Exhibit 10.1
Option Agreement
OPTION AGREEMENT
THIS AGREEMENT is dated for reference the 28th day of November, 2002.
BETWEEN:
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An Ontario resident with an address at
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▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
(the "Optionor")
OF THE FIRST PART
AND:
BAYVIEW CORPORATION
a Nevada corporation with its registered address at
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
("Bayview")
OF SECOND PART
WHEREAS:
A. The Optionor is the owner of an undivided 100% right, title and
interest in and to mineral claims described in this Agreement;
B. Bayview wishes to acquire the option to acquire a 85% interest in
the Optionor's property on the terms and subject to the conditions
contained in this Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
premises and the mutual covenants and agreements hereinafter
contained, the parties hereto agree as follows:
1. DEFINITIONS
1.1 In this Agreement, the following terms will have the meaning set
forth below:
(A) "Exploration and Development" means any and all activities
comprising or undertaken in connection with the exploration and
development of the Property, the construction of a mine and mining
facilities on or in proximity to the Property and placing the Property
into commercial production;
(B) "Property" means and includes:
(i) the mining claims in the Sudbury Mining District, Ontario, Canada
listed in Schedule A to this Agreement; and
(ii) all rights and appurtenances pertaining to the mining claims
listed in Schedule A, including all water and water rights, rights of
way, and easements, both recorded and unrecorded, to which the
Optionor is entitled;
C) "Property Expenditures" means all reasonable and necessary monies
expended on or in connection with Exploration and Development as
determined in accordance with generally accepted accounting principles
including, without limiting the generality of the foregoing:
(i) the cost of entering upon, surveying, prospecting and drilling on
the Property;
ii) the cost of any geophysical, geochemical and geological reports
or surveys relating to the Property;
(iii) all filing and other fees and charges necessary or advisable
to keep the Property in good standing with any regulatory authorities
having jurisdiction;
(iv) all rentals, royalties, taxes (exclusive of all income taxes and
mining taxes based on income and which are or may be assessed against
any of the parties hereto) and any assessments whatsoever, whether the
same constitute charges on the Property or arise as a result of the
operation thereon;
(v) the cost, including rent and finance charges, of all buildings,
machinery, tools, appliances and equipment and related capital items
that may be erected, installed and used from time to time in
connection with Exploration and Development;
(vi) the cost of construction and maintenance of camps required for
Exploration and Development;
(vii) the cost of transporting persons, supplies, machinery and
equipment in connection with Exploration and Development;
(viii) all wages and salaries of persons engaged in Exploration and
Development and any assessments or levies made under the authority of
any regulatory body having jurisdiction with respect to such persons
or supplying food, lodging and other reasonable needs for such
persons
(ix) all costs of consulting and other engineering services including
report preparation;
(x) the cost of compliance with all statutes, orders and regulations
respecting environmental reclamation, restoration and other like work
required as a result of conducting Exploration and Development; and
(xi) all costs of searching for, digging, working, sampling,
transporting, mining and procuring diamonds, other minerals, ores, and
metals from and out of the Property;
2. OPTION
2.1 The Optionor hereby grants to Bayview the exclusive right and
option to acquire an undivided 85% right, title and interest in and to
the Property (the "Option") for total consideration consisting of a 1%
Net Smelter Return attached as schedule "C" hereto, cash payments to
the Optionor totalling $8,500 US and the incurrence of Property
Expenditures totalling $203,800 US to be made as follows:
(A) upon execution of this Agreement, the payment to the
Optionor of the sum of $8,500 US;
(B) by November 30, 2003, the incurrence of Property
Expenditures in the amount of $24,600 US;
(C) by November 30, 2004, the incurrence of Property
Expenditures in the further amount of $179,200 US for total
aggregate Property Expenditures of $203,800 by November 30,
2004, provided that any Property Expenditures
incurred prior to November 30, 2003 which are in excess of
$24,600 will be applied to the further required amount of $179,200.
2.2 Upon making the cash payments and Property Expenditures as
specified in Paragraph 2.1, Bayview shall have acquired an undivided
85% right, title and interest in and to the Property.
2.3 This Agreement is an option only and the doing of any act or the
making of any payment by Bayview shall not obligate Bayview to do any
further acts or make any further payments.
3. TRANSFER OF TITLE
3.1 Upon execution of this Agreement, Bayview shall be entitled to
record this Agreement against title to the Property.
3.2 Upon making the cash payments and Property Expenditures as
specified in Paragraph 2.1, the Optionor shall deliver to Bayview a
duly executed ▇▇▇▇ of sale or quit claim deed and such other executed
documents of transfer as required, in the opinion of Bayview's
lawyers, for the transfer of an undivided 85% interest in the Property
to Bayview.
4. JOINT VENTURE
4.1 Upon Bayview acquiring an interest in the Property pursuant to
paragraph 2.1, the Optionor and Bayview agree to join and participate
in a single purpose joint venture ( the "Joint Venture") for the
purpose of further exploring and developing and, if economically and
politically feasible, constructing and operating a mine on the
Property. The Joint Venture shall be governed by an agreement which
shall be in the form of joint venture agreement attached as Schedule B
hereto.
5.
RIGHT OF ENTRY
5.1 During the currency of this Agreement, Bayview, its servants,
agents and workmen and any persons duly authorised by Bayview, shall
have the right of access to and from and to enter upon and take
possession of and prospect, explore and develop the Property in such
manner as Bayview in its sole discretion may deem advisable for the
purpose of incurring Property Expenditures as contemplated by Section
2, and shall have the right to remove and ship therefrom ores,
minerals, metals, or other products recovered in any manner therefrom.
6. COVENANTS OF BAYVIEW
6.1 Bayview covenants and agrees that:
(A) during the term of this Agreement, Bayview shall keep the
Property clear of all liens, encumbrances and other charges and shall
keep the Optionor indemnified in respect thereof;
(B) Bayview shall carry on all operations on the Property in a good
and workmanlike manner and in compliance with all applicable
governmental regulations and restrictions including but not limited to
the posting of any reclamation bonds as may be required by any
governmental regulations or regulatory authorities;
(C) during the term of the option herein, Bayview shall pay or cause
to be paid any rates, taxes, duties, royalties, workers' compensation
or other assessments or fees levied with respect to its operations
thereon and in particular Bayview shall pay the yearly claim
maintenance payments necessary to maintain the claims in good
standing;
(D) Bayview shall maintain books of account in respect of its
expenditures and operations on the Property and, upon reasonable
notice, shall make such books available for inspection by
representatives of the Optionor;
(E) Bayview shall allow any duly authorised agent or representative
of the Optionor to inspect the Property at reasonable times and
intervals and upon reasonable notice given to Bayview, provided
however, that it is agreed and understood that any such agent or
representative shall be at his own risk in respect of, and Bayview
shall not be liable for, any injury incurred while on the Property,
howsoever caused;
(F) Bayview shall allow the Optionor access at reasonable times to
all maps, reports, sample results and other technical data prepared or
obtained by Bayview in connection with its operations on the Property;
(G) Bayview shall indemnify and save the Optionor harmless of and
from any and all costs, claims, loss and damages whatsoever incidental
to or arising out of any work or operations carried out by or on
behalf of Bayview on the Property, including any liability of an
environmental nature.
7. REPRESENTATIONS AND WARRANTIES
7.1 The Optionor hereby represents and warrants that:
(A) the Property is in good standing with all regulatory authorities
having jurisdictions and all required claim maintenance payments have
been made;
(B) it has not done anything whereby the mineral claims comprising
the Property may be in any way encumbered;
(C) it has full corporate power and authority to enter into this
Agreement and the entering into of this Agreement does not conflict
with any applicable laws or with its charter documents or any contract
or other commitment to which it is party; and
(D) the execution of this Agreement and the performance of its terms
have been duly authorised by all necessary corporate actions including
the resolution of its Board of Directors.
7.2 Bayview hereby represents and warrants that:
(A) it has full corporate power and authority to enter into this
Agreement and the entering into of this Agreement does not conflict
with any applicable laws or with its charter documents or any contract
or other commitment to which it is party; and
(B) the execution of this Agreement and the performance of its terms
have been duly authorised by all necessary corporate actions including
the resolution of its Board of Directors.
8. ASSIGNMENT
8.1 With the consent of the other party, which consent shall not be
unreasonably withheld, Bayview and the Optionor has the right to
assign all or any part of its interest in this Agreement and or in the
Property, subject to the terms and conditions of this Agreement. It
shall be a condition precedent to any such assignment that the
assignee of the interest being transferred agrees to be bound by the
terms of this Agreement, insofar as they are applicable.
9. CONFIDENTIALITY OF INFORMATION
9.1 Each of Bayview and the Optionor shall treat all data, reports,
records and other information of any nature whatsoever relating to
this Agreement and the Property as confidential, except where such
information must be disclosed for public disclosure requirements of a
public company.
10. TERMINATION
10.1 Until such time as Bayview has acquired an undivided 85% interest
in the Property pursuant to Section 2, this Agreement shall terminate
upon any of the following events:
(A) upon the failure of Bayview to make a payment or incur Property
Expenditures required by and within the time limits prescribed by
Paragraph 2.1;
(B) in the event that Bayview, not being at the time in default under
any provision of this Agreement, gives 30 day's written notice to the
Optionor of the termination of this Agreement;
(C) in the event that Bayview shall fail to comply with any of its
obligations hereunder, other than the obligations contained in
Paragraph 2.1, and subject to Paragraph 11.1, and within 30 days of
receipt by Bayview of written notice from the Optionor of such
default, Bayview has not:
(i) cured such default, or commenced proceedings to cure such default
and prosecuted same to completion without undue delay; or
(ii) given the Optionor notice that it denies that such default has
occurred.
(D) delivery of notice of termination by Bayview pursuant to
Paragraph 2.1 in the event the Geological Report is not acceptable;
(E) the inability of Bayview to complete the private placement
referred to in Paragraph 2.1(c).
In the event that Bayview gives notice that it denies that a default
has occurred, Bayview shall not be deemed in default until the matter
shall have been determined finally through such means of dispute
resolution as such matter has been subjected to by either party.
10.2 Upon termination of this Agreement under ▇▇▇▇▇▇▇▇▇ ▇▇.▇, ▇▇▇▇▇▇▇
shall:
(A) transfer any interest in title to the Property, in good standing
to the Optionor free and clear of all liens, charges, and
encumbrances;
(B) turn over to the Optionor copies of all maps, reports, sample
results, contracts and other data and documentation in the possession
of Bayview or, to the extent within Bayview's control, in the
possession of its agents, employees or independent contractors, in
connection with its operations on the Property; and
(C) ensure that the Property is in a safe condition and complies with
all environmental and safety standards imposed by any duly authorised
regulatory authority.
10.3 Upon the termination of this Agreement under ▇▇▇▇▇▇▇▇▇ ▇▇.▇,
▇▇▇▇▇▇▇ shall cease to be liable to the Optionor in debt, damages or
otherwise save for the performance of those of its obligations which
theretofore should have been performed, including those obligations in
Paragraph 10.2.
10.4 Upon termination of this Agreement, Bayview shall vacate the
Property within a reasonable time after such termination, but shall
have the right of access to the Property for a period of six months
thereafter for the purpose of removing its chattels, machinery,
equipment and fixtures.
11. FORCE MAJEURE
11.1 The time for performance of any act or making any payment or any
expenditure required under this Agreement shall be extended by the
period of any delay or inability to perform due to fire, strikes,
labour disturbances, riots, civil commotion, wars, acts of God, any
present or future law or governmental regulation, any shortages of
labour, equipment or materials, or any other cause not reasonably
within the control of the party in default, other than lack of
finances.
12. REGULATORY APPROVAL
12.1 If this Agreement is subject to the prior approval of any
securities regulatory bodies, then the parties shall use their best
efforts to obtain such regulatory approvals.
13. NOTICES
13.1 Any notice, election, consent or other writing required or
permitted to be given hereunder shall be deemed to be sufficiently
given if delivered or mailed postage prepaid or if given by telegram,
telex or telecopier, addressed as follows:
In the case of the Optionor: ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
In the case of Bayview : Bayview Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
and any such notice given as aforesaid shall be deemed to have been
given to the parties hereto if delivered, when delivered, or if
mailed, on the third business day following the date of mailing, or,
if telegraphed, telexed or telecopied, on the same day as the
telegraphing, telexing or telecopying thereof PROVIDED HOWEVER that
during the period of any postal interruption in Canada any notice
given hereunder by mail shall be deemed to have been given only as of
the date of actual delivery of the same. Any party may from time to
time by notice in writing change its address for the purposes of this
Paragraph 13.1.
14. GENERAL TERMS AND CONDITIONS
14.1 The parties hereto hereby covenant and agree that they will
execute such further agreements, conveyances and assurances as may be
requisite, or which counsel for the parties may deem necessary to
effectually carry out the intent of this Agreement.
14.2 This Agreement shall constitute the entire agreement between the
parties with respect to the Property. No representations or
inducements have been made save as herein set forth. No changes,
alterations or modifications of this Agreement shall be binding upon
either party until and unless a memorandum in writing to such effect
shall have been signed by all parties hereto. This Agreement shall
supersede all previous written, oral or implied understandings between
the parties with respect to the matters covered hereby.
14.3 Time shall be of the essence of this Agreement.
14.4 The titles to the sections in this Agreement shall not be deemed
to form part of this Agreement but shall be regarded as having been
used for convenience of reference only.
14.5 Unless otherwise noted, all currency references contained in this
Agreement shall be deemed to be references to United States funds.
14.6 Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision shall be prohibited by or be
invalid under applicable law, such provision shall be ineffective only
to the extent of such prohibition or invalidity, without invalidating
the remainder of such provision or the remaining provisions of this
Agreement.
14.7 The Schedules to this Agreement shall be construed with and as an
integral part of this Agreement to the same extent as if they were set
forth verbatim herein.
14.8 Defined terms contained in this Agreement shall have the same
meanings where used in the Schedules.
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14.9 This Agreement shall be governed by and interpreted in accordance
with the laws of British Columbia and the laws of Canada applicable
therein.
14.10 This Agreement shall enure to the benefit of and be binding
upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
WITNESS WHEREOF this Agreement has been executed by the parties hereto
as of the day and year first above written.
▇▇▇▇▇ ▇▇▇▇▇
______________________________
Signature of Authorised Signatory
______________________________
Name of Authorised Signatory
______________________________
Position of Authorised Signatory
BAYVIEW CORPORATION
by its authorised signatory:
______________________________
Signature of Authorised Signatory
______________________________
Name of Authorised Signatory
______________________________
Position of Authorised Signatory
SCHEDULE "A"
PROPERTY DESCRIPTION
G.P.S. CO-ORDINATES: 5169500N and 521500E
SUDBURY MINING DISTRICT
ONTARIO
CANADA
List of Claims
CLAIM NUMBERS TOWNSHIP/AREA CURRENT EXPIRY DATE
3004254 - 11 UNITS ▇▇▇▇▇▇▇▇▇ SEPTEMBER 10, 2004
3004255 - 2 UNITS ▇▇▇▇▇▇▇▇▇ SEPTEMBER 10, 2004
SCHEDULE "B"
JOINT VENTURE AGREEMENT
EXPLORATION JOINT VENTURE AGREEMENT
THIS AGREEMENT made as of the ** day of **, 20**.
BETWEEN:
▇▇▇▇▇ ▇▇▇▇▇
an Ontario resident with an address at
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
(the "Optionor")
OF THE FIRST PART
AND:
BAYVIEW CORPORATION
a Nevada corporation with its registered address at
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
("Bayview")
OF THE SECOND PART
WHEREAS:
A. Bayview owns a 85% and ▇▇▇▇▇ ▇▇▇▇▇ owns a 15% undivided
right, title and interest in and to the Property;
B. The parties wish to create a joint venture to carry out the
continued exploration of the Property on the terms and subject to the
conditions hereinafter set forth;
C. The parties have agreed that, if following the completion of
such exploration a Feasibility Report is prepared which recommends
placing the Property into commercial production, they will negotiate
and settle a further joint venture agreement for the development and
placing of the Property into commercial production;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
premises, and of the mutual covenants and agreements herein contained,
the parties hereto have agreed and do hereby agree as follows:
1. DEFINITIONS
1.1 In this Agreement, including the Recitals and Schedules
hereto the following words and expressions shall have the following
meanings:
(a) "Affiliate" shall have the same meaning as under the Company
Act (British Columbia) as at the date hereof;
(b) "Agreement" means this Joint Venture Agreement as amended
from time to time;
(c) "Costs" means all items of outlay and expense whatsoever,
both direct and indirect incurred by or on behalf of the
parties, in connection with the Property, the exploration
and development thereof and expenses in respect of the
Feasibility Report;
(d) "Feasibility Report" means a detailed written report of the
results of a comprehensive study on the economic feasibility
of placing the Property or a portion thereof into commercial
production and shall include a reasonable assessment of the
mineral ore reserves and their amenability to metallurgical
treatment, a description of the work, equipment and supplies
required to bring the Property or a portion thereof into
commercial production and the estimated cost thereof, a
description of the mining methods to be employed and a
financial appraisal of the proposed operations supported by
an explanation of the data used therein;
(e) "Interest" means the undivided beneficial percentage
interest from time to time of a party in the Joint Venture,
the Property, and Mineral Products, as set out hereunder;
(f) "Joint Venture" means the joint venture created pursuant to
this Agreement;
(g) "Management Committee" means the committee of
representatives of the parties to this Agreement constituted
in accordance with the provisions of article 5 to manage or
supervise the management of the business and affairs of the
Joint Venture;
(h) "Mineral Products" means the end products derived from
operating the Property as a mine;
(i) "Net Profits" shall mean net profits calculated in
accordance with Schedule "B" hereto;
(j) "Operator" means the operator appointed pursuant to article
6;
(k) "Other Tenements" means all surface rights of and to any
lands within or outside the Property including surface held
in fee or under lease, licence, easement, right of way or
other rights of any kind (and all renewals, extensions and
amendments thereof or substitutions therefor) acquired by or
on behalf of the parties with respect to the Property;
(l) "Program" means a plan, including budgets, for the Project
or any part thereof as approved by the Management Committee
pursuant to this Agreement;
(m) "Project" means the exploration and development of the
Property and preparation and delivery of a Feasibility
Report;
(n) "Property" means those certain mining claims and related
rights and interests set out and more particularly described
in Schedule "A" hereto and Other Tenements and shall include
any renewal thereof and any form of substitute or successor
title thereto; and
(o) "Royalty" shall mean a royalty on the Net Profits calculated
and paid in accordance with Schedule "B" hereto.
2. REPRESENTATIONS AND WARRANTIES
2.1 Bayview represents to ▇▇▇▇▇ ▇▇▇▇▇ that:
(a) it is the legal and beneficial owner of a 85% Interest free
and clear of all liens, charges and encumbrances; and
(b) save and except as set out herein, there is no adverse claim
or challenge against or to the ownership of or title to
Bayview's Interest or any portion thereof, nor is there any
basis therefor, and there are no outstanding agreements or
options to acquire or purchase Bayview's Interest or any
portion thereof.
2.2 ▇▇▇▇▇ ▇▇▇▇▇ represents to Bayview that:
(a) it is the legal and beneficial owner of a 15% Interest free
and clear of all liens, charges and encumbrances; and
(b) save and except as set out herein, there is no adverse claim
or challenge against or to the ownership of or title to
▇▇▇▇▇ ▇▇▇▇▇'▇ Interest or any portion thereof, nor is there
any basis therefor, and there are no outstanding agreements
or options to acquire or purchase ▇▇▇▇▇ ▇▇▇▇▇'▇ Interest or
any portion thereof.
2.3 Each of the parties represents to the other that:
(a) it is a company duly incorporated, organized and validly
subsisting under the laws of its incorporating jurisdiction;
(b) it has full power and authority to carry on its business and
enter into this Agreement and any agreement or instrument
referred to or contemplated by this Agreement and to carry
out and perform all of its obligations hereunder;
(c) it has duly obtained all corporate authorizations for the
execution, delivery and performance of this Agreement and
the consummation of the transactions herein contemplated,
and the execution, delivery and performance of this
Agreement 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,
lien or charge under the provisions of its constating
documents or any indenture, agreement or other instrument
whatsoever to which it is a party or by which it is bound or
to which it may be subject and will not contravene any
applicable laws.
2.4 The representations and warranties hereinbefore set out are
conditions on which the parties have relied in entering into this
Agreement, are to be construed as both conditions and warranties and
shall, regardless of any investigation which may have been made by or
on behalf of any party as to the accuracy of such representations and
warranties, survive the closing of the transactions contemplated
hereby and each of the parties will indemnify and save the other
harmless from all loss, damage, costs, actions and suits arising out
of or in connection with any breach of any representation or warranty
contained in this Agreement and each party shall be entitled, in
addition to any other remedy to which it may be entitled, to set off
any such loss, damage or costs suffered by it as a result of any such
breach against any payment required to be made by it to the other
party hereunder.
3. PURPOSE AND CREATION OF THE JOINT VENTURE
3.1 The parties agree each with the other to use their best
efforts to explore and develop the Property with the goal of
eventually putting the Property into commercial production should a
Feasibility Report recommending commercial production be obtained and
a decision to commence commercial production be made, which
Feasibility Report and decision have not, at the date of this
Agreement, been obtained or made and for this purpose hereby agree to
associate and participate in a single purpose joint venture to carry
out all such acts which are necessary or appropriate, directly or
indirectly, to carry out the Project.
3.2 The parties have not created a partnership and nothing
contained in this Agreement shall in any manner whatsoever constitute
a party the partner, agent or legal representative of any other party
or create any fiduciary relationship between them for any purpose
whatsoever. No party shall have any authority to act for or to assume
any obligations or responsibility on behalf of any other party except
as may be, from time to time, agreed upon in writing between the
parties or as otherwise expressly provided.
3.3 The rights and obligations of each party shall be in every
case several and not joint or joint and several.
3.4 Beneficial ownership of the Property shall remain in each
party in proportion to its respective Interest and any legal title to
the Property held by any party shall be subject to this Agreement.
All property held, acquired or contributed by or on behalf of the
parties under or pursuant to this Agreement shall be beneficially
owned by the parties as tenants in common in proportion to their
respective Interests.
3.5 Each party shall make available its Interest exclusively for
the purposes of the Project and, in particular, each party agrees to
grant a mortgage, charge, lien or other encumbrance on, or any
security interest in, its Interest to and in favour of any lender to
facilitate financing of the Project or any portion thereof.
3.6 The rights and obligations of the parties created under this
Agreement shall be strictly limited to the Project and shall not be
extended by implication or otherwise, except with the unanimous
written consent of the parties.
3.7 Except as may be otherwise expressly provided in this
Agreement, nothing herein shall restrict in any way the freedom of any
party, except with respect to its Interest, to conduct as it sees fit
any business or activity whatsoever, including the development or
application of any process, and the exploration for, development,
mining, extraction, production, handling, processing or any treatment,
transportation or marketing of any ore, mineral or other product for
any other purpose, without any accountability to any other party.
3.8 Each party shall do all things and execute all documents
necessary in order to maintain the Property and the Project in good
standing provided that all Costs need only be met by each party in
proportion to its Interest.
3.9 Except as may be otherwise expressly specified in this
Agreement, each party, in proportion to its Interest, shall indemnify
and hold harmless each other party and each director, officer,
employee, agent and representative of each other party, from and
against any claim of or liability to any third person asserted on the
ground that action taken under this Agreement has resulted in or will
result in any loss or damage to such third person to the extent, but
only to the extent, that such claim or liability is paid by such other
party in the amount in excess of that amount payable by reason of such
other party's Interest, but the foregoing shall not prejudice any
claim of any party against the Operator.
3.10 Each party covenants and agrees with the other:
(a) to perform or cause to be performed its obligations and
commitments under this Agreement and, without limiting the
generality of the foregoing, to pay Costs in proportion to
its Interest except as may be otherwise provided in article
4 hereof;
(b) not to engage either alone or in association with others in
any activity in respect of the Property or the Project
except as provided or authorized by this Agreement.
4. DILUTION
4.1 Upon formation of the Joint Venture, Bayview shall be deemed
to have incurred Costs of $213,800 and ▇▇▇▇▇ ▇▇▇▇▇ to have incurred
Costs of $32,070.
4.2 The respective Interests of the parties shall be subject to
variation from time to time in the event:
(a) of failure by a party to pay its proportionate share of
Costs;
(b) subject to section 8.6 hereof, of the election by a party
not to participate in a Program; or
(c) subject to section 8.6 hereof, of the election by a party to
pay less than its proportionate share of Costs in respect of
a Program adopted by the Management Committee.
4.3 Upon the happening of any of the events set forth in
subsection 4.2 hereof, each party's Interest shall be varied to equal
the product obtained by multiplying 100% by a fraction of which the
numerator shall be the amount of Costs paid by such party and of which
the denominator shall be the total amount of Costs paid by all
parties. For the purposes of this section, the amount of Costs paid
by a party shall include the amount of Costs deemed to have been paid
by that party as set forth in section 4.1.
4.4 In the event that a party's Interest is reduced to 5% or
less by the operation of section 4.3 hereof, such party shall forfeit
its Interest to the other party and shall receive as consideration
therefor a Royalty equal to 2% of Net Profits payable within 60 days
after the end of each calendar quarter. If, as a result of such
forfeiture, one party has an Interest equal to 100% the Joint Venture
shall terminate.
5. MANAGEMENT COMMITTEE
5.1 A Management Committee, consisting of one representative of
each party, and one or more alternate representatives, shall be
constituted and appointed forthwith after the formation of the Joint
Venture. The Management Committee shall manage, or supervise the
management of, the business and affairs of the Joint Venture and shall
exercise all such powers and do all such acts as the Joint Venture may
exercise and do. The Management Committee shall meet within 15 days
of its constitution and may otherwise meet at such places as it thinks
fit for the dispatch of business, adjourn and otherwise regulate its
meetings and proceedings as the members thereof deem fit. The
Chairman of all meetings shall be a representative of the Operator.
Matters decided at any meeting of the Management Committee shall be
decided by a simple majority of votes with each party's
representatives being entitled to cast that number of votes which is
equal to that party's Interest, and, in the case of an equality of
votes, the dispute shall be referred to arbitration pursuant to
article 20. Unless agreed to in writing by the parties hereto, all
meetings of the Management Committee shall be held in Vancouver,
British Columbia. Any meetings may, if both parties so consent, be
held by conference telephone.
5.2 A quorum for any meeting of the Management Committee shall
consist of a representative or representatives of a party or parties
whose Interests aggregate equal to or in excess of 95%. No business
other than the election of a chairman, if any, and the adjournment or
termination of the meeting shall be dealt with if a quorum is not
present at the commencement of the meeting but the quorum need not be
present throughout the meeting. A meeting at which a quorum is not
present shall be adjourned to the same time and place one week later
at which adjourned meeting a quorum shall be one representative of a
party.
5.3 A meeting of the Management Committee at which a quorum is
present shall be competent to exercise all or any of the authorities,
powers and discretion bestowed upon the Management Committee in this
Agreement.
5.4 No questions submitted to the Management Committee need be
seconded and the chairman, if any, of the meeting shall be entitled to
submit the questions.
5.5 The decision on any matter evidenced by the consent in
writing of the representatives of all parties shall be as valid as if
it had been decided at a duly called and held meeting of the
Management Committee. Each written consent may be signed in
counterparts each consented to in writing by one or more
representatives which together shall be deemed to constitute one
consent.
5.6 At the time of any decision by the Management Committee to
adopt a Program, the parties shall, subject to the provisions of
article 8 hereof, pay their proportionate share of the estimated Costs
of such Program by depositing the same into the interest bearing bank
account opened and maintained pursuant to section 5.7 hereof.
5.7 The Operator shall open and maintain an interest bearing
bank account with a Canadian Chartered bank in the name of the Joint
Venture and shall use the funds on deposit therein for the purposes of
the Joint Venture. The Operator shall appoint signing officers on the
said account as shall be required and shall advise the parties of the
particulars of the said account.
5.8 Each of the parties hereby agree that any interest earned on
any sums deposited in the bank account opened and maintained pursuant
to section 5.7 hereof shall be shared in proportion to their
respective Interests.
5.9 If the Operator fails to do so, any party (the "Paying
Party") may pay any reasonable Costs due to maintain the Property in
good standing and the other party shall, in proportion to its Interest
and within 15 days of being given notice of such payment, reimburse
the Paying Party for such payment, failing such reimbursement the
party not paying shall forfeit its Interest to the Paying Party and
this Agreement shall terminate.
5.10 At any time during the currency of this Agreement the
Management Committee may cause a Feasibility Report to be prepared by
a substantial and well recognized Canadian engineering firm in such
form as the Management Committee may require. The Management
Committee shall, forthwith upon receipt of a Feasibility Report,
provide each of the parties with a copy thereof. Upon request of any
party and at reasonable intervals and times the parties shall meet in
order to discuss the Feasibility Report.
6. OPERATOR
6.1 The initial Operator shall be ▇▇▇▇▇ ▇▇▇▇▇, which shall
continue as operator until changed pursuant to section 8.2 or by a
decision of the Management Committee with parties representing
Interests of 75% or more voting in favour. If the Operator has failed
to perform in a manner that is consistent with good mineral
exploration and development practice or is in default of its duties
and responsibilities under this Agreement, and the Management
Committee or the other party has given to the Operator written notice
setting forth particulars of the Operator's default and the Operator
has not within 30 days of such notice commenced to remedy the default
and thereafter to proceed continuously and diligently to complete all
required remedial action the other party shall become the Operator.
6.2 The Operator may at any time on 60 days' notice to the
Management Committee resign as Operator, in which event the Management
Committee shall select another party or person to be Operator upon the
30th day after receipt of the Operator's notice of resignation or such
sooner date as the Management Committee may establish and give notice
of to the resigning Operator. The resigning Operator shall thereupon
be released and discharged from all its duties and obligations as
Operator on the earlier of those dates save only as to those duties
and obligations that it theretofore should have performed.
6.3 Upon the Operator making a voluntary or involuntary
assignment into bankruptcy or taking advantage of any legislation for
the winding-up or liquidation of the affairs of insolvent or bankrupt
companies the Operator shall automatically cease to be the Operator
and the other party or its nominee appointed as Operator.
6.4 The new Operator shall assume all of the rights, duties,
obligations and status of the Operator as provided in this Agreement,
other than the previous Operator's Interest, if any, without
obligation to retain or hire any of the employees of the former
Operator or to indemnify the former Operator for any costs or expenses
which the previous Operator will incur as a result of the termination
of employment of any of its employees resulting from this change of
Operator, and shall continue to act as Operator until its replacement
or resignation.
6.5 The Operator shall be paid by the Joint Venture, as
compensation for general overhead expenses which the Operator may
incur, an amount equal to 10% of all Costs in each year but only 5% of
Costs paid by the Operator under any contract involving payments by it
in excess of $100,000 in one year.
7. POWERS, DUTIES AND OBLIGATIONS OF OPERATOR
7.1 Subject to the control and direction of the Management
Committee, the Operator shall have full right, power and authority to
do everything necessary or desirable to carry out a Program and the
Project and to determine the manner of exploration and development of
the Property and, without limiting the generality of the foregoing,
the right, power and authority to:
(a) regulate access to the Property subject only to the right of
representatives of the parties to have access to the
Property at all reasonable times for the purpose of
inspecting work being done thereon but at their own risk and
expense;
(b) employ and engage such employees, agents and independent
contractors as it may consider necessary or advisable to
carry out its duties and obligations hereunder and in this
connection to delegate any of its powers and rights to
perform its duties and obligations hereunder, but the
Operator shall not enter into contractual relationships with
a party except on terms which are commercially competitive;
(c) execute all documents, deeds and instruments, do or cause to
be done all such acts and things and give all such
assurances as may be necessary to maintain good and valid
title to the Property and each party hereby irrevocably
constitutes the Operator its true and lawful attorney to
give effect to the foregoing and hereby agrees to indemnify
and save the Operator harmless from any and all costs, loss
or damage sustained or incurred without gross negligence or
bad faith by the Operator directly or indirectly as a result
of its exercise of its powers pursuant to this subsection;
(d) conduct such title examination and cure such title defects
as may be advisable in the reasonable judgment of the
Operator.
7.2 The Operator shall have the following duties and obligations
during the term hereof:
(a) to diligently manage, direct and control all exploration and
development operations in and under the Property in a
prudent and workmanlike manner and in compliance with all
applicable laws, rules, orders and regulations;
(b) to prepare and deliver to each of the parties during the
periods of active field work, quarterly progress reports of
the work in progress, on or before the day which is 45 days
following each calendar quarter with respect to work done in
such quarter and on or before March 31st of every year
comprehensive annual reports covering the activities
hereunder and the results obtained during the 12 month
period ending on December 31 immediately preceding;
(c) to prepare and deliver to each of the parties copies of all
assays, maps and drill logs immediately upon their
preparation or receipt;
(d) subject to the terms and conditions of this Agreement, to
keep the Property in good standing, free and clear of all
liens, charges and encumbrances of every character arising
from operations (except for those which are in effect on the
date of this Agreement or are created pursuant to this
Agreement, liens for taxes not yet due, other inchoate liens
and liens contested in good faith by the Operator) and to
proceed with all diligence to contest or discharge any lien
that is filed by reason of the Operator's failure to perform
its obligations hereunder;
(e) to maintain true and correct books, accounts and records of
operations hereunder separate and apart from any other
books, accounts and records maintained by the Operator;
(f) to permit one representative of the parties, appointed in
writing, at all reasonable times and at their expense to
inspect, audit and copy the Operator's accounts and records
relating to the Project for any fiscal year of the Operator
within nine months following the end of such fiscal year;
(g) to obtain and maintain and cause any contractor engaged
hereunder to obtain and maintain during any period in which
active work is carried out hereunder such insurance coverage
as the Management Committee deems advisable;
(h) to permit the parties or their representatives, appointed in
writing, at all reasonable times, at their own expense and
risk, reasonable access to the Property and all data derived
from carrying out a Program;
(i) to open and maintain on behalf of the Joint Venture such
bank account or bank accounts as the Management Committee
may direct with a Canadian chartered bank;
(j) to prosecute and defend, but not to initiate without the
consent of the Management Committee, all litigation or
administrative proceedings arising out of the Property, or
Project;
(k) to transact, undertake and perform all transactions,
contracts, employments, purchases, operations, negotiations
with third parties and any other matter or thing undertaken
by or on behalf of the Joint Venture hereunder in the
Operator's name and to promptly pay all expenditures
incurred in connection therewith when due; and
(l) to maintain in good standing those mineral claims comprised
in the Property by the doing and filing of all assessment
work or the making of payments in lieu thereof and by the
payment of all taxes and other like charges and payments.
7.3 Subject to any specific provisions of this Agreement, the
Operator, in carrying out its duties and obligations hereunder, shall
at all times be subject to the direction and control of the Management
Committee and shall perform its duties hereunder in accordance with
the instructions and directions as from time to time communicated to
it by the Management Committee and shall make all reports to the
Management Committee except where otherwise specifically provided
herein.
7.4 The Operator shall commence and diligently complete the
Project and without limiting the generality of the foregoing, may
retain an independent consulting geologist acceptable to all parties
to prepare a report in respect of the Project, the results thereof,
the conclusions derived therefrom and the recommendation as to whether
or not further work should be conducted on the Property.
8. PROGRAMS
8.1 Costs shall only be incurred under and pursuant to Programs
prepared by the Operator, approved by the Management Committee and
delivered to the parties as provided in this article. Any Feasibility
Report shall be prepared pursuant to a separate Program.
8.2 The Operator shall prepare and submit to the parties a
Program within 180 days of the completion of the previous Program. If
the Operator does not prepare a Program within the time limited, then
the other party shall have the right to prepare a Program for
submission to the other party at which time the party submitting the
Program shall become the Operator.
8.3 Within 30 days of the receipt by the parties of a Program,
each party shall give written notice to the Operator stating whether
or not they elect to contribute their proportionate share of Costs of
such Program or requesting the Operator to revise the Program provided
that each party may only make such requests once in respect of each
Program. Subject to subsection 8.6, failure by either of the parties
to give notice pursuant to this subsection within such 30 day period
shall be deemed an election by that party not to contribute to such
Program.
8.4 If a party elects or is deemed to have elected not to
contribute its proportionate share of the Costs of a Program, the
other party may give notice in writing to the Operator stating that it
will contribute all expenditures under or pursuant to such Program and
the Operator will proceed with such Program and thereafter the
Interests of the parties shall be adjusted in accordance with article
4. The Operator will not proceed with any program, which is not fully
subscribed.
8.5 If the parties elect to contribute their proportionate share
of the Costs of a Program, the Operator will then proceed with the
Program.
8.6 If either party elects or is deemed to have elected not to
contribute to a Program its Interest will not be subject to adjustment
thereunder if, within 60 days of such election or deemed election, it
elects to pay to the contributing party 150% of what would otherwise
have been its contribution to the Costs of such Program, but any
amount so paid in excess of what would otherwise have been its
contribution to such Program shall be deemed not to be a contribution
to Costs by the party making it.
8.7 An election by a party to contribute to the Costs of a
Program shall make that party liable to pay its proportionate share of
the Costs actually incurred under or pursuant to the Program including
Program Overruns, as hereinafter defined, of up to but not exceeding
10%.
8.8 After having elected to contribute its proportionate share
of the Costs of a Program which is proceeded with, a party shall,
within 15 days after being requested in writing to do so by the
Operator, pay such portion of its share of Costs as the Operator may
require but the Operator shall not require payment of any funds in
advance if the party provides the Operator with reasonable assurance
and evidence that it has secured financing by way of the issuance of
"flow-through" shares sufficient to pay its proportionate share of the
Costs of a Program and such financing requires that party to incur the
Costs before funds are advanced to the party. At any other time the
Operator shall not require payment of funds more than one month in
advance.
8.9 If it appears that Costs will exceed by greater than 10%
those estimated under a Program the Operator shall immediately give
written notice to the party or parties contributing to that Program
outlining the nature and extent of the additional costs and expenses
("Program Overruns"). If Program Overruns are approved by the party
or parties contributing to that Program, then within 15 days after the
receipt of a written request from the Operator, the party or parties
contributing to that Program shall provide the Operator with their
respective shares of such Program Overruns. If Program Overruns are
not approved by the party or parties contributing to that Program, the
Operator shall have the right to curtail or abandon the portion of
such Program relating to the Program Overruns.
8.10 If either party at any time fails to pay its proportionate
share of Costs in accordance with subsections 8.8 or 8.9, the Operator
may give written notice to that party demanding payment, and if the
party has not paid such amount within 15 days of the receipt of such
notice, that party shall:
(a) be deemed to be in default under subsection 8.8 or 8.9 as
applicable; and
(b) forfeit its Interest to the other party and shall receive as
consideration therefore a Royalty equal to 2% of Net Profits
payable within 60 days after the end of each calendar
quarter. If, as a result of such forfeiture, one party has
an Interest equal to 100% the Joint Venture shall terminate.
9. INFORMATION AND DATA
9.1 At all times during the subsistence of this Agreement the
duly authorized representatives of each party shall have access to the
Property and the Project at its and their sole risk and expense and at
reasonable intervals and times, and shall further have access at all
reasonable times to all technical records and other factual
engineering data and information relating to the Property and the
Project in the possession of the Management Committee or the Operator.
In exercising the right of access to the Property or the Project the
representatives of a party shall abide by the rules and regulations
laid down by the Management Committee and by the Operator relating to
matters of safety and efficiency. If any representative of a party is
not a director, senior officer or employee of a party, the party shall
so advise the Operator so that the Operator may require the
representative, before giving him access to the Property or the
Project or to data or information relating thereto, to sign an
undertaking in favour of the Joint Venture, in form and substance
satisfactory to the Operator, to maintain confidentiality to the same
extent as each party is required to do under section 9.2 hereof.
9.2 All records, reports, accounts and other documents referred
to herein with respect to the Property and the Project and all
information and data concerning or derived from the Property and the
Project shall be kept confidential and each party shall take or cause
to be taken such reasonable precautions as may be necessary to prevent
the disclosure thereof to any person other than each party, the
Operator, an Affiliate, their respective legal, accounting and
financial or other professional advisors, and any financial
institution or other person having made, making or negotiating loans
to one or more of the foregoing or any trustee for any such person, or
as may be required by securities or corporate laws and regulations or
by the policies of any securities commission or stock exchange, or in
connection with the filing of an offering memorandum, rights offering
circular, prospectus or statement of material facts by a party, an
Affiliate or the Operator or to a prospective assignee as permitted
hereunder, or as may be required in the performance of obligations
under this Agreement without prior consent of all parties, which
consent shall not be unreasonably withheld.
10. PARTITION
10.1 No party shall, during the term of this Agreement, exercise
any right to apply for any partition of the Property or for sale
thereof in lieu of partition.
11. TAXATION
11.1 Each party on whose behalf any Costs have been incurred
shall be entitled to claim all tax benefits, write-offs and deductions
with respect thereto.
12. RIGHT OF FIRST REFUSAL
12.1 Save and except as provided in section 3.5 and article 4
hereof, neither party shall transfer, convey, assign, mortgage or
grant an option in respect of or grant a right to purchase or in any
manner transfer or alienate all or any portion of its Interest or
rights under this Agreement otherwise than in accordance with this
article.
12.2 Nothing in this article shall prevent:
(a) a sale by a party of all of its Interest or an assignment of
all its rights under this Agreement to an Affiliate provided
that such Affiliate first complies with the provisions of
section 12.10 and agrees with the other party in writing to
retransfer such Interest to the originally assigning party
before ceasing to be an Affiliate of such party;
(b) a variation pursuant to section 4.3; or
(c) a disposition pursuant to an amalgamation or corporate
reorganization which will have the effect in law of the
amalgamated or surviving company possessing all the
property, rights and interests and being subject to all the
debts, liabilities and obligations of each amalgamating or
predecessor company.
12.3 Should a party (the "transferring party") intend to dispose
of all or any portion of its Interest or rights under this Agreement
it shall first give notice in writing to the other parties (the "other
parties") of such intention together with the terms and conditions on
which the transferring party intends to dispose of its Interest or a
portion thereof or rights under this Agreement.
12.4 If a party (the "transferring party") receives any offer to
dispose of all or any portion of its Interest or rights under this
Agreement which it intends to accept, the transferring party shall not
accept the same unless and until it has first offered to sell such
Interest or rights to the other parties (the "other parties") on the
same terms and conditions as in the offer received and the same has
not been accepted by the other parties in accordance with section
12.6.
12.5 Any communication of an intention to sell pursuant to
section 12.3 and 12.4 (the "Offer") shall be in writing delivered in
accordance with article 14 and shall:
(a) set out in reasonable detail all of the terms and conditions
of any intended sale;
(b) if it is made pursuant to section 12.3, include a photocopy
of the Offer; and
(c) if it is made pursuant to section 12.4, clearly identify the
offering party and include such information as is known by
the transferring party about such offering party;
and such communication will be deemed to constitute an Offer by the
transferring party to the other parties to sell the transferring
party's Interest or its rights (or a portion thereof as the case may
be) under this Agreement to the other parties on the terms and
conditions set out in such Offer. For greater certainty it is agreed
and understood that any Offer hereunder shall deal only with the
disposition of the Interest or rights of the transferring party
hereunder and not with any other interest, right or property of the
transferring party and such disposition shall be made solely for a
monetary consideration.
12.6 Any Offer made as contemplated in section 12.5 shall be open
for acceptance by the other parties for a period of 60 days from the
date of receipt of the Offer by the other parties.
12.7 If the other parties accept the Offer within the period
provided for in section 12.6, such acceptance shall constitute a
binding agreement of purchase and sale between the transferring party
and the other parties, in proportion to their Interests, for the
Interest or its rights (or a portion thereof as the case may be) under
this Agreement on the terms and conditions set out in such Offer.
12.8 If the other parties do not accept the Offer within the
period provided for in section 12.6, the transferring party may
complete a sale and purchase of its Interest or a portion thereof on
terms and conditions no less favourable to the transferring party than
those set out in the Offer and, in the case of an Offer under section
12.4, only to the party making the original offer to the transferring
party and in any event such sale and purchase shall be completed
within nine months from the expiration of the right of the other
parties to accept such Offer or the transferring party must again
comply with the provisions of this article.
12.9 If the other parties do accept the Offer within the period
provided for in section 12.6 but fail to close the transaction
contemplated thereby within 90 days following receipt of such Offer,
the transferring party may complete a sale and purchase of its
Interest or a portion thereof on any terms and conditions but in any
event such sale and purchase shall be completed within nine months
from the expiration of the right of the other parties to accept such
Offer or the transferring party must again comply with the provisions
of this article.
12.10 While any Offer is outstanding no other Offer may be made
until the first mentioned Offer is disposed of and any sale resulting
therefrom completed or abandoned in accordance with the provisions of
this article.
12.11 Before the completion of any sale by the transferring party
of its Interest or rights or any portion thereof under this Agreement,
the purchasing party shall enter into an agreement with the parties
agreeing not to sell except on the same terms and conditions as set
out in this Agreement.
13 FORCE MAJEURE
13.12 No party will be liable for its failure to perform any
of its obligations under this Agreement due to a cause beyond its
reasonable control (except those caused by its own lack of funds)
including, but not limited to acts of God, fire, flood, explosion,
strikes, lockouts or other industrial disturbances, laws, rules and
regulations or orders of any duly constituted governmental authority
or non-availability of materials or transportation (each an
"Intervening Event").
13.13 All time limits imposed by this Agreement will be
extended by a period equivalent to the period of delay resulting from
an Intervening Event.
13.14 A party relying on the provisions of section 13.1 will
take all reasonable steps to eliminate any Intervening Event and, if
possible, will perform its obligations under this Agreement as far as
practical, but nothing herein will require such party to settle or
adjust any labour dispute or to question or to test the validity of
any law, rule, regulation or order of any duly constituted
governmental authority or to complete its obligations under this
Agreement if an Intervening Event renders completion impossible.
14 NOTICE
14.15 Any notice, direction, cheque or other instrument
required or permitted to be given under this Agreement shall be in
writing and may be given by delivery or by sending by telecopier, in
each case addressed to the intended recipient at the address of the
respective party set out on the front page hereof.
14.16 Any notice, direction, cheque or other instrument
aforesaid will, if delivered, be deemed to have been given and
received on the day it was delivered, and, if sent by telecopier, be
deemed to have been given or received on the day it was so sent.
14.17 Any party may at any time give to the other notice in
writing of any change of address of the party giving such notice and
from and after the giving of such notice the address or addresses
therein specified will be deemed to be the address of such party for
the purposes of giving notice hereunder.
15 WAIVER
15.18 If any provision of this Agreement shall fail to be
strictly enforced or any party shall consent to any action by any
other party or shall waive any provision as set out herein, such
action by such party shall not be construed as a waiver thereof other
than at the specific time that such waiver or failure to enforce takes
place and shall at no time be construed as a consent, waiver or excuse
for any failure to perform and act in accordance with this Agreement
at any past or future occasion.
16 FURTHER ASSURANCES
16.19 Each of the parties hereto shall from time to time and
at all times do all such further acts and execute and deliver all
further deeds and documents as shall be reasonably required in order
to fully perform and carry out the terms of this Agreement. For
greater certainty this section shall not be construed as imposing any
obligation on any party to provide guarantees.
17 USE OF NAME
17.20 No party shall, except when required by this Agreement
or by any law, by-law, ordinance, rule, order or regulation, use,
suffer or permit to be used, directly or indirectly, the name of any
other party for any purpose related to the Property or the Project.
18 ENTIRE AGREEMENT
18.21 This Agreement embodies the entire agreement and
understanding among the parties hereto and supersedes all prior
agreements and undertakings, whether oral or written, relative to the
subject matter hereof.
19 AMENDMENT
19.22 This Agreement may not be changed orally but only by an
agreement in writing, executed by the party or parties against which
enforcement, waiver, change, modification or discharge is sought.
20 ARBITRATION
20.23 If any question, difference or dispute shall arise
between the parties or any of them in respect of any matter arising
under this Agreement or in relation to the construction hereof the
same shall be determined by the award of three arbitrators to be named
as follows:
(a) the party or parties sharing one side of this dispute shall
name an arbitrator and give notice thereof to the party or
parties sharing the other side of the dispute;
(b) the party or parties sharing the other side of the dispute
shall, within 14 days of receipt of the notice, name an
arbitrator; and
(c) the two arbitrators so named shall, within 15 days of the
naming of the latter of them, select a third arbitrator.
The decision of the majority of these arbitrators shall be
made within 30 days after the selection of the latter of them. The
expense of the arbitration shall be borne by the parties to the
dispute as determined by the arbitrators. If the parties on either
side of the dispute fail to name their arbitrator within the time
limited or proceed with the arbitration, the arbitrator named may
decide the question. The arbitration shall be conducted in accordance
with the provisions of the Commercial Arbitration Act (British
Columbia) and the decision of the arbitrator or a majority of the
arbitrators, as the case may be, shall be conclusive and binding upon
all the parties.
21 RIGHT TO AUDIT
21.24 Any party acquiring a Royalty pursuant to this
Agreement shall have the right to audit at its expense the books and
records in respect of such Royalty of the Operator or the other party,
if it is not the Operator in respect of such Royalty.
22 TIME
22.25 Unless earlier terminated by agreement of all parties
or as a result of one party acquiring a 100% Interest, the Joint
Venture and this Agreement shall remain in full force and effect for
so long as any part of the Property or Project is held in accordance
with this Agreement. Termination of the Agreement shall not, however,
relieve any party from any obligations theretofore accrued but
unsatisfied.
23 RULE AGAINST PERPETUITIES
23.26 If any right, power or interest of any party in any
Property under this Agreement would violate the rule against
perpetuities, then such right, power or interest shall terminate at
the expiration of 20 years after the death of the last survivor of all
the lineal descendants of her Majesty, Queen ▇▇▇▇▇▇▇▇▇ ▇▇ of the
United Kingdom, living on the date of this Agreement.
24 DOCUMENT RETENTION ON TERMINATION
24.27 Prior to the distribution of the Property or the
Project or the net revenues received on the disposal thereof on
termination of this Agreement, the Management Committee shall meet and
may approve a procedure for the retention, maintenance and disposal of
documents maintained by the Management Committee (the "Documents") and
shall appoint such party as may consent thereto to ensure that all
proper steps are taken to implement and maintain that procedure. If a
quorum is not present at the meeting or if the Management Committee
fails to approve a procedure as aforesaid, the Operator, if a party,
otherwise the party holding the largest Interest as at the day
immediately preceding the date the Management Committee was called to
meet, shall retain, maintain and dispose of the Documents according to
such procedure, in compliance with all applicable laws, as it deems
fit. The party entrusted with the retention, and expenses incidental
thereto, shall be entitled to receive payment of those costs and
expenses prior to any distribution being made of the Property and
Project or the net revenues received on the disposal thereof.
25 ENUREMENT
25.28 This Agreement shall enure to the benefit of and be
binding upon the parties hereto and their respective successors and
permitted assigns.
26 GOVERNING LAW
26.29 This Agreement shall be governed by and interpreted in
accordance with the laws of the Province of British Columbia.
27 SEVERABILITY
27.30 If any one or more of the provisions contained herein
should be invalid, illegal or unenforceable in any respect in any
jurisdiction, the validity, legality and enforceability of such
provision shall not in any way be affected or impaired thereby in any
other jurisdiction and the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be
affected or impaired thereby.
28 NUMBER AND GENDER
28.31 Words used herein importing the singular number only
shall include the plural, and vice versa, and words importing the
masculine gender shall include the feminine and neuter genders, and
vice versa, and words importing persons shall include firms and
corporations.
29 HEADINGS
29.32 The division of this Agreement into articles and
sections and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation
of this Agreement.
30 TIME OF THE ESSENCE
30.33 Time shall be of the essence in the performance of this
Agreement.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as
of the day, month and year first above written.
▇▇▇▇▇ ▇▇▇▇▇
______________________________
Signature of Authorised Signatory
______________________________
Name of Authorised Signatory
______________________________
Position of Authorised Signatory
BAYVIEW CORPORATION
by its authorised signatory:
______________________________
Signature of Authorised Signatory
______________________________
Name of Authorised Signatory
______________________________
Position of Authorised Signatory
SCHEDULE "A"
to that certain Joint Venture Agreement between ▇▇▇▇▇ ▇▇▇▇▇ and
Bayview Corporation made as of the * day of *, 20*
THE PROPERTY
G.P.S. CO-ORDINATES: 5169500N and 521500E
SUDBURY MINING DISTRICT
ONTARIO
CANADA
List of Claims
CLAIM NUMBERS TOWNSHIP/AREA CURRENT EXPIRY DATE
3004254 - 11 UNITS ▇▇▇▇▇▇▇▇▇ SEPTEMBER 10, 2004
3004255 - 2 UNITS ▇▇▇▇▇▇▇▇▇ SEPTEMBER 10, 2004
SCHEDULE "B"
To that agreement dated as of the * day of *, 20* between * and *.
1. "Net Profits" means the aggregate of:
(a) all revenues from the sale or other disposition of ores,
metals or minerals mined or extracted from the Property or
any portion thereof and any concentrates produced therefrom;
(b) all revenues from the operation, sale or other disposition
of any Facilities the cost of which is included in the
definition of "Operating Expenses", "Capital Expenses" or
"Exploration Expenses"; and
(c) Working Capital deducted in the calculation of Net Profits
for the prior period,
less (without duplication) Working Capital, Operating Expenses,
Capital Expenses and Exploration Expenses.
2. "Working Capital" means the amount reasonably necessary to
provide for the operation of the mining operation on the Property and
for the operation and maintenance of the Facilities for a period of
six months.
3. "Operating Expenses" means all costs, expenses, obligations,
liabilities and charges of whatsoever nature or kind incurred or
chargeable directly or indirectly in connection with commercial
production from the Property and in connection with the maintenance
and operation of the Facilities, all in accordance with generally
accepted accounting principles, consistently applied, including,
without limiting the generality of the foregoing, all amounts payable
in connection with mining, handling, processing, refining,
transporting and marketing of ore, concentrates, metals, minerals and
other products produced from the Property, all amounts payable for the
operation and maintenance of the Facilities including the replacement
of items which by their nature require periodic replacement, all taxes
(other than income taxes), royalties and other imposts and all amounts
payable or chargeable in respect of reasonable overhead and
administrative services.
4. "Capital Expenses" means all expenses, obligations and
liabilities of whatsoever kind (being of a capital nature in
accordance with generally accepted accounting principles) incurred or
chargeable, directly or indirectly, with respect to the development,
acquisition, redevelopment, modernization and expansion of the
Property and the Facilities, including, without limiting the
generality of the foregoing, interest thereon from the time so
incurred or chargeable at a rate per annum from time to time equal to
the "prime rate" of the Royal Bank of Canada plus 2% per annum, but
does not include Operating Expenses nor Exploration Expenses.
5. "Exploration Expenses" means all costs, expenses,
obligations, liabilities and charges of whatsoever nature or kind
incurred or chargeable, directly or indirectly, in connection with the
exploration and development of the Property all determined in
accordance with generally accepted accounting principles including,
without limiting the generality of the foregoing, all costs reasonably
attributable, in accordance with generally accepted accounting
principles, to the design, planning, testing, financing,
administration, marketing, engineering, legal, accounting,
transportation and other incidental functions associated with the
exploration and mining operation contemplated by this Agreement and
with the Facilities, but does not include Operating Expenses nor
Capital Expenses.
6. "Facilities" means all plant, equipment, structures, roads,
rail lines, storage and transport facilities, housing and service
structures, real property or interest therein, whether on the Property
or not, acquired or constructed exclusively for the mining operation
on the Property contemplated by this Agreement.
7. Installments of the Royalty payable shall be paid by the
Operator as follows:
(a) within 45 days after the end of each of the first three
calendar quarters in each fiscal year and within 60 days of
the end of the last calendar quarter in each year, the
Operator shall pay to the royalty holder an amount equal to
25% of the estimated Royalty, if any, for the fiscal year,
adjusted if necessary after the first quarter of any fiscal
year to reflect any change during the fiscal year in
estimated Royalty; and
(b) within 120 days after the end of the calendar year, the
balance, if any, of Royalty payable in respect of the fiscal
year last completed.
Should the Operator not pay the royalty holder the
installment of the Royalty payable within the time specified then such
unpaid installment of Royalty shall bear interest equal to the "prime
rate" of the Royal Bank of Canada plus 2% per annum calculated from
the last day of the calendar quarter in which the liability for the
payment of the installment of Royalty arose.
8. The Operator shall, within 45 days after the end of each
calendar quarter, furnish to the royalty holder quarterly unaudited
statements respecting operations on the Property, together with a
statement showing the calculation of Royalty for the calendar quarter
last completed.
9. Within 120 days after the end of each calendar year, the
accounts of the Operator 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 Operator, at its expense. The royalty holder
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.
10. If the audited financial statements furnished pursuant to
paragraph 9 disclose any overpayment of Royalty by the Operator during
the year, the amount of the overpayment shall be deducted from future
installments of Royalty payable hereunder.
11. If the audited financial statements furnished pursuant to
paragraph 9 disclose any underpayment of Royalty by the Operator
during the year, the amount thereof shall be paid to the royalty
holder forthwith after determination thereof.
12. The Operator 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 royalty holder 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 Operator to the royalty holder pursuant hereto. The royalty
holder shall have the right, at its own expense, to have such accounts
audited by independent auditors once each year.
SCHEDULE "C"
NET SMELTER RETURNS
For the purposes of this agreement, the term "Net Smelter Returns"
shall mean the net proceeds actually paid to Bayview from the sale by
Bayview of minerals mined and removed from the Property, after
deduction of the following:
(a) smelting costs, treatment charges and penalties including, but
not being limited to, metal losses, penalties for impurities and
charges for refining, selling and handling by the smelter, refinery or
other purchaser; provided, however, in the case of leaching
operations or other solution mining or beneficiation techniques, where
the metal being treated is precipitated or otherwise directly derived
from such ▇▇▇▇▇ solution, all processing and recovery costs incurred
by Bayview, beyond the point at which the metal being treated is in
solution, shall be considered as treatment charges;
(b) costs of handling, transporting and insuring ores, minerals and
other materials or concentrates from the Property or from a
concentrator, whether situated on or off the Property, to a smelter,
refinery or other place of treatment; and
(c) ad valorem taxes and taxes based upon production, but not income
taxes.
In the event Bayview commingles minerals from the Property with
minerals from other properties, Bayview shall establish procedures, in
accordance with sound mining and metallurgical techniques, for
determining the proportional amount of the total recoverable metal
content in the commingled minerals attributable to the input from each
of the properties by calculating the same on a metallurgical basis, in
accordance with sampling schedules and mining efficiency experience,
so that production royalties applicable to minerals produced from the
Property may reasonably be determined.