THE PROPERTY OPTION AGREEMENT WILLIAM A. HOWELL AND DEL EXPLORATION LTD. THE RUSTY 1 to 4, AND IRON 1 MINERAL PROPERTIES PROVINCE OF BRITISH COLUMBIA
XXXXXXX
X. XXXXXX
AND
DEL
EXPLORATION LTD.
THE
XXXXX 1 to 4, AND IRON 1
MINERAL
PROPERTIES
PROVINCE
OF BRITISH COLUMBIA
TABLE
OF CONTENTS
|
DEFINITIONS |
3 |
|
REPRESENTATIONS
AND WARRANTIES OF XXXXXX |
5 |
|
|
|
|
REPRESENTATIONS
AND WARRANTIES OF DEL |
6 |
|
GRANT
AND EXERCISE OF OPTION |
6 |
|
RIGHT
OF ENTRY |
8 |
|
OBLIGATIONS
OF XXXXXX DURING PROPERTY OPTION PERIOD |
8 |
|
TERMINATION
OF PROPERTY ACQUISITION |
8 |
|
TRANSFERS
|
9 |
|
FORCE
MAJEURE |
10 |
|
CONFIDENTIAL
INFORMATION |
10 |
|
ARBITRATION
|
10 |
|
DEFAULT
AND TERMINATION |
11 |
|
NOTICES
|
11 |
|
GENERAL
|
11 |
SCHEDULE
“A”
DESCRIPTION
OF PROPERTY RIGHTS AND PROPERTY
SCHEDULE
“B”
JOINT
VENTURE AGREEMENT
2
OPTION
AGREEMENT
THIS
AGREEMENT made
effective as of the 3 day of February, 2005.
BETWEEN:
XXXXXXX
X. XXXXXX an
individual having a residence at 00000 00X Xxxxxx, Xxxxxx, in the Province of
British Xxxxxxxx, X0X, 0X0, Xxxxxx;
(hereafter
“Xxxxxx”)
- and
-
DEL
EXPLORATION LTD.., a body
corporate, incorporated under the laws of British Columbia and having offices
located at 455 0000 Xxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0,
Xxxxxx;
(hereafter
“DEL”)
WHEREAS:
X.
Xxxxxx is
the holder of or is entitled to become the holder of all Property Rights related
to the Property; and
X.
Xxxxxx
has agreed to grant an Option to DEL to acquire an interest in and to the
Property Rights and the Property, on the terms and conditions hereinafter set
forth;
NOW
THEREFORE THIS AGREEMENT WITNESSETH that in
consideration of the sum of $1.00 now paid by DEL to Xxxxxx (the receipt of
which is hereby acknowledged), the parties agree as follows:
DEFINITIONS
1.1
For the
purposes of this Agreement the following words and phrases shall have the
following meanings, namely:
a)
“Agreement”
means this agreement and any amendments thereto from time to time;
b) “Commencement
Date” means the date of this Agreement;
|
c)
|
“Completion
Date” means the date on which DEL fulfills all of its obligations with
respect to proper exercise of the Option as contemplated in Article 4
hereof; |
d) “DEL”
means DEL Exploration Ltd.;
|
e)
|
“Exploration
Expenditures” means the sum of (i) all costs of acquisition and
maintenance of the Property, all exploration and development expenditures
and all other costs and expenses of whatsoever kind or nature including
those of a capital nature, incurred or chargeable by DEL with
|
3
respect
to the exploration and development of the Property and the placing of the
Property into Commercial Production and (ii) any compensation for general
overhead expenses which Xxxxxx, as Operator, will charge to DEL, an amount equal
to 7.5% of all amounts included in subparagraph (i) in each year involving
payments by it in excess of $50,001 in the year, and 15% of all other amounts
included in subparagraph (i) in each year involving payments by it less than
$50,000 in the year;
|
f)
|
“Feasibility
Report” means a detailed written report of the results of a comprehensive
study on the economic feasibility of placing the Property or a portion
thereof into Commercial Production and shall include a reasonable
assessment of the mineral ore reserves and their amenability to
metallurgical treatment, a description of the work, equipment and supplies
required to bring the Property or a portion thereof into Commercial
Production and the estimated cost thereof, a description of the mining
methods to be employed and a financial appraisal of the proposed
operations supported by an explanation of the data used therein;
|
g)
“Xxxxxx”
means Xxxxxxx X. Xxxxxx
|
h)
|
“Joint
Venture Agreement” means the agreement substantially in the form as
attached hereto as Schedule “B”; |
|
i)
|
“Mine”
means the workings established and assets acquired, including, without
limiting the generality of the foregoing, development headings, plant and
concentrator installations, infrastructure, housing, airport and other
facilities in order to bring the Property into Commercial
Production; |
j)
“Mineral
Products” means the end products derived from operating the Property as a
Mine;
k)
“Mining
Operations” means every kind of work done:
i) on or in
respect of the Property in accordance with a Feasibility Report; or
|
ii)
|
if
not provided for in a Feasibility Report, unilaterally and in good faith
to maintain the Property in good standing, to prevent waste or to
otherwise discharge any obligation which is imposed upon it pursuant to
this Agreement; |
including,
without limiting the generality of the foregoing, investigating, prospecting,
exploring, developing, property maintenance, preparing reports, estimates and
studies, designing, equipping, improving, surveying, construction and mining,
milling, concentrating, rehabilitation, reclamation, and environmental
protection;
|
l)
|
“Option”
means the irrevocable option for DEL to earn in and acquire a net
undivided interest in and to the Property as provided in this
Agreement; |
|
m)
|
“Option
Period” means the period commencing on the Commencement Date to and
including December 31, 2008; |
|
n)
|
“Property”
means the exploration properties and lands located in the Province of
Newfoundland, all as more particularly described in Schedule “A”
hereto; |
| o) |
“Property Rights”
means all applications for permits for general reconnaissance, permit for
general reconnaissance, interim approvals, applications for contracts of
work,
contracts of work, licenses, permits, easements, rights-of-way,
certificates and other approvals obtained by either of the parties either
before or after the date of this
Agreement
and necessary for the exploration and |
4
development
of the Property, or for the purpose of placing the Property into production or
continuing production therefrom;
REPRESENTATIONS
AND WARRANTIES OF XXXXXX
2.1 Xxxxxx
hereby acknowledges and confirms that it holds the Property Rights related to an
undivided one hundred (100%) percent interest in the Property as at the date
hereof.
| 2.2 |
Xxxxxx
represents and warrants to DEL that: |
| a) |
Xxxxxx
is lawfully authorized to hold his interest in the Property and will
remain so entitled until 75% of the interests of Xxxxxx in the Property
have been duly transferred to DEL as contemplated by the terms
hereof; |
| b) |
Xxxxxx
is
an individual, has attained the age of majority and is legally competent
to execute this agreement and to take all actions required pursuant
thereto and that upon the execution and delivery, this agreement, will
constitute a legal, valid and binding contract of Xxxxxx enforceable
against Xxxxxx in accordance with its
terms; |
| c) |
as
at the date hereof and at the time of transfer to DEL of an interest in
the mineral claims and/or exploration licenses comprising the Property
Xxxxxx is and will be the beneficial owner of its interest in the Property
free and clear of all liens, charges, claims, royalties or net profit
interests of whatsoever nature, and no taxes or rentals will be due in
respect of any thereof; |
| d) |
Xxxxxx
has the right and capacity to deal with the Property and the right to
enter into this Agreement and to dispose of his right, title and interest
in the Property as herein contemplated; |
| e) |
there
is no adverse claim or challenge against or to Xxxxxx’x interest in the
Property, nor to the knowledge of Xxxxxx is there any basis therefor, and
there are no outstanding agreements or options to acquire or purchase such
interest in the Property or any portion thereof other than this
Agreement; |
| f) |
no
person has any royalty, net profit interests or other interest whatsoever
in the Property; |
| g) |
Xxxxxx
is duly authorized to execute this Agreement and for the performance of
this Agreement by him, 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 its
articles or constating documents or any indenture, agreement or other
instrument whatsoever to which Xxxxxx is a party or by which he is bound
or to which he or the Property may be
subject; |
| h) |
no
proceedings are pending for, and it is unaware of any basis for the
institution of any proceedings leading to, the placing of Xxxxxx in
bankruptcy or subject to any other laws governing the affairs of and
insolvent person; |
| i) |
there
are no claims, proceedings, actions or lawsuits in existence and to the
best of Xxxxxx’x information and belief none are contemplated or
threatened against or with respect to the right, title, estate and
interest of Xxxxxx in the Property; |
| j) |
to
the best of his information and belief, all laws, regulations and orders
of all governmental agencies having jurisdiction over the Property have
been complied with by Xxxxxx; |
| k) |
to
the best of his information and belief Xxxxxx is in good standing under
all agreements and instruments affecting the Property to which he is a
party or is bound. |
2.3
The representations and warranties contained in this section are provided for
the exclusive benefit of DEL, and a breach of any one or more thereof may be
waived by DEL in whole or in part at any time without prejudice to its rights in
respect of any other breach of the same or any other representation or warranty,
and the representations and warranties contained in this section shall survive
the execution hereof.
5
2.4
The representations and warranties contained in this section shall be deemed to
apply to all assignments, transfers, conveyances or other documents transferring
to DEL the interest to be acquired hereunder and there shall not be any merger
of any covenant, representation or warranty in such assignments, transfers,
conveyance or documents, any rule or law, in equity or statute to the contrary
notwithstanding.
REPRESENTATIONS
AND WARRANTIES OF DEL
3.1
DEL represents and warrants to Xxxxxx that:
| a) |
it
has been duly incorporated and validly exists as a corporation in good
standing under the laws of its jurisdiction of
incorporation; |
| b) |
it
is or will be prior to acquiring any undivided interest in the Property
hereunder, lawfully authorized to hold mineral claims and real property
under the laws of the jurisdiction in which the Property is
situate; |
| c) |
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 transaction herein contemplated by it 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 it or any shareholders' or directors' resolution, indenture,
agreement or other instrument whatsoever to which it is a party or by
which they are bound or to which it or the Property may be subject;
and, |
| d) |
no
proceedings are pending for, and it is unaware of any basis for the
institution of any proceedings leading to, the dissolution or winding up
of DEL or the placing of DEL in bankruptcy or subject to any other laws
governing the affairs of insolvent corporations.
|
3.2
The representations and warranties contained in this section are provided for
the exclusive benefit of Xxxxxx and a breach of any one or more thereof may be
waived by Xxxxxx in whole or in part at any time without prejudice to its rights
in respect of any other breach of the same or any other representation or
warranty, and the representations and warranties contained in this section shall
survive the execution hereof.
3.3
The representations and warranties contained in this section shall be deemed to
apply to all assignments, transfers, conveyances or other documents transferring
to Xxxxxx the interest to be acquired hereunder and there shall not be any
merger of any covenant, representation or warranty in such assignments,
transfers, conveyance or documents, any rule or law, in equity or statute to the
contrary notwithstanding.
.
GRANT
AND EXERCISE OF OPTION
4.1
Xxxxxx hereby irrevocably grants to DEL the sole and exclusive right and Option
to acquire up to and including a eighthly five percent (85%) right, title,
estate and interest of Xxxxxx’x one hundred (100%) percent net undivided
interest) in and to the Property Rights and Property, free and clear of all
charges, encumbrances, claims, royalties and net profit interests of whatsoever
nature.
4.2
If at any time after the date hereof Xxxxxx determines in its sole discretion to
commission a Feasibility Report recommending the Construction of a Mine, Xxxxxx
shall give written notice thereof to DEL.
4.3
The Option may be exercised at any time (subject to the terms as stated herein)
by DEL:
a)
paying Xxxxxx two thousand ($2,500) dollars upon the execution of this
agreement;
b)
paying Xxxxxx three thousand ($3,000) dollars on or before December 31,
2005;
c)
paying Xxxxxx seven thousand and five hundred ($7,500) on or before December 31,
2006
d)
paying Xxxxxx seventeen thousand and five hundred dollars ($17,500) on or
before December 31, 2007
e)
incurring Exploration Expenditures on the Property as
follows:
6
i)
aggregate Exploration Expenditures of not less than five thousand dollars
($5,000) on or before December 31, 2005;
ii)
aggregate Exploration Expenditures (including Exploration Expenditures as
described in paragraph 4.3(c)(i) above) of not less than ten thousand dollars
($10,000) on or before December 31, 2006;
iii)
aggregate Exploration Expenditures (including Exploration Expenditures as
contemplated in paragraph 4.3(c)(i) and (ii) above) of not less than sixty
thousand ($60,000) dollars on or before December 31, 2007; and
iv)
aggregate Exploration Expenditures (including Exploration Expenditures as
contemplated in paragraph 4.3(c)(i), (ii) and (iii) above) of not less than one
hundred and sixty thousand dollars ($160,000) on or before December 31,
2008.
4.4
Prior to the exercise of the Option as herein provided, Xxxxxx is hereby
appointed as operator of the
Property
and shall carry out exploration and development programs on the Property on the
following terms:
a)
Xxxxxx shall have the same powers, duties and obligations in carrying out such
programs asset out in Article 7 of the Joint Venture Agreement attached hereto
as Schedule “B”, excepting thereout Section 7.5 and 7.6 thereof;
b)
For income tax purposes, all Exploration Expenditures incurred by Xxxxxx
pursuant to such programs shall be incurred for the benefit of DEL;
and
c)
Until such time as the Option is exercised in accordance with the terms hereof,
DEL shall have no interest of whatsoever nature in the Property Rights or the
Property.
4.5
If and when the Option has been exercised in accordance with Section 4.3
and commencing on the
Completion
Date:
a)
The undivided right, title and interest of the parties in the Property
shall be as follows:
Before
Completion Date (net) After
Completion Date (net)
Xxxxxx
100% Xxxxxx
15%
DEL
0% DEL
85%
Total
100% Total
100%
b)
the undivided right, title and interest in and to the Property Rights and the
Property acquired by DEL upon the Completion Date shall vest in DEL free and
clear of all charges, encumbrances, claims, royalties or net profit interests of
whatsoever nature other than as set forth and described in Venture Agreement
substantially in the form attached hereto as Schedule “B”;
d)
for the purposes of the Joint Venture Agreement:
i)
Xxxxxx will be deemed to have contributed thirty three thousand and six hundred
dollars ($33,600)and DEL will be deemed to have contributed one hundred and
ninety thousand and five hundred dollars ($190,500) dollars of Costs to the
Joint Venture for purposes thereof;
ii) Xxxxxx
will be the initial operator of the Joint Venture and will have the option to
remain as operator of the Joint Venture for so long as Xxxxxx holds a
participating interest of fifteen (15%) percent or greater in the Joint
Venture;
iii)
Xxxxxx will be entitled to a fee equal to:
A. 7.5%
of the value of Costs in excess of five thousand ($5,000) dollars;
and
B. 15% of
the value of Costs less than five thousand ($5,000) dollars;
iv) any
royalties on production from the Property payable to third parties will be
payable pro rata in accordance with each party's participating interest in the
Joint Venture.
4.6
Within 30 days after the Completion Date, Xxxxxx shall deliver to DEL's
counsel such number of duly executed transfers which in the aggregate convey
Xxxxxx'x interest to be acquired hereunder in the Property in favour of DEL. In
the event that Xxxxxx shall deliver notice to DEL's counsel that it has
exercised the Option pursuant to the terms hereof, DEL shall be entitled to
receive and to record such of the transfers contemplated hereby at its own cost
with the appropriate governmental office to effect legal transfer of such
interest in the Property into the name of DEL.
4.7
If, during the Option Period, DEL:
7
a)
makes a voluntary or involuntary assignment into bankruptcy or takes
advantage of any legislation for the winding-up or liquidation of the affairs of
insolvent or bankrupt companies or has a bankruptcy petition filed against it;
or
b)
fails to perform in a manner that is consistent with good mining practice
or fails to perform in a manner consistent with its duties and responsibilities
under this Agreement and does not remedy such default within 30 days of receipt
of notice from Xxxxxx specifying such default;
RIGHT
OF ENTRY
5.1
During the term of this Agreement, the directors and officers of Xxxxxx
and DEL and their servants, agents and independent contractors, shall have the
sole and exclusive right in respect of the Property to:
a)
enter thereon at their sole risk and expense;
b) do
such prospecting, exploration, development and other mining work thereon and
thereunder as Xxxxxx, as operator, in its sole discretion may determine
advisable;
c)
bring upon and erect upon the Property such buildings, plant, machinery and
equipment as Xxxxxx and DEL may deem advisable and for a period of six months
following the termination of this Agreement, to remove such buildings, plant,
machinery and equipment; and
d)
remove therefrom and dispose of reasonable quantities of ores, minerals and
metals for the purposes of obtaining assays or making other tests.
OBLIGATION
OF XXXXXX DURING OPTION PERIOD
6.1
During the term of this Agreement, Xxxxxx shall:
a)
maintain in good standing those mineral claims and/or exploration licenses
comprised in the Property by the doing and filing of assessment work or the
making of payments in lieu thereof, and the performance of all other actions
which may be necessary in that regard and in order to keep such mineral claims
free and clear of all liens and other charges arising from Xxxxxx’x activities
thereon except those at the time contested in good faith by DEL;
b)
permit the directors, officers, employees and designated consultants of DEL, at
their own risk and expense, access to the Property at all reasonable times, and
DEL agrees to indemnify Xxxxxx against and to save it harmless from all costs,
claims, liabilities and expenses that DEL may incur or suffer as a result of any
injury (including injury causing death) to any director, officer, employee or
designated consultant of DEL while on the Property;
c)
permit DEL, at its own expense, reasonable access to the results of the work
done on the Property during the last completed calendar year;
d)
do all work on the Property in a good and workmanlike fashion and in accordance
with all applicable laws, regulations, orders and ordinances of any governmental
authority;
e)
indemnify and save DEL harmless in respect of any and all costs, claims,
liabilities and expenses arising out of Xxxxxx'x activities on the
Property;
TERMINATION
OF OPTION
7.1
Provided that DEL is not in default pursuant to the provisions hereof, DEL shall
have the right at any time during the term of this Agreement to terminate the
Option by providing not less than forty five (45) days written notice to
Xxxxxx.
7.2
Notwithstanding the termination of the Option, DEL shall have the right, within
a period of one hundred and eighty (180) days following the end of the Option
Period, to remove from the Property all buildings, plant, equipment, machinery,
tools, appliances and supplies which have been brought upon the Property by or
on behalf of DEL, and any such property not removed within such 180 day period
shall thereafter become the property of Xxxxxx.
8
TRANSFERS
8.1
If Xxxxxx (the “Proposed Seller”) should receive a bona fide offer from an
independent third party (the “Proposed Purchaser”) dealing at arm's length with
the Proposed Seller to purchase all or a part of its interest in the Property,
which offer the Proposed Seller desires to accept, or if the Proposed Seller
intends to sell all or a part of its interest in the Property:
a)
The Proposed Seller shall first offer (the “Offer”) such interest in writing to
DEL upon terms no less favourable than those offered by the Proposed Purchaser
or intended to be offered by the Proposed Seller, as the case may
be;
b)
The Offer shall specify the price, terms and conditions of such sale, the name
of the Proposed Purchaser and shall, in the case of an intended offer by the
Proposed Seller, disclose the person or persons to whom Xxxxxx intends to offer
its interest and, if the offer received by the Proposed Seller from the Proposed
Purchaser provides for any consideration payable to the Proposed Seller
otherwise than in cash, the Offer shall include the Proposed Seller's good faith
estimate of the cash equivalent of the non-cash consideration;
c)
If within a period of sixty (60) days of the receipt of the Offer and DEL
notifies the Proposed Seller in writing that it will accept the Offer, the
Proposed Seller shall be bound to sell such interest to DEL on the terms and
conditions of the Offer. If the Offer so accepted by DEL contains the Proposed
Seller's good faith estimate of the cash equivalent of the non-cash
consideration as aforesaid, and if DEL disagrees with the Proposed Seller's best
estimate, DEL shall so notify Xxxxxx at the time of acceptance and DEL shall, in
such notice, specify what it considers, in good faith, the fair cash equivalent
to be and the resulting total purchase price. If DEL so notifies the Proposed
Seller, the acceptance by DEL shall be effective and binding upon DEL, and the
cash equivalent of any such non-cash consideration shall be determined by
binding arbitration and shall be payable by DEL, subject to prepayment as
hereinafter provided, within 60 days following its determination by arbitration.
DEL shall in such case pay to the Proposed Seller, against receipt of an
absolute transfer of clear and unencumbered title to the interest of the
Proposed Seller being sold, the total purchase price which is specified in its
notice to the Proposed Seller and such amount shall be credited to the amount
determined following arbitration of the cash equivalent of any non-cash
consideration;
d) If
DEL fails to notify the Proposed Seller before the expiration of the time
limited therefor that it will purchase the interest offered, the Proposed Seller
may sell and transfer such interest to the Proposed Purchaser at the price and
on the terms and conditions specified in the Offer for a period of sixty (60)
days, but the terms of this paragraph shall again apply to such interest if the
sale to the Proposed Purchaser is not completed within such sixty (60)
days;
e)
Any sale hereunder shall be conditional upon the Proposed Purchaser
delivering to the nonselling party, its agreement related to this Agreement and
to the Property, containing:
i)
a covenant by the Proposed Purchaser to perform all the obligations of the
Proposed Seller to be performed under this Agreement in respect of the interest
to be acquired by it from the Proposed Seller to the same extent as if this
Agreement had been originally executed by the Proposed Purchaser;
and
ii) a
provision subjecting any further sale, transfer or other disposition of such
interest
in the
Property and this Agreement or any portion thereof to the restrictions contained
in this paragraph (e).
8.2
The provision of Section 8.1 shall apply to a proposed sale by DEL of its
interest in the Property
mutatis
mutandis such that
Xxxxxx shall have a right of first refusal to acquire such interest in
proportion to the then current interest.
8.3
No assignment by a party of any interest less than its entire interest in this
Agreement and in the
Property
shall discharge it from any of its obligations hereunder, but upon the transfer
by a party of the entire interest at the time held by it in this Agreement,
whether to one or more transferees and whether in one or in a number of
successive transfers, the party shall be deemed to be discharged from all
obligations hereunder save and except for fulfilment of contractual commitments
accrued due prior to the date on which the party shall have no further interest
in this Agreement.
9
FORCE
MAJEURE
9.1
If DEL is at any time either during the term of this Agreement or thereafter
prevented or delayed in complying with any provisions of this Agreement by
reason of strikes, lock-outs, labour shortages, power shortages, fuel shortages,
fires, wars, acts of God, governmental regulations restricting normal
operations, shipping delays or any other reason or reasons, other than lack of
funds, beyond the control of DEL, the time limits for the performance by DEL of
its obligations hereunder shall be extended by a period of time equal in length
to the period of each such prevention or delay, but nothing herein shall
discharge DEL from its obligations hereunder to maintain the Property in good
standing.
9.2
DEL shall give prompt notice to Xxxxxx of each event of force majeure under
Section 9.1 and upon cessation of such event shall furnish to Xxxxxx with notice
to that effect together with particulars of the number of days by which the
obligations of DEL hereunder have been extended by virtue of such event of force
majeure and all preceding events of force majeure.
CONFIDENTIAL
INFORMATION
10.1
The parties to this Agreement shall keep confidential all books, records, files
and other information supplied by any party to one of the other parties or to
their employees, agents or representative in connection with this Agreement or
in respect of the activities carried out on the Property by a party, or related
to the sale of minerals, or other products derived from the Property, including
all analyses, reports, studies or other documents prepared by a party or its
employees, agents or representatives, which contain information from, or
otherwise reflects such books, records, files or other information. The parties
shall not and shall ensure that their employees, agents or representatives do
not disclose, divulge, publish, transcribe, or transfer such information, all or
in part, without the prior written consent of the other parties, which may not
be arbitrarily withheld and which shall not apply to such information or any
part thereof to the extent that:
a)
prior to its receipt by a party such information was already in the possession
of such party or its employees, agents or representatives; or
b)
in respect of such information required to be publicly disclosed pursuant to
applicable securities or corporate laws.
ARBITRATION
11.1
The parties agree that all questions or matters in dispute with respect to any
dispute shall be settled by arbitration and shall be submitted to arbitration
pursuant to the terms hereof.
11.2
It shall be a condition precedent to the right of any parties, to submit any
matter to arbitration pursuant to the provisions hereof, that any party
intending to refer any matter to arbitration shall have given not less than ten
(10) days' prior notice of its intention to do so to the other party, together
with particulars of the matter in dispute. On the expiration of such ten (10)
days, the party who gave such notice may proceed to refer the dispute to
arbitration as provided in 11.3.
11.3
The party desiring arbitration shall appoint one arbitrator, and shall notify
the other party of such appointment, and such other party shall, within fifteen
(15) days after receiving such notice, either consent to the appointment of such
arbitrator which shall then carry out the arbitration or appoint an arbitrator,
and the two arbitrators so named, before proceeding to act, shall, within thirty
(30) days of the appointment of the last appointed arbitrator, unanimously agree
on the appointment of a third arbitrator to act with them and be chairman of the
arbitration herein provided for. If the other parties shall fail to appoint an
arbitrator within fifteen (15) days after receiving notice of the appointment of
the first arbitrator, the first arbitrator shall be the only arbitrator, and if
the two arbitrators appointed by the party shall be unable to agree on the
appointment of the chairman, the chairman shall be appointed under the
provisions of the Arbitration
Act of
British Columbia. Except as specifically otherwise provided in this section, the
arbitration herein provided for shall be conducted in accordance with such Act.
The chairman, or in the case where only one arbitrator is appointed, the single
arbitrator, shall fix a time and place in Vancouver, British Columbia, for the
purpose of hearing the evidence and representations of the
parties,
10
and he
shall preside over the arbitration and determine all questions of procedure not
provided for under such Act or this section. After hearing any evidence and
representations that the parties may submit, the single arbitrator, or the
arbitrators, as the case may be, shall make an award and reduce the same to
writing, and deliver one copy thereof to each of the parties. The expense of the
arbitration shall be paid as specified in the award
11.4
The parties agree that the award of a majority of the arbitrators, or in the
case of a single arbitrator, of such arbitrator, shall be final and binding upon
each of them.
DEFAULT
AND TERMINATION
12.1
If at any time during the term of this Agreement DEL fails to perform any
obligation required to be performed by it hereunder or is in breach of a
warranty given by it hereunder, which failure or breach materially interferes
with the implementation of this Agreement, Xxxxxx may terminate this Agreement
but only if:
a)
it shall have first given to the defaulting DEL a notice of default containing
particulars of the obligation which the defaulting DEL has not performed, or the
warranty breached; and
b)
the defaulting DEL has not, within forty-five (45) days following delivery of
such notice of default, cured such default or commenced proceedings to cure such
default by appropriate payment or performance, the defaulting DEL hereby
agreeing that should it so commence to cure any default it will prosecute the
same to completion without undue delay, provided however, that this paragraph
shall not be extended to a default by DEL to exercise an Option pursuant to
Article 4 thereof.
12.2
Notwithstanding Section 12.1 hereof, if at any time DEL fails to perform a
condition precedent to the exercise of the Option, Xxxxxx shall be entitled to
forthwith terminate this Agreement.
NOTICES
13.1
Each notice, demand or other communication required or permitted to be given
under this Agreement shall be in writing and shall be sent by prepaid registered
mail deposited in a Post Office in Canada addressed to the party entitled to
receive the same, or delivered, telexed, telegraphed or telecopied to such party
at the address for such party specified on the face page hereof. The date of
receipt of such notice, demand or other communication shall be the date of
delivery thereof if delivered, telexed, telegraphed or telecopied, or, if given
by registered mail as aforesaid, shall be deemed conclusively to be the third
business day after the same shall have been so mailed except in the case of
interruption of postal services for any reason whatever, in which case the date
of receipt shall be the date on which the notice, demand or other communication
is actually received by the addressee.
13.2
Either party may at any time and from time to time notify the other party in
writing of a change or address and the new address to which notice shall be
given to it thereafter until further change.
GENERAL
14.1
This Agreement shall supersede and replace any other agreement or arrangement,
whether oral or written, heretofore existing between the parties in respect of
the subject matter of this Agreement.
14.2
No consent or waiver expressed or implied by any party in respect of any breach
or default by any other party in the performance by such other of its
obligations hereunder shall be deemed or construed to be a consent to or a
waiver of any other breach of default.
14.3
The parties shall promptly execute or cause to be executed all documents, deeds,
conveyances and other instruments of further assurance and do such further and
other acts which may be reasonably necessary or advisable to carry out fully and
effectively the intent and purpose of this Agreement or to record wherever
appropriate the respective interest from time to time of the parties in the
Property.
14.4
This Agreement shall enure to the benefit of and be binding upon the parties and
their respective successors and permitted assigns.
14.5
This Agreement shall, (i) be governed by and construed in accordance with the
laws of British Columbia and the parties hereby irrevocably attorn to the
jurisdiction of the said province and (ii) be
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subject
to the approval of all securities regulatory authorities having jurisdiction,
such approvals to be sought in a timely and diligent manner.
14.6
Time shall be of the essence in this Agreement.
14.7
Wherever the neuter and singular is used in this Agreement it shall be deemed to
include the plural, masculine and feminine, as the case may be.
14.8
The rights and obligations of each party shall be in every case several and not
joint or joint and several.
IN
WITNESS WHEREOF the
parties hereto have executed this Agreement as of the day and year first above
written.
XXXXXXX
X.XXXXXX
/s/Xxxxxxx
X.
Xxxxxx
/s/Xxxxx
Xxxxx
Xxxxxxx
X.
Xxxxxx witness
Xxxxx
Xxxxx
name
of witness
DEL
EXPLORATION LTD.
/s/Xxxxxx
Ferguson____________
Xxxxxx
Xxxxxxxx, Pres. & CE0
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