THIS OPTION AGREEMENT MADE THE 17TH DAY OF FEBRUARY 2006
BETWEEN:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, OF THE TOWN OF KEARNEY, IN THE PROVINCE OF ONTARIO,
HEREINAFTER REFERRED TO AS "▇▇▇▇▇▇▇" OR "THE OPTIONOR"
OF THE FIRST PART
AND:
GRAPHITE TECHNOLOGY GROUP INC.,
A CORPORATION INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
HEREINAFTER REFERRED TO AS "GRAPHITE TECHNOLOGY"
OR IN THE ALTERNATIVE "THE OPTIONEE"
OF THE SECOND PART
WHEREAS ▇▇▇▇▇▇▇ represents to Graphite Technology that he is the owner
and has exclusive right to deal with and dispose of, free of any and all
agreements and encumbrances of any nature or kind whatsoever, of Four (4) Leased
Mining Claims (hereinafter referred to as "the Leased Claims"), more
particularly described in Schedule "A" annexed hereto and Eight (8) un-patented
or un-leased Mining Claims (hereinafter referred to as "the Mining Claims"),
more particularly described in Schedule "B" annexed hereto and jointly hereafter
referred to as the "Mining Properties" as situated in the Township of Butt, in
the Province of Ontario, subject only to the interest of International Graphite
Inc.;
AND WHEREAS the same properties where the subject of an Option
Agreement between the Optionor herein, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, and Cal Graphite
Corporation, hereinafter referred to as "Cal Graphite", dated the 28th day of
September 1987 as amended by the Agreement between the parties dated the 29th
day of September 1998 (hereinafter referred to as the "Cal Graphite Option
Agreement");
AND WHEREAS Cal Graphite did merge with and all its assets where
transferred to International Graphite Inc. (hereinafter referred to as
"International Graphite") including all there right, title and interest in the
said Mining Properties;
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AND WHEREAS International Graphite is in default of its payments and
other obligations under the Option and in particular, is in default in the
amount of On Hundred and Forty-Six Thousand, Two Hundred and Fifty-Six dollars
and Fifty cents ($146,256.50) of the Minimum Royalty payments under the said
Agreement as of October 1, 2005 and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ is entitled under the terms
of the said Agreement to a return of the claims to him free and clear of all
encumbrances;
AND WHEREAS Tormont Industries Ltd. has registered a Construction Lien
in the amount of Thirty-nine Thousand and Twenty dollars and Sixty-one cents
($39,020.61) as Instrument No. 383825 on the 17th day of April 2000 and a
Certificate of Action in respect thereto as Instrument No. 385155 on the 20th
day of June 2000 as against the said properties;
AND WHEREAS Graphite Technology, represents and warrants that it has
entered into an Agreement to take over and assume all the assets and liabilities
of International Graphite including but not restricted to One Hundred and
Forty-six Thousand, Two Hundred and Fifty-six dollars and Fifty cents
($146,256.50) outstanding to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ under the said Agreements and is or
will be in a position to carry out its obligations under this Agreement;
AND WHEREAS ▇▇▇▇▇▇▇ wishes to grant Graphite Technology and Option to
Purchase a One Hundred percent (100%) interest in and certain rights to prospect
and examine the Mining Properties subject to the terms and conditions and the
Royalties set out;
AND WHEREAS the parties hereto agree to renegotiate the terms and
conditions of the Option Agreement and the Cal Graphite Option Agreement, shall
be null and void upon the execution of this Agreement save and except that the
outstanding Minimum Royalty payments of One Hundred and Forty-six Thousand, Two
Hundred and Fifty-six dollars and Fifty cents ($146,256.50) owing to ▇▇▇▇▇▇▇
pursuant thereto as of October 1, 2005 and any other Royalties accruing
thereunder since that date shall remain outstanding, and shall be considered an
unpaid vendor's lien as against the property
THEREFORE, this Agreement witness that in consideration of the premises
as set out herein and the sum of Fifteen Thousand dollars ($15,000.00) in the
lawful money of Canada now paid to ▇▇▇▇▇▇▇ by Graphite Technology (the receipt
and sufficiency of which is hereby acknowledged), and the mutual covenants and
the Agreements hereinafter contained the parties hereto agree as follows:
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ARTICLE 1 - THE REPRESENTATION AND WARRANTIES OF BOTH ▇▇▇▇▇▇▇ AND GRAPHITE
TECHNOLOGY
1.01 The representations of ▇▇▇▇▇▇▇ and Graphite Technology hereinbefore and
hereinafter set out shall form part of this Agreement and are
conditions upon which Graphite Technology and ▇▇▇▇▇▇▇ have relied on in
entering into this Agreement and are construed as both conditions and
warranties. In addition, Schedule "A" and Schedule "B" shall be
applicable and form part of this Agreement.
ARTICLE 2 - PURCHASE OPTION AND TERMS:
2.01 ▇▇▇▇▇▇▇ hereby gives and grants to Graphite Technology the sole and
exclusive right and option (hereinafter called the "Purchase Option")
to purchase from the ▇▇▇▇▇▇▇ all its right, title and interest in and
to the Mining Properties free and clear of all encumbrances, but
subject to the Royalties and Minimum Royalties as hereinafter set out
and the Cal Graphite Option Agreement, for an aggregate consideration
of One Hundred and Fifty Thousand dollars ($150,000.00).
2.02 Subject to prior termination pursuant to the provisions of this
Agreement, the Purchase Option shall remain in full force and effect up
to and including the 31st day of December 2007 provided the sum of One
Hundred and Fifty Thousand dollars ($150,000.00) paid in the following
amounts on or before the dates hereinafter set out:
(a) Upon the signing of this Agreement Graphite Technology pays ▇▇▇▇▇▇▇ the
sum of Fifteen Thousand dollars ($15,000.00), the Purchase Option shall
continue in full force and effect up to and including the 30th day of
June 2006;
(b) Provided Graphite Technology pays ▇▇▇▇▇▇▇ a further sum of Fifteen
Thousand dollars ($15,000.00) on or before the 30th day of June 2006
the Purchase Option shall continue in full force and effect up to and
including the 31st day of December 2006;
(c) Provided Graphite Technology pays ▇▇▇▇▇▇▇ a further sum of Forty
Thousand dollars ($40,000.00) on or before the 31st day of December
2006 the Purchase Option shall continue in full force and effect up to
and including the 30th day of June 2007;
(d) Provided Graphite Technology pays ▇▇▇▇▇▇▇ a further sum of Forty
Thousand dollars ($40,000.00) on or before the 30th day of June 2007
the Purchase Option shall continue in full force and effect to and
including the 31st day of December 2007;
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(e) Provided Graphite Technology pays to ▇▇▇▇▇▇▇ the further sum of Forty
Thousand dollars ($40,000.00) on or before the 31st day of December
2007 the Purchase Option shall be deemed to be fully paid for and
exercised.
2.03 In the event that Graphite Technology fails to pay any of the amounts
specified above on or before the dates set out, this Option Agreement
shall be at an end and any monies already paid shall be forfeit to
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ shall be under no obligation to Graphite Technology
nor shall Graphite Technology have any further or other claim against
the Mining Properties, but shall still be required to complete its
obligations to ▇▇▇▇▇▇▇ hereinafter set out respecting the termination
of this Agreement and the arrears of Royalties payable pursuant to the
Cal Graphite Agreement, shall remain outstanding in full.
ARTICLE 3 - EXERCISE OF PURCHASE OPTION:
3.01 Graphite Technology may at any time, while the Purchase Option
Agreement is in full force and effect, exercise the Purchase Option by
delivering ▇▇▇▇▇▇▇ a notice accordingly together with payment of an
amount equal to the difference between One Hundred and Fifty Thousand
dollars ($150,000.00) and the aggregate of all monies paid hereunder,
including without limitation, the Fifteen Thousand dollars
($15,000.00) paid to ▇▇▇▇▇▇▇ upon the execution hereof. Upon delivery
and payment aforesaid, the Purchase Option shall be deemed to be full
exercised at the date of giving the said notice and Graphite
Technology shall thereafter hold One Hundred percent (100%) legal and
beneficial interest in the Mining Properties free of any lien or
encumbrance of ▇▇▇▇▇▇▇ or anyone claiming through ▇▇▇▇▇▇▇, save and
except for the Royalties hereinafter set out and the Cal Graphite
Option Agreement. Upon the payment in full and the exercise of the
Option Agreement, ▇▇▇▇▇▇▇ agrees to discharge the outstanding arrears
of Royalty payments in the amount of One Hundred and Forty-Six
Thousand, Two Hundred and Fifty-six dollars and Fifty cent
($146,256.50) owing pursuant to the Cal Graphite Option Agreement
provided that all Royalty and Minimum Royalty payments as hereinafter
set in this Option Agreement have been paid to date and the Mining
Properties have been transferred in accordance with Article 11 hereof
then subject to these conditions, and any right of ▇▇▇▇▇▇▇ to the
arrears of Royalty payments or as against the claims pursuant to the
Cal Graphite Option Agreement in respect thereto shall be forever
extinguished.
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ARTICLE 4 - ROYALTY
4.01 Whether or not Graphite Technology exercises the Purchase Option, it
shall be obligated to pay ▇▇▇▇▇▇▇ a Royalty or Minimum Royalty ("the
Royalty") as follows:
(a) Commencing on the 1st day of October 2006, and each full year hereafter
that the Mining Properties are subject to the terms and conditions of
this Agreement a Royalty, or a minimum annual fixed Royalty in the
amount of Twenty-two Thousand dollars ($22,000.00) is payable
hereunder, (subject to the Cost of Living Adjustment clause specified
below) and shall be paid by Graphite Technology to ▇▇▇▇▇▇▇. The first
Twenty-two Thousand dollar ($22,000.00) Minimum Royalty payment shall
be due and be paid in one installment on or before the 1st day of
October 2006, not withstanding that a full year has not expired since
the execution of this Agreement and thereafter payment shall be made in
two equal annual installments on or before the 1st day of April and
October of each and every year;
(b) The aforesaid minimum annual fixed Royalty payment shall be adjusted
annually in accordance with any rise or fall in the consumer price
index ratio for all products for the City of Toronto published or
announced by Information Canada or any successor federal government
agency. The first adjustment shall be made on the 1st day of October
2007 and a subsequent adjustment shall be made on the 1st day of
October each subsequent year thereafter. The annual fixed Minimum
Royalty payment for the year commencing on October 1, 2007 and for each
subsequent year thereafter, shall be paid in and for the previous year
plus or minus the percentage thereof which is equal to the percentage
rise or fall of the Consumer Price Index Ratio from the 1st day of
October 2006 to the 1st day of October of the particular year for which
the fixed Minimum Royalty payment is due. All such calculations or
adjustments to the Minimum Royalty shall be based on the Consumer Price
Index as of the 1st day of October 2006.
(c) In the year in which commercial mining production and products sales
begin, and each subsequent year thereafter, the Royalty owing for each
such year shall be an amount equal to Two and a half (2.5%) percent of
the gross value of Graphite Technology sales of products derived from
ore mined on the Mining Properties during in the particular year in
question, but always subject to the minimum Royalty adjusted as set out
above. In calculating the gross value of Graphite Technology sales of
products in any particular year, there shall be no deductions by
Graphite Technology for any monies expended in respect to its project
on Mining Properties (including capital costs). More particularly, but
not so as to limit the generality of the foregoing, there shall be no
deduction for Graphite Technology's costs of money, operating costs,
taxes payable, mining, processing, upgrading and any other costs
relating to its project on the Mining Properties as a whole whether or
not such activities are actually carried on or done on the Mining
Properties or elsewhere provided that they apply to the ore or
materials mined or derived from the Mining Properties.
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(d) After the initial Minimum Royalty payment of Twenty-two Thousand
dollars ($22,000.00) on the 1st day of October 2006, the Royalty or
Minimum Royalty shall be paid in semi-annual installments, the first
Royalty payment to be made on the 1st day of April and the 1st day of
October in each year commencing on April 1, 2007. In calculating any
Royalty payment due hereunder, there shall be no deduction from the
Royalty otherwise payable for any Minimum Royalty payments previously
paid or made by Graphite Technology to ▇▇▇▇▇▇▇ in any previous year or
period, and for greater clarity, the Royalty, or the minimum Royalty,
as the case may be, shall be payable in addition to the monies set out
above in respect to Graphite Technology's option of the Mining
Properties.
ARTICLE 5 - ASSIGNMENTS
5.01 Graphite Technology shall be at liberty to assign and transfer all its
rights, title and interest in this Option Agreement provided:
(a) ▇▇▇▇▇▇▇ is informed and gives its consent thereto, which consent shall
not be unreasonably withheld;
(b) Graphite Technology provides written confirmation by the Assignee of
Graphite Technology that the Assignee shall be bound by this Agreement
and that the rights and privileges of ▇▇▇▇▇▇▇ hereunder will be
followed and respected. Graphite Technology shall remain liable for all
its obligations and payments due hereunder to ▇▇▇▇▇▇▇ and in the event
of default, hereunder ▇▇▇▇▇▇▇ may enforce any rights or remedies it may
have jointly or severely, as it shall see fit as against both Graphite
Technology and the Assignee.
5.02 If ▇▇▇▇▇▇▇ formulates the intention to assign the right to receive the
Royalty, in whole or in part, ▇▇▇▇▇▇▇ shall not complete any such
assignment and no purported assignment shall be valid unless and until
the Assignee agrees with Graphite Technology and ▇▇▇▇▇▇▇ to be bound by
the provisions hereof as fully as if such Assignee was a signatory
hereto. The form of such subsistence of such agreement shall be as
▇▇▇▇▇▇▇ and Graphite Technology may reasonably require.
5.03 ▇▇▇▇▇▇▇ shall be at liberty to assign and transfer its right, title and
interest in this Option Agreement provided;
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(a) Graphite Technology is first informed and gives it consent thereto,
which consent shall not be unreasonably withheld; and
(b) ▇▇▇▇▇▇▇ shall provide written confirmation by the Assignee of ▇▇▇▇▇▇▇
that the rights and privileges of Graphite Technology hereunder will be
followed and respected.
ARTICLE 6 - THE RIGHT TO ENTER AND DO WORK
6.01 ▇▇▇▇▇▇▇ hereby gives and grants to Graphite Technology, its servants
and agents during the currency of the Purchase Option and the sole and
exclusive right:
(a) To enter in, under or upon the Mining Properties;
(b) To have exclusive and quiet possession of the Mining Properties;
(c) To do such prospecting, exploration, development and/or other mining
work thereon and thereunder as Graphite Technology in its sole
discretion may consider advisable;
(d) To enter upon and erect upon the Mining Properties such mining plant,
buildings, machinery, tools, appliances, and/or equipment as Graphite
Technology in its sole discretion may consider advisable; and
(e) To remove from the Mining Properties and dispose or ores, minerals and
metals, but only for the purpose of making assay and tests, unless the
Option Price and Royalty payments have been paid in full and the Mining
Properties have been brought to Lease.
ARTICLE 7 - REPRESENTATIONS, WARRANTIES AND COVENANTS
7.01 ▇▇▇▇▇▇▇ hereby represents and warrants to Graphite Technology that:
(a) The laws of the Province of Ontario or any other applicable laws with
respect to the Mining Properties have been complied with and, without
limiting the generality of the foregoing, the Mining Properties have
each been properly and duly staked and recorded in accordance with the
laws of the said Province;
(b) The Mining Properties are in good standing;
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(c) Graphite Technology may enter in, under or upon the Mining Properties
for the purposes of the Agreement and subject to the Mining Act of
Ontario and any environmental laws or regulations applicable thereto,
extract and dispose of ore, as provided in paragraph 6.01 hereof,
without making any payment to, and without accounting to or obtaining
the permission of, any person, firm or corporation.
7.02 ▇▇▇▇▇▇▇ hereby covenants that:
(a) It will not use the name of Graphite Technology or any company
associated with Graphite Technology in any document or release made to
or available to the public without prior written approval of Graphite
Technology;
(b) Any information acquired by it hereunder relating to the Mining
Properties shall be confidential and shall not be released or
communicated to any person firm or corporation while this Agreement is
in full force and effect without the prior written approval of Graphite
Technology; and
(c) For so long as the purchase option is in full force and effect, it will
not deal, or attempt to deal with its right, title and interest in and
to the Mining Properties in any way that would or might affect the
right of Graphite Technology hereunder to purchase a One Hundred
percent (100%) interest in the Mining Properties, free and clear of any
encumbrance.
7.03 Graphite Technology hereby covenants and agrees for so long as the
Purchase Option continues in full force and effect:
(a) To permit ▇▇▇▇▇▇▇ or its duly authorized agents upon reasonable prior
notice to Graphite Technology, to have access to the Mining Properties
in order to examine any work carried out by or on behalf of Graphite
Technology provided, however, that neither ▇▇▇▇▇▇▇ nor its agents shall
interfere with or obstruct the operation of Graphite Technology, its
servants and agents on the Mining Properties, and further provided that
▇▇▇▇▇▇▇ agrees to indemnify and save Graphite Technology harmless from
all loss or damage of any nature or kind whatsoever in any way
referable to the entry of, presence on, or activities of either of
▇▇▇▇▇▇▇ or its agents while on the Mining Properties and including,
without limiting the generality of the foregoing, bodily injuries or
death at any time resulting therefrom and damage to property sustained
by any person or persons;
(b) To maintain the Mining Properties in good standing while this Agreement
is in full force and effect and for a further Twelve (12) months after
the termination thereof;
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(c) To forward ▇▇▇▇▇▇▇ one copy of all engineering reports, drawings,
surveys, logs and all other data, or working papers relating to the
work done on the Mining Properties or on adjoining properties insofar
as they relate to the Mining Properties;
(d) To permit ▇▇▇▇▇▇▇, its servants or agents access to the books and
records of Graphite Technology pertaining to the operation or work on
the Mining Properties for the purposes of calculating or verifying the
Royalties payable hereunder and compliance with this Agreement, may
have such books and records audited by an independent firm or chartered
accountants at ▇▇▇▇▇▇▇'▇ costs; and
(e) To obtain a Lease of the Mining Properties pursuant to the Mining Act
of Ontario within one year of the signing of this Agreement.
ARTICLE 8 - PROTECTION OF GRAPHITE TECHNOLOGY
8.01 ▇▇▇▇▇▇▇ will, from time to time, as and when requested by Graphite
Technology, execute or cause to be executed all further documents and
instruments which are in the opinion of Graphite Technology reasonably
necessary to enable Graphite Technology to take advantage of the rights
given to it in this Agreement.
8.02 Subject to Article 11 of this Option Agreement ▇▇▇▇▇▇▇ agrees that
Graphite Technology may protect its interest in the Mining Properties,
as the same may be from time to time constituted, by doing either or
both of the following:
(a) It may register this Agreement or a memorandum of this
Agreement or any other document or documents which Graphite
Technology may consider advisable in order to protect is
rights and interest hereunder against the title of the Mining
Properties; or
(b) It may transfer the Mining Properties into its name or into
the name of its nominee or nominees, to be held in trust and
to be dealt with only in accordance with the provisions of
this agreement.
ARTICLE 9 - RIGHT TO REMOVE ASSETS
9.01 At any time and from time to time during the currency of the Purchase
Option and for a period of One Hundred and Eighty (180) days after the
termination of this Agreement and subject to compliance thereto,
Graphite Technology may enter upon and remove from the Mining
Properties any and all building, plant, machinery, tools, appliances
and/or equipment brought or erected upon the Mining Properties by
Graphite Technology. Any such buildings, plant, machinery, tools,
appliances and/or equipment not so removed within the said period of
One Hundred and Eighty (180) days shall become the property of ▇▇▇▇▇▇▇.
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ARTICLE 10 - TERMINATION
10.01 Subject to the provisions of paragraph 7.03(b), 9.01 and 10.03 hereof,
this Agreement shall terminate and be at an end:
(a) If Graphite Technology fails to pay any Option Purchase
Installment as set forth in paragraph 2.02 hereof or any
Royalty or Minimum Royalty payment as set out in paragraph 4
hereof on or before the relevant date therein set forth, then
upon the day following such relevant date; or
(b) If Graphite Technology fails within Ninety (90) days of this
Agreement to transfer the Leased Mining Claims as set out in
Schedule "A" annexed hereto free and clear of all encumbrances
of any nature and kind whatsoever including the Tormont
Construction Lien and Certificate of Action to ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇ who shall hold the same in trust for the parties
hereto as there interest may appear together with the
un-patented Mining Claims as set in Schedule "B" annexed
hereto, which are already held in trust pursuant to the
above-mentioned Option Agreement between ▇▇▇▇▇▇▇ and Cal
Graphite and obtains an acknowledgement from International
Graphite or other necessary parties releasing him from any
obligations to it pursuant to the Trust Agreement; or
(c) If Graphite Technology does not exercise the Purchase Option
during the currency thereof, then at the expiry of the
purchase option; or
(d) If Graphite Technology otherwise fails to comply with this
Option Agreement.
10.02 In the event that Graphite Technology fails to complete any obligation
under this Agreement on or before the dates specified herein, (other
than the payment of money for which no notice is required) ▇▇▇▇▇▇▇
shall give Graphite Technology written notice of the same specifying
the breach and requiring Graphite Technology to remedy the same. In the
event that Graphite Technology fails to remedy the breach within Sixty
(60) days of the receipt of the notice relating thereto, then ▇▇▇▇▇▇▇,
at its option, may declare the Agreement terminated and the Agreement
thereafter shall be treated as at an end. Notwithstanding that the
Agreement has been terminated ▇▇▇▇▇▇▇, shall be entitled to any
Purchase Price installments or Royalty payments due or accruing prior
to such termination, or the cost of fulfilling any other obligation of
Graphite Technology set out herein, or any damages or other losses
resulting from such default and may enforce payment or compliance of
the same in any way it shall in its sole and absolute discretion it
considers desirable.
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10.03 In the event of any dispute between the parties arising wherein ▇▇▇▇▇▇▇
asserts that this Agreement is terminated and Graphite Technology
denies the validity of the alleged termination, Graphite Technology's
position and all of Graphite Technology's rights given to it by this
Agreement shall remain preserved and undisturbed until the matter is
resolved in Court or otherwise, but Graphite Technology will forthwith
commence an Action in Ontario claiming a declaration or other
appropriate relief and to pay the disputed amount into Court to the
credit of such action, otherwise this Agreement shall be terminated and
at an end.
10.04 Notwithstanding anything to the contrary contained in this Agreement,
Graphite Technology may at any time or from time to time, either before
or after exercise of the Purchase Option, terminate this Agreement with
respect to any or all Mining Claims comprising part of the Mining
Properties, subject to paragraph 7.03, 9.01 and this Article hereof,
upon giving notice accordingly to ▇▇▇▇▇▇▇. Forthwith after any such
termination, such part of the Mining Properties with respect to which
this Agreement has been terminated shall cease to be part of the Mining
Properties for the purpose of this Agreement, all obligations of
Graphite Technology hereunder, including the obligation to pay the
minimum fixed annual Royalty payment (where the notice has been given
with respect to all the Mining Claims) shall, subject to this Article
hereof, thereupon be at an end. The term "Mining Properties" shall mean
only those parts thereof which are still subject to the provisions of
this Agreement. Notwithstanding the release of part of the Mining
Properties only, the Purchase Option Price and the Royalty or Minimum
Royalty payments hereunder shall not be reduced.
10.05 Upon termination hereof, pursuant to this paragraph 10 or otherwise:
(a) If Graphite Technology has registered any agreement,
memorandum, document or documents against the title of the
Mining Properties, then Graphite Technology shall forthwith
for an aggregate consideration of $1.00 discharge or release
such agreement, memorandum, document or documents with respect
to the Mining Properties or such of them that are no longer
subject to the provisions of this Agreement, as the case may
be; or
(b) If Graphite Technology has transferred the Mining Properties
into its name or into the name of its nominee or nominees,
then Graphite Technology shall forthwith deliver to ▇▇▇▇▇▇▇ a
duly executed transfer of the Mining Properties or such of
them as are no longer subject to the provisions of this
Agreement, as the case may be, transferring for an aggregate
consideration of $1.00 title thereto to ▇▇▇▇▇▇▇ or as ▇▇▇▇▇▇▇
may otherwise in writing instruct;
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(c) Graphite Technology shall do all things and execute all
documents so as to maintain the Mining Properties in good
standing and to bring the same to Lease pursuant to the Mining
Act of Ontario within One (1) year of the signing of this
Agreement;
(d) Graphite Technology shall no longer have any claim or interest
in or as against the Mining Properties of any nature or kind
whatsoever and any monies thereto before paid shall remain the
sole property of ▇▇▇▇▇▇▇;
(e) Graphite Technology shall release all its rights, title or
interest in the Mining Properties forthwith.
ARTICLE 11 - TITLE
11.01 Title to the Mining Properties shall be transferred to ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇, the solicitor for ▇▇▇▇▇▇▇, who shall hold the same in trust
for the parties hereto as their interest may appear until the following
have been completed:
(a) That the Option price of One Hundred and Fifty Thousand
dollars ($150,000.00) has been paid in full as aforesaid;
(b) The claims have been brought to Lease in accordance with the
Mining Act of Ontario;
(c) All Royalty or Minimum Royalty payments have been paid to
date; and
(d) The properties presently registered in the name of
International Graphite have been transferred to ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇ in accordance with this Agreement and the Tormont
Construction Lien and the Certificate of Action in respect
thereto have been deleted from the title to the said claims;
and
(e) Graphite Technology has otherwise complied with this
Agreement.
Upon completion of the above conditions, the Mining Properties shall be
registered jointly in the name of ▇▇▇▇▇▇▇ and Graphite Technology or
their executives, administrators, successors or assigns, as the case
may be, together with a copy of this Agreement. Thereafter, any Royalty
payments due shall be a first charge or encumbrance against the Mining
Properties and payment thereof may be enforced as such in addition to
any other remedy, which ▇▇▇▇▇▇▇ may have.
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ARTICLE 12 - LEGAL AND ACCOUNTING FEES
12.01 Graphite Technology agrees to pay all of ▇▇▇▇▇▇▇'▇ reasonable legal and
accounting fees payable in connection with the negotiation, drafting,
registration and servicing of this Agreement and all other matters
relating thereto as well as a liability for outstanding fees that
▇▇▇▇▇▇▇ has accrued in relation with his dealings with Cal Graphite and
International Graphite, which Graphite Technology acknowledges are in
excess of Ten Thousand dollars ($10,000.00) plus G.S.T.
ARTICLE 13 - NOTICE
13.01 Any notice, document or other communication required or permitted by
this Agreement to be given by a party hereto shall be in writing and is
sufficiently given if delivered personally, or if sent by prepaid
ordinary mail, or if transmitting by any form of telecommunication to
either party to this Agreement as listed below:
Graphite Technology Group Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
214 - ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
13.02 Either party may from time to time by notice in writing change its
address for the purposes of this Article 13.
13.03 Any payment that Graphite Technology may decide to make or cause to be
made to ▇▇▇▇▇▇▇ hereunder shall be deemed to have been well and truly
made if a cheque payable to ▇▇▇▇▇▇▇ in accordance with the provisions
of paragraph 13.01 hereof, the provisions of which shall apply, Mutatis
Mutandus, as if such cheque was a notice given hereunder.
14
ARTICLE 14 - INDEMNIFICATION AND UNDERTAKING
14.01 Graphite Technology agrees to indemnify and save ▇▇▇▇▇▇▇ harmless from
all claims, actions, causes of action, expenses, losses and damages
brought against or suffered by ▇▇▇▇▇▇▇ as a result of any act or
omission of Graphite Technology arising out of Graphite Technology's
occupation, use and control of the Mining Properties.
14.02 Graphite Technology further undertakes not to do anything which might
encumber the Mining Properties to the detriment or prejudice of ▇▇▇▇▇▇▇
and undertakes to do all work on the Mining Properties in good ▇▇▇▇▇▇▇
like manner and to comply with all municipal, provincial and federal
laws and by-laws and regulations covering its conduct and with regard
to the Mining Properties.
ARTICLE 15 - OPTION
15.01 Subject to the provisions hereof specifically to the contrary, this is
an Option Agreement only and nothing herein contained and no act done
nor payment made hereunder shall obligate Graphite Technology to do any
further or other act or acts or to make further payment or payments,
and in no event shall this Agreement or any act done or any payment
made be construed as an obligation of Graphite Technology to do or
perform any work or make any payments or further payments on or with
respect to the Mining Properties. PROVIDED HOWEVER, notwithstanding
that the foregoing Graphite Technology undertakes to bring the claims
to Lease pursuant to the Mining Act of Ontario on or before the 28th
day of February 2007, in addition, Graphite Technology shall record all
work done against the said claims and insure that the taxes are paid
and there is sufficient work done on the claims for Twelve (12) months
after the termination in order to maintain the same in good standing
and arrange the transfer of the Lease Claims to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ or
▇▇▇▇▇▇▇ free and clear of all encumbrances.
ARTICLE 16 - MINING AND EXPLORATION
16.01 Graphite Technology shall conduct its exploration, mining and other
activities on the Mining Properties in accordance with good mining and
exploration practice and to comply with all mining, environmental laws,
by-laws or regulations of any governmental body having jurisdiction,
including the closing of any workings and the reclamation of any lands
where buildings or other mining debris has been dumped or placed
according to law.
15
ARTICLE 17 - TRAPPERS CABIN
17.01 Graphite Technology agrees to permit ▇▇▇▇▇▇▇ to maintain his trappers
cabin in the vicinity of Graphite Lake located on the Mining Properties optioned
hereunder until such time as he is required or is requested to remove the same
by Graphite Technology or by any law, by-law, or regulation for the Province of
Ontario which requires him to remove the same. In either case, Graphite
Technology agrees to pay ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ reasonable compensation for the costs
of removing, relocating or rebuilding the same in an alternative location and in
the event the parties cannot agree as to the amount and content of reasonable
compensation or costs, Graphite Technology may at its own expense relocate the
cabin to a sight specified by ▇▇▇▇▇▇▇ which sight shall be no further then Fifty
(50) miles from where it is presently located or in the alternative to pay
compensation for its reconstruction in the amount of to but not exceeding the
present value of the cabin at the time it was relocated or constructed
ARTICLE 18 - GENERAL
18.01 ▇▇▇▇▇▇▇ and Graphite Technology both agree that either before or after
termination of this Agreement, they will execute all documents and do
all acts and things as either of them may reasonably request and as may
be lawfully within its power to do (other than the payment of money) to
carry out the provision and/or the intent of this Agreement.
18.02 This Agreement supersedes all prior negotiations and contains the
entire understanding between the parties hereto and may be modified
only by instrument in writing signed by the party or parties against
which the modification is asserted.
18.03 Time shall be of the essence of this Agreement and shall enure to the
benefit of and be binding upon ▇▇▇▇▇▇▇, its successors and assigns and
Graphite Technology, its successors and assigns.
18.04 The parties hereto shall execute all documents and further assurances
and do all things that shall be necessary or desirable in order to
carry out the terms and intent of this Option Agreement.
18.05 Interest shall be payable in any monies outstanding or in default
pursuant to this Agreement at the rate of Ten (10%) percent per annum.
18.06 This Agreement shall be subject to and he interpreted and administered
in accordance with the laws of the Province of Ontario and disputes or
actions commenced in respect thereto shall be in the Province
aforesaid.
16
IN WITNESS WHEREOF the parties hereto have executed this Agreement as
of the date first above written.
)
) GRAPHITE TECHNOLOGY GROUP INC.
)
)
) /s/ ▇▇▇▇▇▇ ▇▇▇▇
) ---------------
) I have authority to bind the
) Corporation.
)
)
/s/ ▇▇▇▇▇ ▇▇▇▇▇ ) /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------- ) -------------------
Witness ) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
)