Exhibit 10.3
May 13, 2019
Thunder Mountain Gold Corp,Inc.
11770 W. President Dr.,Ste. F Boise, Idaho
USA 83713
Attention: Eric Jones, President & CEO
Dear Mr. Jones,
Re:Management Services Agreement between Thunder Mountain Gold, Inc. ("THMG") and South Mountain Mines, Inc. ("SMMI") (the "Management Services Agreement")
Reference is made to the option agreement dated February 27, 2019 (the “Option Agreement") between BeMetals Corp. ("BMET"), BeMetals USA Corp ("BMET USA"), THMG, Thunder Mountain Resources, Inc. and SMMI. Capitalized terms used but not otherwise defined herein shall have the same meanings given to them in the Option Agreement.
This Management Services Agreement is entered into by THMG and SMMI further to and as contemplated in the Option Agreement. Under this Management Services Agreement, THMG will provide the management services described below to SMMI in respect of the South Mountain Property, as described in Schedule 1to the Option Agreement (the "Project"), in order to enable SMMI to provide management services to BMET USA further to the management services agreement entered into between SMMI and BMET USA concurrently with this Management Services Agreement (the "SMMl/BMET Management Services Agreement") on the following terms and conditions:
1.Term of Management Services Agreement
The term of this Management Services Agreement will commence on the date of execution and, subject to extension as provided below, will terminate automatically upon the first to occur of:
(i)the second anniversary of the date of this Agreement;
(ii)at any time after the termination of the SMMl/BMET Management Services Agreement upon the written agreement of SMMI and THMG; and
(iii)thedate, ifany, that theOptionAgreementis terminatedin accordance with its terms, other thaninthe event thatBMETcompletes the exercise of theOption(asdefined inthe Option Agreement).
Inthe eventthat BMET USAcompletes the exercise of the Option(asdefined inthe OptionAgreement)inaccordance withtheOption Agreement,thetermof this Agreement will beextended untilthe thirdanniversary ofthe dateof executionof this Agreement (the"Extended Term").During this Extended Term,this Management Services Agreementmay beterminated at the election of SMMI at anytimeafter Completion by giving 30 days'notice ofsame,
provided thatSMMIhasconcurrently paidto THMGan amount equal to(i)all accruedbut unpaid MonthlyManagement ServicesFee tothe datethisManagementServices Agreement would otherwisehavebeen terminated,and (ii)an amount equal to theMonthly ManagementServicesFee thatwould otherwisebepayablebySMMItoTHMG from suchdatetothethreeyearanniversaryof the dateof this Agreement.Duringany ExtendedTerm,theManagementServiceswill beadjusted as contemplatedinsection 2(a) belowtoreflect SMMI as a wholly owned subsidiaryof BMET USA.
2.Management Services
(a)During the term of this Management Services Agreement, THMG will provide management services to SMMI to enable the SMMI to perform its obligations under the SMMl/BMET Management Services Agreement. The management services to be provided to SMMI will include the services required to enable the BMET Parties to perform exploration and development work in respect of the Property in the manner contemplated in the Option Agreement (the "Management Services") including, but not limited to:
prior to Completion (as defined in the Option Agreement):
(i)assisting BMET USA personnel and the Technical Committee in running the Operations in accordance with the terms of the Option Agreement;
(ii)ensuring provision of all necessary Exploration Data and access to the Technical Committee, the PEA Author and any additional subcontractors and/or co-authors in a timely manner with a view to completion of the PEA as soon as practicable;
(iii)facilitating necessary access to data and SMMI personnel to accommodate the foregoing; and
(iv)such additional services relating to the Project as the Technical Committee may reasonably request consistent with the scope and intent of the Option Agreement; and
following Completion (i.e. during the Extended Term):
(v)assisting BMET USA and SMMI personnel as may be necessary or helpful in transitioning ownership of the Project to BMET USA and advancing the Project towards development and/or production;
(vi)facilitating necessary access to data and THMG personnel to accommodate the foregoing; and
(vii)such additional services relating to the Project as SMMI may reasonably request.
(viii)THMGacknowledgesand agrees thattheManagement Services tobeprovidedand expensesincurred by SMMIwillbeatthe direction of the Technical Committee's review and consent inaccordance withtheSMMl/BMETManagement Services Agreement.
b.THMG will provide the followingemployeesof THMG (the"THMG Employees")will be madeavailableto SMMI inordertoenable SMMIto provide the Management Services to BMET: (i) Eric Jones, (ii) Larry Thackery,and(iii) Jim Collard. THMGwill beresponsible forthepayment ofall salary,benefits and other compensation payable to the THMG Employees. Inthe eventa THMG Employee resigns, isterminatedor is otherwise notavailableto perform the Management Services during the term ofthis Agreement, SMMI andTHMGwillattempt to findareplacement employeeacceptableto BMET. In theevent thatan acceptablereplacementemployeeis not found,the Monthly ManagementServicesFee
shallbeadjustedinaccordancewithsection 3below.
c.SMMIagreesthat it willcomply withits obligations under the SMMI/ BMET ManagementServicesAgreement
d.THMGacknowledges and agreesthat (i)SMMIwill further direct the THMG Employees withinthe scopeof theSMMl/BMETManagement Services Agreement toenable SMMIto providetheManagementServicesto BMET,and(ii)SMMIwillengagethe THMG Employees for projectsasinstructed by theChairof the Technical Committee.
3.Payment
Inconsiderationfor SMMI providing the Management Services, SMMI will pay to THMG thesum ofUS$25,000 per month withoutset-off ordeduction (the "Monthly Management Services Fee"),provided that, in theevent that(i)aTHMG Employee resigns, is resigns, isterminatedor isotherwisenot available to performtheManagementServicesduring theterm ofthisAgreement and(ii) THMG is unable to provideareplacementemployeeacceptable to BMET,theMonthly ManagementServicesFeeshallbeautomatically adjustedproportionally (basedon theproportion ofsuchdepartingTHMG Employee's employmentsalarycompensation inrelation tothe aggregateofallTHMG Employees' salary compensation,asadvised by THMG) to reflectthat theTHMG Employee is no longerproviding servicestoSMMI.
4.Insurance
(a)SMMI agrees that whilethisAgreementremains in force, totakeoutandmaintainwitha reputable insurancecompany orcompanies, the following insurance (the"SMMI Insurance"),unlessotherwisedirected by the Technical Committee:
(i)automobileliability insurance coveringallmotorvehicles,owned or non-owned, operatedand/orlicensed by the operator, with bodily injury, deathandproperty damage limitofnot less than US$300,000 inclusive, per occurrence;and
(ii)comprehensive generalliability insurancewithbodily injury, deathandproperty damage limitof notlessthanUS$1,000,000,inclusive,per occurrence; and,without restricting thegeneralityof the forgoing provisions of thissub-clause, such coverage shall include contractualliabilityandtortious liability. Theaggregate amount beingUS$2,000,000.
(b)SMMI shall add the THMGEmployees includingthird partiesas additional insuredon the automobile and comprehensive general liability insurance policiesas setoutaboveinsections4(a)(i)and(ii).
(c)SMMI shalldeliver to THMGa duplicate originalor certifiedorphotostaticcopyorcopiesofthepolicy orpoliciesofinsurance evidencingcompliancewith theprovisionscontainedin thisclause, to beretained inSMMI'scustodyduring thecontinuance of this Agreement.
5.Indemnity
SMMI shallindemnifyand saveharmless theTHMG against all actions proceedings,claimsanddemands for personal injuryorpropertydamagetaken or madeagainstTHMGoritspropertybyanyGovernmental Authorityor anyperson, firmor corporation other thanTHMGarising out of anynegligent act oromissionofSMMI,itsagents or employees in any wayconnectedwith any workdoneortobedonebyTHMG underthe termsofthisAgreement.
THMG shallindemnifyand save harmless SMMI against all actions proceedings, claimsand demands forpersonal injuryorpropertydamage taken ormadeagainstSMMIoritsconsultants oritspropertybyanyGovernmentalAuthority or anyperson, firmor corporation otherthanSMMI arising out of any negligent act or omission ofTHMG, itsagentsoremployeesinany way connected with any workdoneor to be doneby THMG inconnectionwith thisAgreement.
6.Expenses
(a)Duringtheterm ofthisAgreement, SMMI shallreimburseTHMGforallreasonableandproperexpensesincurred inproviding theManagementServices,provided thatsuch expenseswere directedand/or approved bythe Technical Committee prior tobeingincurredandTHMGsubmitstoSMMI a written statementofexpensesincurred togetherwith copies of all receipts and backupinformation.
(b)Whereverpracticable SMMI shallreview,approve andreimburseTHMGforthe said expenses within thirty(30) days fromthedateon whichthewritten statement of expenses, receipts andbackupis submitted.
7.Obligations of THMG and the THMGEmployees
THMGwarrants and agrees thatTHMGand theTHMGEmployees will actina professional andhonestmanner during the time of this Agreement to fulfilling faithfully anddiligentlytheManagementServiceshereunder inaccordance with all reasonabledirectionsgiven to THMG by SMMI and the TechnicalCommittee.
8.Confidentiality
Each partywillabide by theagreementswith respect to confidentialityasset forthin the OptionAgreement.
9.Entire Agreement
This Agreement,together withtheOption Agreement,constitutes the entireagreement between the parties and supersedes allpreviousagreements andunderstandingsin anywayrelating to thesubjectmatter hereof. It isexpresslyunderstoodandagreed that norepresentations, inducements,promisesor agreementsoral orotherwise between the partiesnot embodied hereinshallbeof any force or effect.
10.Agreement Binding
Subject tothe restrictionsonassignmenthereincontained, this Agreement shall ensure to the benefitof and be binding upontheparties heretoandtheirrespective successors,legalrepresentativesand assigns.
11.Assignment
Other thanasexpresslycontemplated bythisAgreement, this Agreement shallnotbe assignablebyeitherparty.
12.Notice
Allnotices, requests,or other communicationsby the termshereofrequired or permitted to begivenby oneparty to anothershallbe giveninwritingbyemailor byregistered mail,postage pre-paid, addressed as follows:
South MountainMines,Inc.
11770 President Dr.,Ste. F,
Boise,ID83713 USA
Attention: James Collard, President
Fax No.:(208)322-5626
Email:jim@thundermountaingold.com
and:
Thunder MountainGoldMines, Inc.
11770 President Dr.,Ste.F,
Boise,ID83713USA
Attention: EricJones,President
FaxNo.: (208) 658-1037
Email: eric@thundermountaingold.com
Such noticesshall bedeemedto havebeengiven andreceived if delivered,ontheday ofdeliveryorifsentbyemailor facsimile,on the business day followingthe date itwas so sent.
13.Governing Law
This Agreementwill be governed by andconstruedinaccordance with the laws of theState ofIdaho,USAandany proceedingrelating to orarisingas a consequence ofthis Agreementwillbecommencedor maintained onlyin thecourts ofthe StateofIdaho,USA.
Yourstruly,
Thunder Mountain Gold,Inc.agrees to and accepts theterms and conditions to this Management Conract on the13th day of May, 2019.
