set out are conditions on which ▇▇▇▇▇▇ has relied in
entering into this Agreement and will survive the
acquisition of any interest in the Property by Hunter and/or
the termination of this Agreement. The Optionor hereby
indemnifies and saves ▇▇▇▇▇▇ 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 the Optionor, that
the Optionor had knowledge of, or acting reasonably should
have had knowledge of and contained in this agreement
4. REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇
▇▇▇▇▇▇ represents and warrants to the Optionor that:
a. it is properly constituted and has the full power and
authority to enter into this Agreement; and
b. there are no outstanding suits or actions for non-
performance on reclamation work or any other activities with
respect to Hunter.
5. COVENANTS OF ▇▇▇▇▇▇
▇▇▇▇▇▇ covenants and agrees with the Optionor that until
the Option is exercised in accordance with the terms and
conditions of this Agreement, or the Option or this
Agreement otherwise terminates, Hunter shall:
a. keep the Property free and clear of liens and other
charges arising from the operations of Hunter under this
Agreement;
b. carry on all operations on the Property in a good and
miner-like manner and in compliance with all applicable
governmental regulations and restrictions;
c. pay or cause to be paid any rates, taxes, duties,
royalties, assessments or fees levied with respect to the
Property or Hunter's operations thereon in accordance with
this agreement;
d. indemnify and hold the Optionor harmless from any and
all liabilities, costs, damages or charges arising from the
failure of Hunter to comply with the covenants of Hunter
contained herein or otherwise arising from the operations on
the Property by ▇▇▇▇▇▇, its servants or agents; and
e. provide the Optionor with copies of any and all
documents filed by Hunter for recording of it's interest
with respect to the Property and any related regulatory
filings.
6. COVENANTS OF THE OPTIONOR
.1 To advise Hunter as required of its obligations
relating to keeping the property in good standing as
set out above; and
.2 indemnify and hold Hunter harmless from any and all
liabilities, costs, damages or charges arising from the
failure of the Optionor to comply with the covenants of
the Optionor contained herein or otherwise arising from
the operations on the Property by the Optionor, its
servants or agents.
7. TERMINATION
▇. ▇▇▇▇▇▇ may terminate this Agreement at any time, by
giving written notice to the Optionor of the termination of
this Agreement (the "Notice of Termination") and such
termination shall be effective on the 15th day after the
Notice of Termination is sent to the Optionor.
i. Notwithstanding the above, if Hunter fails to make any
payment (optional, discretionary or otherwise) or fails to
do anything on or before the last day provided for such
payment or performance under this Agreement (in each or
either case referred to as a "default" ), the Optionor may
terminate this Agreement but only if:
i. The Optionor has first given Hunter written notice of
the default containing particulars of the payment which
Hunter has not made or the act which Hunter has not
performed; and
ii. Hunter has not, within 30 days following delivery of
such notice, cured such default by appropriate payment or
performance (Hunter hereby agreeing that should it so
commence to cure any default, they will prosecute the same
to completion without undue delay).
j. Should Hunter fail to comply with the provisions of Sub-
paragraph 6.2 above, the Optionor may thereafter terminate
this Agreement by notice to Hunter with respect to the
default on the Property as laid out in Sub-paragraph 6.2.
k. Upon the termination of the Agreement, Hunter forfeits
any and all interest in the Property and shall cease to be
liable to the Optionor in debt, damages or otherwise. Upon
the termination of this Agreement, ▇▇▇▇▇▇ shall vacate the
Property within a reasonable time after such termination,
but shall have the right of access to such Property for a
period of three months thereafter for the purpose of
removing its chattels, machinery, equipment and fixtures
there from.
8. INDEPENDENT ACTIVITIES
Except as expressly provided herein, both parties shall
have the free and unrestricted right to independently
engage in and receive the full benefit of any and all
business endeavors of any sort whatsoever, whether or
not competitive with the endeavors contemplated herein
without consulting the others or inviting or allowing
the others to participate therein. Neither party shall
be under any fiduciary or other duty to the other, which
will prevent them from engaging in, or enjoying the
benefits of competing endeavors within the general scope
of the endeavors 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 of
either of the parties. In particular, without limiting
the foregoing, neither of the parties shall have an
obligation to the other party as to:
l. any opportunity to acquire, explore and develop any
mining property, interest or right presently owned by them
or offered to them outside of the Property at any time; and
m. the erection of any mining plant, mill, smelter or
refinery, whether or not such mining plant, mill, smelter or
refinery is erected for processing ores or concentrates from
the Property.
9. CONFIDENTIALITY OF INFORMATION
Both parties hereto shall treat all data, reports,
records and other information relating to this agreement
and the Property as confidential. While this agreement
is in effect, neither of the parties 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:
n. such disclosure is mandatory under the law or is deemed
necessary by Hunter's or the Optionor's counsel for the
satisfaction by Hunter or the Optionor of their obligations
to applicable securities regulatory bodies; or
▇. ▇▇▇▇▇▇ or the Optionor is seeking the participation of
such third party in the exploration, development or
production or financing of the Property and such information
is divulged under confidential circumstances.
Due consideration shall be given to present and future
governmental regulations with respect to such data
disclosures. The parties shall provide to each other,
with minimum 24 hour notice where possible, draft
planned press releases for comment.
10. ASSIGNMENT
p. Each of the parties has the right to assign all or any
part of their interest in the Property and in this
agreement. It shall be a condition precedent to any such
assignment that the assignee of the interest being
transferred agree in writing to be bound by the terms of
this agreement, as if it had been an original party hereto.
▇. ▇▇▇▇▇▇ shall have a 30 day first right of refusal on
any sale or transfer of the Optionor' rights title or
interest in the Property or any royalty from the Property.
11. UNAVOIDABLE DELAYS
If either party should be delayed in or prevented from
performing any of the terms, covenants or conditions of
this Agreement by reason of a cause beyond the control
of such parties, including fires, floods, earthquakes,
subsidence, ground collapse or landslides, interruptions
or delays in transportation or power supplies, strikes,
lockouts, wars, acts of God, government regulation or
interference, including but without restricting the
generality of the foregoing, forest or highway closures
or any other cause beyond such parties' control, then
any such failure on the part of such parties to so
perform shall not be deemed to be a breach of this
agreement and the time within which such parties are
obliged to comply with any such term, covenant or
condition of this agreement shall be extended by the
total period of all such delays. In order that the
provisions of this article may become operative, such
party shall give notice in writing to the other party,
forthwith and for each new cause of delay or prevention
and shall set out in such notice particulars of the
cause thereof and the day upon which the same arose, and
shall give like notice forthwith following the date that
such cause ceased to subsist.
If Notice under this clause is provided the Optionor
shall also provide Notice to the Government of Uganda
and make reasonable commercial efforts to have
provisions made for additional time with respect to
completion of work requirements and payment of mineral
taxes and associated deadlines. However, there is no
assurance that theses efforts will be successful and if
not the requirement for maintaining claims in good
standing shall be waived if necessary.
12. ARBITRATION
If there is any disagreement dispute or controversy (a
"Dispute") between the parties with respect to any
matter arising under this agreement or the construction
hereof, then the Dispute may be determined by
arbitration in accordance with the following procedures
or may be determined in accordance with a court of
competent jurisdiction in Ontario:
r. The parties on both sides of the Dispute shall inform
the other parties by notice of the name of an appointed
independent person as Arbitrator, who is a recognized expert
in the area which is the subject matter of the Dispute; and
s. The appointed Arbitrators shall agree on the name of
the one person that they wish to act as the third
Arbitrator. If the two Arbitrators can not agree within 30
days of their appointment on a third Arbitrators they may
apply to the Ontario Court General Division for guidance by
the court on the selection a third Arbitrator.
The arbitration shall be conducted in accordance with
the Arbitrations Act (Ontario ) and the decision of the
arbitrator panel shall be made within 30 days following
their being named, shall be based exclusively on the
advancement of exploration, development and production
work on the Property and not on the financial
circumstances of the parties. The costs of arbitration
shall be borne equally by the parties to the Dispute
unless otherwise determined by the arbitrator in the
award.
13. NOTICES
Any notice, election, consent or other writing required
or permitted to be given hereunder shall be deemed to be
sufficiently given if delivered by courier or if mailed
by registered mail, addressed as follows:
In the case of PK
C/o the President
NPK Resources Ltd
PO Box 1417
Kampala, Uganda
Facsimile: 256 77241 7801
In the case of Uranium Hunter Corporation:
Uranium Hunter Corporation
First Canadian Place
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Attention ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile:▇▇▇ ▇▇▇ ▇▇▇▇
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 (10th)
business day following the date of mailing, or, if
telegraphed or faxed, on the next succeeding day
following the telegraphing or 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
or if mailed by registered mail shall be deemed to have
been given only as of the date of actual delivery of the
same. Either party may from time to time by notice in
writing change its address for the purpose of this
paragraph.
14. GENERAL TERMS AND CONDITIONS
t. 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 is agreement.
u. This Agreement shall represent the entire understanding
between the parties with respect to the Property. No
representations or inducements have been made save as herein
set forth. No changes, alterations, or modifications of this
agreement shall be binding upon all parties until and unless
a memorandum in writing to such effect shall have been
signed by both parties hereto.
v. 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.
w. 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.
x. All reference to dollar amounts contained in this
agreement are references to United States funds.
y. This Agreement shall be governed by and interpreted in
accordance with the laws in effect in Ontario, and the
parties hereto attorn to the courts of Ontario for the
resolution of any disputes arising out of this agreement.
z. The Agreement may be executed in any number of
counterparts. Each counterpart shall be deemed for all
purposes to be an original, and all such counter-parts shall
constitute one and the same instrument, binding on all of
the parties hereto. A copy of this Agreement signed by one
party and faxed to another party shall be deemed to have
been executed and delivered by the signing party as though
an original. A photocopy of this Agreement shall be
effective as an original for all purposes.
aa. This Agreement shall enure to the benefit of and be
binding upon the parties hereto and their respective
successors and assigns.
bb. The parties will each be responsible for their own
internal costs and legal and other professional fees
incurred in connection herewith, the negotiation,
preparation and execution of this Definitive Agreement, or
otherwise relating to the Proposed Transaction.
15. RIGHT OF FIRST REFUSAL
The mineral rights as set out in the agreement relate
only to Uranium on the property. ▇▇▇▇▇▇ shall have a
right of first refusal to purchase other mineral rights
on the property the particulars being set out as
follows:
A. For the purposes of this Section, the term " bona fide
offer" shall mean an offer in writing received in good
faith by NPK from a person, firm or corporation dealing
at arm's length with NPK offering to purchase the other
mineral rights on the property beneficially owned by
NPK within 60 days from the date of such offer.
B. If NPK receives a bona fide offer (hereafter referred
to as the "Offer")to purchase the mineral rights
beneficially owned by NPK (hereinafter referred to as
the "Subject minerals") at a specified price, then NPK
shall first offer to sell the Subject minerals to
Hunter by giving Hunter notice in writing
(hereinafter referred to as the "Notice") of the NPK's
desire and intention to sell the Subject minerals on
the basis of the price specified in the Offer and on
the terms and conditions specified in the Offer,
accompanied by a copy of the Offer and indicating that
the Offer is acceptable to NPK.
C. Upon Notice having been given to Hunter in the manner
herein provided, Hunter shall have 60 business days
from the date when such Notice is received within which
to give NPK notice in writing (hereinafter referred to
as an "Intent to Buy") that Hunter desires and agrees
to purchase the Subject Minerals at the same price as
is set out in the Offer and on the same terms and
conditions as are contained in the Offer, subject to
the provisions of this Section. If ▇▇▇▇▇▇ fails or
refuses to give an Intention to buy within the time
prescribed shall be deemed to have refused to purchase
the Subject minerals.
D. If Hunter gives an intention to buy to the Seller
within the time prescribed, then Hunter shall purchase
the Subject minerals.
If the foregoing correctly sets forth your understanding of
the terms and conditions agreed to between us with respect
to the Option granted to ▇▇▇▇▇▇ please acknowledge the
same by signing and returning to us the duplicate copy of
this letter enclosed for that purpose, whereupon a binding
agreement among us will be in effect.
NPK INC
Per: s/___________________________
President and Director
The Undersigned, Hunter, hereby confirm our acceptance of
the foregoing terms and conditions and agree to be bound
thereby as of this 26 day of June 2007.
Uranium Hunter Corporation
Per:
s/____________________________
▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
President and Director
