OPTION AGREEMENT
EXHIBIT
10.2
OPTION
AGREEMENT
THIS
OPTION AGREEMENT is made and entered into effective as of July 28, 2006 by
and between Elkhorn Goldfields, Inc., a Montana corporation, whose address
is
000 Xxxx Xxxx Xxxxxx, Xxxxx, Xxxxxxxx 00000 (“EGI”),
and
Montana Tunnels Mining, Inc., a Delaware corporation, whose address is X.X.
Xxx
000, Xxxxxxxxx Xxxx, Xxxxxxx 00000 (“MTM”).
EGI
and MTM will be collectively referred to hereinafter as the “Parties”
and
each will be referred to individually as a “Party”.
RECITALS
A. MTM
is
the owner of certain patented mining claims and unpatented mining claims in
Xxxxxxxxxx County, Montana, and holds a leasehold interest in certain additional
unpatented mining claims in Xxxxxxxxxx County, Montana, all as more particularly
described in Exhibit A
attached
hereto and incorporated by reference (the “Property”).
A
previously operating gold mine known as the Diamond Hill Mine (the “Mine”)
is
located on the Property. MTM is also the owner of certain personal property
rights and interests associated with the Mine (the “Assets”),
as
described in Exhibit B
attached
hereto and incorporated herein by reference.
B. MTM
desires to grant to EGI, and EGI desires to acquire: (i) an exclusive right
to explore and evaluate the mineral development potential of the Property;
and
(ii) an option to purchase the Property from MTM, all for the consideration
and upon the terms and conditions described herein.
AGREEMENT
NOW,
THEREFORE, for and in consideration of the claim maintenance and tax payment
requirements set forth in this Agreement, and the mutual promises, covenants,
and conditions herein contained and recited, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged
and
confirmed, the Parties hereto agree as follows:
ARTICLE
1
DEFINITIONS
As
used
in this Agreement, the following terms shall have the meanings assigned to
them
in this Article 1.
1.1 |
“Affiliate”
means any person, partnership, joint venture, corporation or other
form of
enterprise which directly or indirectly controls, is controlled by,
or is
under common control with, a Party to this Agreement. For purposes
of the
preceding sentence, “control”
means possession, directly or indirectly, of the power to direct or
cause
direction of management and policies through ownership of voting rights.
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F-1
1.2 |
“Agreement”
means this Option Agreement, the recitals and all exhibits attached
hereto
and by this reference incorporated
herein.
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1.3 |
“Asset
Records”
means all records and files of MTM pertaining to the Mine, the Assets
and
the Property, other than Retained Records. Except to the extent such
materials constitute Retained Records, and except to the extent that
providing such materials would be in violation of applicable Laws,
Asset
Records include all available property, geological, geophysical,
geochemical, metallurgical and engineering reports, analyses, data,
maps
and records pertaining to the Assets, the Mine, and the Property; all
mill, processing and smelter records; all assays, surveys, technical
reports, drill logs and samples; all records pertaining to Permits
and
environmental conditions at or affecting the Property; and all title
records and conveyance documents held by MTM with respect to the Property;
excluding any interpretive data or reports that are proprietary to
or
constitute trade secrets of MTM or any third
party.
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1.4 |
“Assumed
Liabilities”
means all of the past, present and future obligations and liabilities
(whether known or unknown, fixed or contingent) associated with the
Property, the Mine, and the Assets.
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1.5 |
“Assumption
Agreement”
means the Assumption Agreement in the form of Exhibit D
hereto, pursuant to which EGI will assume and be solely responsible
for
the Assumed Liabilities.
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1.6 |
“Xxxx
of Sale”
means a Xxxx of Sale and Assignment substantially in the form of
Exhibit E
hereto,
pursuant to which MTM will convey the Personal Property to
EGI.
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1.7 |
“Effective
Date”
means July 28, 2006.
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1.8 |
“Environmental
Compliance”
means actions taken in connection with activities or operations on
the
Property to comply with the requirements of all Environmental Laws
or
contractual commitments related to reclamation of the Property or other
compliance with Environmental Laws.
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1.9 |
“Environmental
Laws”
means the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, the Resource Conservation and Recovery Act of 1976, the
Clean
Air Act, the Clean Water Act, the Hazardous Materials Transportation
Act,
the Toxic Substances Control Act, the Federal Water Pollution Control
Act,
the Superfund Amendments and Reauthorization Act of 1986, the Safe
Drinking Water Act, the Endangered Species Act, the National Environmental
Policy Act, the Mine Safety and Health Act of 1977, the Federal Land
Policy and Management Act of 1976, the Emergency Planning and Community
Right to Know Act, and the National Historic Preservation Act, each
as
amended, and any state law counterparts, together with all other laws
(including rules, regulations, codes, plans, injunctions, judgments,
orders, decrees, rulings, and charges thereunder) of federal, state
and
local governments (and all agencies thereof) concerning pollution or
protection of the environment, reclamation, public health and safety,
or
employee health and safety, including laws relating to emissions,
discharges, releases, or threatened releases of pollutants, contaminants,
or chemical, industrial, hazardous, or toxic materials or wastes into
ambient air, surface water, ground water, or lands or otherwise relating
to the existence, manufacture, processing, distribution, use, treatment,
storage, disposal, recycling, transport, or handling or reporting or
notification to any governmental authority in the collection, storage,
use, treatment or disposal of pollutants, contaminants, or chemical,
industrial, hazardous, or toxic materials or
wastes.
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F-2
1.10 |
“Environmental
Liabilities”
means any liability arising out of, based on or resulting
from: (i) the presence, release, threatened release,
discharge or emission into the environment of any Hazardous Materials
or
substances existing or arising on, beneath or above such property and/or
emanating or migrating and/or threatening to emanate or migrate from
such
property to other properties; (ii) disposal or treatment of or the
arrangement for the disposal or treatment of Hazardous Materials
originating or transported from such property to an off-site treatment,
storage or disposal facility; (iii) physical disturbance of the
environment on or from such property; or (iv) the violation or
alleged violation of any Environmental Laws relating to such
property.
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1.11 |
“Exploration”
means all activities directed toward ascertaining the existence, location,
quantity, quality or commercial value of deposits of Valuable Minerals,
and all related Environmental Compliance.
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1.12 |
“Exploration
and Related Work”
means and includes all operations and activities of EGI (or performed
at
the request of EGI) on or relating to the Property for purposes of
determining ore reserves and mineralization, including, without
limitation, the right to enter upon the Property for purposes of
surveying, exploring, testing, sampling, trenching, bulk sampling in
an
amount not to exceed 200 tons of ore without the consent of MTM,
prospecting and drilling for Valuable Minerals, and to construct and
use
roads and drill pads, and to use so much of the surface of the Property
in
such manner as EGI deems necessary in its reasonable discretion for
the
enjoyment of any rights and privileges granted to EGI hereunder or
otherwise necessary to effect the purposes of this Agreement, and any
reclamation and remediation required in connection with the
foregoing.
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1.13 |
“Hazardous
Materials”
means any substance: (a) the presence of which requires reporting,
investigation, removal or remediation under any Environmental Law;
(b) that is defined as a “hazardous waste,” “hazardous substance,”
“extremely hazardous substance” or “pollutant” or “contaminant” under any
Environmental Law; (c) that is toxic, explosive, corrosive,
flammable, ignitable, infectious, radioactive, reactive, carcinogenic,
mutagenic or otherwise hazardous and is regulated under any Environmental
Law; (d) the presence of which on a property causes or threatens to
cause a nuisance upon the property or to adjacent properties or poses
or
threatens to pose a hazard to the health or safety of persons on or
about
the property; (e) that contains gasoline, diesel fuel or other petroleum
hydrocarbons; or (f) that contains PCBs, asbestos or urea formaldehyde
foam insulation; in each case subject to exceptions provided in applicable
Environmental Laws.
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F-3
1.14 |
“Mining
Lease”
means that Mining Exploration and Lease Agreement dated May 26, 1999,
among Xxxx Xxxxxx, et al and MTM.
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1.15 |
“Option”
means the exclusive right of EGI to purchase the Property pursuant
to this
Agreement.
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1.16 |
“Option
Period”
means the period of time commencing on the Effective Date and continuing
for a period of two years thereafter, unless EGI has previously exercised
the Option in accordance with Sections 2.1 and 2.2 or EGI has
otherwise relinquished its rights
hereunder.
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1.17 |
“Property”
shall have the meaning set forth in
Recital A.
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1.18 |
“Retained
Records”
means (i) copies of any property files of MTM pertaining to the
Property, the Mine or the Assets; (ii) all tax returns, files and
records of MTM pertaining to the Property, the Mine or the Assets;
(iii) all files, records and sales materials of MTM pertaining to
marketing and sales of production from the Mine; and (iv) all other
files and records of MTM which do not directly relate to the Property,
the
Mine or the Assets.
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1.19 |
“Valuable
Minerals”
means all ores, minerals, mineral deposits or mineral substances of
every
kind or character located in, on or under the
Property.
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1.20 |
“$”
means United States currency.
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ARTICLE 2
GRANT
OF RIGHTS AND OPTION
2.1 |
Rights
Granted.
MTM hereby grants to EGI: (a) the exclusive right to enter
upon the Property during the Option Period for the purpose of conducting
Exploration and Related Work; and (b) the exclusive and irrevocable
option to purchase the Property, exercisable by EGI in its sole discretion
(the “Option”)
by (i) paying a purchase price (if it elects to exercise the Option)
of $250,000 plus the posting of a substitute reclamation bond, payable
as
set forth in Section 2.4 (the “Purchase
Price”),
and (ii) paying holding costs for the Property as set forth in
Section 2.3.
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2.2 |
Option
Period; Termination.
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(a) |
Option
Period.
Unless sooner terminated pursuant to this Section 2.2, the Option
shall expire at 5:00 p.m. Mountain time on July 28, 2008 (the
“Expiration
Date”).
The Option may be exercised by EGI by delivery to MTM of a written
notice
of election to exercise the Option at any time prior to the end of
the
Option Period (the date such notice is effective being referred to
hereinafter as the “Exercise
Date”).
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(b) |
Termination.
In the event EGI desires to terminate this Agreement, which EGI may
elect
to do in its sole discretion at any time during the Option Period,
EGI may
terminate this Agreement by giving MTM written notice of termination,
and
this Agreement shall be deemed terminated immediately upon receipt
by MTM
of the notice of termination. Following expiration of the Option Period
without EGI exercising the Option, or termination of this Agreement
for
any reason prior to the expiration of the Option Period, neither of
the
Parties shall have any further obligations or liabilities hereunder,
except as set forth in Sections 8.1 and
8.2.
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F-4
2.3 |
Property
Maintenance.
During the Option Period, in order to maintain the Option in full force
and effect, EGI shall, at least 15 days prior to their respective
completion or due dates, (a) perform required annual assessment work
(in good faith and in accordance with industry standards) or pay all
claim
maintenance fees required in lieu thereof to maintain the unpatented
mining claims comprising a portion of the Property (the “Claims”),
and provide reasonable evidence of such payment or performance to MTM;
(b) make all filings and recordings with the Bureau of Land
Management (the “BLM”)
and Xxxxxxxxxx County required in connection therewith,
and provide copies of such filings and recordings to MTM; (c) pay all
real property and other ad valorem taxes assessed against the
Property; and (d) pay all rental and advance royalty payments
required under the Mining Lease. If EGI fails to make the payments
or
perform the obligations set forth in items (a) - (d) above, and to
provide MTM with evidence of payment or performance of the same, not
later
than 15 days prior to their respective completion or due dates, MTM
may,
but shall have no obligation to, pay or perform the same and terminate
this Agreement pursuant to
Section 8.2.
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2.4 |
The
Closing.
If EGI exercises the Option in accordance with the terms of this
Agreement, the closing of the sale of the Property (the “Closing”)
shall take place within 30 days after the written notice of election
to exercise the Option is delivered by EGI to MTM, at a time and place
mutually agreeable to EGI and MTM.
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(a) |
Deliverables.
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(i) |
At
the Closing, MTM shall deliver to EGI: (a) a fully
executed and acknowledged good and sufficient special warranty deed
and
assignment substantially in the form of Exhibit C
attached hereto and incorporated herein by reference (the “Deed”),
conveying the Property to EGI free and clear of all liens and encumbrances
arising by, through or under MTM other than Permitted Encumbrances;
(b) a fully executed Xxxx of Sale; (c) a fully-executed
Assignment of the Mining Lease in the form of Exhibit F
attached hereto and incorporated herein by reference; (d) a
certificate of non-foreign status for U.S. federal tax purposes;
(e) a fully executed Assumption Agreement; and (f) the Asset
Records.
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(ii) |
At
the Closing, EGI shall deliver: (a) the full amount of the
Purchase Price, $250,000 of which shall be paid by wire transfer in
accordance with written instructions to be delivered by MTM to EGI
prior
to the date of the Closing, and the remainder of which shall be payable
by
EGI having in place a reclamation bond or other surety instruments,
which
will have been as of the Closing Date accepted by the Montana Department
of Environmental Quality (“MDEQ”) and the BLM, to (1) replace MTM’s
existing reclamation bond covering the Property in the amount of $622,512
(as more particularly described in Section 2.7), and (2) which will
allow for the release, simultaneous with the Closing, of that Irrevocable
Standby Letter of Credit No. SSB-SB-2005/0276 (DEQ Bond No. 002620-HR)
and
any guarantees associated therewith; (b) a fully executed Assumption
Agreement; and (c) certificates of good standing for EGI from the offices
of the Montana Secretary of State. In addition, each of EGI and MTM
will
deliver such other closing certificates and documents as are reasonably
requested by the other Party. Closing costs, including real property
transfer taxes, recording costs and any escrow fees will be paid by
EGI,
including all applicable taxes and disbursements. Any ad valorem real
property taxes on the Property for calendar year 2006 will be split
between MTM and EGI on a pro rata basis.
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F-5
2.5 |
Geological
and Other Data.
Upon execution of this Agreement, MTM shall make available to EGI all
records, information and data in its possession or reasonably available
to
it relating to title to the Property or environmental conditions at
or
pertaining to the Property, and all maps, assays, surveys, technical
reports, drill logs, samples, mine, mill, processing and smelter records,
and metallurgical, geological, geophysical, geochemical, and engineering
data, and interpretive reports derived therefrom, concerning the Property
and EGI, at its expense, may copy any such records, information and
data
that it desires. MTM makes no representation or warranty as to the
accuracy, reliability or completeness of any such records, information
or
data, and EGI and any third parties with whom EGI shares any such data and
information shall rely on the same at their sole
risk.
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2.6 |
Transfer
Approvals.
Promptly after the Exercise Date, EGI agrees, in consultation with
and
approval from MTM, to contact the applicable governmental authorities
and
use commercially reasonable efforts to understand what information
those
governmental authorities will require in order to timely grant the
transfer of the Permits from MTM to EGI or what information those
governmental authorities will require EGI to submit in order for EGI
to
obtain replacement permits for those Permits presently held by MTM
that
are not transferable (provided that in making such contacts EGI shall
comply with the confidentiality provisions set forth in
Section 10.5). Promptly after the Exercise Date, EGI (i) shall
file with the appropriate governmental authorities all applications
and
other instruments of transfer for all of the Permits which are
transferable and subject to approval or other processing by such
governmental authorities, including the posting and acceptance by the
appropriate governmental authority of whatever bonds or other surety
are
required in connection with such approval or other processing;
(ii) shall file with the appropriate governmental authorities all
required notices of transfers of these Permits for which no approval
is
necessary; and (iii) shall file with the appropriate governmental
authorities all applications, instruments or notices required, including
the posting and acceptance by the appropriate governmental authority
of
whatever bonds or other surety are required, to obtain replacement
permits
for those Permits presently held by MTM that are not transferable (with
those items referred to in sub-clauses (i), (ii) and (iii) above
collectively referred to as the “Transfer
Approvals”).
EGI will diligently pursue on a commercially reasonable efforts basis
all
Transfer Approvals necessary to complete transfer of the Property and
the
Permits from MTM to EGI or obtain replacement permits in EGI’s own name as
of the Closing Date (provided that all such Transfer Approvals shall
be
contingent on the consummation of the Closing), and will keep MTM apprised
of the status of its efforts to secure such Transfer Approvals (provided
that use of “commercially reasonable efforts” shall not require EGI to
undertake extraordinary or unreasonable measures to obtain such Transfer
Approvals as of the Closing Date, such as the initiation or prosecution
of
legal proceedings or the payment of fees in excess of normal and usual
filing and processing fees). All of the Transfer Approvals must be
in
place and effective as of the Closing Date, and EGI shall have no right
to
conduct any activities under any permit that has not been assigned,
transferred or re-issued to it.
MTM agrees that it will cooperate in good faith with EGI in its efforts
to
obtain the Transfer Approvals.
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F-6
2.7 |
Replacement
of Bonds.
Not later than ten days after the Exercise Date, EGI shall provide
to the
appropriate state and federal governmental authorities (the “Agencies”)
a firm undertaking (such firm undertaking to include submission of
the
final reclamation bond on forms approved by the Agencies) acceptable
to
the Agencies (subject only to the payment of required premiums by EGI
and
the Closing) to post, effective as of the Closing Date, a reclamation
bond
(or other surety instrument acceptable to MTM and the Agencies) covering
all of the existing reclamation, remediation, clean-up and closure
obligations pertaining to the Property, which shall replace MTM’s existing
reclamation bond covering the Property in the amount of $622,512 (as
more
particularly described in Section 2.7), and which will allow for the
release, simultaneous with the Closing, of that Irrevocable Standby
Letter
of Credit No. SSB-SB-2005/0276 (DEQ Bond No. 002620-HR) and any guarantees
associated therewith. From and after the Closing Date, EGI assumes,
and
MTM shall have no further obligation or liability for, all reclamation,
remediation, clean-up and closure requirements associated with the
Property.
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ARTICLE
3
RIGHTS
AND OBLIGATIONS OF EGI AND OTHER
ARRANGEMENTS
DURING THE OPTION PERIOD
3.1 |
EGI’s
Rights.
During the Option Period, the rights of EGI shall include the
following:
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(a) |
Operations
at the Property.
EGI may carry out such Exploration operations at the Property as it
may,
in its sole discretion, determine to be warranted, and EGI shall have
the
exclusive right to conduct and control of all Exploration and Related
Work
on or for the benefit of the Property, and of any and all equipment,
supplies, machinery or other assets purchased or otherwise acquired
in
connection with such Exploration operations; provided,
however,
that during the Option Period except as provided herein, EGI shall
have no
right to conduct on the Property any activities related to activities
of
EGI on other properties, and EGI shall have no right
to:
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(i) |
conduct
any activities in preparation for the removal and recovery of Valuable
Minerals from the Property, including pre-stripping, stripping and
the
construction or installation of a mill, xxxxx facilities, or any other
improvements or other facilities for beneficiation of Valuable Minerals;
or
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F-7
(ii) |
to
remove Valuable Minerals from the Property,
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except that EGI shall be permitted to recover and remove such Valuable Minerals from the Property as are reasonably required to carry out Exploration on the Property in accordance with usual industry standards, including removal of samples of Valuable Minerals for testing. |
(b) |
Permits.
The rights of EGI shall include all other rights necessary or incident
to
or for its performance of its activities hereunder, including, but
not
limited to the authority to apply in its own name for all necessary
permits, licenses and other approvals from the United States of America,
the State of Montana or any other governmental or other entity having
regulatory authority over any part of the
Property.
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3.2 |
Conduct
of Operations by EGI at the Property.
All of the work which may be performed by EGI on or with respect to
the
Property shall be performed in a good and workmanlike manner and in
accordance with good industry practices.
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3.3 |
Indemnity.
EGI agrees to indemnify, defend and hold MTM, its Affiliates, and their
respective officers, directors and employees harmless from and against
any
and all Losses (as defined in Section 7.1) MTM may incur to third
persons or entities for injury to or death of persons or damage to
property which result from operations conducted by or on behalf of
EGI at
or with respect to the Property during the Option Period, unless such
injury, death or damage is due to MTM’s gross negligence or willful
misconduct.
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3.4 |
Insurance.
During the Option Period, EGI agrees to carry such insurance, covering
all
employees of EGI working at or on the Property, as will fully comply
with
the requirements of the statutes of the State of Montana pertaining
to
worker’s compensation and occupational disease and disabilities as are now
in force or as may be hereafter amended or enacted. In addition, during
the Option Period, EGI agrees to carry liability insurance with respect
to
any operations conducted by it or on its behalf on or with respect
to the
Property in reasonable amounts in accordance with accepted industry
practices. In connection with that obligation, EGI agrees that it will
carry general liability insurance (a) with a policy limit of
$1,000,000 (combined single limit, annual aggregate), until such time
as
EGI elects to conduct activities on the Property that will require
submission to the BLM or MDEQ and approval by the BLM or MDEQ of a
Plan of
Operations or Mining and Reclamation Plan, and thereafter (b) with a
policy limit of $2,000,000 (combined single limit, annual aggregate),
and
that MTM shall be named as an additional named insured on each of said
policies for the foresaid amounts. Prior to conducting any work on
the
Property, EGI will provide to MTM a certificate evidencing the required
amount of insurance coverage and naming MTM as an additional insured,
which such certificate shall provide for at least thirty (30) days
prior written notice of cancellation to EGI and to
MTM.
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3.5 |
Compliance
with Laws.
EGI agrees to conduct and perform all of its operations on or with
respect
to the Property during the Option Period in compliance with all applicable
federal, state and local laws, rules and regulations, including, without
limitation, such laws, rules and regulations pertaining to social
security, unemployment compensation, wages and hours and conditions
of
labor, and Environmental Laws, and EGI shall defend, indemnify and
hold
MTM, its Affiliates and their respective officers, directors and employees
harmless from and against any and all Losses (as defined in
Section 7.1) incurred by MTM occasioned by the failure of EGI to
comply with said laws, rules or
regulations.
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F-8
3.6 |
Liens
and Encumbrances.
During the Option Period, and thereafter if EGI does not exercise the
Option, EGI shall keep the title to the Property free and clear of
all
liens and encumbrances resulting from its operations under this Agreement.
At its sole cost and expense, EGI shall contest any suit, demand or
action
commenced to enforce any claim of a lien or encumbrance on the Property
and, if the suit, demand or action is decided by a court or other
authority of ultimate and final jurisdiction against EGI or the Property,
EGI shall promptly pay the judgment and shall post any bond and take
all
other action necessary to prevent any sale or loss of the Property
or any
part thereof.
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3.7 |
Reclamation.
If this Agreement is terminated and EGI does not exercise the Option,
EGI
shall reclaim and remediate the Property to the extent disturbed by
EGI
(or at its direction) during the Option Period, in accordance with
applicable federal, state and local laws, rules and regulations. MTM,
to
the extent it may legally do so, hereby agrees to grant to EGI such
access
to the Property following such termination as is reasonably necessary
to
complete such reclamation and remediation work, although MTM shall
have no
obligation to maintain any of the Claims after this Agreement is so
terminated.
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3.8 |
Data
and Information.
During the Option Period, not later than 30 days after the first and
second anniversaries of the Effective Date, EGI shall provide to MTM
copies of any and all data and information created by it or on its
behalf
and pertaining to the Property including, but not limited to,
electronically transferred geochemical laboratory results, raw
geophysical, geological data and information, and information and data
represented on paper such as survey maps, drill hole logs, assay reports,
and other non-interpretive geological data relating to the Claims,
as well
as copies of internal analyses of such data, excluding any such analyses
that include trade secrets or other data or information proprietary
to
EGI. The data and information to be provided to MTM shall include without
limitation copies of survey maps, drill hole logs, assay reports or
other
non-interpretive data (or analyses thereof) pertaining to work that
was
not performed on the Property if it was performed for the benefit of
the
Property. EGI makes no representation or warranty as to the accuracy,
reliability or completeness of any such information made available
to MTM
under this Section 3.8, and MTM shall rely on the same at its sole
risk.
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3.9 |
Responsibility
for Services to the Mine.
All charges for water, electricity, natural gas, telephone, sewer,
trash
disposal and other recurring services provided to the Mine which relate
to
such services provided subsequent to the Effective Date will be for
the
account of EGI.
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F-9
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES OF MTM
4.1 |
Representations
and Warranties.
MTM represents and warrants to EGI as of the date hereof as follows,
and
covenants that these representations and warranties will be true and
correct throughout the Option Period and through the
Closing:
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(a) |
Organization
and Standing.
MTM is a corporation duly organized, validly existing, and in good
standing under the laws of the State of
Delaware.
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(b) |
Corporate
Power.
MTM has the requisite corporate power and authority: (i) to enter
into this Agreement and all other agreements contemplated hereby; and
(ii) to carry out and perform its obligations under the terms and
provisions of this Agreement and all agreements contemplated
hereby.
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(c) |
Authorization
and Enforceability.
All requisite corporate action on the part of MTM, and its officers,
directors, and shareholders, necessary for the execution, delivery,
and
performance of this Agreement and all other agreements of MTM contemplated
hereby, have been taken. This Agreement and all agreements and instruments
contemplated hereby are, and when executed and delivered by MTM (assuming
valid execution and delivery EGI), will be, legal, valid, and binding
obligations of MTM enforceable against MTM in accordance with their
respective terms. The execution, delivery and performance of this
Agreement by MTM will not violate any provision of the articles of
incorporation or by-laws of MTM or of any law; any order of any court
or
other agency of government; or any provision of any indenture, agreement
or other instrument to which MTM is a party or by which its properties
or
assets are bound; or be in conflict with, result in a breach of or
constitute (with due notice and lapse of time) a default under any
such
indenture, agreement or other instrument. There is no law, rule or
regulation, nor is there any judgment, decree or order of any court
or
governmental authority binding on MTM which would be contravened by
the
execution, delivery, performance or enforcement of this Agreement or
any
instrument or agreement required hereunder. Notwithstanding the foregoing,
no representation is made as to: (i) the remedy of specific
performance or other equitable remedies for the enforcement of this
Agreement or any other agreement contemplated hereby; or (ii) rights
to indemnity under this Agreement for securities law liability.
Additionally, this representation is limited by applicable bankruptcy,
insolvency, moratorium, and other similar laws affecting generally
the
rights and remedies of creditors and secured
parties.
|
(d) |
Encumbrances.
To MTM’s knowledge, the Property is free and clear of all encumbrances
arising by, through or under MTM, except for Permitted Encumbrances
and
those liens, claims and encumbrances specifically identified in
Exhibit A.
Except as set forth in the mining lease identified in Exhibit A
(the Mining
Lease”)
and as otherwise identified in Exhibit A,
there are no royalties or other burdens on production affecting the
Properties. For purposes of this Agreement, “Permitted
Encumbrances”
means (i)(A) liens for taxes, assessments and governmental charges or
levies not yet due and payable; and (B) encumbrances such as
materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s liens and
other similar liens arising in the ordinary course of business securing
obligations that (x) are not overdue for a period of more than 60
days and (y) are not in excess of $5,000 in the aggregate at any
time; (ii) minor survey exceptions, easement agreements and other
customary encumbrances on title to real property that (A) were not
incurred in connection with any indebtedness and (B) do not have a
material adverse effect on the value or the use of such property for
its
present purposes; (iii) zoning restrictions and other limitations
imposed by any governmental authority having jurisdiction over real
property; (iv) reservations in federal patents; (v) encumbrances
of record (which for purposes of this Agreement shall include encumbrances
that are reflected in the official records of the Xxxxxxxxxx County,
Montana Clerk and Recorder’s Office or the Xxxxxxxxxx County Assessor’s
Office, or that are reflected in the public records maintained by the
Montana State Office of the Bureau of Land Management); (vi) as to
those portions of the Property covered by the Mining Lease, the terms
and
conditions of the Mining Lease, and liens affecting the interests of
the
lessor under the Mining Lease; (vii) liens of pledges or deposits
under workers’ compensation laws or similar legislation, unemployment
insurance or other types of social security or to secure the performance
of tenders, statutory obligations, surety and appeal bonds, bids, leases,
governmental contracts, performance and return of money bonds and similar
obligations; (viii) rights reserved to or vested in any governmental
authority to control or regulate any interest in the Property in any
manner, and all laws, rules and regulations of any governmental authority;
and (ix) the production royalty payable to Shamrock Partners pursuant
to that Quit Claim Deed described in Item 1 of Part 4 of Exhibit
A.
|
F-10
(e) |
Validity
of Mining Lease.
(i) MTM has not received any notice of default of any of the terms or
provisions of the Mining Lease; (ii) the Mining Lease is in good
standing; (iii) MTM has no knowledge of any act or omission or any
condition on the properties covered thereby which could be considered
or
construed as a material default under the Mining Lease. MTM has delivered
to or made available for inspection by EGI a true and correct copy
of the
Mining Lease.
|
(f) |
Title
to Claims.
With respect to the Claims, except as provided in Exhibit A
and subject to the paramount title of the United States and the rights
of
third parties to use the surface of those Claims pursuant to applicable
laws, to MTM’s knowledge: (i) all Governmental Fees required to
maintain those Claims have been paid through the assessment year ending
September 1, 2006; and (ii) evidence of payment of Governmental
Fees, and other filings required to maintain those Claims in good standing
have been properly and timely recorded or filed with appropriate
governmental agencies. Nothing in this Section 4.1(f), however, shall
be deemed to be a representation or a warranty as to the presence or
absence of unpatented mining claims or millsites in conflict with the
Claims, that the Claims constitute a compact group of contiguous claims
free of interior gaps or fractions, or that any of the Claims contains
a
valuable mineral deposit. In addition, MTM does not make any
representation or warranty as to whether or not MTM or its
predecessors-in-title established or maintained pedis
possessio
rights with respect to any of the Claims, what rights MTM has to use
the
surface of any of the Claims for any purpose, or otherwise as to the
validity of any of the Claims or the use of the same (except as
specifically set forth above).
|
F-11
(g) |
Litigation.
With respect to the Property, there are no pending or, to MTM’s knowledge,
threatened, actions, suits, claims or
proceedings.
|
(h) |
Permits.
MTM has obtained all material permits, licenses, approvals, authorizations
and qualifications of all federal, state and local authorities required
for it to carry on its current operations at or on the Property
(collectively, the “Permits”),
as listed on Schedule 4.1(h).
|
(i) |
Taxes.
All federal, state and local excise, property and other taxes and
assessments assessed against the Property and due on or prior to the
Effective Date have been timely and properly paid.
|
(j) |
Disclaimer
of Certain Representations and Warranties.
EXCEPT AS SPECIFICALLY PROVIDED IN THIS ARTICLE 4, MTM MAKES NO
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED (AND HEREBY DISCLAIMS
ANY SUCH REPRESENTATIONS OR WARRANTIES) WITH RESPECT TO (A) THE
PROPERTY, (B) LIABILITIES, INCLUDING ENVIRONMENTAL LIABILITIES,
ASSOCIATED THEREWITH, OR (C) THE QUANTITY, QUALITY, SUITABILITY FOR
MINING OR COSTS OF MINING OF ANY MINERAL RESERVES OR RESOURCES, IF
ANY,
INCLUDED IN THE PROPERTY.
|
ARTICLE
5
REPRESENTATIONS
AND WARRANTIES OF EGI
5.1 |
Representations
and Warranties of EGI.
EGI represents and warrants to MTM as of the date hereof as follows,
and
covenants that these representations and warranties will be true and
correct throughout the Option Period and through the
Closing:
|
(a) |
Organization
and Standing.
EGI is a corporation duly organized, validly existing, and in good
standing under the laws of the State of
Montana.
|
(b) |
Corporate
Power.
EGI has the requisite corporate power and authority: (i) to enter
into this Agreement and all other agreements contemplated hereby; and
(ii) to carry out and perform its obligations under the terms and
provisions of this Agreement and all agreements contemplated
hereby.
|
(c) |
Authorization
and Enforceability.
All requisite corporate action on the part of EGI and its respective
officers, directors and shareholders, necessary for the execution,
delivery and performance of this Agreement and all other agreements
contemplated hereby have been taken. This Agreement and all agreements
and
instruments contemplated hereby, when executed and delivered by EGI
(assuming valid execution and delivery by MTM), will be the legal,
valid,
and binding obligations of EGI enforceable against it in accordance
with
their terms. The execution, delivery and performance of this Agreement
by
EGI will not violate any provision of the articles of incorporation
or
by-laws of EGI, or of any law; any order of any court or other agency
of
government; or any provision of any indenture, agreement or other
instrument to which EGI is a party or by which its properties or assets
are bound; or be in conflict with, result in a breach of or constitute
(with due notice and lapse of time) a default under any such indenture,
agreement or other instrument. There is no law, rule or regulation,
nor is
there any judgment, decree or order of any court or governmental authority
binding on EGI which would be contravened by the execution, delivery,
performance or enforcement of this Agreement or any instrument or
agreement required hereunder. Notwithstanding the foregoing, no
representation is made as to: (i) the remedy of specific
performance or other equitable remedies for the enforcement of this
Agreement or any other agreement contemplated hereby; or (ii) rights
to indemnity under this Agreement for securities law liability.
Additionally, this representation is limited by applicable bankruptcy,
insolvency, moratorium and other similar laws affecting generally the
rights and remedies of creditors and secured
parties.
|
F-12
(d) |
EGI’s
Due Diligence.
EGI has conducted such due diligence investigations concerning the
Property as it has determined to be appropriate. With respect to the
exploration potential of the Property, title to or environmental
conditions at or potential environmental liabilities associated with
the
Property, the validity of the Claims and all other matters concerning
the
Property which are not specifically addressed by MTM’s representations and
warranties in this Agreement, EGI has relied exclusively upon its due
diligence investigation of the Property, including the advice of its
own
experts or consultants, as EGI has determined to be necessary or desirable
in its sole discretion.
|
ARTICLE
6
NOTICES
6.1 |
Notices.
All notices given in connection herewith shall be in writing, and all
such
notices and deliveries to be made pursuant hereto shall be given or
made
in person, by certified or registered mail, by reputable overnight
courier, or by facsimile with receipt confirmed. Such notices and
deliveries shall be deemed to have been duly given and received when
actually delivered in person or sent by facsimile (during normal business
hours and with receipt confirmed), on the next business day following
the
date they are sent by courier, or three (3) business days after registered
or certified mailing when deposited in a receptacle for United States
mail, postage prepaid, and addressed as
follows:
|
F-13
(a) |
If
to MTM:
|
Montana
Tunnels Mining, Inc.
0000 Xxxxx
Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention:
R. Xxxxx Xxxxxxx
Facsimile
No.: (000) 000-0000
Telephone
No.: (000) 000-0000
with
a
copy to:
Xxxxxxx
Xxxxxxxx
Xxxxx
Xxxxxx & Xxxxxx LLP
0000
00xx
Xxxxxx, Xxxxx 000
Xxxxxx,
Xxxxxxxx 00000
Facsimile
No.: (000) 000-0000
Telephone
No.: (000) 000-0000
(b) |
If
to EGI:
|
Elkhorn
Goldfields, Inc.
000 Xxxx
Xxxx Xxxxxx
Xxxxx,
Xxxxxxxx 00000
Attention:
Xxxxxx Xxxxxxxx
Facsimile
No.: (000)
000-0000
Telephone
No.: (000)
000-0000
with
a
copy to:
Xxxx X.
Xxxxxx, Esq.
Xxxxxx
Xxxxxxxxxx, LLP
0000
Xxxxxx Xxxxxx
Xx Xxxx,
Xxxxx 00000
Facsimile
No.: (000) 000-0000
Telephone
No.: (000) 000-0000
ARTICLE
7
INDEMNIFICATION
7.1 |
By
EGI.
EGI agrees to defend, indemnify and hold harmless MTM, its Affiliates,
successors, assigns, and its and their respective officers, directors
and
employees from and against any and all claims, actions, suits, losses,
liabilities, damages, assessments, judgments, costs and expenses,
including reasonable attorneys’ fees and the costs of defending the same
(collectively, “Losses”),
arising out of or related to: (a) any breach by EGI of any
representation, warranty or covenant set forth in this Agreement;
(b) any activities conducted by or on behalf of EGI on or in
connection with the Property; or (c) any Environmental Liabilities
associated with the Property in connection with operations carried
out by
or at the direction of EGI.
|
F-14
7.2 |
By
MTM.
MTM agrees to defend, indemnify and hold harmless EGI, its Affiliates,
successors, assigns, and its and their respective officers, directors
and
employees from and against any and all Losses arising out of or related
to
any breach by MTM of any representation, warranty or covenant set forth
in
this Agreement.
|
7.3 |
Notification.
Any Party who has a claim giving rise to indemnification liability
pursuant to this Agreement (an “Indemnified
Party”)
which results from a claim by a third party or otherwise shall give
prompt
notice to the other Party (the “Indemnifying
Party”)
of such claim, together with a reasonable description thereof. Failure
to
provide such notice shall not relieve a Party of any of its obligations
hereunder except to the extent materially prejudiced thereby. With
respect
to any claim by a third party against any Party to this Agreement which
is
subject to indemnification under this Agreement, the Indemnifying Party
shall be afforded the opportunity, at its expense, to defend or settle
the
claim if it utilizes counsel reasonably satisfactory to the Indemnified
Party, and promptly commences the defense of such claim and pursues
such
defense with diligence; provided,
however,
that the Indemnifying Party shall secure the consent of the Indemnified
Party to any settlement, which consent shall not be unreasonably withheld.
The Indemnified Party may participate in the defense of any claim at
its
expense, and until the Indemnifying Party has agreed to defend such
claim,
the Indemnified Party may file any motion, answer or other pleading
or
take such other action as it deems appropriate to protect its interests
or
those of the Indemnifying Party. If an Indemnifying Party does not
elect
to contest any third-party claim, the Indemnifying Party shall be bound
by
the results obtained with respect thereto by the Indemnified Party,
including any settlement of such claim.
|
ARTICLE
8
DEFAULT
AND TERMINATION
8.1 |
Termination
by EGI.
EGI shall have the right to terminate, surrender and relinquish this
Agreement at any time during the Option Period by giving written notice
to
MTM of such election in accordance with the provisions of
Section 2.2(b). Upon termination of this Agreement by EGI, EGI shall
have no further liability or obligations hereunder or with respect
to the
Property, except with respect to the obligations set forth in
Sections 2.3 (if such termination is effective after August 1 of
the calendar year in question), 3.3, 3.5 (only
with respect to indemnification),
3.6, 3.7, 3.8, 7.1, 7.3, 8.1, 8.3, 8.4 and 8.5, and any other obligations
that may have accrued prior to the effective date of such termination,
and
MTM shall have no further liability or obligations hereunder, except
with
respect to the obligations set forth in
Section 3.7.
|
8.2 |
Termination
by MTM.
In the event of a default hereunder on the part of EGI, MTM shall give
to
EGI written notice specifying the particular default or defaults asserted,
and, in the case of a default other than with respect to the payment
of
money, EGI shall have 30 days after the receipt of said notice within
which either to cure such specified defaults, or to undertake diligent
efforts to cure the same. In the event such curative action is not
so
completed or diligent efforts to cure such defaults are not undertaken
within the applicable 30-day period and thereafter diligently pursued
to
completion, MTM may elect to terminate this Agreement by notice to
EGI as
provided in Section 6.1, which such termination shall be effective
immediately upon EGI’s receipt of such notice. In the case of a default by
EGI relating to the payment of any funds to MTM, EGI shall have five
days
after receipt of notice of such default to rectify the same, failing
which
MTM may elect to terminate this Agreement by written notice to EGI
as
provided in Section 6.1. Upon termination of this Agreement pursuant
to this Section 8.2, EGI shall have no further liability or
obligations hereunder or with respect to the Property, except with
respect
to the obligations set forth in Sections 2.3 (if such termination is
effective after August 1 of the calendar year in question) 3.3, 3.5
(only with respect to indemnification), 3.6, 3.7, 3.8, 7.1, 7.3, 8.3,
8.4
and 8.5, and any other obligations that may have accrued prior to the
effective date of such termination, and MTM shall have no further
liability or obligations hereunder, except with respect to the obligations
set forth in Section 3.7.
|
F-15
8.3 |
Return
of Data.
As soon as practicable upon the termination of this Agreement, if EGI
has
not exercised the Option, EGI shall return to MTM all title,
environmental, metallurgical, geological, geophysical, milling and
other
data furnished to EGI by MTM. At such time, EGI shall make available
to
MTM for examination and copying all information relating to title to
the
Property or environmental conditions at or pertaining to the Property,
and
all surveys, maps, drill hole logs, samples, sample locations, mine,
mill,
processing and smelter records geological, geophysical, geochemical
and
engineering data from the Property, as well as assays developed by
EGI
with respect to the Property during the term of this Agreement and
not
previously made available to MTM; provided,
however,
that EGI shall have no obligation to make any interpretive data or
reports
developed by it or on its behalf available to MTM. EGI makes no
representation or warranty as to the accuracy, reliability or completeness
of any such information made available to MTM under this Section 8.3,
and MTM shall rely on the same at its sole risk.
|
8.4 |
Release.
Upon termination of this Agreement during the Option Period, if EGI
has
not exercised the Option, EGI shall provide MTM with a written release,
in
the nature of a quit claim deed or similar document in recordable form,
of
its rights hereunder with respect to the
Property.
|
8.5 |
Surrender
of Possession and Removal of Equipment.
Upon termination of this Agreement, if EGI has not exercised the Option,
EGI shall surrender possession of the Property, subject to the condition
that EGI shall have the right at any time within six months after such
surrender or termination of this Agreement to remove all of its tools,
equipment, machinery, supplies, fixtures, buildings, structures and
other
property erected or placed on such property by EGI. Title to such property
not removed within the time period set forth above shall, at the election
of MTM, pass to MTM.
|
8.6 |
Survival
of Terms Upon Exercise of Option.
If EGI exercises the Option, the terms and conditions of
Sections 2.4, 2.5, 7.1, this Section 8.6, and
Sections 10.2, 10.3 and 10.8 shall survive, notwithstanding the
execution and delivery of the Deed, and shall not be deemed merged
into
the Deed.
|
F-16
ARTICLE
9
ENTIRE
AGREEMENT/AMENDMENT
9.1 |
Entire
Agreement.
This Agreement is the complete expression of all agreements, contracts,
covenants and promises among the Parties, and all negotiations,
understandings, and agreements among the Parties are set forth in this
Agreement, which solely and completely expresses their understanding,
and
shall be construed without reference to any such negotiations,
understandings and agreements.
|
9.2 |
Amendments.
Except as permitted by Section 10.2, this Agreement may not be
amended or modified, nor may any obligation hereunder be waived, except
by
writing duly executed on behalf of all Parties, and unless otherwise
specifically provided in such writing, any amendment, modification,
or
waiver shall be effective only in the specific instance and for the
purpose it is given.
|
ARTICLE
10
GENERAL
PROVISIONS
10.1 |
Governing
Law.
This Agreement, and the rights and liabilities of the Parties hereunder,
shall be governed by and construed in accordance with the laws of the
State of Colorado, other than its rules as to conflicts of law, and
the
Parties hereby submit to the non-exclusive jurisdiction of the Colorado
state and federal courts with respect to any matters arising out of
or
pertaining to this Agreement, and hereby waive any defenses of lack
of
jurisdiction, inconvenient forum or improper
venue.
|
10.2 |
Parties
in Interest; Assignment.
All of the terms and provisions of this Agreement shall be binding
upon
and inure to the benefit of and be enforceable by the respective Parties
hereto and their successors and permitted assigns. During the Option
Period, EGI’s rights, powers, privileges, obligations and interests under
this Agreement shall not be assigned or delegated to any third party,
other than to an Affiliate of EGI; provided, however, that any such
assignment or delegation to an Affiliate of EGI shall not relieve EGI
of
any obligations or liabilities under this Agreement. If
EGI exercises the Option, it may assign or delegate its rights and
obligations under this Agreement to any third party, provided that
(a) such third party agrees in writing to be bound by all of the
terms and conditions of this Agreement, and (b) any such assignment
or delegation shall not relieve EGI of any obligations or liabilities
under this Agreement.
|
10.3 |
Other
Business Opportunities.
This Agreement is, and the rights and obligations of the Parties are,
strictly limited to the matters set forth herein. Each of the Parties
shall have the free and unrestricted right to independently engage
in and
receive the full benefits of any and all business ventures of any sort
whatever, whether or not competitive with the matters contemplated
hereby,
without consulting the other or inviting or allowing the other to
participate therein. The doctrines of “corporate opportunity” or “business
opportunity” shall not be applied to any other activity, venture, or
operation of either Party, whether adjacent to, nearby, or removed
from
the Property, and neither Party shall have any obligation to the other
with respect to any opportunity to acquire any interest in any property
outside the Property at any time, or within the Property after termination
of this Agreement, regardless of whether the incentive or opportunity
of a
Party to acquire any such property interest may be based, in whole
or in
part, upon information learned during the course of operations or
activities hereunder.
|
F-17
10.4 |
No
Partnership.
Nothing contained in this Agreement shall be deemed to constitute either
Party the partner of the other, nor, except as otherwise herein expressly
provided, to constitute any Party the agent or legal representative
of the
other, nor to create any fiduciary relationship between them. It is
not
the intention of the Parties to create, nor shall this Agreement be
construed to create, any mining, commercial, tax or other partnership.
Neither Party shall have any authority to act for or to assume any
obligation or responsibility on behalf of the other Party, except as
otherwise expressly provided herein.
|
10.5 |
Confidentiality.
Except as set forth in Section 10.8, each of the Parties agrees to
treat all data, reports, records and other information developed or
made
available to it by the other Party under this Agreement and applicable
to
the Property as confidential, and unless either Party is required by
any
law, rule, regulation, or order or by rule or regulation of a stock
exchange or securities commission to disclose any of such information,
information shall not be disclosed to any third party without the prior
written consent of the non-disclosing Party, which consent shall not
be
unreasonably withheld.
|
10.6 |
Memorandum
for Recording.
Promptly following the execution of this Agreement, the Parties agree
to
execute for recording purposes a written Short Form of Option Agreement,
in a form mutually agreeable to the parties, setting forth the basic
terms
and conditions of this Agreement as necessitated by Montana law. Promptly
after the execution and delivery of that Short Form of Option Agreement,
EGI shall record that Short Form in the official records of Xxxxxxxxxx
County, and provide a copy of the recorded Short Form to MTM. MTM may
record a notice of non-responsibility as reasonably deemed necessary
by
MTM.
|
10.7 |
Public
Announcements.
Disclosure of information relating to this Agreement or the Property
may
be made by either Party if such information is required to be disclosed
to
any federal, state, provincial or local government or appropriate agencies
and departments thereof or if such information is required by law,
stock
exchange rule or regulation to be publicly announced. Otherwise, public
announcements or reports by EGI of information relating to this Agreement
or the Property shall be made only on the basis of agreed texts upon
the
prior written consent of MTM, which consent shall not be unreasonably
withheld. EGI agrees that it will, not less than two business days
in
advance of making public any information referred to in this
Section 10.7, give MTM written notice of the text of the proposed
report and provide MTM with the opportunity to comment on the form
and
content thereof before the same is issued. MTM shall respond within
two
business days after receipt of such notice, or its silence will constitute
a waiver of objection to the terms of the proposed
text.
|
10.8 |
Severability.
In the event that any one or more of the provisions contained in this
Agreement or in any other instrument or agreement contemplated hereby
shall, for any reason, be held to be invalid, illegal, or unenforceable
in
any respect, such invalidity, illegality, or unenforceability shall
not
affect any other provision of this Agreement or any such other instrument
or agreement.
|
F-18
10.9 |
Attorneys’
Fees.
In the event of any controversy, claim, or dispute between the Parties
hereto, arising out of or relating to this Agreement or the breach
thereof, the prevailing Party in any arbitration or litigation resolving
the same shall be entitled to recover from the losing Party reasonable
expenses, attorneys’ fees, and costs.
|
10.10 |
Further
Documents.
At the request of either Party, the Parties shall execute and deliver
any
further instruments, agreements, documents or other papers reasonably
requested by the other Party to effect the purposes of this Agreement
and
the transactions contemplated hereby.
|
10.11 |
Dispute
Resolution.
The Parties hereby agree that any dispute arising under this Agreement
shall be subject to the informal dispute resolution procedure set forth
in
this Section 10.11. The Party asserting the existence of a dispute as
to the interpretation of any provision of this Agreement or the
performance by the other Party of any of its obligations hereunder
shall
notify the other Party of the nature of the asserted dispute. Within
seven
business days after receipt of such notice, a designated representative
of
MTM and a designated representative of EGI shall arrange for a personal
or
telephone conference in which they use good faith efforts to resolve
such
dispute. If those individuals are unable to resolve the dispute, they
shall each prepare and, within seven business days after their conference,
circulate to the President of MTM and the President of EGI a memorandum
outlining in reasonable detail the nature of the dispute. Within five
business days after receipt of the memoranda, the individuals to whom
the
memoranda were addressed shall arrange for a personal or telephone
conference in which they attempt to resolve such dispute. If those
individuals are unable to resolve the dispute, either Party may proceed
with any legal remedy available to it; provided,
however,
that the Parties agree that any statement made as to the subject matter
of
the dispute in any of the conferences referred to in this
Section 10.12 shall not be used in any legal proceeding against the
Party that made such statement.
|
10.12 |
Counterparts.
This Agreement may be executed in multiple counterparts and by facsimile
signatures, and all such counterparts taken together shall be deemed
to
constitute one and the same document.
|
10.13 |
Rule
Against Perpetuities.
Any right or option to acquire any interest in real or personal property
under this Agreement must be exercised, if at all, so as to vest such
interest in the acquirer within 21 years after the Effective Date of
this
Agreement.
|
10.14 |
Interpretation.
Whenever the word “including” is used in this Agreement, it shall be
deemed to mean “including without limitation.”
|
[Signature
Page Follows]
F-19
IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed, delivered, and effective from the date first above
written.
ELKHORN
GOLDFIELDS, INC., a Montana corporation
By:_____________________________
(name):
Xxxxxxx Xxxxxx
(title):
President
MONTANA
TUNNELS MINING, INC., a Delaware corporation
By:______________________________
(name):
R. Xxxxx Xxxxxxx
(title):
President
F-20