AURORA-TREND STILLWATER VENTURE AGREEMENT JOINT VENTURE between AURORA METALS (BVI) LIMITED and TREND MINING COMPANY January 1, 2005
EXHIBIT
10.22
AURORA-TREND
STILLWATER VENTURE
AGREEMENT
JOINT
VENTURE
between
AURORA
METALS (BVI) LIMITED
and
TREND
MINING COMPANY
January
1, 2005
TABLE
OF CONTENTS
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Section
|
Title
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Page
No.
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|
JOINT
VENTURE AGREEMENT - RECITALS
|
1
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|
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ARTICLE
1. - DEFINITIONS
|
1
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|
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ARTICLE
2. - REPRESENTATION AND WARRANTIES - TITLE TO
ASSETS
|
4
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|
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2.1
|
Capacity
of Participants
|
4
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|
2.2
|
Representations
and Warranties
|
5
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|
2.3
|
Remedies
for Breach of Representations and Warranties of Title to the
Properties
|
6
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2.3.1
Loss of Title
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6
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2.3.2
Less than 100% Interest
|
6
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|
|
2.3.3
Third Party Claims
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6
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|
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2.4
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Disclosures
|
7
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2.5
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Record
Title
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7
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ARTICLE
3. - NAME,
PURPOSES AND TERM
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7
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3.1
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General
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7
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3.2
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Name
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7
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3.3
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Purposes
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7
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3.4
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Limitation
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8
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3.5
|
Effective
Date and Term
|
8
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ARTICLE
4. - RELATIONSHIP
OF THE PARTICIPANTS
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8
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4.1
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No
Partnership
|
8
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4.2
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U.S.
and State Tax Elections and Allocations
|
9
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4.3
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Other
Business Opportunities
|
9
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|
4.4
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Waiver
of Right to Partition
|
9
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4.5
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Transfer
or Termination of Rights to Properties
|
9
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4.6
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Implied
Covenants
|
10
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ARTICLE
5. - CONTRIBUTIONS
BY PARTICIPANTS
|
10
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|
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5.1
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Participants'
Initial Contributions
|
10
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|
5.2
|
Obligations
Prior to Earn-In
|
10
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|
5.2.1 Annual
and Cumulative Exploration Expenditures
|
10
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|
|
5.2.2 Overhead
Charges During Earn-In
|
10
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|
|
5.2.3
Carry-forward
of Excess Cumulative Exploration Expenditures
|
11
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|
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5.2.4 Maintenance
of Properties During Earn-In
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11
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|
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5.3
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Payments
by TMC to AM
|
11
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5.3.1
Payment
at Closing
|
11
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|
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5.3.2
Annual Payments
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11
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5.4
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Termination
of TMC’s Obligation to Make Initial Contribution
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11
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Page
i of iv
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Section
|
Title
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Page
No.
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5.5
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Additional
Cash Contributions
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12
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5.6
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Earn-In
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12
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5.7
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Reports
|
12
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ARTICLE
6. - INTERESTS
OF PARTICIPANTS DEFAULTS
AND REMEDIES
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12
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6.1
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Participating
Interests
|
12
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6.2
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Elections
at Time of Earn-In
|
13
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6.3
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Deemed
Expenditures
|
13
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6.4
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Changes
in Participating Interests
|
13
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6.5
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Voluntary
Reduction in Participation
|
13
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6.6
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Default
in Making Contributions
|
14
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6.7
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Conversion
of Interest
|
15
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6.8
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Continuing
Liabilities Upon Adjustments of Participating Interests
|
15
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ARTICLE
7. - MANAGEMENT COMMITTEE
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16
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7.1
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Organization
and Composition
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16
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7.2
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Decisions
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16
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7.3
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Meetings
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16
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7.4
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Action
Without Meeting
|
17
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7.5
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Matters
Requiring Approval
|
17
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ARTICLE
8. - MANAGER
|
17
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|
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8.1
|
Appointment
|
17
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8.2
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Powers
and Duties of the Manager
|
17
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8.3
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Standard
of Care
|
20
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8.4
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Resignation
- Deemed Offer to Resign
|
20
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8.5
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Payments
to Manager
|
21
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8.6
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Transactions
with Affiliates
|
21
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8.7
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Activities
During Deadlock
|
21
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ARTICLE
9. - PROGRAMS AND BUDGETS
|
21
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9.1
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Initial
program and Budget
|
21
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9.2
|
Operations
Pursuant to Programs and Budgets
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22
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9.3
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Presentation
of Programs and Budgets
|
22
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9.4
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Review
and Approval of Proposed Programs and Budgets
|
22
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9.5
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Election
to Participate
|
22
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|
9.6
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Deadlock
on Proposed Programs and Budgets
|
22
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9.7
|
Budget
and Overruns - Program Changes
|
23
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9.8
|
Emergency
or Unexpected Expenditures
|
23
|
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ARTICLE
10. - ACCOUNTS AND SETTLEMENTS
|
23
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|
|
10.1
|
Matters
of Accounts and Settlements
|
23
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Page
ii of iv
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Section
|
Title
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Page
No.
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ARTICLE
11. - DISPOSITION OF PRODUCTION
|
23
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11.1
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Taking
in Kind
|
23
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11.2
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Failure
of participant to Take in Kind
|
24
|
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ARTICLE
12. - WITHDRAWAL AND TERMINATION
|
24
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|
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12.1
|
Termination
by Expiration or Agreement
|
24
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12.2
|
Withdrawal
|
24
|
|
12.3
|
Continuing
Obligations
|
24
|
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12.4
|
Disposition
of Assets on Termination
|
25
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12.5
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Right
to Data After Termination
|
25
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|
12.6
|
Continuing
Authority
|
25
|
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12.7
|
Non-Compete
Covenants
|
26
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|
12.8
|
Mutual
Withdrawal
|
26
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12.9
|
Right
to Data After Termination
|
26
|
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ARTICLE
13. - SURRENDER OF PROPERTIES
|
27
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|
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13.1
|
Surrender
of Properties
|
27
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13.2
|
Re-acquisition
|
27
|
|
ARTICLE
14. - TRANSFER OF INTEREST
|
27
|
|
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14.1
|
General
|
27
|
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14.2
|
Limitations
on Free Transferability
|
27
|
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14.3
|
Right
of First Refusal
|
28
|
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14.4
|
Exceptions
to Right of First Refusal
|
29
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ARTICLE
15. - CONFIDENTIALITY AND RELEASES
|
29
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|
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15.1
|
General
|
29
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15.2
|
Exceptions
|
29
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|
15.3
|
Confidentiality
|
30
|
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ARTICLE
16. - AREA OF INTEREST
|
30
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|
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16.1
|
Acquisitions
in Area of Interest
|
30
|
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ARTICLE
17. - GENERAL PROVISIONS
|
31
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|
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17.1
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Notices
|
31
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17.2
|
Waiver
|
32
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17.3
|
Modification
|
32
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|
17.4
|
Force
Majeure
|
32
|
|
17.5
|
Economic
Force Majeure
|
33
|
|
17.6
|
Governing
Law
|
33
|
|
17.7
|
Rule
Against Perpuity
|
33
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17.8
|
Further
Assurances
|
33
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|
17.9
|
Survival
of Terms and Conditions
|
33
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17.10
|
Entire
Agreement
|
33
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Page
iii of iv
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Section
|
Title
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Page
No.
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17.11
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Memorandum
|
34
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17.12
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Funds
|
34
|
|
Signature
Page
|
35
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SCHEDULES
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||
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A
|
Properties
and Underlying Agreements
|
|
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A-1
|
Schedule
of Claims Included in Properties
|
|
|
Basal
Zone Lease Agreement
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||
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A-2
|
Schedule
of Claims Included in Properties
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|
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Mountain
View Lease Agreement
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||
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B
|
Accounting
Procedures
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|
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C
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Net
Smelter return Royalty
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D
|
Insurance
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E
|
Plan
of Claims in Properties - Area of Interest
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Page iv
of iv
THIS
AGREEMENT, made effective as of January
1, 2005
between
AURORA
METALS (BVI) LIMITED
(hereafter "AM") with an address at ▇.▇. ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
and TREND
MINING COMPANY
(hereafter "TMC") with an address at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
RECITALS
|
A.
|
AM
and TMC entered into a Letter of Intent (hereafter “LOI”) dated September
20, 2004, subsequently extended until February 18, 2005, agreeing
to form
a Joint Venture (hereafter “JV”) to explore and develop property leased by
or owned by AM.
|
|
B.
|
TMC
wishes to participate with AM in exploration, evaluation, development
and
mining of minerals within the property and AM is willing to grant
such
right to TMC.
|
NOW,
THEREFORE, in consideration of the covenants and agreements contained herein,
AM
and TMC agree as follows:
ARTICLE
1. - DEFINITIONS
"Accounting
Procedure" means
the
procedures set forth in Schedule B.
"Affiliate"
means
any
person, partnership, joint venture, corporation or other form of enterprise
which directly or indirectly controls, is controlled by, or is under common
control with, a Participant. For purposes of the preceding sentence, "control"
means possession, directly or indirectly, of the power to direct or cause
direction of management and policies through ownership of voting securities,
contract, voting trust or otherwise.
"Agreement"
means
this Joint Venture Agreement, including all amendments and modifications
thereof, and all schedules and Schedules, which are incorporated herein by
this
reference.
“Area
of Interest”means
those claims in the Stillwater Complex, Stillwater and Sweet Grass Counties,
Montana as specified in Schedules A-1 and A-2 and within two miles of the
boundaries of these claims and any other claims subsequently acquired by
AM.
"Assets"
means
the
Properties, Products and all other real and personal property, tangible and
intangible, held for the benefit of the Participants hereunder.
"Budget"
means
a
detailed estimate of all costs to be incurred by the Participants with respect
to a Program and a schedule of cash advances to be made by the
Participants.
Page
1 of 35
"Commencement
of Commercial Production"
means
the date upon which the production and processing facilities developed under
this Agreement achieve an ore production and processing rate for a continuous
thirty-day (30) period equal to at least ninety percent (90%) of the design
rate
established in a Feasibility Study, or such performance criteria as laid
down by
the principal lenders, bankers and/or financial institutions providing capital
to the Development.
"Development"
means
all preparation for the removal and recovery of Products, including the
construction or installation of a mill or any other improvements to be used
for
the mining, handling, milling, processing or other beneficiation of Products,
and all Exploration work conducted subsequent to a decision to commence
Development as contemplated by a Feasibility Study.
"Earn-In"
means
the date upon which TMC earns its interest in the Properties pursuant to
Section
5.6.
"Exploration"
means
all activities directed toward ascertaining the existence, location, quantity,
quality or commercial value of deposits of Products.
"Exploration
Expenditures"
means
the cost of evaluation of the Properties defined as further exploring and
developing the Properties, including drilling, excavating and searching by
recognized prospecting techniques, sampling, assaying, testing and evaluating
materials removed from the Properties, mapping, plotting, surveying,
constructing and maintaining camps, roads, works and structures necessary
to
carry out such evaluation, sampling or testing, all studies including, but
not
limited to, a Feasibility Study required to develop a mine and all work that
may
be required in preparing a mine for operating, the cost or payments to maintain
the Properties, including costs to locate and/or relocate the unpatented
mining
claims, costs to maintain the Underlying Agreements through which the Properties
are acquired and costs reimbursed by TMC to AM for maintaining the Underlying
Agreements, Properties acquisition costs, taxes and/or fees to maintain
Properties and filings together with an allowance for overhead and
administrative expenses as described in Section 5.3.1. These expenditures
include both exploration costs as defined in Section 617 of the Internal
Revenue
Service Code and development expenditures as defined in Section 616 of the
Internal Revenue Service Code.
"Feasibility
Study"
means a
detailed study compiled by an independent third party, selected and jointly
approved by the Management Committee, conducted to determine commercial
feasibility and viability of placing a prospective orebody or deposit into
production and may include, but not be limited to:
|
(i)
|
such
geophysical, geochemical, geological, aerial or other survey
as may be
necessary to provide a reasonable estimate of the quality and
extent of
the deposit;
|
|
(ii)
|
such
technical or assay reports as may be necessary to evaluate any
proposed
method of extraction and
processing;
|
|
(iii)
|
the
area required for optimum development of the orebody or
deposit;
|
Page
2 of 35
|
(iv)
|
a
mine construction program setting forth the descriptions of the
work,
permits, equipment, facilities, supplies and mines required to
bring the
prospective orebody or deposits of Products into Commercial Production,
and the estimated costs thereof or a schedule of expenditures
by year of
the costs necessary to bring the project into
production;
|
|
(v)
|
details
of a proposed annual program for initial development of the
deposit;
|
|
(vi)
|
a
plan for such reclamation of the Properties as is required by
law and the
estimated costs hereof;
|
|
(vii)
|
conclusions
and recommendations regarding the economic feasibility and timing
for
bringing the prospective orebody or deposits of Products into
Commercial
Production, taking into account items (i) through (vi)
above;
|
|
(viii)
|
such
other information as the Management Committee may deem appropriate
to
allow banking or other financial institutions familiar with the
mining
business to make a decision to loan funds sufficient to construct
the
proposed mine with security based solely on the reserves and
mine
described in a Feasibility Study.
|
"Initial
Contribution"
means
that contribution each Participant has made or agrees to make pursuant to
Section 5.1.
"Joint
Account"
means
the account maintained in accordance with the Accounting Procedure showing
the
charges and credits accruing to the Participants.
"Management
Committee"
means
the committee established under Article 7.
"Manager"
means
TMC during the Earn-In phase or the person or entity appointed under Article
8
to manage Operations, or any succeeding Manager.
"Mining"
means
the mining, extracting, producing, handling, milling or other processing
of
Products.
"Operations"
means
the activities carried out under this Agreement after Earn-In.
"Participant"
and
"Participants"
means
the persons or entities that have a Participating Interest.
"Participating
Interest"
means
the percentage interest representing the operating ownership interest of
a
Participant in Assets, and all other rights and obligations arising under
this
Agreement, as such interest may from time to time be adjusted hereunder.
Participating Interests shall be calculated to three decimal places and rounded
to two (e.g.,
1.519%
rounded to 1.52%). Decimals of .005 or more shall be rounded up to 0.01;
decimals of less than 0.005 shall be rounded down. The initial Participating
Interests of the Participants are set forth in Section 6.1.
Page
3 of 35
"Prime
Rate"
means
the prime interest rate quoted as "Prime" by the Wall Street Journal as said
rate may change from day to day and which quoted rate may not be the lowest
rate
averaged on a month-to-month basis at which a financing institution loans
funds.
"Production
Decision"
means a
decision by the Management Committee to commence Development and put the
Properties into production.
"Products"
means
all ores, minerals, and mineral resources produced from the Properties under
this Agreement.
"Program"
means a
description in reasonable detail of the activities of the Venture which are
to
be conducted by the Manager during a period.
"Properties"
means
those interests in property described in the schedules in Schedules A-1 and
A-2
and depicted on the map forming Schedule E.
"Simple
Majority" means
a
decision by the Management Committee by greater than 50% of the votes being
entitled to be cast.
"Transfer"
means
sell, grant, assign, encumber, pledge or otherwise commit or dispose
thereof.
“Underlying
Agreements”means
the
Mountain View Lease Agreement and the Basal Zone Lease Agreement to which
AM is
a signatory together with the granting lessors thereunder.
"Venture"
means
the business arrangement of the Participants under this Agreement to be known
as
the Aurora-Trend Stillwater Venture.
ARTICLE
2. - REPRESENTATIONS
AND WARRANTIES - TITLE TO ASSETS
2.1 Capacity
of Participants
|
Each
of the parties hereto represents and warrants as
follows:
|
| (i) | that it is a corporation duly incorporated and in good standing in its state of incorporation and that it is qualified to do business and is in good standing in those jurisdictions where necessary in order to carry out the purposes of this Agreement; |
|
(ii)
|
that
it has the capacity to enter into and perform this Agreement
and all
transactions contemplated herein and that all corporate and other
actions
required to authorize it to enter into and perform this Agreement
have
been properly taken;
|
|
(iii)
|
that
it will not breach any other agreement or arrangement by entering
into or
performing this Agreement; and
|
Page
4 of 35
|
(iv)
|
that
this Agreement has been duly executed and delivered by it and is
valid and
binding upon it in accordance with its
terms.
|
2.2 Representations
and Warranties
AM
makes
the following representations and warranties effective the date
hereof:
|
(i)
|
that
it has the full and exclusive right and power to act on behalf
of AM, and
on behalf of any other interested person or entities, to enter
into this
Agreement and to grant the rights granted to AM
hereunder;
|
|
(ii)
|
to
the best of its knowledge and belief with respect to unpatented
mining
claims set forth in Schedules A-1 and A-2 that are included within
the
Properties, subject to the paramount title of the United States
and except
as disclosed in writing to TMC:
|
| (a) |
the
unpatented mining claims were properly laid out and monumented;
|
| (b) |
all
required location and validation work was properly performed;
|
| (c) |
location
notices and certificates were properly recorded and filed with
appropriate
governmental agencies;
|
| (d) |
the
claims are free and clear of defects, liens and encumbrances arising
by,
through or under AM, except those of record or disclosed in writing
to TMC
and defects, liens, and any such encumbrances that do not materially
affect TMCs' rights under this
Agreement;
|
| (e) |
AM
has not received notice from anyone asserting conflicting claims;
|
| (f) |
the
unpatented mining claims are in good standing and compliance with
all
federal and state regulations in force as of the effective date
of this
Agreement; and
|
| (g) |
the
claims forming the Properties have been assigned to the Aurora-Trend
Stillwater Venture in accordance with the Underlying
Agreements.
|
|
(iii)
|
knows
of no violation of any applicable federal, state, regional, or
county law
or regulation relating to zoning, land use, environmental protection,
or
otherwise with respect to the Properties or activities relating
thereto;
|
|
(iv)
|
with
respect to the Properties, knows of no pending or threatened actions,
suits, claims or proceedings; and
|
|
(v)
|
has
granted TMC access to all information concerning title to the Properties
in AM’s possession or control, including but not limited to, true and
correct copies of all leases, other contracts and abstracts relating
to
the Properties of which AM has
knowledge.
|
The
representations and warranties set forth above shall survive the execution
and
delivery of any documents of Transfer provided under this
Agreement.
Page
5 of 35
2.3 Remedies
for Breach of Representations and Warranties of Title to the
Properties
2.3.1
Loss
of Title
|
Any
failure or loss of title to the Properties, and all costs of defending
title, shall be charged to the Joint Acccount, except that all
costs and
losses arising out of, or resulting from, breach of the representations
and warranties of AM shall be charged to AM, and all such costs
and losses
arising out of gross negligence by TMC, or the Manager, shall be
charged
to TMC, or the Manager, as may be the case. TMC shall have the
right, but
not the obligation, to undertake to cure such defects, or to defend,
or to
litigate to defend such defects.
|
2.3.2
Less
than 100% Interest
In
the
event it is determined that AM controls less than the full undivided interest
therein, AM's interest hereunder shall bear the same proportion to 100% as
its
total actual interest bears to the full undivided whole.
2.3.3
Third
Party Claims
|
(i)
|
If
AM fails to satisfy and discharge any mortgage, lien, tax levy
or
encumbrance (an "Encumbrance") chargeable solely or in part to
AM on the
claims listed in Schedules A-1 and A-2 or the Underlying Agreements
therein, or suffers or permits any encumbrance to be imposed upon
such,
TMC at its option may, but shall not be obligated to, pay for and
discharge any encumbrance and set off a such payment by withholding
and
retaining from any payments due AM any amounts so paid by TMC,
without
prejudice to any right of TMC to recover from AM are against the
claims
listed in Schedules A-1 or A-2 or the Underlying Agreements the
amount of
such payment in any manner or by any remedy whatsoever, and TMC
shall have
all the rights and remedies against AM which the mortgagor, lienor
or
creditor had immediately prior to the time of such payment. Upon
the
request of TMC, AM shall promptly make, execute, acknowledge and
deliver
to TMC any and all instruments (in a form and substance satisfactory
to
TMC) that TMC in its sole judgment may deem necessary or desirable
to
fully effectuate the provisions of this Section
2.3.
|
|
(ii)
|
If
any person or entity not a party hereto asserts to have a claim
of
ownership in the claims listed on Schedules A-1 or A-2 or the Underlying
Agreements, or a claim to a share in the production from the claims
listed
in Schedules A-1 and A-2 (an "Adverse Claim"), TMC, at its sole
discretion, after written notice to AM, may suspend its obligation
to make
payments as provided herein, and in lieu thereof, may deposit in
an
interest-bearing account payments equivalent to payments which
may
otherwise become due AM. Such deposits or deposits shall remain
in such
interest-bearing account until the claims or controversy is resolved
or
settled by final court decision, by arbitration, negotiation or
otherwise.
When TMC is required, or elects, to make any payments to such persons
or
entities not a party hereto, as a result of, or in settlement of,
any such
adverse claim, either by way of contract, settlement, compromise,
final
court judgment, or otherwise, TMC may recover from, or credit against,
any
payments thereafter becoming due to AM hereunder, the amount of
such
payments of all other costs and expenses (including reasonable
attorneys’
fees) paid or incurred by TMC as a result of any such Adverse
Claim.
|
Page
6 of 35
2.4 Disclosures
|
Each
of the Participants represents and warrants that it is unaware
of any
material facts or circumstances which have not been disclosed in
this
Agreement, which would be disclosed to the other Participant in
order to
prevent the representations in this Article 2 from being materially
misleading.
|
2.5 Record
Title
|
Title
to the Assets shall be held by the Venture after TMC has earned
its
interest.
|
ARTICLE
3. - NAME,
PURPOSES AND TERM
3.1 General
|
AM
and TMC hereby enter into this Agreement for the purposes hereinafter
stated, and they agree that all of their rights and all of the
Operations
on or in connection with the Properties shall be subject to and
governed
by this Agreement.
|
3.2 Name
|
The
name of this Venture shall be the “Aurora-Trend Stillwater Venture”. The
Manager shall accomplish any registration required by applicable
assumed
or fictitious name statutes and similar
statutes.
|
3.3 Purposes
|
This
Agreement is entered into for the following purposes and for no
others,
and shall serve as the exclusive means by which the Participants,
or
either of them, accomplish such
purposes:
|
Page
7 of 35
|
(i)
|
to
conduct Exploration within the
Properties;
|
| (ii) |
to
evaluate the possible Development of the
Properties;
|
| (iii) |
to
engage in
Development and Mining Operations on the Properties, if
feasible;
|
| (iv) |
to
engage in
marketing Products, but only to the extent permitted by Article
11;
and
|
| (v) |
to
perform any other activity necessary, appropriate, or incidental
to any of
the foregoing.
|
3.4 Limitation
|
Unless
the Participants otherwise agree in writing, the Operations shall
be
limited to the purposes described in Section 3.3, and nothing in
this
Agreement shall be construed to enlarge such
purposes.
|
3.5 Effective
Date and Term
|
The
Effective Date of this Agreement shall be the date first recited
above.
The term of this Agreement shall be for twenty (20) years from
the
Effective Date and for so long thereafter as Products are produced
from
the Properties, unless the Agreement is terminated earlier as provided
herein.
|
ARTICLE
4. - RELATIONSHIP
OF THE PARTICIPANTS
4.1 No
Partnership
|
Nothing
contained in this Agreement shall be deemed to constitute either
Participant the partner of the other, nor, except as otherwise
herein
expressly provided, to constitute either Participant the agent
or legal
representative of the other, nor to create any fiduciary relationship
between them. It is not the intention of the Participants to create,
nor
shall this Agreement be construed to create, any mining, commercial
or
other partnership.
|
|
Neither
Participant shall have any authority to act for or to assume any
obligation or responsibility on behalf of the other Participant,
except as
otherwise expressly provided herein. The rights, duties, obligations
and
liabilities of the Participants shall be several and not joint
or
collective. Each Participant shall be responsible only for its
obligations
as herein set out and shall be liable only for its share of the
costs and
expenses as provided herein, it being the express purpose and intention
of
the Participants that their ownership of Assets and the rights
acquired
hereunder shall be as tenants in common.
|
|
Each
Participant, its directors, officers, employees, agents and attorneys
shall be indemnified from and against any and all losses, claims,
damages
and liabilities arising out of any act or any assumption of liability
by
the indemnifying Participant, or any of its directors, officers,
employees, agents and attorneys done or undertaken, or apparently
done or
undertaken, on behalf of the other Participant, except pursuant
to the
authority expressly granted herein or as otherwise agreed in writing
between the Participants.
|
Page
8 of 35
4.2 U.S.
Tax Elections and Allocations
Without
changing the effect of Section 4.1, the Participants agree that their
relationship shall constitute a tax partnership within the meaning of ▇▇▇▇▇▇▇
▇▇▇ (▇) ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Internal revenue Code of 1986, as amended.
The
Particpants hereto agree to execute or join in such instruments as are
necessary
to make such election effective, and hereby authorize and direct Manager
to take
such action as is necessary to effectuate such purpose, including filing
of the
partnership tax return required by Treasury Regulation § 1.761-2(b)(2). Each
Participant shall be entitled to claim all tax benefits, write-offs, and
deductions with respect to all, and any, costs which it has
incurred
The
Participants also agree that, to the extent permissible under applicable
law,
their relationship shall be treated for state income tax purposes in the
same
manner as it is for federal income tax purposes.
The
Manager shall be the Tax Matters Partner and shall prepare and file, after
approval of the management Committee, any tax returns or other tax forms
required.
4.3 Other
Business Opportunities
|
Except
as expressly provided in this Agreement, each Participant shall
have the
right independently to engage in and receive full benefits from
business
activities, whether or not competitive with the Operations, without
consulting the other. The doctrines of "corporate opportunity"
or
"business opportunity" shall not be applied to any other activity,
venture, or operation of either Participant. Unless otherwise agreed
in
writing, no Participant shall have any obligation to mill, beneficiate
or
otherwise treat any Products or any other Participant's share of
Products
in any facility owned or controlled by such
Participant.
|
4.4 Waiver
of Right to Partition
|
The
Participants hereby waive and release all rights of partition,
or of sale
in lieu thereof, or other division of Assets, including any such
right
provided by statute.
|
4.5 Transfer
of
Termination of Rights to Properties
Except
as
otherwise provided in this Agreement, neither participant shall transfer
all or
any part of its interest in the assets or this Agreement or otherwise permit
or
cause such interest to terminate.
Page
9 of 35
4.6 Implied
Covenants
|
There
are no implied covenants contained in this Agreement other than
those of
good faith and fair dealing.
|
ARTICLE
5. - CONTRIBUTIONS
BY PARTICIPANTS
5.1 Participants'
Initial Contributions
|
AM,
as its Initial Contribution, hereby contributes the Properties
described
in Schedules A-1 and A-2 to the purposes of this Agreement. TMC,
as its
Initial Contribution, shall contribute the Exploration Expenditures
and
payment as hereinafter set forth.
|
5.2 Obligations
Prior to Earn-In
|
Prior
to earning its interest in the Properties, and subject to the termination
provisions contained herein, TMC shall be required, but not obligated
to
make the following Exploration Expenditures on or for the benefit
of the
Properties to extend this Agreement into the next
period.
|
| 5.2.1 |
Annual
and Cumulative Exploration
Expenditures
|
|
TMC
shall expend, as a minimum, the following annual and cumulative
Exploration Expenditures:
|
|
Exploration
Expenditures
|
|||||||
|
Year
|
Annual
Expenditure ($)
|
Cumulative
Expenditure ($)
|
|||||
|
1
|
100,000
|
100,000
|
|||||
|
2
|
400,000
|
500,000
|
|||||
|
3
|
500,000
|
1,000,000
|
|||||
|
4
|
500,000
|
1,500,000
|
|||||
|
5
|
500,000
|
2,000,000
|
|||||
|
Total
|
2,000,000
|
||||||
|
Year
1, for purposes of calculating annual expenditures shall end on
December
31, 2005 and
each subsequent year shall
end on December
31.
|
| 5.2.2 |
Overhead
Charges During
Earn-In
|
|
Five
percent (5%) of all Exploration Expenditures, except property payments,
taxes and/or fees to maintain the Properties, to cover TMC' overhead
and
administrative costs shall be charged by TMC and shall qualify
as
Exploration Expenditures but shall be limited to five percent (5%)
on
contracts in excess of One Hundred Thousand Dollars
($100,000).
|
Page
10 of 35
|
5.2.3
|
Carry-forward
of Excess Cumulative Exploration
Expenditures
|
|
All
Exploration Expenditures shall be cumulative and any Exploration
Expenditures in excess of the minimum required in any period shall
be
credited and applied toward any subsequent Exploration Expenditures.
|
|
5.2.4
|
Maintenance
of Properties During
Earn-In
|
|
During
the Earn-In period TMC shall be responsible for maintaining the
underlying
agreements in good standing and for maintaining the unpatented
lode claims
which comprise the properties and may relocate any of the unpatented
claims which TMC believes may be defective. In addition, TMC agrees
to
reimburse AM for the lease payments, including those payable to
the Bureau
of Land Management, incurred by AM on a pro rata basis commensurate
with
the ratio of the claims in the Properties to the total claims under
the
Underlying Agreements.
|
|
|
5.3 Payments
by TMC to AM
| 5.3.1 |
Payment
at Closing
|
Upon
execution of this Agreement, TMC shall issue fifty thousand (50,000)
shares of
TMC’s unrestricted, registered common stock to AM.
| 5.3.2 |
Annual
Payments
|
To
keep
the joint venture agreement in good standing:
| (i) |
on
the first anniversary date, i.e. January 1, 2006, TMC shall pay
$20,000 in
cash, and issue 20,000 shares of TMC’s common stock to AM;
and
|
| (ii) |
on
the second, third, fourth and fifth anniversary dates until Earn-In,
TMC
shall issue $20,000 in cash or the equivalent value in TMC’s
unrestricted,
registered common stock determined by the average stock price over
the
previous calendar month.
|
5.4 Termination
of TMC’s Obligation to Make Initial Contribution
|
TMC
may terminate this Agreement at any time during the Earn-In period
for any
reason, or no reason, by providing AM sixty (60) days written notice
of
such termination. Until TMC has earned its interest in the Properties,
TMC
shall conduct exploration activities, maintain the Properties and
shall
conduct operations according to programs and budgets determined
by the
Management Committee. TMC shall hold AM harmless from any liabilities
resulting from TMC's activities on the Properties during the Earn-In
period.
|
Page
11 of 35
|
Upon
TMC’s termination under the provisions of this Section 5.4, TMC shall
have
no further right, title or interest in the Venture. TMC’s withdrawal shall
be effective upon such termination, but such withdrawal shall nor
relieve
TMC of its obligation to fund and satisfy any liabilities to third
persons
incurred or payments due to AM prior to TMC’s
withdrawal.
|
5.5 Additional
Cash Contributions
|
At
such time as TMC has earned its fifty percent (50%) interest in
the
Properties, pursuant to Section 5.2, the Participants, subject
to any
election permitted by Sections 6.1, 6.2 and 6.3, shall be obligated
to
contribute funds to adopted Programs and Budgets in proportion
to their
respective Participating Interest.
|
5.6 Earn-In
|
TMC
shall earn a fifty percent (50%) Participating Interest in the
Properties
upon completion of the Exploration Expenditures and payment set
forth
under Section 5.2. If TMC expends the $2,000,000 commitment in
Section 5.2
prior to the end of Year 5, it will be deemed to have earned its
Participating Interest at that time. Except as provided for in
Section
6.2, subsequent to TMC earning fifty percent (50%) interest in
the
Venture, all expenditures for the benefit of the Properties shall
be
contributed by the Parties in accordance to their Participating
Interest.
Immediately upon TMC satisfying its Earn-In requirements under
Section
5.2, AM shall execute an Assignment of Interests Agreement and
deliver to
TMC such documents that are necessary to transfer an appropriate
percentage of interest in AM's interest in and to the Properties
to
TMC.
|
5.7 Reports
|
TMC
shall, during the Earn-In period, provide AM with copies of periodic
reports describing its activities on the Properties and shall conduct
a
semi-annual review with AM to discuss the progress TMC has made
during the
preceding period as well as the plans and programs being contemplated
for
the next period.
|
ARTICLE
6. - INTERESTS
OF PARTICIPANTS DEFAULTS
AND REMEDIES
6.1 Participating
Interests
|
TMC
shall have no Participating Interest unless and until it has completed
the
Exploration Expenditures set forth in Section 5.2 during the Earn-In
period. The Participants shall have the following Participating
Interests
upon TMC's completion of the obligations set forth in
Section 5.2:
|
TMC - 50%
AM
- 50%
Page
12 of 35
6.2 Elections
at Time of Earn-In
At
such
time as TMC completes the obligations set forth in Section 5.2 and has earned
its fifty percent (50%) Participating Interest in the Properties, AM and
TMC
shall have a period of sixty (60) days to either
| (i) |
elect
to participate in the Venture and contribute to each Program and
Budget
for their entire respective Participating Interest, or
|
| (ii) |
to
elect to withdraw from the Venture and convert to a Net Smelter
Return of
2.5% as set out in Schedule C.
|
6.3 Deemed
Expenditures
At
Earn-In TMC and AM shall, irrespective of their actual expenditures on or
with
respect to the Properties, be deemed to have incurred expenditures as follows:
TMC
$2,000,000
AM $2,000,000
6.4 Changes
in Participating Interests
A
Participant’s Participating Interest shall be changed as follows:
| (i) |
as
provided in Sections 6.2 or 6.7; or
|
| (ii) |
upon
an election by a Participant pursuant to Section 6.5 to contribute
less to
an adopted Program and Budget than the percentage reflected by
its
Participating Interest; or
|
| (iii) |
in
the event of default by a Participant in making its agreed-upon
contribution to an adopted Program and Budget;
or
|
| (iv) |
transfer
by a Participant of less than all its Participating Interest in
accordance
with Article 14: or
|
| (v) |
acquisition
of less than all of the Participating Interest of the other Participant,
however arising.
|
Page
13 of 35
6.5 Voluntary
Reduction in Participation
Except
with respect to a participant’s obligation to make its Initial Contribution, as
to
which
no
election is permitted, a Participant may elect, as provided in Section 9.5,
to
limit its contributions to an adopted Program and Budget as
follows:
| (i) |
to
some lesser extent than its respective Participating Interest;
or
|
| (ii) |
not
at all.
|
If
a
Participant elects to contribute to an adopted Program and Budget some lesser
amount than its respective Participating Interest, or not at all, the
Participating Interest of that Participant shall be recalculated at the time
of
election by dividing:
| (i) |
the
sum of
|
| (a) |
the
value of the Participant’s Initial Contribution as per Section
6.3,
|
| (b) |
the
total of all of the Participant’s contributions under Section 5.3,
and
|
| (c) |
the
amount, if any, the Participant elects to contribute to the adopted
Program and Budget;
|
by
| (ii) |
the
sum of (a), (b) and (c) above for all Participants;
|
and
then
multiplying the result by one hundred.
The
Participating Interest of the other Participant shall thereupon become the
difference between one hundred percent (100%) and the recalculated Participating
Interest.
6.6 Default
in Making Contributions
If
a
Participant defaults in making a contribution or cash call required by an
approved Program and Budget, the non-defaulting Participant may advance the
defaulted contribution on behalf of the defaulting Participant and treat
the
same, together with any accrued interest, as a demand loan bearing interest
from
the date of the advance at the Prime Rate plus two percent (2%) compounded
quarterly. The failure to repay said loan upon demand shall be a default.
Each
Participant hereby grants to the other a lien upon its interest in the
Properties and a security interest in its rights under this Agreement and
in its
Participating Interest in other Assets, and the proceeds therefrom, to secure
any loan made hereunder, including interest thereon, reasonable attorneys'
fees
and all other reasonable costs and expenses incurred in recovering the loan
with
interest and in enforcing such lien or security interest, or both.
A
non-defaulting Participant may elect the applicable remedy under this Section
6.6, or, to the extent a Participant has a lien or security interest under
applicable law, it shall be entitled to its rights and remedies at law and
in
equity. All such remedies shall be cumulative. The election of one or more
remedies shall not waive the election of any other remedies.
Each
Participant hereby irrevocably appoints the other its attorney-in-fact to
execute, file and record all instruments necessary to perfect or effectuate
the
provisions hereof.
Page
14 of 35
6.7 Conversion
of Interest
If
at any
time the Participating Interest of a Participant is reduced to ten percent
(10%)
or less by an affirmative election not to contribute all or some portion
of its
share pursuant to a Program and Budget as provided in Article 9, the
diluted Participant shall be deemed to have withdrawn from the Venture and
this
Agreement shall terminate; provided, however, the diluting Participant shall
have the right to receive through the 2.5% Net Smelter Return Royalty, as
set
out in Schedule C, and not from any other source, an amount equal to one
hundred
and fifteen percent (115%) of the diluting Participant's actual or deemed
expenditures contributed hereunder, whichever expenditure is greater. Upon
receipt of such amount the diluting Participant shall thereafter have no
further
right, title, or interest under this Agreement or in the Assets.
6.8 Continuing
Liabilities Upon Adjustments of Participating
Interests
Any
reduction of a Participant's Participating Interest under this Section 6
shall
not relieve such Participant of its share of any liability, whether it accrued
before or after such reduction, arising out of Operations conducted prior
to
such reduction. For purposes of this Article 6, such Participant's share
of such
liability shall be equal to its Participating Interest at the time such
liability was incurred.
The
increased Participating Interest accruing to a Participant as a result of
the
reduction of the other Participant's Participating Interest shall be free
of
royalties, liens or other encumbrances arising by, through or under such
other
Participant, other than those existing at the time the Properties was acquired
or those to which both Participants have given their written consent.
An
adjustment to a Participating Interest need not be evidenced during the term
of
this Agreement by the execution and recording of appropriate instruments,
but
each Participant's Participating Interest shall be shown in the books of
the
Manager. Either Participant, however, at any time upon the request of the
other
Participant, shall execute and acknowledge instruments necessary to evidence
such adjustment in form sufficient for recording in the jurisdiction where
the
Properties is located.
Page
15 of 35
ARTICLE
7. - MANAGEMENT COMMITTEE
7.1 Organization
and Composition
Prior
to
completion of TMC’s Earn-In and the election by AM and TMC to participate in the
Venture as provided in Section 6.2, the Participants shall establish a
Management Committee to determine overall policies, objectives, procedures,
methods and actions under this Agreement. The Management Committee shall
consist
of one member appointed by TMC and one member appointed by AM. Each Participant
may appoint one or more alternates to act in the absence of a regular member.
Any alternate so acting shall be deemed a member. Appointments shall be made
or
changed by notice in writing to the other participant.
7.2 Decisions
Prior
to
completion of TMC’s Earn-In, each Participant, acting through its appointed
member(s) shall have an equal vote. In the event of a deadlock, the Manager
shall hold the deciding vote. After completion of TMC’s Earn-In, each
Participant shall have a vote equal to its Participating Interest in the
Venture. Decisions of the Management Committee shall be decided by Simple
Majority of the Participating Interests.
7.3 Meetings
The
Management Committee shall hold regular meetings at least quarterly at mutually
agreed places. The Manager shall give thirty (30) days’ written notice to the
Participant’s of such regular meetings. In addition, either Participant may call
a special meeting upon thirty (30) days’ written notice to the Manager and the
other Participant. In case of emergency, reasonable notice of a special meeting
shall suffice. There shall be a quorum if at least one member representing
each
Participant is present. The Management Committee shall not transact any business
at a meeting unless a quorum is present at the commencement of the meeting.
If a
quorum is not present at the commencement of the meeting, or within half
an hour
after the time fixed for the meeting to commence, the meeting shall be adjourned
to the same time and day of the next week. If a quorum is not present at
the
commencement of the adjourned meeting, one representative shall be deemed
to be
a quorum.
Each
notice of a meeting shall include an itemized agenda and detailed back-up
information prepared by the Manager in the case of a regular meeting, or
by the
Participant calling the meeting in the case of a special meeting, but any
matters may be considered with the consent of all Participants. The Manager
shall prepare minutes of all meetings of all meetings and shall distribute
copies of such minutes to the Participants within thirty (30 days after the
meeting.
The
minutes, when signed by all Participants, shall be the official record of
the
decisions made by the Management Committee and shall be binding on the Manager
and the Participants. If personnel employed in Operations are required to
attend
a Management Committee meeting, reasonable costs incurred in connection with
such attendance shall be a Venture cost. All other costs shall be paid by
the
Participants individually.
Page
16 of 35
7.4 Action
Without Meeting
In
lieu
of meetings, the Management Committee may hold telephone conferences, so
long as
all decisions are immediately confirmed in writing by the
Participants.
7.5 Matters
Requiring Approval
Except
as
otherwise delegated to the Manager in Section 8.2, the Management Committee
shall have exclusive authority to determine all management matters to this
Agreement.
ARTICLE
8. - MANAGER
8.1 Appointment
Following
signing of this Agreement, TMC shall be the initial Manager.
8.2 Powers
and Duties of the Manager
| (i) |
The
Manager shall manage, direct and control
Operations.
|
|
(ii)
|
The
Manager shall implement the decisions of the Management Committee,
shall
make all expenditures necessary to carry out adopted Programs and
Budgets,
and shall promptly advise the Management Committee if it lacks
sufficient
funds to carry out its responsibilities under this
Agreement.
|
|
(iii)
|
The
Manager shall:
|
| (a) |
purchase
or otherwise acquire all material, supplies, equipment, water,
utility and
transportation services required for Operations, such purchases
and
acquisitions to be made on the best terms available, taking into
account
all of the circumstances;
|
| (b) |
obtain
such customary warranties and guarantees as are available in connection
with such purchases and acquisitions; and
|
| (c) |
keep
the Assets free and clear of all liens and encumbrances, except
for those
existing at the time of, or created concurrent with, the acquisition
of
such Assets, or mechanic's or materialmen's liens which shall be
released
or discharged in a diligent manner, or liens and encumbrances specifically
approved by the Management
Committee.
|
Page
17 of 35
|
(iv)
|
The
Manager shall conduct such title examinations and cure such title
defects
as may be advisable in the reasonable judgment of the
Manager.
|
| (v) |
TheManager
shall:
|
| (a) |
make
or arrange for all payments required by leases, licenses, permits,
contracts and other agreements related to the Assets;
|
| (b) |
pay
all taxes, assessments and like charges on Operations and Assets
except
taxes determined or measured by a Participant's sales revenue or
net
income. If authorized by the Management Committee, the Manager
shall have
the right to contest in the courts or otherwise, the validity or
amount of
any taxes, assessments or charges if the Manager deems them to
be
unlawful, unjust, unequal or excessive, or to undertake such other
steps
or proceedings as the Manager may deem reasonably necessary to
secure a
cancellation, reduction, readjustment or equalization thereof before
the
Manager shall be required to pay them, but in no event shall the
Manager
permit or allow title to the Assets to be lost as the result of
the
nonpayment of any taxes, assessments or like charges; and
|
| (c) |
shall
do all other acts reasonably necessary to maintain the
Assets.
|
| (vi) |
The
Manager shall:
|
| (a) |
apply
for all necessary permits, licenses and approvals;
|
| (b) |
comply
with applicable federal, provincial, municipal and local laws and
regulations;
|
| (c) |
notify
promptly the Management Committee of any allegations of substantial
violation thereof; and
|
| (d) |
prepare
and file all reports or notices required for Operations. The Manager
shall
not be in breach of this provision if a violation has occurred
in spite of
the Manager's good faith efforts to comply, and the Manager has
timely
cured or disposed of such violation through performance, or payment
of
fines and penalties.
|
| (vii) |
The
Manager shall prosecute and defend, but shall not initiate
without consent
of the Management Committee, all litigation or administrative
proceedings
greater than fifty thousand dollars ($50,000) arising out of
Operations.
The non-managing Participant shall have the right to participate,
at its
own expense, in such litigation or administrative proceedings.
The
non-managing Participant's approval shall be required in advance
of any
settlement involving payments, commitments or obligations,
if the
non-managing Participant's share is in excess of twenty-five
thousand
dollars ($25,000) in cash or
value.
|
Page
18 of 35
|
(viii)
|
The
Manager shall provide insurance for the benefit of the Participants
as
provided in Schedule D.
|
|
(ix)
|
The
Manager may dispose of Assets, whether by release, abandonment,
surrender
or Transfer in the ordinary course of business, except that Properties
may
be released, abandoned or surrendered only as provided in Article
13.
Without prior authorization from the Management Committee, however,
the
Manager shall not:
|
| (a) |
dispose
of Assets in any one transaction having a value in excess of $250,000:
|
| (b) |
enter
into any sales contracts or commitments for Product, except as
permitted
in Section 11.2;
|
| (c) |
begin
a liquidation of the Venture; or
|
| (d) |
dispose
of all or a substantial part of the Assets necessary to achieve
the
purposes of the Venture.
|
| (x) |
The
Manager shall have the right to carry out its responsibilities
hereunder
through agents, affiliates or independent
contractors.
|
| (xi) |
The
Manager shall be obligated to perform or cause to be performed
during the
term of this Agreement all obligations required by law in order
to
maintain the Properties which obligations shall be included
in Programs
and Budgets.
|
| (xii) |
The
Manager shall keep and maintain all required accounting and
financial
records pursuant to the Accounting Procedure and in accordance
with
customary cost accounting practices in the mining
industry.
|
|
(xiii)
|
The
Manager shall keep the Management Committee advised of all Operations
by
submitting in writing to the Management Committee:
|
| (a) |
monthly
progress reports which include statements of expenditures and comparisons
of such expenditures to the adopted Budget;
|
| (b) |
periodic
summaries of data acquired;
|
| (c) |
copies
of reports concerning Operations;
|
| (d) |
a
detailed final report within forty-five (45) days after completion
of each
Program and Budget, which shall include comparisons between actual
and
budgeted expenditures and comparisons between the objectives and
results
of Programs; and
|
| (e) |
such
other reports as the Management Committee may reasonably request.
|
Page
19 of 35
At
all
reasonable times the Manager shall provide the Management Committee or the
representative of any Participant, upon the request of any member of the
Management Committee, access to, and the right to inspect and copy all maps,
drill logs, core tests, reports, surveys, assays, analyses, production reports,
operations, technical, accounting and financial records, and other information
acquired in Operations. In addition, the Manager shall allow the non-managing
Participant, at the latter's sole risk and expense, and subject to reasonable
safety regulations, to inspect the Assets and Operations at all reasonable
times, so long as the inspecting Participant does not unreasonably interfere
with Operations.
| (xiv) |
The
Manager shall undertake all other activities reasonably necessary
to
fulfill the foregoing.
|
| (xv) |
The
Manager shall not be in default of any duty under this Section
8.2 if its
failure to perform results from the failure of the non-managing
Participant to perform acts or to contribute amounts required
of it by
this Agreement.
|
8.3 Standard
of Care
The
Manager shall conduct all Operations in a good, workmanlike and efficient
manner, in accordance with all applicable laws, sound mining and other
applicable industry standards and practices, and in accordance with the terms
and provisions of leases, licenses, permits, contracts and other agreements
pertaining to Assets. The Manager shall not be liable to the non-managing
Participant for any act or omission resulting in damage or loss except to
the
extent caused by, or attributable to, the Manager’s willful misconduct or gross
negligence.
8.4 Resignation
- Deemed Offer to Resign
The
Manager may resign upon thirty (30) days’ prior notice to the other Participant.
If any of the following shall occur, the Manager shall be deemed to have
offered
to resign, which offer shall be accepted by the other Participant, if at
all,
within ninety (90) days following such deemed offer:
| (i) |
the
Participating Interest of the Manager becomes less than fifty percent
(50%); or
|
| (ii) |
the
Manager fails to perform a material obligation imposed upon it
under this
Agreement and such failure continues for a period of thirty (30)
days
after written notice from the other Participant demanding performance;
or
|
| (iii) |
the
Manager fails to pay or contest in good faith its bills within
thirty (30)
days after receiving written notice that they are due;
or
|
| (iv) |
a
receiver, liquidator, assignee, custodian, trustee, sequestrator
or
similar official for a substantial part of its assets is appointed
and
such appointment is neither made ineffective nor discharged within
sixty
(60) days after receiving written notice of the making thereof,
or such
appointment is consented to, requested by, or acquiesced in by
the
Manager; or
|
Page
20 of 35
| (iv) |
the
Manager commences a voluntary case under any applicable bankruptcy,
insolvency or similar law now or hereafter in effect; or consents
to the
entry of an order for relief in an involuntary case under any
such law or
to the appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or other similar official
of
any substantial part of its assets; or makes a general assignment
for the
benefit of creditors; or fails generally to pay its or Venture
debts as
such debts become due; or takes corporate or other action in
furtherance
of any of the foregoing; or
|
|
(vi)
|
entry
is made against the Manager of a judgment, decree or order for
relief
affecting a substantial part of its assets by a court of competent
jurisdiction in an involuntary case commenced under any applicable
bankruptcy, insolvency or other similar law of any jurisdiction
now or
hereafter in effect.
|
8.5 Payments
to Manager
|
The
Manager shall be compensated for its services and reimbursed for
its costs
hereunder in accordance with the Accounting
Procedure.
|
8.6 Transactions
with Affiliates
|
If
the Manager engages Affiliates to provide services hereunder, it
shall do
so on terms no more favorable than would be the case with unrelated
persons in arm’s-length
transactions.
|
8.7 Activities
During Deadlock
If
the
Management Committee for any reason fails to adopt a Program and Budget,
subject
to the contrary direction of the management Committee and to the receipt
of
necessary funds, the Manager shall continue Operations at levels comparable
with
the last adopted Program and Budget. For Purposes of determining the required
contributions of the Participants and their Participating Interests, the
last
adopted Program and Budget shall be deemed extended.
ARTICLE
9. - PROGRAMS AND BUDGETS
9.1 Initial
Program and Budget
The
initial Program and Budget will be provided by the Management Committee within
ninety (90) days of TMC’s Earn-In.
Page
21 of 35
9.2 Operations
Pursuant to Programs and Budgets
Except
as
otherwise provided in Section 9.8 and Article 16. Operations shall be conducted,
expenses shall be incurred, and Assets shall be acquired only pursuant to
approved Programs and Budgets.
9.3 Presentation
of Programs and Budgets
|
Proposed
Programs and Budgets shall be prepared by the Manager for a period
of up
to one year. Each adopted Program and Budget, regardless of length,
shall
be reviewed at least once a year at one of the quarterly meetings
of the
Management Committee. During the period encompassed by any Program
and
Budget for the succeeding period shall be prepared by the Manager
and
submitted to the Management
Committee.
|
9.4 Review
and Approval of Proposed Programs and Budgets
Within
thirty (30) days after submission of a proposed Program and Budget to the
Management Committee, the Management Committee shall:
(i) approve
the proposed Program and Budget; or
(ii) propose
modifications of the proposed Program and Budget; or
(iii) reject
the proposed Program and Budget.
|
If
the Management Committee makes the elections pursuant to Section
9.4 (ii)
or 9.4 (iii) then the Manager will review the modifications and/or
any
recommendations of the Management Committee and will resubmit a
Program
and Budget within thirty (30) days.
|
9.5 Election
to Participate
|
By
written notice to the Management Committee within thirty (30) days
after
approving a Program and Budget except as provided for in Section
6.1, a
Participant may elect to contribute to such Program and Budget
in an
amount equal to its Participating Interest or a lesser amount as
provided
for in Section 6.5. If a Participant fails to so notify the Management
Committee, the Participant shall be deemed to have elected not
to
contribute to such Program and Budget and the provisions of Section
6.4
shall apply. Subject to Section 9.6 if a Participant elects not
to
participate in the Program and Budget and the other Participant
elects to
contribute to the Program and Budget the provisions of Section
6.5 shall
apply.
|
9.6 Deadlock
on Proposed Programs and Budgets
|
If
the Participants, acting through the Management Committee, fail
to approve
a program and
Budget by the beginning of the period to which the proposed Program
and
Budget applies,
the provisions of Section 8.7 shall
apply
|
Page
22 of 35
9.7 Budget
and Overruns - Program Changes
The
Manager shall immediately notify the Management Committee of any material
departure from an adopted Program and Budget. If the Manager exceeds an adopted
Budget by more than ten percent (10%), then such excess over ten percent
(10%)
shall be for the sole account of the manager, not creditable to the calculation
of Participating Interests, unless such excess amount is directly caused
by an
emergency or unexpected expenditure made pursuant to Section 9.8, or is
otherwise authorized by the approval of the Management Committee. Budget
overruns of ten percent (10%), or less, shall be borne by the Participants
in
proportion to their respective Participating Interests as of the time the
overrun occurs.
9.8 Emergency
or Unexpected Expenditures
In
case
of emergency, the Manager
may take
any reasonable action it deems necessary to protect life, limb or property,
to
protect the Assets or to comply with law or government regulation.
The
Manager may also make reasonable expenditures for unexpected events which
are
beyond its reasonable control and which do not result from a breach by it
of its
standard of care. The Manager shall promptly notify the Participants of the
emergency or unexpected expenditures, and the Manager shall be reimbursed
for
all resulting costs by the Participants in proportion to their respective
Participating Interests at the time the emergency or unexpected expenditures
are
incurred.
ARTICLE
10. - ACCOUNTS
AND SETTLEMENTS
10.1
Matters
of Accounts and Settlements
|
These
items shall be governed by the provisions in Schedule B (Accounting
Procedures) attached hereto.
|
ARTICLE
11.
- DISPOSITION
OF PRODUCTION
11.1
Taking
in Kind
Each
Participant shall take in Kind or separately dispose of its share of all
Products in accordance with its Participating Interest. Any extra expenditure
incurred in the taking in kind or separate disposition by any Participant
of its
proportionate share of Products shall be borne by such Participant. Nothing
in
this Agreement shall be construed as providing, directly or indirectly, for
any
joint or co-operative marketing or selling of its Products or permitting
the
processing of Products of any parties other than the Participants at any
processing facilities constructed by the Participants pursuant to this
Agreement. The Manager shall give the Participants notice at least ten (10)
days
in advance of the delivery date upon which their respective shares of Products
will be available.
Page
23 of 35
11.2
Failure
of Participant to Take in Kind
If
a
participant fails to take in kind, the Manager shall have the right, but
not the
obligation, for a period of time consistent with the minimum needs of the
industry, but not to exceed one year, to purchase the Participant’s share for
its own account or to sell such share as agent for the Participant at not
less
than the prevailing market price in the area. Subject to the terms of any
such
contracts of sale then outstanding, during any period that the Manager is
purchasing or selling a Participant’s share of production, the Participant may
elect by notice to the Manager to take in kind. The Manager shall be entitled
to
deduct from proceeds of any sale by it for account of a Participant reasonable
expenses incurred in such a sale.
ARTICLE
12.
- WITHDRAWAL
AND TERMINATION
12.1 Termination
by Expiration or Agreement
This
Agreement shall terminate as expressly provided in this Agreement, unless
earlier terminated by written agreement.
12.2 Withdrawal
A
Participant may elect to withdraw as a participant from this Agreement by
giving
notice to the other Participant of the effective date of withdrawal, which
shall
be the alter of the then current Program and Budget or at least forty-five
(45)
days after the date of the notice. Upon such withdrawal, this Agreement shall
terminate, and the withdrawing Participant shall be deemed to have transferred
to the remaining Participant, without cost and free and clear of royalties,
liens or other encumbrances arising by, through or under such withdrawing
Participant, except those exceptions to title described in Schedules F and
G and
those to which both Participants have given their written consent after the
date
of this Agreement, all of its Participating Interest in the Assets and in
this
Agreement. Any withdrawal under this Section 12.2 shall not relieve the
withdrawing Participant of its share of liabilities to third persons (whether
such accrues before or after such withdrawal) arising out of Operations
conducted prior to such withdrawal. For purposes of this Section 12.2, the
withdrawing Participant’s share of such liabilities shall be equal to its
Participating Interest at the time such liability was incurred.
12.3 Obligations
|
On
termination of this Agreement under Section 12.1 or 12.2, the Participants
shall remain liable for continuing obligations hereunder until
final
settlement of all accounts and for any liability, whether it accrues
before or after termination, if it arises out of Operations during
the
term of the Agreement.
|
Page
24 of 35
12.4
Disposition
of Assets on Termination
|
Promptly
after termination under Section 12.1, the Manager shall take all
action
necessary to wind up the activities of the Venture, and all costs
and
expenses incurred in connection with the termination of the Venture
shall
be expenses chargeable to the Venture. Any Participant that has
a negative
Joint Account balance when the Venture is terminated for any reason
shall
contribute to the Assets of the Venture an amount sufficient to
raise such
balance to zero. The Assets shall first be paid, applied, or distributed
in satisfaction of all liabilities of the Venture to third parties
and
then to satisfy any debts, obligations, or liabilities owed to
the
Participants. Before distributing any funds or Assets to Participants,
the
Manager shall have the right to segregate amounts, which, in the
Manager’s
reasonable judgment, are necessary to discharge continuing obligations,
or
to purchase for the account of Participants, bonds or other securities
for
the performance of such obligations. The foregoing shall not be
construed
to include the repayment of any Participant's contributions or
Joint
Account balance. Thereafter, any remaining cash and all other Assets,
including property shall be distributed (in undivided interests
unless
otherwise agreed) to the Participants, first in the ratio and to
the
extent of their respective Joint Accounts and then in proportion
to their
respective Participating Interests, subject to any dilution, reduction,
or
termination of such Participating Interests as may have occurred
pursuant
to the terms of this Agreement. No Participant shall receive a
distribution of any interest in Products or proceeds from the sale
thereof
if such Participant's Participating Interest therein has been terminated
pursuant to this Agreement.
|
12.5
Right
to Data After Termination
|
After
termination of this Agreement pursuant to Section 12.1, each Participant
shall be entitled to copies of all information acquired hereunder
before
the effective date of termination not previously furnished to it,
but a
terminating or withdrawing Participant shall not be entitled to
any such
copies in respect to a later termination or
withdrawal.
|
12.6 Continuing
Authority
On
termination of this Agreement under Section 12.1 or the deemed withdrawal
of a
Participant pursuant to Sections 5.2 and 6.4, the Manager shall have the
power
and authority, subject to control of the Management Committee, if any, to
do all
things on behalf of the Participants which are reasonably necessary or
convenient to:
| (i) |
wind
up Operations; and
|
| (ii) |
complete
any transaction and satisfy any obligation, unfinished or unsatisfied,
at
the time of such termination or withdrawal, if the transaction
or
obligation arises out of Operations prior to such termination or
withdrawal. The Manager shall have the power and authority to grant
or
receive extensions of time or change the method of payment of an
already
existing liability or obligation, prosecute and defend actions
on behalf
of the Participants and the Venture, mortgage Assets, and take
any other
reasonable action in any matter with respect to which the former
Participants continue to have, or appear, or are alleged to have,
a common
interest or a common liability.
|
Page
25 of 35
| 12.7 |
Non-Compete
Covenants
|
A
Participant that withdraws pursuant to Section 12.2, or is deemed to have
withdrawn pursuant to Sections 6.2 or 6.7 shall not directly or indirectly
acquire any interest in property within the Area of Interest for two (2)
years
after the effective date of withdrawal. If a withdrawing Participant, or
an
Affiliate of a withdrawing Participant, breaches this Section 12.7, such
Participant of Affiliate shall be obligated to offer to convey to the
non-withdrawing Participant, without cost, any such property or interest
so
acquired. Such offer shall be made in writing and can be accepted by the
non-withdrawing Participant at any time within forty-five (45) days after
it is
received by such non-withdrawing Participant.
|
12.8
|
Mutual Withdrawal
|
|
If
a Participant elects to withdraw from this Agreement pursuant to
Section
12.2, the other Participant may also elect to withdraw as a Participant
by
giving written notice thereof to the other Participant within thirty
(30)
days after receipt of the first Participant's notice of withdrawal,
in
which event the Participants shall be deemed to have agreed to
terminate
the Venture as of the first date of withdrawal pursuant to Section
12.1.
|
| 12.9 |
Rights
to Data After Termination
|
After
termination of this Agreement pursuant to Sections 12.1 or 12.2, project
data
shall be distributed as follows:
| (i) |
all
proprietary data provided by AM covering data on the Properties
and other
Stillwater Complex lands and all copies thereof will be returned
to AM
within thirty (30) days of the termination date. These data include
geological and related documentation, records, reports and information
provided by the lessors signatories to Schedules A-1 and A-2;
and
|
| (ii) |
copies,
including but not limited to, of any and all raw data developed
by TMC
about or on the Properties, any geological data, computer generated
data,
notes, summaries, maps, surveys, assays, drill hole logs or other
documentation generated by TMC during the life of the Venture will
be
provided to AM.
|
Page
26 of 35
ARTICLE
13. - SURRENDER
OF PROPERTIES
13.1 Surrender
of Properties
The
Management Committee may authorize the Manager to surrender part or
all of
the
Properties. If the Management Committee authorizes any such surrender over
the
objection of a Participant, the Participant that desires to surrender shall
assign to the objecting Participant, without cost to the objecting Participant,
all of the surrendering Participant’s interest in the properties to be
surrendered, and the surrendered Properties shall cease to be part of the
Properties.
13.2
Re-acquisition
If
any
properties are surrendered under the provisions of this Article 13., then,
unless this Agreement is terminated earlier, neither Participant nor any
Affiliate thereof shall acquire any interest in such Properties or a right
to
acquire such Properties for a period of two years following the date of such
surrender. If a Participant re-acquires any properties in violation of this
Section 13.2, the other participant may elect by notice to the
re-acquiring
Participant
within forty-five (45) days after it has actual notice of such re-acquisition,
to have such Properties made subject to the terms of this Agreement. In the
event such an election is made, the re-acquired properties shall thereafter
be
treated as Properties, and the costs of re-acquisition shall be borne pro
rata
by the participants and shall be included for purposes of calculating the
Participants’ respective Participating Interests.
ARTICLE
14.
- TRANSFER OF INTEREST
14.1
General
A
Participant shall have the right to Transfer to any third party all or any
part
of its interest in or to this Agreement, its Participating Interest, or the
Assets solely as provided in this Article 14 and subject to the Underlying
Agreements.
14.2
Limitations
on Free Transferability
The
transfer of a Participant in Section 14.1 shall be subject to the following
terms and conditions:
|
(i)
|
no
transferee of all or any part of the interest of a Participant
in this
Agreement, any Participating Interest, or the Assets shall have
the rights
of a Participant unless and until the transferring Participant
has
provided to the other Participant notice of the Transfer, and except
as
provided in Sections 14.2(iii) and 14.2(vi), the transferee, as
of the
effective date of the Transfer, has committed in writing to be
bound by
this Agreement to the same extent as the transferring
Participant;
|
Page
27 of 35
|
(ii)
|
no
Transfer permitted by this Article 14 shall relieve the transferring
Participant of its share of any liability, whether accruing before
or
after such Transfer, which arises out of Operations conducted prior
to
such Transfer;
|
|
(iii)
|
in
the event of a Transfer of less than all of a Participating Interest,
the
transferring Participant and its transferee shall act and be treated
as
one Participant;
|
|
(iv)
|
except
as provided in Section 14.4 (iii), no Participant shall transfer
any
interest in this Agreement or the Assets except by Transfer of
part or all
of its Participating Interest;
|
|
(v)
|
from
the date of execution of this Agreement, if the Transfer is the
grant of a
security interest by mortgage, deed of trust, pledge, lien or other
encumbrance of any interest in this Agreement, any Participating
Interest
or the Assets to secure a loan or other indebtedness of a Participant
in a
bona fide transaction, such security interest shall be subordinate
to the
terms of this Agreement and the rights and interests of the other
Participant hereunder. Upon any foreclosure or other enforcement
of rights
in the security interest the acquiring third party shall be deemed
to have
assumed the position of the encumbering Participant with respect
to this
Agreement and the other Participant, and it shall comply with and
be bound
by the terms and conditions of this Agreement;
|
|
(vi)
|
if
a sale or other commitment or disposition of Products or proceeds
from the
sale of Products by a Participant upon distribution to it pursuant
to
Article 11 creates in a third party a security interest in Products
or
proceeds therefrom prior to such distribution, such sales, commitment
or
disposition shall be subject to the terms and conditions of this
Agreement; and
|
| (v) |
no
Participant, without the consent of the other participant, shall
make a
transfer which shall cause termination of the tax partnership established
by the provisions of Section 4 2.
|
14.3 Right
of First Refusal
Except
as
otherwise provided in Section 14.4, if either Participant receives an offer
to
transfer or otherwise dispose of all or a part of its Participating Interest
in
the Venture and/or Assets to a third party, including AM’s one hundred percent
(100%) interest in the “G” and “H” Chromites and the nickel-copper-cobalt
mineralization in the ▇▇▇ Basin not subject to this Joint Venture, prior
to
accepting such offer the transferring Participant shall first offer the interest
to the non-transferring Participant at the same terms and conditions as set
forth in the third party offer. The non-transferring Participant may accept
the
offer by written notice to the transferring Participant given within sixty
(60)
days of receipt of the transferring Participant’s offer. If the non-transferring
Participant does not accept the offer, then the transferring Participant
may
sell or otherwise dispose of its interest under terms and conditions not
less
favorable to it than those set forth in the third party offer, provided that
the
sale or other disposition is effectuated within one hundred and eighty (180)
days from the effective date of the third party offer.
Page
28 of 35
14.4
Exceptions
to Right of First Refusal
Section
14.3 shall not apply to the following:
|
(i)
|
transfer
by a Participant of all or any part of its interest in this Agreement,
any
Participating Interest, or the Assets to an
Affiliate:
|
|
(ii)
|
incorporation
of a Participant, or corporate merger, consolidation, amalgamation
or
reorganization of a Participant by which the surviving entity shall
possess substantially all of the stock, or all of the property
rights and
interests, and be subject to substantially all of the liabilities
and
obligations of that Participant;
|
|
(iii)
|
the
grant by a Participant of a security interest in any interest in
this
Agreement, any Participating Interest, or the Assets by mortgage,
deed of
trust, pledge, lien or other encumbrance which shall be subordinate
as set
forth above; or
|
|
(iv)
|
a
sale or other commitment or disposition of Products or proceeds
from sale
of Products by a Participant upon distribution to it pursuant to
Article 11.
|
ARTICLE
15. - CONFIDENTIALITY AND RELEASES
15.1
General
The
financial terms of this Agreement and all information obtained in connection
with the performance of this Agreement are valuable trade secrets and shall
be
the exclusive property of the Participants and shall be maintained on a
confidential basis. Neither Participant shall make any disclosure to any
third
party or the public or give out any publicity, press release or written material
relating to confidential information, the Venture or the terms of this Agreement
without the prior written consent of the other Participant, which consent
shall
not be unreasonably withheld.
15.2 Exceptions
The
consent required by Section 15.1 shall not apply to a disclosure:
|
(i)
|
to
an Affiliate, consultant, contractor or subcontractor that has
a bona fide
need to be informed;
|
|
(ii)
|
to
any third party to whom the disclosing Participant contemplates
a Transfer
of all or any part of its interest in or to this Agreement, its
Participating Interest, or the Assets;
or
|
Page
29 of 35
|
(iii)
|
which
the disclosing Participant is required by pertinent law or regulation
or
the rules of any stock exchange to disclose; provided that in any
case to
which this Section 15.2 is applicable, the disclosing Participant
shall
give written notice to the other Participant prior to the making
of any
such disclosure; or
|
| (iv) |
as
necessary to administer or enforce this
Agreement.
|
As
to any
disclosure pursuant to Section 15.2(i) or (ii), only such confidential
information as such third party shall have a legitimate business need to
know
shall be disclosed and such third party shall first agree in writing to protect
the confidential information from further disclosure to the same extent as
the
Participants are obligated under this Article 15.
15.3
Duration
of Confidentiality
The
provision of this Article 15. shall apply during the term of this Agreement
and
for two (2) years following a termination pursuant to Section 12.1 or following
withdrawal pursuant to Section 12.2, and shall continue to apply to any
Participant who withdraws, who is deemed to have withdrawn, or who Transfers
its
Participating Interest, for two (2) years following the date of such
occurrence.
ARTICLE
16. - AREA
OF INTEREST
16.1
Acquisitions
in Area of Interest
If
at any
time during the existence of this Agreement any Participant or any former
Participant that has a production royalty interest as provided for herein,
(in
this section only, called the “Acquiring Party”) stakes or otherwise acquires
any right to or interest in any properties within the Area of Interest, the
Acquiring Party shall forthwith give notice to the other Participant(s) of
such
acquisition, the total cost of such acquisition, the total cost thereof and
all
details in the possession of that Participant with respect to the details
of the
acquisition, the nature of the property and the known mineralization. Each
other
Participant may, within thirty (30) days of receipt of the Acquiring Party’s
notice, elect, by notice to the Acquiring Party, to require that the properties
and the right or interest acquired be held equally by the parties and be
included in and thereafter form part of the Properties for all purposes of
this
Agreement.
In
the
event properties or interests in properties are acquired by an Acquiring
Party
through a joint venture in the Area of Interest after the Effective Date
of this
Agreement, any such acquired properties or interest in acquired properties,
shall be held equally by TMC and AM unless otherwise agreed.
If
the
election aforesaid is made, the other Participants shall reimburse the Acquiring
Party for that portion of the cost of acquisition which is equivalent to
their
respective Participating Interests. If no other participant makes the election
aforesaid within that period of thirty (30) days, the right or interest acquired
shall not form part of the Properties and the Acquiring Party shall be solely
entitled thereto.
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ARTICLE
17.
-
GENERAL PROVISIONS
17.1 Notices
All
notices, payments and other required communications ("Notices") to the
Participants shall be in writing, and shall be addressed respectively as
follows:
|
(i)
|
If
to TMC:
|
Trend
Mining Company,
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇
▇.▇.▇. ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Phone:
▇▇▇-▇▇▇-▇▇▇▇
Fax:
▇▇▇-
▇▇▇-▇▇▇▇
| (ii) |
If
to AM:
|
Aurora
Metals (BVI) Limited,
▇.▇.
▇▇▇
▇▇▇▇▇,
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇
▇.▇.▇.
▇▇▇▇▇-▇▇▇▇
Attention:
▇▇▇▇ ▇.▇. ▇▇▇▇▇
Phone:
▇▇▇-▇▇▇-▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
All
Notices shall be given:
| (a) |
by
personal delivery to the Participant, or
|
| (b) |
by
electronic communication or facsimile, with a confirmation sent
by
registered or certified mail return receipt requested,
or
|
| (c) |
by
registered or certified mail return receipt requested;
or
|
|
(d)
|
by
express mail.
|
All
Notices shall be effective and shall be deemed delivered:
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31 of 35
| a. |
if
by personal delivery on the date of delivery if delivered during
normal
business hours, and, if not delivered during normal business hours,
on the
next business day following delivery,
and/or
|
| b. |
if
by electronic communication or facsimile on the next business day
following receipt of the electronic communication or facsimile,
and/or
|
| c. |
if
solely by mail on the next business day after actual receipt.
|
A
Participant may change its address by Notice to the other
Participant.
17.2
Waiver
The
Failure of a Participant to insist on the strict performance of any provision
of
this Agreement or to exercise any right, power or remedy upon a breach hereof
shall not constitute a waiver of any provision of this Agreement or limit
the
Participant’s right thereafter to enforce any provision or exercise any
right.
17.3
Modification
No
modification of this Agreement shall be valid unless made in writing and
duly
executed by the Participants.
17.4
Force
Majeure
Except
for the obligation to make payments when due hereunder, the obligations of
a
Participant shall be suspended to the extent, and for the period, that
performance is prevented by any cause, whether foreseeable or unforeseeable,
beyond its reasonable control, including, without limitation, lack of
satisfactory market, labor disputes (however arising and whether, or not,
employee demands are reasonable or within the power of the Participant to
grant); acts of God; laws, regulations, orders, proclamations, instructions
or
requests of any government or governmental entity; judgements or orders of
any
court; inability to obtain on reasonably acceptable terms any public or private
license, permit or alleged, present or prospective violation of federal,
provincial or local environmental standards; acts of war or conditions arising
out of or attributable to war, whether declared or undeclared; riot, civil
strife, insurrection or rebellion; fire, explosion, earthquake, storm, flood,
sink holes,; drought or other adverse weather conditions; delay or failure
by
suppliers or transporters of materials, parts, supplies, services or equipment
or by contractors’ or subcontractors’ shortage of, or inability to obtain,
labor, transportation, materials, machinery, equipment, supplies, utilities
or
services; accidents; breakdown of equipment, machinery or facilities; or
any
other cause whether similar or dissimilar to the foregoing.
The
affected Participant shall promptly give notice to the other Participant
of the
suspension of performance, stating therein the nature of the suspension,
the
reasons therefor, and the expected duration thereof and this Agreement shall
be
extended by the total period of such delays or suspension. The affected
Participant shall resume performance as soon as reasonably possible. During
the
period of suspension the obligations of the Participants to advance funds
pursuant to Section 9.2 shall be reduced to levels consistent with
Operations.
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32 of 35
17.5 Economic
Force Majeure
Following
the Earn-In Period and if at any time after the Management Committee reaches
a
determination, in its reasonable judgment, that the minerals encompassed
within
the Properties cannot be profitably mined under the terms and conditions
of this
Agreement as it is then in effect, the Management Committee may declare that
a
condition of Force Majeure exists as provided in Section 17.4 above; provided,
that in no event shall a condition of Force Majeure declared pursuant to
this
Section 17.5 be in effect for more than five (5) consecutive years.
17.6
Governing
Law
This
Agreement shall be
governed by and interpreted in accordance with the laws of the State of
Colorado.
17.7
Rule
Against Perpetuity
Any
right
or option to acquire any interest in real or personal property under this
Agreement must be exercised, if at all, so as to vest such interest in the
acquirer within twenty-one (21) years after the Effective Date of this
Agreement.
17.8
Further
Assurances
Each
of
the Participants agrees, from time to time, to take such actions and execute
such additional instruments as may be reasonably necessary or convenient
to
implement and carry out the intent and purpose of this Agreement.
17.9
Survival
of Terms and Conditions
The
following Sections shall survive the termination of this Agreement to the
full
extent necessary for their enforcement and the protection of the Participant
in
whose favor they run. Sections 2.2, 4.3, 6.6, 6.8, 12.2, 12.3, 12.4, 12.7,
13.2,
17.6 and 1.3.3 of the Accounting Procedures.
17.10 Entire
Agreement
This
Agreement contains the entire understanding of the Participants and supersedes
all prior agreements and understandings between the Participants relating
to the
subject matter hereof. This Agreement shall be binding upon and inure to
the
benefit of the respective successors and permitted assigns of the Participants.
In the event of any conflict between this Agreement and Schedules attached
hereto, the Terms of this Agreement shall be controlling.
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33 of 35
17.11 Memorandum
At
the
request of either Participant, a Memorandum or short form of this Agreement,
as
appropriate, which shall not disclose financial information contained herein,
shall be prepared and recorded by Manager. This Agreement shall not be
recorded.
17.12 Funds
All
references to dollar amounts contained in this Agreement are references to
the
currency of the United States of America.
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34 of 35
IN
WITNESS HEREOF,
this
Agreement has been executed by the parties hereto effective as of the day
and
year first above written.
| AURORA METALS (BVI) LIMITED | ||
| |
|
|
| By: | /s/ ▇▇▇▇ A.A. ▇▇▇▇▇ | |
|
▇▇▇▇ ▇.▇. ▇▇▇▇▇ |
||
|
Title:
|
President and Director | |
| TREND MINING COMPANY | ||
| |
|
|
| By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
|
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ |
||
|
Title:
|
President and Chief Executive Office | |
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35 of 35