OPTION AGREEMENT
-----------------
THIS AGREEMENT made as of the 6th day of April, 2001
BETWEEN:
XXXXXXX X. XXXXXXXXXXX, of 0000 Xxxxx Xxxx,
----------------------
XxxxXxxxxxxxx, Xxxxxxx Xxxxxxxx
(the "Optionor")
OF THE FIRST PART
AND:
XXXXXXX VENTURES CORP., of Suite 201,
----------------------
000 Xxxxx Xxxxxx Xxxxx, Xxxxxx, XX 00000
(the "Optionee")
OF THE SECOND PART
WHEREAS:
A. The Optionor is the owner of certain mineral claims located in the
Vernon Mining Division of the Province of British Columbia, Canada known as the
Zumar 1, 2, 3 and 4 claims (the "Property");
B. The Optionor has agreed to grant an exclusive option to the Optionee
to acquire an interest in and to the Property, subject to the Royalty, on the
terms and conditions hereinafter set forth;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the sum of $1.00
now paid by the Optionee to the Optionor (the receipt of which is hereby
acknowledged), the parties agree as follows:
DEFINITIONS
-----------
1. For the purposes of this Agreement the following words and phrases
shall have the following meanings, namely:
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(a) Commencement of Commercial Production" means:
(i) if a mill is located on the Property, the last day of a period of
40 consecutive days in which, for not less than 30 days, the mill
processed ore from the Property at 60% of its rated concentrating
capacity; or
(ii) if a mill is not located on the Property, the last day of a
period of 30 consecutive days during which ore has been shipped
from the Property on a reasonably regular basis for the purpose
of earning revenues,
but any period of time during which ore or concentrate is shipped from
the Property for testing purposes or during which milling operations
are undertaken as initial tune-up, shall not be taken into account in
determining the date of Commencement of Commercial Production;
(b) "Exploration Expenditures" means the sum of:
(i) all costs of acquisition and maintenance of the Property, all
expenditures on the exploration and development of the Property,
and all other costs and expenses of whatsoever kind or nature,
including those of a capital nature, incurred or chargeable by
the Optionee with respect to the exploration of the Property, and
(ii) as compensation for general overhead expenses which the Optionee
may incur, an amount equal to 10% of all amounts included in
subparagraph (i) in each year but only 5% of such amounts when
paid by the Optionee under any contract involving payments by it
in excess of $100,000 in one year;
(c) "Option" means the option to acquire a 100% undivided interest in and
to the Property as provided in this Agreement;
(d) "Option Period" means the period from the date of this Agreement to
and including the date of exercise or termination of the Option;
(e) "Property" means the mineral claims described in Schedule "A" hereto
including any replacement or successor claims, and all mining leases
and other mining interests derived from any such claims. Any reference
herein to any mineral claim comprising the Property includes any
mineral leases or other interests into which such mineral claim may
have been converted;
(f) "Property Rights" means all 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 of the Property, or for the purpose
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of placing the Property into production or continuing production
therefrom; ;
(g) "Royalty" means the amount of royalty from time to time payable to the
Optionor hereunder and as defined in Schedule "B" attached hereto.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE OPTIONOR
---------------------------------------------------------------
2. (a) The Optionor represents and warrants to and covenants with the Optionee
that:
(i) it is legally entitled to hold the Property and the Property
Rights and will remain so entitled until the interest of the
Optionor in the Property which is subject to the Option has been
duly transferred to the Optionee as contemplated hereby;
(ii) it is, and at the time of each transfer to the Optionee of an
interest in the mineral claims comprising the Property pursuant
to the exercise of the Option it will be, the recorded holder and
beneficial owner of all of the mineral claims comprising the
Property free and clear of all liens, charges and claims of
others, except as noted on Schedule "A", and no taxes or rentals
are or will be due in respect of any of the mineral claims;
(iii) the mineral claims comprising the Property have been duly and
validly located and recorded pursuant to the laws of the
jurisdiction in which the Property is situate and are in good
standing with respect to all filings, fees, taxes, assessments,
work commitments or other conditions on the date hereof and until
the dates set opposite the respective names thereof in Schedule
"A";
(iv) there are not any adverse claims or challenges against or to the
ownership of or title to any of the mineral claims comprising the
Property, nor to the knowledge of the Optionor is there any basis
therefor, and there are no outstanding agreements or options to
acquire or purchase the Property or any portion thereof, and no
person other than the Optionor, pursuant to the provisions
hereof, has any royalty or other interest whatsoever in
production from any of the mineral claims comprising the Property
other than as set out in Schedule "A";
(v) no proceedings are pending for, and the Optionor is unaware of
any basis for the institution of any proceedings leading to the
placing of the Optionor in bankruptcy or subject to any other
laws governing the affairs of insolvent persons;
(b) The representations and warranties contained in this section are
provided for the
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exclusive benefit of the Optionee, and a breach of any one or more
thereof may be waived by the Optionee 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
of this Agreement and of any transfers, assignments, deeds or further
documents respecting the Property.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE OPTIONEE
---------------------------------------------------------------
3. (a) The Optionee represents and warrants to and covenants with the Optionor
that:
(i) it has been duly incorporated, amalgamated or continued and
validly exists as a corporation in good standing under the laws
of its jurisdiction of incorporation, amalgamation or
continuation;
(ii) it will on exercise of the Option be lawfully authorized to hold
mineral claims and real property under the laws of the
jurisdiction in which the Property is situate;
(iii) 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 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 the Articles or the constating documents of the
Optionee or any shareholders' or directors' resolution,
indenture, agreement or other instrument whatsoever to which the
Optionee is a party or by which it is bound or to which it or the
Property may be subject;
(iv) no proceedings are pending for, and the Optionee is unaware of
any basis for the institution of any proceedings leading to, the
dissolution or winding up of the Optionee or the placing of the
Optionee in bankruptcy or subject to any other laws governing the
affairs of insolvent corporations;
(b) The representations and warranties contained in this section are
provided for the exclusive benefit of the Optionor and a breach of any
one or more thereof may be waived by the Optionor 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.
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GRANT AND EXERCISE OF OPTION
--------------------------------
4. (a) The Optionor hereby grants to the Optionee the sole and exclusive
right and option to acquire a 100% undivided interest in and to the
Property free and clear of all charges, encumbrances and claims except
those set out in Schedule "A" and the Royalty.
(b) The Option shall be exercised by the Optionee:
(i) paying the Optionor $1,000 US on the execution of this Agreement,
the receipt of which is hereby acknowledged by the Optionor;
(ii) incurring Exploration Expenditures of up to $115,000 US on the
Property as follows:
(A) $5,000 US on or before December 31, 2001;
(B) a further $10,000 US on or before December 31, 2002; and
(C) a further $100,000 US on or before December 31, 2003;.
In the event that the Optionee spends, in any of the above periods,
less than the specified sum, it may pay to the Optionor the difference
between the amount it actually spent and the specified sum before the
expiry of that period in full satisfaction of the Exploration
Expenditures to be incurred. In the event that the Optionee spends, in
any period, more than the specified sum, the excess shall be carried
forward and applied to the Exploration Expenditures to be incurred in
succeeding periods.
(c) If and when the Option has been exercised, a 100% undivided right,
title and interest in and to the Property shall vest in the Optionee
free and clear of all charges, encumbrances and claims other than the
Royalty.
TRANSFER OF PROPERTY
----------------------
5. The Optionor shall, forthwith after the exercise of the Option by the
Optionee, deliver to the Optionee duly executed transfers of the appropriate
interest in the Property which shall have been acquired by the Optionee upon
exercise of the Option.
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RIGHT OF ENTRY
----------------
6. Throughout the Option Period the directors and officers of the
Optionee and its servants, agents and independent contractors, shall have the
sole and exclusive right in respect of the Property to:
(a) enter thereon;
(b) have exclusive and quiet possession thereof;
(c) do such prospecting, exploration, development and other mining work
thereon and thereunder as the Optionee in its sole discretion may
determine advisable;
(d) bring upon and erect upon the Property such buildings, plant,
machinery and equipment as the Optionee may deem advisable; and
(e) remove therefrom and dispose of reasonable quantities of ores,
minerals and metals for the purposes of obtaining assays or making
other tests.
OBLIGATIONS OF THE OPTIONEE DURING OPTION PERIOD
------------------------------------------------------
7. During the Option Period the Optionee shall:
(a) maintain in good standing those mineral claims comprising the Property
by the doing and filing of assessment work or the making of payments
in lieu thereof, by the payment of taxes and rentals, 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 the Optionee's activities thereon
except those at the time contested in good faith by the Optionee;
(b) permit the directors, officers, employees and designated consultants
of the Optionor, at their own risk and expense, access to the Property
at all reasonable times, and the Optionor agrees to indemnify the
Optionee against and to save it harmless from all costs, claims,
liabilities and expenses that the Optionee may incur or suffer as a
result of any injury (including injury causing death) to any director,
officer, employee or designated consultant of the Optionor while on
the Property;
(c) 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;
(d) indemnify and save the Optionor harmless in respect of any and all
costs, claims, liabilities and expenses arising out of the Optionee's
activities on the Property, but the
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Optionee shall incur no obligation hereunder in respect of claims
arising or damages suffered after termination of the Option if upon
termination of the Option any workings on or improvements to the
Property made by the Optionee are left in a safe condition;
(e) permit the Optionor, at its own expense, reasonable access to the
results of the work done on the Property during the last completed
calendar year;
(f) deliver to the Optionor, forthwith upon receipt thereof, copies of all
reports, maps, assay results and other technical data compiled by or
prepared at the direction of the Optionee with respect to the
Property.
TERMINATION OF OPTION BY OPTIONEE
-------------------------------------
8. (a) The Option shall terminate:
(i) upon the Optionee failing to incur or make any expenditure or
payment which must be incurred or made in exercise of the Option;
or
(ii) at any other time, by the Optionee giving notice of such
termination to the Optionor.
(b) If the Option is terminated the Optionee shall:
(i) leave in good standing for a period of at least 12 months from
the termination of the Option Period those mineral claims
comprising the Property;
(ii) deliver or make available at no cost to the Optionor within 90
days of such termination, all drill core, copies of all reports,
maps, assay results and other relevant technical data compiled
by, prepared at the direction of, or in the possession of the
Optionee with respect to the Property and not theretofore
furnished to the Optionor.
(c) Notwithstanding the termination of the Option, the Optionee shall have
the right, within a period of 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 the Optionee, and any such property
not removed within such 180 day period shall thereafter become the
property of the Optionor.
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ROYALTY
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9. (a) Upon the Commencement of Commercial Production, the Optionee
shall pay to the Optionor the Royalty, being equal to 2% of Net
Smelter Returns, on the terms and conditions as set out in this
paragraph and in Schedule "B".
(b) Installments of the Royalty payable shall be paid by the Optionee to
the Optionor immediately upon the receipt by the Optionee of the
payment from the smelter, refinery or other place of treatment of the
proceeds of sale of the minerals, ore, concentrates or other product
from the Property.
(c) Within 120 days after the end of each fiscal year, commencing with the
year in which Commencement of Commercial Production occurs, the
accounts of the Optionee relating to operations on the Property and
the statement of operations, which shall include the statement of
calculation of Royalty for the year last completed, shall be audited
by the auditors of the Optionee at its expense. The Optionor shall
have 45 days after receipt of such statements to question the accuracy
thereof in writing and, failing such objection, the statements shall
be deemed to be correct and unimpeachable thereafter.
(d) If such audited financial statements disclose any overpayment of
Royalty by the Optionee during the fiscal year, the amount of the
overpayment shall be deducted from future installments of Royalty
payable.
(e) If such audited financial statements disclose any underpayment of
Royalty by the Optionee during the year, the amount thereof shall be
paid to the Optionor forthwith after determination thereof.
(f) The Optionee agrees to maintain for each mining operation on the
Property, up-to-date and complete records relating to the production
and sale of minerals, ore, bullion and other product from the
Property, including accounts, records, statements and returns relating
to treatment and smelting arrangements of such product, and the
Optionor or its agents shall have the right at all reasonable times,
including for a period of 12 months following the expiration or
termination of this Agreement, to inspect such records, statements and
returns and make copies thereof at its own expense for the purpose of
verifying the amount of Royalty payments to be made by the Optionee to
the Optionor pursuant hereto. The Optionor shall have the right to
have such accounts audited by independent auditors at its own expense
once each fiscal year.
(g) Upon the Optionor receiving a total of $1,000,000 US from payments of
Royalty the Royalty shall terminate. The Optionee shall always have
the right to prepay such amount before it is actually due.
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POWER TO CHARGE PROPERTY
---------------------------
10. At any time after the Optionee has exercised the Option, the
Optionee may grant mortgages, charges or liens (each of which is herein called a
"mortgage") of and upon the Property or any portion thereof, any mill or other
fixed assets located thereon, and any or all of the tangible personal property
located on or used in connection with the Property to secure financing of
development of the Property, provided that, unless otherwise agreed to by the
Optionor, it shall be a term of each mortgage that the mortgagee or any person
acquiring title to the Property upon enforcement of the mortgage shall hold the
same subject to the right of the Optionor to receive the Royalty hereunder as if
the mortgagee or any such person had executed this Agreement.
TRANSFERS
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11. (a) The Optionee may at any time either during the Option Period or
thereafter, sell, transfer or otherwise dispose of all or any portion
of its interest in and to the Property and this Agreement provided
that any purchaser, grantee or transferee of any such interest shall
have first delivered to the Optionor its agreement relating to this
Agreement and to the Property, containing:
(i) a covenant to perform all the obligations of the Optionee to be
performed under this Agreement in respect of the interest to be
acquired by it from the Optionee to the same extent as if this
Agreement had been originally executed by such purchaser, grantee
or transferee; 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 (a).
(b) No assignment by the Optionee of any interest less than its entire
interest in this Agreement and in the Property shall, as between the
Optionee and the Optionor, discharge it from any of its obligations
hereunder, but upon the transfer by the Optionee 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 Optionee shall be deemed to be discharged from all
obligations hereunder save and except for the payment of the Royalty
or other fulfilment of contractual commitments accrued due prior to
the date on which the Optionee shall have no further interest in this
Agreement.
(c) If the Optionor should receive a bona fide offer from an independent
third party (the "Proposed Purchaser") dealing at arm's length with
the Optionor to purchase all or a part of its interest in the
Property, which offer the Optionor desires to accept, or if the
Optionor intends to sell all or a part of its interest in the
Property:
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(i) The Optionor shall first offer (the "Offer") such interest in
writing to the Optionee upon terms no less favourable than those
offered by the Proposed Purchaser or intended to be offered by
the Optionor, as the case may be.
(ii) 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 Optionor, disclose the person or
persons to whom the Optionor intends to offer its interest and,
if the offer received by the Optionor from the Proposed Purchaser
provides for any consideration payable to the Optionor otherwise
than in cash, the Offer shall include the Optionor's good faith
estimate of the cash equivalent of the non-cash consideration.
(iii) If within a period of 60 days of the receipt of the Offer the
Optionee notifies the Optionor in writing that it will accept the
Offer, the Optionor shall be bound to sell such interest to the
Optionee on the terms and conditions of the Offer. If the Offer
so accepted by the Optionee contains the Optionor's good faith
estimate of the cash equivalent of the non cash consideration as
aforesaid, and if the Optionee disagrees with the Optionor's best
estimate, the Optionee shall so notify the Optionor at the time
of acceptance and the Optionee shall, in such notice, specify
what it considers, in good faith, the fair cash equivalent to be
and the resulting total purchase price. If the Optionee so
notifies the Optionor, the acceptance by the Optionee shall be
effective and binding upon the Optionor and the Optionee, and the
cash equivalent of any such non-cash consideration shall be
determined by binding arbitration and shall be payable by the
Optionee, subject to prepayment as hereinafter provided, within
60 days following its determination by arbitration. The Optionee
shall in such case pay to the Optionor, against receipt of an
absolute transfer of clear and unencumbered title to the interest
of the Optionor being sold, the total purchase price which is
specified in its notice to the Optionor and such amount shall be
credited to the amount determined following arbitration of the
cash equivalent of any non-cash consideration.
(iv) If the Optionee fails to notify the Optionor before the
expiration of the time limited therefor that it will purchase the
interest offered, the Optionor 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 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 60 days.
(v) Any sale hereunder shall be conditional upon the Proposed
Purchaser delivering a written undertaking to the Optionee, in
form and substance
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satisfactory to its counsel, to be bound by the terms and
conditions of this Agreement.
SURRENDER OF PROPERTY INTERESTS
PRIOR TO TERMINATION OF AGREEMENT
-------------------------------------
9. The Optionee may at any time during the Option Period elect to abandon
any one or more of the mineral claims comprised in the Property by giving notice
to the Optionor of such intention. Any claims so abandoned shall be in good
standing under the laws of the jurisdiction in which they are situate for at
least 12 months from the date of abandonment. Upon any such abandonment, the
mineral claims so abandoned shall for all purposes of this Agreement cease to
form part of the Property and, if title to such claims has been transferred to
the Optionee the Optionee shall retransfer such title to the Optionor at the
Optionee's expense.
FORCE MAJEURE
--------------
10. (a) If the Optionee is at any time either during the Option Period 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 the Optionee, the time limited for the
performance by the Optionee 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 the
Optionee from its obligations hereunder to maintain the Property in
good standing;
(b) The Optionee shall give prompt notice to the Optionor of each event of
force majeure and upon cessation of such event shall furnish to the
Optionor with notice to that effect together with particulars of the
number of days by which the obligations of the Optionee hereunder have
been extended by virtue of such event of force majeure and all
preceding events of force majeure.
(c) After the Commencement of Commercial Production, the Optionee shall
work, mine and operate the Property during such time or times as the
Optionee in its sole judgment considers such operations to be
profitable. The Optionee may suspend or curtail operations, both
before and after Commencement of Commercial Production, during periods
when the products derived from the Property cannot be profitably sold
at prevailing prices or if an unreasonable inventory thereof, in the
Optionee's sole judgment, has accumulated or would otherwise
accumulate.
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CONFIDENTIAL INFORMATION
-------------------------
11. No information furnished by the Optionee to the Optionor hereunder
in respect of the activities carried out on the Property by the Optionee, or
related to the sale of minerals, ore, bullion or other product derived from the
Property, shall be published or disclosed by the Optionor without the prior
written consent of the Optionee, but such consent in respect of the reporting of
factual data shall not be unreasonably withheld, and shall not be withheld in
respect of information required to be publicly disclosed pursuant to applicable
securities or corporation laws, regulations or policies.
ARBITRATION
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12. (a) All questions or matters in dispute under this Agreement shall
be submitted to arbitration pursuant to the terms hereof.
(b) It shall be a condition precedent to the right of any party 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 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 10 days, the party who gave such notice may
proceed to refer the dispute to arbitration as provided in paragraph
(c).
(c) The party desiring arbitration shall appoint one arbitrator, and shall
notify the other party of such appointment, and the other party shall,
within 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 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 party shall fail to
appoint an arbitrator within 15 days after receiving notice of the
appointment of the first arbitrator, the first arbitrator shall be the
only arbitrator. If the two arbitrators appointed by the parties shall
be unable to agree on the appointment of the chairman, the chairman
shall be appointed under the provisions of the Commercial 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, 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.
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(d) 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.
TERMINATION OF MINING OPERATIONS
-----------------------------------
16. The Optionee may permanently discontinue mining operations on the
Property at any time after the Commencement of Commercial Production when in its
opinion no further mining operations can be economically carried out thereon.
At such time, the Optionee shall dispose of all mining plant and equipment used
on the Property, effect all reclamation work as required by law, and otherwise
dispose of the Property as it thinks fit. Any purchaser of the Property after
termination of mining operations on the Property shall take the Property free
and clear of all claims by the Optionor. The accounts of the Optionee relating
to its mining operations on the Property shall be audited by the auditors of the
Optionee as soon as practicable after the sale or disposition of all mining
plant, equipment and the Property, and completion of reclamation. Final
settlement of any Royalty payable to the Optionor shall be effected without
delay after receipt of the final audited statements. After receipt of such
final audited statements and payment of Royalty, if any, this Agreement and the
mutual obligations of the Optionee and the Optionor hereunder shall terminate.
DEFAULT
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13. If at any time during the Option Period the Optionee is in default
of any provision in this Agreement (other than the provisions of subparagraph
4(b) for which no notice of default need be given), the Optionor may terminate
this Agreement, but only if:
(a) it shall have first given to the Optionee a notice of default
containing particulars of the obligation which the Optionee has not
performed, or the warranty breached; and
(b) the Optionee has not, within 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 Optionee hereby
agreeing that should it so commence to cure any default it will
prosecute the same to completion without undue delay.
Should the Optionee fail to comply with the provision of subparagraph
(b), the Optionor may thereafter terminate this Agreement by giving notice
thereof to the Optionee.
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NOTICES
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14. Each notice, demand or other communication required or permitted to
be given under this Agreement shall be in writing and shall be delivered,
telegraphed or telecopied to such party at the address for such party specified
above. The date of receipt of such notice, demand or other communication shall
be the date of delivery thereof if delivered or telegraphed or, if given by
telecopier, shall be deemed conclusively to be the next business day. Either
party may at any time and from time to time notify the other party in writing of
a change of address and the new address to which notice shall be given to it
thereafter until further change.
GENERAL
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15. (a) 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.
(b) No consent or waiver expressed or implied by either party in respect
of any breach or default by the other 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 or default.
(c) 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 the intent of this Agreement
or to record wherever appropriate the respective interest from time to
time of the parties in the Property.
(d) This Agreement shall enure to the benefit of and be binding upon the
parties and their respective successors and permitted assigns.
(e) This Agreement shall be governed by and construed in accordance with
the laws of British Columbia and shall be subject to the approval of
all securities regulatory authorities having jurisdiction.
(f) Time shall be of the essence in this Agreement.
(g) 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.
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(h) Any reference in this Agreement to currency shall be deemed to be
United States currency.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year first above written.
THE COMMON SEAL OF )
XXXXXXX VENTURES CORP. )
was hereunto affixed in the )
presence of: )
)
)
/s/ Xxxxxx X. Xxxxxx ) c/s
--------------------------------------)
Authorized Signatory )
)
)
/s/ Xxxxxx Xxx Xxxxxxxxx )
--------------------------------------)
Authorized Signatory )
SIGNED, SEALED AND DELIVERED )
BY XXXXXXX X. XXXXXXXXXXX )
in the presence of: )
)
)
/s/ X. X. X'Xxxxx ) /s/ Xxxxxxx X. Xxxxxxxxxxx
--------------------------------------) --------------------------------
Signature ) Xxxxxxx X. Xxxxxxxxxxx
)
#8-121 W. 13th )
--------------------------------------)
Name )
)
North Van BC )
--------------------------------------)
Address )
)
)
SCHEDULE "A"
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A. Located Mineral Claims
Tag Tenure
Claim Name Number Number Expiry Date
----------- ------ ------ ------------
ZUMAR 1 624326 384330 February 24, 2002
ZUMAR 2 624327 384331 February 24, 2002
ZUMAR 3 624328 384332 February 24, 2002
ZUMAR 4 624329 384333 February 24, 2002
all located in the Vernon Mining Division of the Province of British Columbia,
Canada;
SCHEDULE "B"
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NET SMELTER RETURNS
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1. For the purposes of this Agreement "Net Smelter Returns" shall mean
the actual proceeds received from any mint, smelter or other purchaser for the
sale of bullion, concentrates or ores produced from the Property and sold, after
deducting from such proceeds the following charges to the extent that they are
not deducted by the purchaser in computing payment:
(a) in the case of the sale of bullion, refining charges only;
(b) in the case of the sale of concentrates, smelting and refining
charges, penalties and the cost of transportation of such concentrates
from the Property to any smelter or other purchaser; and
(c) in the case of ores shipped to a purchaser, refining charges for
bullion and charges for smelting, refining and the cost of
transportation from the mill to any smelter or other purchaser for
concentrates.
2. The Optionee shall have the right to commingle with ore from the
Property, ore produced from other properties owned or controlled by the
Optionee, provided the Optionee shall adopt and employ reasonable practices and
procedures for weighing, sampling and assaying in order to determine the amounts
of products derived from, or attributable to, ore mined and produced from the
Property. The Optionee shall maintain accurate records of the results of such
sampling, weighing and assaying with respect to any ore mined and produced from
the Property. The Optionor or its authorized agent shall be permitted the right
to examine at all reasonable times such records pertaining to commingling of
ores or to the calculations of Net Smelter Returns.
