COVENANTS OF THE OPTIONEE. 12.1 During the currency of this Agreement, the Optionee: (a) will do all such things required to keep the Claims in good standing, including, but not restricted to, paying all fees and taxes relating to the Claims and by the doing and filing of all necessary work; (b) will keep the Claims free and clear of all Encumbrances arising from the Optionee’s operations hereunder and making all other payments which may be necessary in that regard, it being understood that the Optionee may subsequently contest any such Encumbrance; (c) will not do any act or thing which would or might in any way adversely affect the rights of the Optionors to the Claims, the rights of the Optionor Sub to the NSR Royalty or any other rights of the Optionors hereunder; (d) will not do any act or thing or fail to do any act or thing which would be or result in a breach of the terms of the Underlying Golden Arc Option Agreement; (e) will permit the Optionor or the Optionor Sub, or their representatives duly authorized by it in writing, at their own risk and expense, access at all reasonable times, but subject to reasonable notice, to the Claims and to all records prepared by the Optionee in connection with work done on or with respect to the Claims, provided that if such disclosure would otherwise be a breach of any securities Laws pertaining to the disclosure of material information, then the Optionors will prior to such disclosure sign a confidentiality agreement in a form reasonably acceptable to the Optionors; (f) will have prepared technical reports in accordance with National Instrument 43-101 by a qualified person independent of the Optionors and the Optionee on the Claims and deliver those technical reports, in electronic form to the Optionors within 90 days of December 31, 2006 and each subsequent December 31 of the term of this Agreement and, in the event that the Optionee terminates this Agreement, within 90 days of such termination; (g) within 90 days of December 31, 2006 and within each subsequent December 31 of the term of the Option of this Agreement will prepare and deliver to the Optionors an Exploration Expense Report relating to Exploration Expense on the Claims during the Option Period not subject to a previous Exploration Expense Report and, in the event that the Optionee terminates this Agreement or exercises the Option, within 90 days of such termination or exercise, with the Exploration Expense Report for the period ended December 31, 2006 reporting on the Exploration Expense on the Golden Arc Claims and the Exploration Expense on the Claims other than the Golden Arc Claims separately; (h) shall make available for review by the Optionors during normal business hours, for a period of one month after the delivery to the Optionors of each Exploration Expense Report, backup invoices, statements and the like verifying such Exploration Expense promptly upon the Optionors’ written request. Each Exploration Expense Report will be deemed complete and accurate if such calculations in such report are not disputed in writing by the Optionors within 60 days following receipt by the Optionors of such Exploration Expense Report. In the event that Optionors dispute any amount (the “Disputed Amount”) set out in the Exploration Expense Report, all such costs incurred by the Optionees in respect of that dispute including, the cost of any audit or other review will be paid by the Optionors to the Optionees, unless such audit or other review discloses that the reported Disputed Amount is an amount exceeding 5% of the amount determined by such audit or review in which case, the Optionee will bear the full expenses of the Optionee and the Optionors; (i) will conduct all work on or with respect to the Claims in a careful and minerlike manner and in compliance with all applicable Laws; (j) will defend, indemnify and save the Optionors harmless from any and all claims, suits, actions made or brought against it as a result of work done by the Optionee, its employees, agents or contractors on or with respect to the Claims; (k) will make all filings and disclosures as required and within the time periods specified under all applicable securities legislation with respect to the allotment and issuance of the Shares pursuant to this Agreement; and (l) will, prior to commencing of any work on the Claims, obtain general liability insurance in an amount not less than $2,000,000.
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COVENANTS OF THE OPTIONEE. 12.1 5.1 During the currency of this Agreementthe Option, the OptioneeOptionee shall:
(a) will do all such things required to keep the Claims Property free and clear of all Liens arising from its operations hereunder (except liens for taxes not yet due, other inchoate liens or liens contested in good standing, including, but not restricted to, paying all fees and taxes relating to the Claims and faith by the doing Optionee) and filing of proceed with all necessary workdiligence to contest or discharge any Lien that is filed;
(b) will keep pay or cause to be paid all workers and wage earners employed by it or its contractors on the Claims free Property, and clear of pay for all Encumbrances arising from materials, services and supplies purchased or delivered in connection with its activities on or with respect to the Optionee’s operations hereunder and making all other payments which may be necessary in that regard, it being understood that the Optionee may subsequently contest any such EncumbranceProperty;
(c) will not do any act or thing which would or might in any way adversely affect the rights of the Optionors to the Claims, the rights of the Optionor Sub to the NSR Royalty or any other rights of the Optionors hereunder;
(d) will not do any act or thing or fail to do any act or thing which would be or result in a breach of the terms of the Underlying Golden Arc Option Agreement;
(e) will permit the Optionor or the Optionor SubR▇▇▇, or their its representatives duly authorized by it in writing, at their its own risk and expense, access to the Property at all reasonable times, but subject to reasonable notice, to the Claims times and to all records and reports, if any, prepared by the Optionee in connection with work done on or with respect to the ClaimsProperty, provided that if such disclosure would otherwise be and f▇▇▇▇▇▇ ▇▇▇▇ within 60 days of the completion of a breach of any securities Laws pertaining program on the Property with a report with respect to the disclosure of work carried out by the Optionee on or with respect to said program and material information, then the Optionors will prior to such disclosure sign a confidentiality agreement in a form reasonably acceptable to the Optionorsresults obtained;
(fd) will have prepared technical reports in accordance with National Instrument 43-101 by a qualified person independent of the Optionors and the Optionee on the Claims and deliver those technical reports, in electronic form to the Optionors within 90 days of December 31, 2006 and each subsequent December 31 of the term of this Agreement and, in the event that the Optionee terminates this Agreement, within 90 days of such termination;
(g) within 90 days of December 31, 2006 and within each subsequent December 31 of the term of the Option of this Agreement will prepare and deliver to the Optionors an Exploration Expense Report relating to Exploration Expense on the Claims during the Option Period not subject to a previous Exploration Expense Report and, in the event that the Optionee terminates this Agreement or exercises the Option, within 90 days of such termination or exercise, with the Exploration Expense Report for the period ended December 31, 2006 reporting on the Exploration Expense on the Golden Arc Claims and the Exploration Expense on the Claims other than the Golden Arc Claims separately;
(h) shall make available for review by the Optionors during normal business hours, for a period of one month after the delivery to the Optionors of each Exploration Expense Report, backup invoices, statements and the like verifying such Exploration Expense promptly upon the Optionors’ written request. Each Exploration Expense Report will be deemed complete and accurate if such calculations in such report are not disputed in writing by the Optionors within 60 days following receipt by the Optionors of such Exploration Expense Report. In the event that Optionors dispute any amount (the “Disputed Amount”) set out in the Exploration Expense Report, all such costs incurred by the Optionees in respect of that dispute including, the cost of any audit or other review will be paid by the Optionors to the Optionees, unless such audit or other review discloses that the reported Disputed Amount is an amount exceeding 5% of the amount determined by such audit or review in which case, the Optionee will bear the full expenses of the Optionee and the Optionors;
(i) will conduct all work on or with respect to the Claims Property in a careful and minerlike manner and in compliance with all applicable Laws;
(j) will defendfederal, provincial and local laws, rules, orders and regulations, and indemnify and save the Optionors R▇▇▇ harmless from any and all claims, suits, actions demands, losses and expenses including, without limitation, with respect to environmental matters, made or brought against it as a result of work done or any act or thing done or omitted to be done by the Optionee, its employees, agents or contractors Optionee on or with respect to the ClaimsProperty;
(ke) will make file all filings and disclosures as required and assessment work within the time periods specified under calendar year the work was completed; and
(f) provide to R▇▇▇ within 60 days of the end of each calendar quarter during which any Expenditures have been incurred comprehensive written reports showing the operations carried out and the results obtained and detailing the Expenditures incurred together with evidence of payment thereof.
5.2 In the event of termination of the Option for any reason other than through the exercise thereof, the Optionee will:
(a) leave the Property:
(i) in good standing and free and clear of all applicable securities legislation Liens arising from its operations hereunder,
(ii) in a safe and orderly condition, and
(iii) in a condition which is in compliance with all rules and orders of governmental authorities with respect to reclamation and rehabilitation of all disturbances resulting from the Optionee's use and occupancy of the Property;
(b) deliver to R▇▇▇, within 90 days of a written request therefor, a report on all work carried out by the Optionee on the Property (limited to factual matters only) together with copies of all sample location maps, drillhole assay logs, assay results and other technical data compiled by the Optionee or its representatives with respect to the allotment and issuance of the Shares pursuant to this AgreementProperty; and
(lc) willhave the right (and, prior if requested by R▇▇▇ within 90 days of the effective date of termination, the obligation) to commencing remove from the Property within one year of any work on termination of this Agreement all facilities erected, installed or brought upon the ClaimsProperty by or at the instance of Optionee, obtain general liability insurance in an amount not less than $2,000,000failing which, the facilities shall become the property of R▇▇▇.
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COVENANTS OF THE OPTIONEE. 12.1 During The Optionee hereby covenants and agrees with the Optionor as follows: that during the currency of this AgreementAgreement it will maintain the said Property in god standing and record as assessment work against the Property all work that qualified for such recording and will pay all rentals, taxes or other governmental charges which shall fall due during the Optionee:
(a) period of this Option; that it will do all such things required to keep the Claims in good standing, including, but not restricted to, paying all fees and taxes relating to the Claims and by the doing and filing of all necessary work;
(b) will keep the Claims free and clear of all Encumbrances arising from the Optionee’s carry out its operations hereunder and making all other payments which may be necessary in that regard, it being understood that the Optionee may subsequently contest any such Encumbrance;
(c) will not do any act or thing which would or might in any way adversely affect the rights of the Optionors to the Claims, the rights of the Optionor Sub to the NSR Royalty or any other rights of the Optionors hereunder;
(d) will not do any act or thing or fail to do any act or thing which would be or result in a breach of the terms of the Underlying Golden Arc Option Agreement;
(e) will permit the Optionor or the Optionor Sub, or their representatives duly authorized by it in writing, at their own risk and expense, access at all reasonable times, but subject to reasonable notice, to the Claims and to all records prepared by the Optionee in connection with work done on or with respect to the Claims, provided that if such disclosure would otherwise be a breach of any securities Laws pertaining to the disclosure of material information, then the Optionors will prior to such disclosure sign a confidentiality agreement in a form reasonably acceptable to the Optionors;
(f) will have prepared technical reports in accordance with National Instrument 43-101 by a qualified person independent of the Optionors and the Optionee on the Claims and deliver those technical reports, in electronic form to the Optionors within 90 days of December 31, 2006 and each subsequent December 31 of the term of this Agreement and, in the event that the Optionee terminates this Agreement, within 90 days of such termination;
(g) within 90 days of December 31, 2006 and within each subsequent December 31 of the term of the Option of this Agreement will prepare and deliver to the Optionors an Exploration Expense Report relating to Exploration Expense on the Claims during the Option Period not subject to a previous Exploration Expense Report and, in the event that the Optionee terminates this Agreement or exercises the Option, within 90 days of such termination or exercise, with the Exploration Expense Report for the period ended December 31, 2006 reporting on the Exploration Expense on the Golden Arc Claims and the Exploration Expense on the Claims other than the Golden Arc Claims separately;
(h) shall make available for review by the Optionors during normal business hours, for a period of one month after the delivery to the Optionors of each Exploration Expense Report, backup invoices, statements and the like verifying such Exploration Expense promptly upon the Optionors’ written request. Each Exploration Expense Report will be deemed complete and accurate if such calculations in such report are not disputed in writing by the Optionors within 60 days following receipt by the Optionors of such Exploration Expense Report. In the event that Optionors dispute any amount (the “Disputed Amount”) set out in the Exploration Expense Report, all such costs incurred by the Optionees in respect of that dispute including, the cost of any audit or other review will be paid by the Optionors to the Optionees, unless such audit or other review discloses that the reported Disputed Amount is an amount exceeding 5% of the amount determined by such audit or review in which case, the Optionee will bear the full expenses of the Optionee and the Optionors;
(i) will conduct all work on or with respect to the Claims Property in a careful and minerlike miner like manner in accordance with the applicable laws and in compliance with regulations of British Columbia and Canada; that it properly pay all applicable Laws;
(j) accounts of every nature and kind for wages, supplies, Workers; Compensation Assessments, income tax deductions and all other accounts and indebtedness incurred by it so that no claim or lien arise thereon or upon the ore or mineral contained therein and it will defend, indemnify the Optionor and save the Optionors it harmless from any and all claimsloss, costs, actions, suits, actions damages or claims which may be made against the Optionor in respect of the operations on the Property, provided however, that the Optionee shall have the right to contest the validity of any such lien or brought claim of lien; upon the termination of this Agreement that it will leave the Property in a safe condition in accordance with applicable statutes and regulations; that it will at all times maintain and keep true and correct records of all production and disposition thereof and of all costs and expenditures incurred as well as all other data necessary or proper for the settlement of accounts between the parties hereto in connection with their rights and obligations under this Agreement. Such records shall be open at all reasonable times upon reasonable notice for inspection by the Optionor or its duly authorized representative; that it will indemnify and hold harmless the Optionor from and against any damage, claim or demand arising out of the Optionee's failure to comply with this paragraph; that it will allow the Optionor or any duly authorized agent or representative of the Optionor to inspect the Property upon giving the Optionee 48 hours written notice; PROVIDED HOWEVER, that it is agreed and understood that the Optionor or any such agent or representative shall not interfere with the Optionee's activities on the Property and shall be at the Optionor's own risk and that the Optionee shall not be liable for any loss, damage or injury incurred by the Optionor or its agent or representative arising from its inspection of the Property, however caused; that it will obtain any and all necessary environmental permits prior to commencing operations on the Property and it will be responsible for any environmental assessments made by governmental bodies as a result of work done by the Optionee, its employees, agents or contractors on or with respect to the Claims;
(k) will make all filings and disclosures as required and within the time periods specified under all applicable securities legislation with respect to the allotment and issuance operations of the Shares pursuant Property; that it will cause to this Agreement; and
(l) willbe filed, prior to commencing of any sufficient assessment work on the Claims, obtain general liability insurance mineral claims so that they are in an amount good standing for not less than $2,000,000that one year at any time during this agreement and on termination shall have a minimum of one (1) year's assessment filed.
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