EXHIBIT 10.02
MEMORANDUM OF UNDERSTANDING
THIS MEMORANDUM OF UNDERSTANDING (this "Memorandum") is entered into by and
among FIRST CHOICE, a British Columbia corporation and IDAHO CONSOLIDATED METALS
CORPORATION, a British Columbia corporation ("ICMC").
WHEREAS, ICMC is the owner of unpatented mining claims ("Claims") located in the
State of Montana, as described in Exhibit A attached hereto.
WHEREAS, ICMC and FIRST CHOICE have entered into a Mutual Nondisclosure
Agreement, as described in Exhibit B attached hereto, in order to proceed with
due diligence and the negotiation of a mining claim Joint Venture agreement
between the parties.
WHEREAS, FIRST CHOICE would like to enter into an Agreement whereby, during the
term of the Agreement FIRST CHOICE would have the exclusive right to explore the
Claims and earn an interest therein.
WHEREAS, ICMC and FIRST CHOICE believe that they have tentatively reached an
agreement in principle as to the major terms and conditions of a Joint Venture
Agreement and they wish to memorialize those terms in writing.
ICMC and FIRST CHIOICE understand as follows:
1. That ICMC intends to enter into a Joint Venture Agreement with FIRST
CHOICE whereby during the term of the Option Agreement FIRST CHOICE
will have the right to acquire up to a 40% interest in the claims
listed in Exhibit A by paying certain consideration and performing a
work program.
2. The term of the Joint Venture Agreement will be five years. Within
sixty (60) days of the signing of the Memorandum Of Understanding,
FIRST CHOICE will pay to ICMC $25,000 U.S. dollars to repay ICMC actual
costs in the property and $200,000 U.S. dollars for consideration along
with 200,000 shares of FIRST CHOICE stock.
3. FIRST CHOICE hereby agrees to assume and be responsible for any finders
fees or related costs caused by this transaction approved as required
by the CDNX.
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4. FIRST CHOICE'S work commitment for the property will be as follows and
along with the work commitment FIRST CHOICE will pay ICMC 250,000 fully
registered and unrestricted shares of its common stock per year:
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YEAR WORK COMMITMENT SHARES
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Year Two U.S.$75,0000 250,000
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Year Three U.S.$150,000 250,000
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Year Four U.S.$200,000 250,000
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5. As part of the Joint Venture Agreement, FIRST CHOICE shall have the
option in year five to buy an additional 10% interest for a total of a
50% interest by paying ICMC for Two Million Five hundred thousand
United States Dollars ($2,500,000). ICMC shall be entitled to a three
percent (3%) Net Smelter Royalty on the property if they decline to
participate in further development of the property after FIRST CHOICE
has earned a 40% interest. The specific terms and conditions of this
royalty will be defined in the Joint Venture Agreement. This purchase
shall not include the purchase of any lateral, apex or similar rights,
interests or titles that ICMC may have in other claims due to its
Claims.
6. FIRST CHOICE and ICMC understand that the board of directors, of both
companies, along with the CDNX will need to approve the formal
Agreement between the parties.
7. FIRST CHOICE and ICMC agree to proceed promptly and in good faith to
conclude the negotiation of the formal Joint Venture Agreement and
which will be on the Rocky Mountain Mineral Law form.
8. This Memorandum does not modify or amend the Mutual Nondisclosure
Agreement between the parties, which continues in full force and
effect.
9. ICMC understands that FIRST CHOICE is planning to use this document in
connection with obtaining financing for this project.
10. In any action to enforce the terms of this Memorandum, the prevailing
party(ies) shall be entitled to recover from the other(s) the costs and
expenses of such action, including, but not limited to, attorney fees.
11. Any dispute arising under this Agreement, that is unresolved though
unaided negotiations, shall be submitted to binding arbitration under
the rules of the American Arbitration Association. The most prevailing
party(ies) in any arbitration preceding shall be entitled to recover
from the other(s) the reasonable costs and expenses of such action as
determined by an arbitrator.
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12. Any communications under this Memorandum shall be given to the parties
either by Registered Canadian mail, telephone or facsimile to the
parties as set forth below:
(a) If to FIRST CHOICE:
First Choice Industries Ltd.
5486 Paton Dr
Delta, B.C. V4K 2G3
Facsimile No.: 604-946-4560
(b) If to ICMC:
Idaho Consolidated Metals Corp
Suite 101
5000 Bridge St
Delta, British Columbia
Canada V4K 2K4
Facsimile No.: 604-940-8865
13. The internal laws of the State of Montana will apply to this
Memorandum.
On Behalf of Idaho Consolidated Metals Corp
Delbert Steiner
President and CEO
On Behalf of First Choice Industries
Bob Chancey
President and CEO
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