EXHIBIT 4.11
OPTION AGREEMENT
BY AND BETWEEN
HALO RESOURCES LTD.
AND
GOLDCORP INC.
DATED
JUNE 20, 2006
THIS OPTION AGREEMENT dated as of the 20th day of June, 2006.
BETWEEN:
GOLDCORP INC.
a corporation duly existing under the laws of the Province of
Ontario
("Goldcorp")
OF THE FIRST PART
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HALO RESOURCES LTD.
a corporation duly continued under the laws of the Province of
British Columbia
("Halo")
OF THE SECOND PART
WHEREAS:
A. Goldcorp is the recorded and beneficial owner of a 100% interest in and
to certain unpatented mining claims and the registered and beneficial
owner of a l00% interest in and to certain leasehold mining claims
located in the Red Lake District of Ontario, as such unpatented and
leasehold mining claims are more particularly described in Schedule "A"
attached hereto (collectively, save and except for the Seventy-Five %
Claims (as defined below), the "Unpatented Property");
B. Goldcorp has agreed to grant Halo an exclusive option (the "Unpatented
Option") to acquire an undivided 60% recorded or registered and
beneficial interest in and to the Unpatented Property in accordance
with and subject to the terms and conditions hereinafter set forth;
C. Goldcorp is the registered and beneficial owner of a 75% interest in
and to leasehold patent mining claims KRL47707 and KRL47708 (the
"Seventy-Five % Claims") as such leasehold patent mining claims are
described in Schedule "A" attached hereto;
D. Goldcorp has agreed to grant to Halo an exclusive option (the
"Seventy-Five % Claims Option") to acquire an undivided 45% registered
and beneficial interest in and to the Seventy-Five % Claims in
accordance with and subject to the terms and conditions hereinafter set
forth;
E. Goldcorp is the registered and beneficial owner of a 50% interest in
and to certain patented mining claims located in the Red Lake District
of Ontario, as such patented mining claims are more particularly
described in Schedule "A1" attached hereto (collectively the "Patented
Property");
F. Goldcorp has agreed to grant Halo an exclusive option (the "Patented
Option") to acquire an undivided 30% registered and beneficial interest
in and to the Patented Property in accordance with and subject to the
terms and conditions hereinafter set forth; and
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G. The Unpatented Property, the Seventy-Five % Claims and the Patented
Property are sometimes hereinafter referred to collectively as the
"Property" and the Unpatented Option, the Seventy-Five % Claims Option
and the Patented Option are sometime collectively referred to as the
"Option".
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual
covenants, conditions and premises herein contained, the sum of Two Dollars now
paid by each of the Parties (as hereinafter defined) to the other and for other
good and valuable consideration (the receipt and sufficiency of which is hereby
acknowledged by each of the Parties) the Parties do hereby covenant and agree as
follows:
1. DEFINITIONS
1.1 DEFINITIONS. In this Agreement:
"this Agreement", "herein", "hereby", "hereof", "hereunder" and similar
expressions shall mean or refer to this Agreement and all schedules
hereto and any and all written agreements or instruments supplemental
or ancillary hereto and the expression "section" followed by a number
means and refers to the specified section of this Agreement.
"Agents" shall mean consultants (including financial advisors),
servants, employees, agents, workmen, contractors and subcontractors.
"Back-in Right" shall have the meaning set forth in section 6.3.
"Development" shall mean all preparation for the removal and recovery
of minerals from the Property.
"Earn-In Date" shall have the meaning set forth in section 6.1.
"Effective Date" shall mean the date of this Agreement set forth on the
first page hereof.
"Encumbrances" shall mean any and all mortgages, pledges, security
interests, liens, charges, encumbrances, contractual obligations and
rights and claims of others, whether recorded or unrecorded, registered
or unregistered.
"Excess Expenditures" shall have the meaning set forth in section 5.1.
"Expenditures" shall mean all expenditures, expenses, obligations and
liabilities of whatever kind or nature reasonably spent or incurred by
Halo in doing Work on the Property from and after the Effective Date,
including for greater certainty and without limitation, expenses paid
for or incurred in connection with any program of surface or
underground prospecting, exploring, geological, geophysical and
geochemical surveying, diamond drilling, drifting, raising and other
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underground work, assaying, metallurgical testing, environmental
studies, submissions to any Governmental Authority and other agencies
with respect to all required production and other permits, licenses and
approvals, moneys expended in keeping the Property and the title
thereto in good standing, and moneys expended in acquiring or
constructing facilities and in developing and mining the Property and
all field costs incurred by employees and Agents with respect to Work
conducted on the Property together with all administrative and overhead
costs directly incurred by the Operator and relating directly to the
administration of the Property or Work done on the Property, provided
that in no event shall such administrative and overhead costs exceed
seven and one half percent (7.5%) of all other Expenditures directly
related to the Property or Work done on the Property and directly
incurred or performed by Halo, or seven and one half percent (7.5%) of
the contract price in respect of all other Expenditures directly
related to the Property or Work done on the Property performed by any
agent, contractor or subcontractor of Halo, and provided always that in
no event shall such costs include non-project related overhead or legal
or other consultants' fees related to the negotiation (including the
conduct of due diligence) execution and delivery of this Agreement.
"Expenditure Date" means each date upon which Expenditures must have
been incurred as provided in the schedule set out in section 4.1.
"Exploration" shall mean all activities directed toward ascertaining
the existence, location, quantity, quality or commercial value of
deposits of minerals on the Property.
"Governmental Authority" means any federal, provincial, municipal or
other governmental department, commission, board, bureau, agency,
government-owned corporation or instrumentality, or any court.
"Joint Venture Agreement" shall mean the joint venture agreement in the
form set forth in Schedule "B" attached hereto, which agreement shall
be executed and delivered by the Parties upon the due exercise of the
Option.
"Losses" shall mean actual losses, liabilities, damages, injuries,
costs or expenses.
"Operator" shall mean Halo.
"Option" shall have the meaning set forth in the recitals to this
Agreement.
"Option Period" shall mean the period during which the Option is in
full force and effect as provided herein.
"Option Shares" shall have the meaning set forth in section 6.3.
"Party" shall mean Halo or Goldcorp, as the case may be.
"Permitted Encumbrances" means any Encumbrance in respect of the
Property constituted by the following:
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(a) inchoate or statutory liens for taxes not at the time
overdue;
(b) inchoate or statutory liens for overdue taxes or
utilities, the validity of which is being contested
in good faith but only for so long as such
contestation effectively postpones enforcement of any
such liens or taxes;
(c) security given to a public utility or any
Governmental Authority when required in the ordinary
course of business;
(d) any reservations or exceptions contained in the
original grants of land and the terms of any lease in
respect of any real property comprising the Property;
(e) minor discrepancies in the legal description of the
Property or any adjoining real property which would
be disclosed in an up-to-date survey and any
registered easements and registered restrictions or
covenants that run with the land which do not
materially detract from the value of, or materially
impair the use of, or affect the right to transfer,
the Property; and
(f) rights of way for or reservations or rights of others
for, sewers, water lines, gas lines, electric lines,
telegraph and telephone lines, and other similar
utilities, or zoning by-laws, ordinances or other
restrictions as to the use of real property, which do
not in the aggregate materially detract from the
value of, or materially impair the use of, or affect
the right to transfer, the Property;
"Person" shall mean any natural person, partnership, company,
corporation, unincorporated association, Governmental Authority or
other agency, trust, trustee or other entity howsoever designated or
constituted.
"Prime Rate" shall mean the interest rate quoted from time to time as
"Prime" by The Toronto-Dominion Bank to its most creditworthy
customers.
"Property" shall have the meaning ascribed thereto in the preambles to
this Agreement.
"Work" means Exploration, Development or other mining and milling work
performed exclusively on or directly in relation to the Property.
2. SCHEDULES, GENDER AND CANADIAN DOLLARS
2.1 SCHEDULES. The following are the schedules attached to and incorporated
in this Agreement by reference and deemed to be a part hereof:
Schedule "A" - Description of the Unpatented
Property and the Seventy-Five %
Claims
Schedule "A1" - Description of the Patented
Property
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Schedule "B" - Joint Venture Agreement
Schedule "C" - Rules for Arbitration
2.2 GENDER AND EXTENDED MEANINGS. In this Agreement all words and personal
pronouns relating thereto shall be read and construed as the number and gender
of the Party or parties referred to in each case require and the verb shall be
construed as agreeing with the required word and pronoun. In this Agreement
words importing the singular number include the plural and vice versa.
2.3 CANADIAN DOLLARS. All references to currency in this Agreement,
including "dollars" and "$", are in Canadian funds.
2.4 BUSINESS DAYS. All references in this Agreement to business days are to
days excluding Saturdays, Sundays and banking or statutory holidays in the
Province of Ontario.
2.5 PERIOD OF TIME. When calculating the period of time within which or
following which any act is to be done or step is to be taken pursuant to this
Agreement, the date which is the reference date in calculating such period shall
be excluded. If the last day of such period is a non-business day, the period in
question shall end on the next business day. Time is of the essence of this
Agreement.
2.6 SECTION HEADINGS. The section and other headings contained in this
Agreement or in the Schedules are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.
3. REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATION AND WARRANTIES OF THE PARTIES. Each of the Parties
hereby represents and warrants to the other as follows and acknowledges that the
other Party is relying on such representations and warranties in entering into
this Agreement:
(a) It is a company duly existing under the laws of its governing
jurisdiction and it is duly organized and validly subsisting
under such laws.
(b) It has full corporate power and authority to carry on its
business and to enter into this Agreement and to carry out and
perform all of its obligations and duties hereunder.
(c) It has duly obtained all corporate and regulatory
authorizations for the execution, delivery and performance of
this Agreement and, except as expressly set out in this
Agreement, such execution, delivery and performance and the
consummation of the transactions herein contemplated will not
conflict with or result in a breach of any covenants or
agreements contained in or constitute a default under or
result in the creation of any Encumbrance under the provisions
of its constating documents or any shareholders' or directors'
resolution or any indenture, agreement or other instrument
whatsoever to which it is a party or by which it is bound and
does not contravene any applicable laws.
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(d) This Agreement has been duly executed and delivered by it and
is valid, binding and enforceable against it in accordance
with its terms, subject to applicable bankruptcy, insolvency,
reorganization and other laws of general application limiting
the enforcement of creditors' rights generally and to the fact
that specific performance is an equitable remedy available
only in the discretion of a court.
(e) There is no Person acting or purporting to act at its request
who is entitled to any brokerage or finders fee in connection
with the transactions contemplated herein.
(f) It has not committed an act of bankruptcy, is not insolvent,
has not proposed a compromising arrangement to its creditors
generally, has not had any petition for a receiving order in
bankruptcy filed against it, has not made a voluntary
assignment in bankruptcy, has not taken any proceedings with
respect to a compromise or arrangement, has not taken any
proceeding to have itself declared bankrupt or wound-up, has
not taken any proceeding to have a receiver appointed of any
part of its assets, has not had any encumbrancer take
possession of any of its property and has not had any
execution or distress become enforceable or become levied upon
any of its property.
3.2 REPRESENTATIONS AND WARRANTIES OF GOLDCORP. Goldcorp hereby represents
and warrants to Halo as follows and acknowledges that Halo is relying on such
representations and warranties in entering into this Agreement:
(a) Goldcorp is the holder of record and is the beneficial holder
of a 100% undivided interest in and to those unpatented mining
claims forming part of the Unpatented Property, is the
registered owner of record and is the beneficial holder of a
100% undivided interest in and to those leasehold mining
claims forming part of the Unpatented Property and is the
registered owner of record and is the beneficial holder of a
75% interest in and to the Seventy-Five % Claims, with good
and marketable (to the extent permitted by applicable laws)
title thereto, and is a registered owner and is a beneficial
holder of an undivided 50% interest in and to the Patented
Property, with good and marketable title thereto, all free and
clear of any and all Encumbrances, other than Permitted
Encumbrances.
(b) There are no other agreements, adverse interests or options to
acquire or purchase the Unpatented Property, Goldcorp's 75%
interest in and to the Seventy-Five % Claims or Goldcorp's 50%
interest in and to the Patented Property, or any portion
thereof. Save for the terms of the leasehold patents related
to those leased mining claims forming part of the Unpatented
Property and the Seventy-Five % Claims and save for the rights
of the other 50% owner of the Patented Property in and to the
Patented Property and the other 25% owner of the Seventy-Five
% Claims in and to the Seventy-Five % Claims, no Person has
any proprietary or possessory interest in or to the Property
other than Goldcorp and, save for the terms of the leasehold
patents related to those leased mining claims forming part of
the Unpatented Property and the Seventy-Five % Claims and save
for the rights of the other 50% owner of the Patented Property
in and to the Patented property and the other 25% owner of the
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Seventy-Five % Claims in and to the Seventy-Five % Claims, no
Person is entitled to any royalty or other payment in the
nature of rent or royalty on any minerals, metals or
concentrates or any other such products removed or produced
from the Property.
(c) The title to the Unpatented Property (including all leases
related thereto), the 75% interest of Goldcorp in and to the
Seventy-Five % Claims (including Goldcorp's 75% interest in
and to the leases related thereto) and the 50% interest of
Goldcorp in and to the Patented Property, are in good standing
and the condition of the Property is in material compliance
with all applicable laws, regulations and orders of all
Governmental Authorities having jurisdiction, including in
respect of any material environmental liability related to or
arising out of the Property.
(d) To the best of its knowledge, there are no outstanding,
pending or threatened, actions, suits or claims affecting or
in respect of the Unpatented Property, Goldcorp's 75% interest
in and to the Seventy-Five % Claims or Goldcorp's 50% interest
in and to the Patented Property, or any part thereof.
(e) To the best of its knowledge, Goldcorp has made available to
Halo all material information in its possession or control
relating to the Property as contemplated in section 7.1. Such
deliveries are for the information and convenience of Halo
only and Goldcorp does not represent the accuracy or
completeness of such deliveries and shall not be liable for
any errors or omissions with respect thereto or contained
therein.
3.3 REPRESENTATIONS AND WARRANTIES OF HALO. Halo hereby represents and
warrants to Goldcorp, and acknowledges that Goldcorp is relying on such
representations and warranties in entering into this Agreement;
(a) Halo is, and has not received any notice from any Governmental
Authority advising it that it is not or will not be,
authorized, permitted or licensed to conduct business in the
Province of Ontario and to perform such operations or
obligations within the jurisdiction of each Governmental
Authority having jurisdiction of the nature and scope of the
operations and obligations to be performed by Halo pursuant to
and in accordance with the terms of this Agreement and the
Joint Venture Agreement;
(b) The outstanding common shares of Halo are listed and posted
for trading on the TSX Venture Exchange; and
(c) Halo has obtained regulatory and TSX Venture Exchange
conditional pre-approval of the issuance and delivery of the
Option Shares in accordance with the terms of this Agreement.
3.4 REPRESENTATIONS AND WARRANTIES AS CONDITIONS. Each Party:
(a) Acknowledges and agrees that the other Party is entering into
this Agreement relying upon the representations and warranties
made by it herein and the correctness of each such
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representation and warranty is a condition upon which such
other Party is relying upon entering into this Agreement, each
of which conditions or breach thereof may be waived in whole
or in part solely by such other Party in writing without
prejudice to its rights in respect of any other breach of such
conditions and all such representations and warranties shall
survive the execution, delivery and termination of this
Agreement and the completion of the transactions contemplated
hereby for a period of one year from the Effective Date
notwithstanding any independent investigations either Party
has made or may make.
(b) Agrees to indemnify and hold harmless the other Party from all
Losses actually incurred by such other Party in connection
with a breach of any representation or warranty made by it and
contained herein.
4. GRANT OF OPTION
4.1 GRANT. In consideration of the covenants and agreements of Halo set
forth herein, Goldcorp does hereby give and grant the Option to Halo. In order
to maintain the Option in good standing, Halo shall perform an exploration
program on the Property at the following minimum expenditures per year on or
before the annual date set out below (on a non-cumulative basis):
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YEAR OF TERM AND MINIMUM EXPENDITURE AMOUNT
EXPENDITURE DATE (CANADIAN DOLLARS)
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Year 1 - on or before December 31, 2006 Cdn $750,000.00
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Year 2 - on or before December 31, 2007 Cdn $1,000,000.00
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Year 3 - on or before December 31, 2008 Cdn $1,250,000.00
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The first Cdn.$750,000.00 of expenditures shall be committed and Halo shall not
be entitled to terminate the Option prior to incurring Cdn.$750,000.00 worth of
Exploration Expenditures in respect of the Property. For greater certainty, Halo
shall during the Option Period incur such Expenditures and perform such Work and
pay Goldcorp's proportionate share of any taxes, rents or assessments payable as
may be necessary in order to keep the Property in good standing during the
Option Period, and such expenditures, payments or Work shall be credited against
Halo's commitment to incur Expenditures pursuant to this section 4.1. Halo and
Goldcorp each acknowledge and agree that extraneous circumstances may make it
difficult for Halo to fully expend the Expenditure amounts for each of Year 1
and Year 2 before the requisite Expenditure Date. Goldcorp agrees that the
requirement to spend such Expenditure amounts may be carried into the subsequent
year, provided that (i) Halo uses, and Halo hereby agrees to use, reasonable
commercial efforts to expend the scheduled Expenditure amounts in the scheduled
year and (ii) in order to exercise the Option, Halo must expend a minimum of
$3,000,000 of Expenditures on or before December 31, 2008 as contemplated in
section 6.1.
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4.2 OPTION PERIOD. The Option shall commence on the Effective Date and
shall terminate on December 31, 2008 (the "Option Period") unless exercised or
otherwise terminated, in accordance with the terms of this Agreement.
5. EXPENDITURES
5.1 EXCESS EXPENDITURES. Expenditures actually incurred exceeding the
Expenditures required from time to time to maintain the Option in good standing
in any period (the "Excess Expenditures") shall be carried forward and credited
to future Expenditure requirements of Halo in subsequent periods. Any excess
Expenditures as at the Earn-In-Date shall be carried forward and credited under
the Joint Venture Agreement.
5.2 OBLIGATIONS OF HALO. Subject to the firm obligation of Halo to fund
Expenditures aggregating a minimum of $750,000 in the first year, if Halo
notifies Goldcorp in writing that it will not incur Expenditures for the next
scheduled period or periods or if Halo fails to incur Expenditures for any
scheduled period for any reason whatsoever, save and except for a continuing
event of Force Majeure, the provisions of section 9.1 shall be applicable and
the Option shall be at an end.
5.3 ITEMIZED EXPENDITURES. Halo shall deliver to Goldcorp within 60 days
after each Expenditure Date, an itemized statement setting out the details of
such Expenditures for the preceding Expenditure period. In the event that
Goldcorp requires further information in respect of, or disputes the accuracy
of, any item in an itemized statement of Expenditures so delivered by Halo,
Goldcorp shall be entitled to an audited report of such Expenditures by the
statutory auditor of Halo. In the event that such matters in dispute are not
settled between the Parties within 30 days of delivery of notice by Goldcorp to
Halo advising of such dispute, then the matter shall be referred to arbitration
for determination as provided in Article 11.
5.4 REMAINING INTEREST IN PATENTED PROPERTY AND SEVENTY-FIVE % CLAIMS. In
the event that Halo determines that it needs to reach agreement with any Person
other than Goldcorp that holds an interest in and to the Patented Property or
the Seventy-Five % Claims in order for Halo to meet its commitments and exercise
its rights under this Agreement, Goldcorp shall take all such reasonable actions
as are reasonably required by Halo, or such other Person with an interest in the
Patented Property, in order to assist Halo to reach such agreement. Halo shall
not be entitled to credit any payments it may agree to make to such Person in
order to reach such agreement, against Halo's commitment to incur expenditures
pursuant to section 4.1.
6. EXERCISE OF OPTION
6.1 OPTION EXERCISE. If Halo has made Expenditures aggregating a minimum of
$3,000,000 in accordance with the provisions of section 4.1, Halo shall be
entitled to provide a written notice of exercise of the Option to Goldcorp
stating the amount of Expenditures incurred and an itemized statement of such
Expenditures. Following receipt of such notice of exercise of the Option, and
subject to the rights of Goldcorp to request more information, to dispute the
accuracy of any item in the statutory declaration or itemized statement of
Expenditures and to receive an audited report of such Expenditures prepared by
the statutory auditor of Halo as set out in section 5.3, which rights shall
apply equally to the statutory declaration and itemized statements delivered by
Halo pursuant to this section, Halo shall be deemed to have exercised the Option
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as at the date of such written notice of exercise (the "Earn-In Date") and Halo
shall have earned an undivided 60% interest in and to the Unpatented Property,
an undivided 45% interest in and to the Seventy-Five % Claims and an undivided
30% interest in and to the Patented Property, free and clear of all
Encumbrances, other than Permitted Encumbrances and such other Encumbrances as
may otherwise have been agreed to by the Parties during the Option Period.
6.2 JOINT VENTURE. In the event Halo exercises the Option, Halo and
Goldcorp shall forthwith enter into the Joint Venture Agreement; for the purpose
of jointly further exploring, developing and exploiting the Property. Goldcorp
and Halo shall thereafter share all future funding of exploration and other
expenditures and liabilities proportionately to their respective interests in
the Property in accordance with and subject to the terms of the Joint Venture
Agreement.
6.3 BACK-IN RIGHT. For a period of ninety (90) days following the date of
the exercise of the Option by Halo, Goldcorp shall, at its sole discretion, have
the right to elect by notice in writing delivered to Halo to exercise the right
(the "Back-in Right") to acquire from Halo (i) a twenty-five (25%) percent
interest in and to the Unpatented Property such that Goldcorp will thereafter
have a sixty-five (65%) percent undivided recorded and beneficial interest in
and to the Unpatented Property and Halo will have a thirty-five (35%) percent
undivided recorded and beneficial interest in and to the Unpatented Property,
(ii) an eighteen and three-quarters (18.75%) percent interest in and to the
Seventy-Five % Claims such that Goldcorp will thereafter have a forty-eight and
three quarters (48.75%) percent undivided registered and beneficial interest in
and to the Seventy-Five % Claims and Halo will have a twenty-six and one-quarter
(26.25%) percent undivided registered and beneficial interest in and to the
Seventy-Five % Claims and (iii) a twelve and one-half (12.5%) percent interest
in and to the Patented Property such that Goldcorp will thereafter have a
thirty-two and one-half (32.5%) percent undivided registered and beneficial
interest in and to the Patented Property and Halo will have a seventeen (17.5%)
percent undivided registered and beneficial interest in and to the Patented
Property, by giving notice of such election in writing to Halo and by paying
Halo $6,000,000.00 on or before the expiration of such ninety (90) day period.
If Goldcorp advises Halo in writing that it does not intend to exercise the
Back-in Right or fails to give such a notice and make such payment within the
ninety (90) day time frame for doing so, Halo shall issue and deliver one
million (1,000,000) fully paid and non-assessable common shares of Halo, free
and clear of all Encumbrances (the "Option Shares") to Goldcorp in accordance
with and subject to section 6.4 below. This section 6.3 shall survive the
termination of this Agreement if this Agreement is terminated pursuant to
section 9.1(f).
6.4 OPTION SHARES.
(a) For the purposes of section 6.3, the Option Shares issued
shall be deemed to have a value per share equal to the volume
weighted average closing price of Halo's common shares on the
TSX Venture Exchange for the thirty trading days immediately
prior to the date that Goldcorp advises Halo that it will not
exercise the Back-in Right or otherwise fails to exercise the
Back-in-Right. If Goldcorp does not exercise the Back-in
Right, Halo shall take all necessary corporate action to issue
and deliver the Option Shares to Goldcorp and to record the
Option Shares on the books of Halo in the name of Goldcorp.
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Halo shall comply with applicable securities laws in
connection with the issuance of such Option Shares.
(b) The Option Shares to be issued by Halo to Goldcorp shall be
subject to all applicable hold periods required by applicable
securities laws and the TSX Venture Exchange (not to exceed
four months from the date of issuance). The issuance of any
Option Shares shall be conditional upon Halo obtaining all
regulatory consents or approvals being received, including
those of the TSX Venture Exchange and Halo will ensure that
all filings required to be made with all applicable securities
regulatory authorities are made in a prompt and timely manner
to allow for the issuance of the Option Shares on a basis that
is exempt from all prospectus and registration requirements
under applicable securities laws. In the event that Halo is
unable to issue the Option Shares to Goldcorp on an exempt
basis within ten business days of the date Goldcorp advises
Halo that it will not exercise the Back-in Right or otherwise
fails to exercise the Back-in Right, Halo shall promptly pay
Goldcorp the cash value of the Option Shares, as determined in
accordance with section 7, in cash, by certified cheque or
wire transfer in immediately available funds.
(c) The Option Shares shall be listed and posted for trading on
the TSX Venture Exchange at the time they are issued and
delivered to Goldcorp in accordance with the terms hereof.
(d) At the time of issuance of the Option Shares, Halo will be for
the preceding four months a reporting issuer, not in default
of the requirements of the SECURITIES ACT (British Columbia)
and no order ceasing or suspending trading in any securities
of Halo will have been issued or pending.
(e) This section 6.4 shall survive the termination of this
Agreement if this Agreement is terminated pursuant to section
9.1(f).
7. DELIVERY OF DATA AND PROPERTY
7.1 DATA. Goldcorp agrees to make available to Halo copies or originals for
copy by Halo (and returned to Goldcorp forthwith) of all maps, reports, data,
drill case, results of surveys and drilling and any other reports of information
Goldcorp may have prepared or caused to be prepared with respect to the
Property, provided that all such maps, reports, data, drill case results of
surveys and drilling and other reports of information shall be kept confidential
by Halo as provided in Article 14 and further provided that Goldcorp shall
retain exclusive title thereto. Such deliveries are for the information and
convenience of Halo only and Goldcorp does not represent the accuracy or
completeness of such deliveries and shall not be liable for any errors or
omissions with respect thereto.
7.2 TITLE TO PROPERTY. Title to Goldcorp's 50% interest in and to the
Patented Property, Goldcorp's 75% interest in and to the Seventy-Five % Claims
and Goldcorp's 100% interest in and to the Unpatented Property shall remain
registered and recorded, as the case may be, in the name of Goldcorp until such
time as Halo shall have duly and properly exercised the Option in accordance
with the terms of this Agreement, whereupon subject to section 6.3, title shall
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thereto be transferred and assigned to, and registered or recorded in the name
of, Halo in accordance with its earned title interest. Halo shall be entitled to
register, record or file notice of this Agreement in all appropriate government
offices upon the due execution and delivery of this Agreement by the Parties
provided that, in the event that Halo does not exercise the Option or this
Agreement is otherwise terminated prior to the exercise of the Option, Halo
shall forthwith discharge and remove such registrations, recordings or filings
from such government offices, and in the event Halo does not complete such
discharge and removal within 30 days of its obligation to do so arising,
Goldcorp shall be entitled to complete and register, record or file such
discharges and remove all such filings and for such limited purposes Halo hereby
appoints Goldcorp as its attorney with full power of substitution.
8. OPERATOR OF THE PROPERTY
8.1 APPOINTMENT OF OPERATOR. Halo shall act as Operator during the Option
Period and as such, Halo shall be responsible in its sole discretion for
carrying out and administering Work on the Property, including the completion of
all activities necessary to fulfill its Expenditures obligations under this
Agreement. Halo as Operator, shall, subject to the rights of the other 50% owner
of the Patented Property in and to that property and the rights of the other 25%
owner of the Seventy-Five % Claims in and to that property, have the right to
enter in, upon and under the Property and to explore, develop, mine, and do such
work upon the Property and to have possession of the Property, including in
order to sample, examine, diamond drill, prospect, explore, develop and mine the
Property in such manner as Halo may determine (subject to the applicable laws,
regulations, policies or orders of all Governmental Authorities having
jurisdiction), including without limitation, the right to erect, bring and
install thereon all buildings, vehicles, machinery, equipment and supplies as
Halo shall deem necessary or advisable and to remove therefrom for analysis and
testing quantities of ores, minerals or metals for assay, testing and milling
purposes only as Halo shall in its sole discretion deem advisable. Halo shall be
responsible for obtaining and/or maintaining in good standing all permits and
licenses and other approvals, from all Governmental Authorities having
jurisdiction as are necessary in order to conduct Work on the Property.
8.2 DELIVERY OF ANNUAL PROGRAMS AND BUDGETS. During the Option Period, not
less than 60 days prior to each year of the term of the Option Period and before
June 30, 2006 for the first $750,000 of Expenditures, Halo shall deliver to
Goldcorp a written program and budget specifying in reasonable detail an outline
of any and all research, prospecting, exploration and development proposed to be
carried out during the next scheduled period and the estimated Expenditures
together with an activities schedule and timetable.
8.3 INFORMAL ADVISORY COMMITTEE. During the Option Period, an informal
committee consisting of Halo and Goldcorp management and technical personnel
shall meet on a semi-annual basis or on such other basis as mutually deemed
necessary by Halo and Goldcorp to address matters relating to Work to be
conducted by Halo as Operator pursuant to this Agreement. Halo shall take into
account in good faith any technical and managerial comments made by the
representatives of Goldcorp.
8.4 MAINTENANCE OF PROPERTY. During the Option Period, Halo shall do,
record and/or pay when due or in advance, all such matters and amounts as are
- 13 -
necessary, including assessment work on the Property, and shall pay such taxes,
fees and rents, as are required to keep the Property in good standing.
8.5 WORK ON CLAIMS. All work by Halo on the Property as Operator during the
Option Period shall be done in a prudent and workmanlike manner in accordance
with good mining practice, in compliance with all laws of all Governmental
Authorities having jurisdiction, including without limitation, all environmental
laws, and in accordance with the terms of all applicable leases relating to the
Unpatented Property.
8.6 INSURANCE. During the Option Period, Halo as Operator shall maintain
adequate insurance coverage in accordance with normal industry standards and
practice protecting the interests of the Parties (including from third party
claims) and shall cause its Agents to obtain and maintain similar adequate
insurance. For greater certainty and without limitation, Halo shall acquire
public liability and property damage insurance (including in respect of all
airstrips located on the Property) in accordance with normal industry standards
naming the Parties as insureds, with severability of interest and protecting the
interests of the Parties (including from third party claims).
8.7 REMOVAL OF LIENS. During the Option Period, Halo as Operator shall pay
or cause to be paid all Agents including, without limitation, workers or wage
earners employed by Halo on the Property and for all material purchased by Halo
in connection with Work on the Property which might give rise to a lien or
privilege thereon. Should any such lien or privilege be recorded against the
Property in consequence of any Work done thereon by or for Halo, Halo shall
forthwith take all such actions, including initiating proceedings, as may be
necessary to have such lien or privilege removed and/or discharged from the
Property and shall have the same removed and/or discharged with all reasonable
dispatch provided, however, that upon such removal or discharge of such lien or
privilege, Halo may proceed to contest any such claim of lien or privilege in
good faith and diligently.
8.8 REPORTS AND INSPECTION.
(a) Halo shall keep full and complete records of all exploration
work and development of the Property, together with the
results of assays made, and all such records and results shall
be available for inspection by Goldcorp prior to the exercise
of the Option by Halo.
(b) During the Option Period, Halo as Operator shall provide
Goldcorp with any information forthwith upon the occurrence of
any material results, supported by copies of relevant data in
respect of such material results.
8.9 ACCESS. During the Option Period, Halo shall permit Goldcorp and its
Agents at their own risk and expense, access at all reasonable times to the
Property and to all information obtained, results produced, samples, core and
data collected from the Property and records, maps, sections and reports
prepared by Halo in connection with any Work done on or with respect to the
Property.
8.10 INDEMNIFICATION BY OPERATOR. Halo as Operator shall indemnify and hold
Goldcorp and its directors, officers, employees and consultants harmless against
and in respect of any and all Losses actually incurred by such Persons arising
- 14 -
out of operations conducted on the Property or other actions by Halo as Operator
or by Halo' Agents. Such indemnity shall survive the termination of this
Agreement.
9. TERMINATION OF OPTION
9.1 TERMINATION EVENTS. Subject to the obligation of the Parties which
expressly survive the termination of this Agreement, this Agreement shall
terminate:
(a) if Halo fails to use reasonable commercial efforts to incur
the required Expenditures on or before the relevant
Expenditure Dates as set forth in section 4.1;
(b) if Halo fails to incur $3,000,000 of Expenditures on or before
December 31, 2008;
(c) upon receipt by Goldcorp of notice from Halo given prior to
the exercise of the Option that Halo will not incur the
Expenditures in accordance with section 5.2;
(d) upon 30 days prior written notice to Halo from Goldcorp in the
event that Halo shall fail to maintain the Property or any
part thereof in good standing, including any leases related to
the Unpatented Property;
(e) if Halo does not exercise the Option on or before December 31,
2008; or
(f) upon exercise of the Option and execution and delivery by the
Parties of the Joint Venture Agreement;
provided that, for greater certainty, and without limitation, sections 9.2
through 9.6 inclusive as well as Article 14 shall survive the termination of
this Agreement.
9.2 RELEASE AND QUITCLAIM OF PROPERTY. If the Option is terminated, Halo
shall forthwith, and in any event within 30 days of such termination, deliver to
Goldcorp a release and quitclaim in form and content satisfactory to Goldcorp,
with respect to the Property and this Agreement.
9.3 TAXES AND RENTS. Upon termination of the Option, Halo shall ensure that
all taxes, fees, rents and payments in respect of the Property and all related
leases have been paid to the date of termination and that the Property and all
related leases remain in good standing for not less than 6 months after
termination.
9.4 DELIVERY OF DATA UPON TERMINATION. Upon termination of the Option, Halo
shall deliver to Goldcorp within 30 days of the date of termination all
originals or copies of maps, reports, results of surveys and drilling and all
other reports of information provided to Halo by Goldcorp as well as copies of
any assay plans, diamond drill records, information, maps and other pertinent
exploration reports produced by Halo or its Agents and related to the Property.
9.5 REMOVAL OF LIENS. Upon termination of the Option, if at that time or
subsequently thereafter a lien on the Property shall arise in connection with
- 15 -
work done thereon by Halo or its Agents and Halo shall wish to contest such
lien, Halo shall post security sufficient to permit such lien to be discharged
and shall forthwith take all such measures as are necessary in order to
discharge such lien.
9.6 REMOVAL OF BUILDINGS AND ENVIRONMENTAL MATTERS. UPON TERMINATION OF THE
OPTION:
(a) All buildings, plant, equipment, machinery, tools, appliances
and supplies which may have been brought upon the Property by
or on behalf of Halo as Operator shall be removed by Halo at
any time not later than sixty (60) days after termination
unless other arrangements on terms satisfactory to Goldcorp
are made between Halo and Goldcorp and, if not so removed,
such buildings, plant, equipment, machinery, tools, appliances
and supplies shall, at the sole option of Goldcorp, become the
property of Goldcorp or may be removed by Goldcorp or its
Agents at the expense of Halo.
(b) Halo shall perform all rehabilitation, reclamation or
pollution control on the Property which is required as a
result of the activities of Halo or its Agents thereon, to the
standard required in accordance with all applicable laws as
approved by the appropriate Governmental Authorities having
jurisdiction.
10. INDEMNIFICATION
10.1 INDEMNIFICATION OF GOLDCORP. Halo shall indemnify and hold Goldcorp and
its directors, officers, employees and consultants harmless against and in
respect of any and all Losses incurred by Goldcorp and its directors, officers,
employees and consultants arising from, relating to or in any way connected with
any loss of life, injury to persons or property or damage to the Property or the
natural environment caused by any act or omission on the part of Halo or its
Agents.
11. ARBITRATION
11.1 BINDING ARBITRATION. Any matter in this Agreement in dispute between
the Parties which has not been resolved by the Parties within fifteen (15) days
of the delivery of notice by either Party of such dispute may be referred by
either Party to binding arbitration. Such referral to binding arbitration shall
be to a qualified single arbitrator pursuant to the ARBITRATIONS ACT, 1991
(Ontario) and its successor legislation, which act shall govern such arbitration
proceeding in accordance with its terms except to the extent modified by the
rules for arbitration set out in Schedule "C". The determination of such
arbitrator shall be final and binding upon the Parties hereto and the costs of
such arbitration shall be as determined by the arbitrator. The Parties covenant
that they shall conduct all aspects of such arbitration having regard at all
times to expediting the final resolution of such arbitration.
12. FORCE MAJEURE
12.1 FORCE MAJEURE. Time shall be of the essence of this Agreement, provided
however that notwithstanding anything to the contrary contained herein, if
either Party should at any time or times during the currency of this Agreement
be delayed in or prevented from complying with this Agreement by reason of wars,
acts of God, strike, lockouts or other labour disputes, inability to access its
- 16 -
place of business or the Property (other than the inability to access the
Property because of the seasonality of weather conditions for which Halo has not
adequately or properly planned), acts of public insurrection, riots, fire,
storm, flood, explosion, government restriction, failure to obtain any approvals
required from any Governmental Authority having jurisdiction (but only in the
circumstances that Halo has filed timely and complete applications for such
approvals from such Governmental Authorities having jurisdiction) including
environmental protection agencies, interference of persons primarily concerned
about environmental issues or aboriginal or aboriginal rights groups, or other
causes whether of the kind enumerated above or otherwise which are not
reasonably within the control of the applicable Party, but excluding for greater
certainty, unavailability of funds, the period of all such delays resulting from
such causes or any of them, shall be excluded in computing the time within which
anything required or permitted by the applicable Party to be done, is to be done
hereunder, and the time within which anything is to be done hereunder shall be
extended by the total period of all such delays. Nothing contained in this
Article shall require the applicable Party to settle any labour dispute or to
test the constitutionality of any enacted law. In the event that any Party
asserts that an event of force majeure has occurred, it shall complete such
reasonable actions or cause such reasonable actions to be completed as may be
necessary to correct or terminate the alleged event of force majeure and give
notice in writing to the other Party specifying the following:
(a) the cause and nature of the alleged event of force majeure;
(b) a summary of the action it or its Agents have taken to the
date of such notice to correct the alleged event of force
majeure;
(c) confirmation as to all acts, actions and things done by it or
its Agents to terminate the event of force majeure; and
(d) the reasonably expected duration of the period of force
majeure.
Any Party asserting an event of force majeure shall provide ongoing periodic
notice in writing to the other Party with respect to such events of force
majeure, including the matters set out above, within 15 days of the end of each
calendar month during the period of force majeure and shall provide prompt
notice in writing to the other Party upon the termination of the event of force
majeure.
13. RELATIONSHIP AND OTHER OPPORTUNITIES - GENERAL
13.1 RELATIONSHIP OF PARTIES. The rights, privileges, duties, obligations
and liabilities, as between the Parties, shall be separate and not joint or
collective and nothing herein contained shall be construed as creating a
partnership, an association, agency or subject as herein specifically provided,
a trust of any kind or as imposing upon either of the Parties any partnership
duty, obligation or liability. No Party is liable for the acts, covenants and
agreements of any other Party.
13.2 OTHER OPPORTUNITIES. Each of the Parties shall have the free and
unrestricted right independently to engage in and receive the full benefits of
any and all business endeavours of any sort whatsoever whether or not
competitive with the endeavours contemplated herein without consulting the other
- 17 -
Party or inviting or allowing the other Party to participate therein. No Party
shall be under any fiduciary or other duty to the other Party which shall
prevent it from engaging in or enjoying the benefits of competing endeavours
within the general scope of endeavours contemplated by this Agreement. The legal
doctrine of "corporate opportunity" sometimes applied to persons engaged in a
joint venture or having fiduciary status shall not apply in the case of either
Party. Each Party hereby waives its rights to partition of the Property and
agrees that it will not seek or be entitled to partition of the Property,
whether by way of physical partition, judicial sale or otherwise.
14. CONFIDENTIALITY
14.1 CONFIDENTIALITY. All information received by any Party as a result of
or in connection with the Property or this Agreement shall be confidential,
shall be treated as confidential and shall not be disclosed to any other Person
without the prior written consent of the other Party, which consent shall not be
withheld unless such other Party can reasonably establish that it would suffer
material damage or would be in violation of any laws or regulations of any
Governmental Authority to which it is subject as a result of such disclosure.
Where disclosure is required by law or a Governmental Authority having
jurisdiction, a copy of the information required to be disclosed including,
without limitation, any press release, shall be provided to the other Party in
advance of its disclosure. The consent required by this Article 14 shall not
apply to a disclosure: (i) to an Agent that has a bona fide need to be informed;
and (ii) to any third Person to whom the disclosing Party bona fide and in good
faith contemplates a transfer of all or any part of its interest in or to the
Property and this Agreement. Only such confidential information as such third
Person shall have a legitimate business need to know shall be disclosed and such
third Person shall first agree in writing to protect the confidential
information from further disclosure to the same extent as the Parties are
obligated under this Article 14. The provisions of this Article 14 shall
continue to apply to any Party notwithstanding any termination of the Option.
Where disclosure is required in connection with a third Person transfer, any
intended third Person transferee must sign a confidentiality agreement with the
other non-disclosing Party containing provisions similar to this Article 14. No
Party shall be liable to the disclosing Person in respect of any
interpretations, opinions, findings, conclusions or other non-factual
information included by the disclosing Person in any report or other document
provided to the other Party whether included by negligence or otherwise. Each
disclosing Person shall jointly and severally indemnify and save harmless the
other Party from and against all Losses actually incurred by the other Party in
respect of the release by the disclosing Person of such non-factual information
to third Persons, irrespective of whether such release was consented to by the
other Party.
15. NOTICE - GENERAL
15.1 NOTICES. All notices, requests, demands or other communications which
by the terms hereof are permitted to be given by either Party to the other shall
be given in writing by personal delivery or by fax, addressed to such other
Party or delivered to such other Party as follows:
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(i) to Goldcorp at:
Bag 2000
17 Mine Road
Balmertown, Ontario
P0V 1C0
Attention: Regional Exploration Manager
Fax No.: 807-735-3120
and to:
3201-130 Adelaide Street West
Toronto, Ontario
M5H 3P5
Attention: Executive Vice President, Canada and USA
Fax No.: 416-363-5950
(ii) to Halo at:
1305-1090 West Georgia Street
Vancouver BC V6E 3V7
Attention: Marc Cernovitch
Fax No.: 604-484-0069
or at such other addresses and to such other Person that may be given by any of
them to the others in writing from time to time on 10 days' prior written notice
and such notices, requests, demands or other communications shall be deemed to
have been received when delivered.
16. GENERAL
16.1 ACTS IN GOOD FAITH. The Parties shall at all times during the currency
of this Agreement and after the termination of the Option, act in good faith
with respect to the other Party and shall do or cause to be done all things
within their respective powers which may be necessary or desirable to give full
effect to the provisions hereof.
16.2 SEVERABILITY. Any provision of this Agreement which is invalid or
unenforceable shall not effect any other provision and shall be deemed to be
severable herefrom.
16.3 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and the federal laws of
Canada applicable therein.
- 19 -
16.4 FURTHER ASSURANCES. The Parties shall sign such further and other
documents and do such further acts or things as may be necessary or desirable in
order to give full force and effect to this Agreement and every part hereof.
16.5 AMENDMENT. This Agreement may not be amended or modified in any respect
except by written instrument signed by the Parties.
16.6 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the Parties with respect to the subject matter hereof and supersedes the
letter of intent between the parties dated April 18, 2006. The execution of this
Agreement has not been induced by nor do the Parties rely upon or regard as
material, any covenants, representations or warranties whatsoever not
incorporated herein and made a part hereof.
16.7 ENUREMENT. This Agreement shall enure to the benefit of and be binding
upon the Parties and each of their successors and permitted assigns. For greater
certainty and without limitation, Halo shall not have the right to mortgage,
charge, transfer or assign this Agreement to any Person without the prior
written consent of Goldcorp. Goldcorp shall have the right to transfer or assign
this Agreement provided that such assignment is in effected in conjunction with
the transfer of the interests of Goldcorp in and to the Property and provided
that the transferee shall have covenanted in assisting with Halo in advance to
be bound by the terms of this Agreement.
16.8 WAIVER. A Waiver of any breach of a provision of this Agreement shall
not be binding upon a party unless the waiver is in writing and such waiver
shall not affect such Party's rights in respect of any subsequent breach.
16.9 COUNTERPARTS. This Agreement may be executed in several counterparts
and by facsimile transmission, each of which so executed shall be deemed to be
an original and such counterparts together shall constitute one and the same
document.
IN WITNESS WHEREOF the Parties have executed these presents as of the Effective
Date.
GOLDCORP INC.
Per:
---------------------------------
Name:
Title:
HALO RESOURCES LTD.
Per: /s/ Marc Cernovitch
---------------------------------
Name: Marc Cernovitch
Title: President & CEO
THIS IS SCHEDULE "A" TO THE OPTION AGREEMENT DATED
AS OF JUNE 20, 2006 BETWEEN
GOLDCORP. INC. AND HALO RESOURCES LTD.
UNPATENTED PROPERTY AND SEVENTY-FIVE % CLAIMS
(STK = UNPATENTED, LP = LEASE PATENT)
--------------------------------------------------------------
PROPERTY TYPE OFFICIAL NO.
--------------------------------------------------------------
UNPATENTED PROPERTY
--------------------------------------------------------------
Pipestone Bay STK 1234170
Pipestone Bay STK 1234140
Pipestone Bay STK 1234141
Pipestone Bay STK 1234142
Pipestone Bay STK 1234143
Pipestone Bay STK 1234144
Middle Bay LP 40860
Middle Bay LP 40861
Middle Bay LP 40862
Middle Bay LP 40863
Middle Bay LP 40864
Middle Bay LP 40865
Middle Bay LP 46181
Middle Bay LP 46182
Middle Bay LP 46183
Middle Bay LP 46184
Middle Bay LP 49874
Middle Bay LP 49875
- 2 -
--------------------------------------------------------------
PROPERTY TYPE OFFICIAL NO.
--------------------------------------------------------------
Middle Bay LP 49897
Middle Bay LP 49898
Middle Bay LP 49899
Middle Bay LP 49900
Middle Bay LP 49901
Middle Bay LP 49902
Middle Bay LP 49903
Middle Bay LP 49904
Middle Bay LP 52174
Middle Bay LP 52175
Middle Bay LP 53397
Middle Bay LP 53398
Middle Bay LP 53399
Middle Bay STK 870130
Middle Bay STK 870131
Middle Bay STK 870132
Middle Bay STK 1143622
Middle Bay STK 1143623
Middle Bay STK 1143624
Middle Bay STK 1143645
Middle Bay STK 1143646
Middle Bay STK 1143647
Middle Bay STK 1184230
- 3 -
--------------------------------------------------------------
PROPERTY TYPE OFFICIAL NO.
--------------------------------------------------------------
Middle Bay STK 1184316
Middle Bay STK 1184317
Middle Bay STK 1185055
Middle Bay STK 1234022
Middle Bay STK 1234029
Middle Bay STK 1234030
Middle Bay STK 1234039
Middle Bay STK 1234051
Middle Bay STK 1234081
Middle Bay STK 1234082
Middle Bay STK 1234083
Middle Bay STK 1234155
Middle Bay STK 1234156
Middle Bay STK 1234157
Middle Bay STK 1248154
Middle Bay STK 1234259
Middle Bay STK 1234245
Middle Bay STK 1234084
Middle Bay STK 3004674
Middle Bay STK 3004676
Middle Bay STK 1247933
Middle Bay STK 1234401
Middle Bay STK 1234402
- 4 -
--------------------------------------------------------------
PROPERTY TYPE OFFICIAL NO.
--------------------------------------------------------------
Middle Bay STK 1248171
Middle Bay STK 1248129
Middle Bay STK 1248169
SEVENTY-FIVE % CLAIMS
Middle Bay LP 47707
Middle Bay LP 47708
--------------------------------------------------------------
THIS IS SCHEDULE "A-1" TO THE OPTION AGREEMENT DATED
AS OF JUNE 20, 2006 BETWEEN
GOLDCORP. INC. AND HALO RESOURCES LTD.
PATENTED PROPERTY
-----------------------------------------------------------
PROPERTY TYPE OFFICIAL NO.
-----------------------------------------------------------
Biron Bay Patent 11077
Biron Bay Patent 11078
Biron Bay Patent 11079
Biron Bay Patent 11080
Biron Bay Patent 11081
Biron Bay Patent 11082
Biron Bay Patent 11083
Biron Bay Patent 11104
Biron Bay Patent 11105
Biron Bay Patent 11106
-----------------------------------------------------------
THIS IS SCHEDULE "C" TO THE JOINT VENTURE AGREEMENT DATED
AS OF JUNE 20, 2006 BETWEEN
GOLDCORP. INC. AND HALO RESOURCES LTD.
RULES FOR ARBITRATION
The following rules and procedures shall apply with respect to any matter to be
arbitrated by the Parties under the terms of the Agreement.
1. INITIATION OF ARBITRATION PROCEEDINGS
(a) If any Party to this Agreement wishes to have any matter under
this Agreement arbitrated in accordance with the provisions of
this Agreement, it shall give notice to the other Party hereto
specifying particulars of the matter or matters in dispute and
proposing the name of the person it wishes to be the single
arbitrator. Within 20 days after receipt of such notice, the
other Party to this Agreement shall give notice to the first
Party advising whether such Party accepts the arbitrator
proposed by the first Party. If such notice is not given
within such 20 day period, the other Party shall be deemed to
have accepted the arbitrator proposed by the first Party. If
the Parties do not agree upon a single arbitrator within such
20 day period such arbitrator shall be chosen in accordance
with the ARBITRATION ACT, 1991 (Ontario) (the "Arbitration
Act").
(b) The individual selected as Arbitrator shall be qualified by
education and experience to decide the matter in dispute. The
Arbitrator shall be at arm's length from both Parties and
shall not be a member of the audit or legal firm or firms who
advise either Party, nor shall the Arbitrator be a person who
is otherwise regularly retained by either of the Parties.
2. SUBMISSION OF WRITTEN STATEMENTS
(a) Within 20 days of the appointment of the Arbitrator, the Party
initiating the arbitration (the "Claimant") shall send the
other Party (the "Respondent") a statement of claim setting
out in sufficient detail the facts and any contentions of law
on which it relies, and the relief that it claims.
(b) Within 15 days of the receipt of the statement of claim, the
Respondent shall send the Claimant a statement of defence
stating in sufficient detail which of the facts and
contentions of law in the statement of claim it admits or
denies, on what grounds, and on what other facts and
contentions of law he relies.
(c) Within 10 days of receipt of the statement of defence, the
Claimant may send the Respondent a statement of reply.
- 2 -
(d) All statements of claim, defence and reply shall be
accompanied by copies (or, if they are especially voluminous,
lists) of all essential documents on which the Party concerned
relies and which have not previously been submitted by any
Party, and (where practicable) by any relevant samples.
(e) After submission of all the statements, the Arbitrator will
give directions for the further conduct of the arbitration.
3. MEETINGS AND HEARINGS
(a) The arbitration shall take place in the City of Toronto,
Ontario or in such other place as the Claimant and the
Respondent shall agree upon in writing. The arbitration shall
be conducted in English unless otherwise agreed by such
Parties and the Arbitrator. Subject to any adjournments which
the Arbitrator allows, the final hearing will be continued on
successive working days until it is concluded.
(b) All meetings and hearings will be in private unless the
Parties otherwise agree.
(c) Any Party may be represented at any meetings or hearings by
legal counsel.
(d) Each Party may examine, cross-examine and re-examine all
witnesses at the arbitration.
4. THE DECISION
(a) The Arbitrator will make a decision in writing and, unless the
Parties otherwise agree, will set out reasons for decision in
the decision.
(b) The Arbitrator will send the decision to the Parties as soon
as practicable after the conclusion of the final hearing, but
in any event no later than 30 days thereafter, unless that
time period is extended for a fixed period by the Arbitrator
on written notice to each Party because of illness or other
cause beyond the Arbitrator's control.
(c) The decision shall determine and award costs.
(d) The decision shall be final and binding on the Parties and
shall not be subject to any appeal or review procedure
provided that the Arbitrator has followed the rules provided
herein in good faith and has proceeded in accordance with the
principles of natural justice. In the event either Party
initiates any court proceeding in respect of the decision of
the Arbitrator or the matter arbitrated, such Party, if
unsuccessful in the court proceeding, shall pay the other
Party's costs on a solicitor/client basis, all reasonable
- 3 -
expenses incurred by such other Party and related to such
court proceeding.
5. JURISDICTION AND POWERS OF THE ARBITRATOR
(a) By submitting to arbitration under these Rules, the Parties
shall be taken to have conferred on the Arbitrator the
following jurisdiction and powers, to be exercised at the
Arbitrator's discretion subject only to these Rules and the
relevant law with the object of ensuring the just,
expeditious, economical and final determination of the dispute
referred to arbitration.
(b) Without limiting the jurisdiction of the Arbitrator at law,
the Parties agree that the Arbitrator shall have jurisdiction
to:
(i) determine any question of law arising in the
arbitration;
(ii) determine any question as to the Arbitrator's
jurisdiction;
(iii) determine any question of good faith, dishonesty or
fraud arising in the dispute;
(iv) order any Party to furnish further details of that
Party's case, in fact or in law;
(v) proceed in the arbitration notwithstanding the
failure or refusal of any Party to comply with these
Rules or with the Arbitrator's orders or directions,
or to attend any meeting or hearing, but only after
giving that Party written notice that the Arbitrator
intends to do so;
(vi) receive and take into account such written or oral
evidence tendered by the Parties as the Arbitrator
determines is relevant, whether or not strictly
admissible in law;
(vii) make one or more interim awards;
(viii) hold meetings and hearings, and make a decision
(including a final decision) in Toronto, Ontario or
elsewhere with the concurrence of the Parties
thereto;
(ix) order the Parties to produce to the Arbitrator, and
to each other for inspection, and to supply copies
of, any documents or other evidence or classes of
documents in their possession or power which the
Arbitrator determines to be relevant; and
(x) make interim orders to secure all or part of any
amount in dispute in the arbitration.
THIS IS SCHEDULE "B" TO THE OPTION AGREEMENT
DATED AS OF JUNE 20, 2006 BETWEEN GOLDCORP INC.
AND HALO RESOURCES LTD.
JOINT VENTURE AGREEMENT
made between
GOLDCORP INC.
and
HALO RESOURCES LTD.
Dated as of , .
TABLE OF CONTENTS
1. DEFINITIONS...........................................................1
1.1 DEFINITIONS..................................................1
1.2 GENDER AND EXTENDED MEANINGS.................................7
1.3 CURRENCY.....................................................7
1.4 BUSINESS DAYS................................................7
1.5 PERIOD OF TIME/TIME OF ESSENCE...............................7
1.6 SECTION HEADINGS.............................................7
2. SCHEDULES.............................................................7
2.1 SCHEDULES....................................................7
3. REPRESENTATIONS AND WARRANTIES........................................7
3.1 REPRESENTATION AND WARRANTIES OF THE PARTIES.................7
4. COMMENCEMENT OF AGREEMENT.............................................8
4.1 EFFECTIVE DATE...............................................8
5. NAME, PURPOSES AND TERM...............................................8
5.1 GENERAL......................................................8
5.2 NAME.........................................................8
5.3 PURPOSES.....................................................8
5.4 TERM OF THE VENTURE..........................................9
5.5 FISCAL YEAR..................................................9
6. RELATIONSHIP..........................................................9
6.1 NO PARTNERSHIP...............................................9
6.2 OTHER BUSINESS OPPORTUNITIES.................................9
6.3 TITLE.......................................................10
6.4 WAIVER OF RIGHT TO PARTITION................................10
6.5 PREPARATION OF TECHNICAL REPORTS............................10
7. INTERESTS OF PARTICIPANTS............................................10
7.1 INITIAL CONTRIBUTIONS.......................................10
7.2 INITIAL PARTICIPATING INTERESTS.............................10
7.3 BACK-IN RIGHT...............................................11
7.4 OPTION SHARES...............................................11
7.5 CASH CONTRIBUTIONS..........................................12
7.6 CHANGES IN PARTICIPATING INTERESTS..........................12
7.7 VOLUNTARY REDUCTION IN PARTICIPATION........................12
7.8 DEFAULT IN MEETING CASH CALLS...............................13
7.9 ELIMINATION OF MINORITY INTEREST............................13
7.10 CONTINUING LIABILITIES UPON ADJUSTMENT OF PARTICIPATING
INTERESTS...............................................14
8. MANAGEMENT COMMITTEE.................................................14
8.1 ORGANIZATION AND COMPOSITION................................14
8.2 DECISION....................................................14
8.3 MEETING.....................................................14
8.4 ACTION WITHOUT MEETING......................................15
8.5 MATTERS REQUIRING APPROVAL..................................15
8.6 MATTERS REQUIRING UNANIMOUS APPROVAL........................15
8.7 PARTICIPANT MAY REQUIRE OPERATIONS TO BE SHUT DOWN..........16
8.8 RESUMPTION OF OPERATIONS....................................16
8.9 MINE MAINTENANCE PLAN.......................................16
8.10 MINE CLOSURE PLAN...........................................17
8.11 IMPLEMENTATION OF MINE CLOSURE PLAN.........................17
8.12 NON-APPROVAL OF MINE CLOSURE PLAN...........................17
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9. MANAGER..............................................................17
9.1 APPOINTMENT.................................................17
9.2 POWERS AND DUTIES OF MANAGER................................18
9.3 STANDARD OF CARE............................................21
9.4 RESIGNATION; DEEMED OFFER TO RESIGN.........................21
9.5 PAYMENTS TO MANAGER.........................................22
9.6 TRANSACTIONS WITH AFFILIATES................................22
10. PROGRAMS AND BUDGETS.................................................22
10.1 OPERATIONS PURSUANT TO PROGRAMS AND BUDGETS.................22
10.2 PRESENTATION OF PROGRAMS AND BUDGETS........................22
10.3 REVIEW AND APPROVAL OF PROPOSED PROGRAMS AND BUDGETS........23
10.4 PREPARATION OF FEASIBILITY STUDY............................23
10.5 REQUEST FOR FEASIBILITY STUDY...............................23
10.6 APPROVAL OF FEASIBILITY STUDY...............................24
10.7 ELECTION TO PARTICIPATE.....................................24
10.8 BUDGET DECREASES............................................24
10.9 BUDGET OVERRUNS; PROGRAM CHANGES............................24
10.10 EMERGENCY OR UNEXPECTED EXPENDITURES........................25
11. ACCOUNTS AND SETTLEMENTS.............................................25
11.1 MONTHLY STATEMENTS..........................................25
11.2 CASH CALLS..................................................25
11.3 SPECIAL CASH CALLS..........................................26
11.4 PAYMENT OF CASH CALLS.......................................26
11.5 FAILURE TO MEET CASH CALLS..................................26
11.6 AUDITS AND ADJUSTMENTS......................................26
12. DISPOSITION OF PRODUCTS..............................................26
12.1 DIVISION OF PRODUCTION......................................26
12.2 LIENS.......................................................27
12.3 FAILURE OF PARTICIPANT TO TAKE IN KIND......................27
13. WITHDRAWAL AND TERMINATION...........................................28
13.1 TERMINATION BY EXPIRATION OR AGREEMENT......................28
13.2 WITHDRAWAL..................................................28
13.3 CONTINUING OBLIGATIONS......................................28
13.4 DISPOSITION OF ASSETS ON TERMINATION........................28
13.5 RIGHT TO DATA AFTER TERMINATION.............................29
13.6 CONTINUING AUTHORITY........................................29
14. TRANSFER OF INTEREST.................................................29
14.1 HALO'S RIGHTS TO TRANSFER...................................29
14.2 GOLDCORP'S RIGHT TO TRANSFER................................29
14.3 RIGHT OF FIRST REFUSAL......................................30
14.4 LIMITATIONS ON FREE TRANSFERABILITY.........................30
14.5 RESTRICTIONS ON MORTGAGES...................................31
15. ARBITRATION..........................................................31
15.1 BINDING ARBITRATION.........................................31
16. FORCE MAJEURE........................................................31
16.1 FORCE MAJEURE...............................................31
17. CONFIDENTIALITY......................................................32
17.1 CONFIDENTIALITY.............................................32
18. EVENT OF DEFAULT OF PARTICIPANT......................................33
18.1 EVENT OF DEFAULT............................................33
18.2 ADDITIONAL REMEDIES.........................................33
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19. NOTICE - GENERAL.....................................................33
19.1 NOTICES.....................................................33
20. MISCELLANEOUS - GENERAL..............................................33
20.1 ACTS IN GOOD FAITH..........................................33
20.2 SEVERABILITY................................................33
20.3 GOVERNING LAW...............................................33
20.4 FURTHER ASSURANCES..........................................33
20.5 AMENDMENT...................................................33
20.6 ENTIRE AGREEMENT............................................33
20.7 ENUREMENT...................................................33
20.8 COUNTERPARTS................................................33
SCHEDULE "I"................................................................33\\
SCHEDULE "II-1".............................................................33\\
SCHEDULE "III-1"............................................................33\\
SCHEDULE "IV-1".............................................................33\\
SCHEDULE "V-1"..............................................................33\\
THIS JOINT VENTURE AGREEMENT dated as of the _________day of ____________, 2006
BETWEEN:
GOLDCORP INC.
a corporation duly existing under the laws of [o]
("Goldcorp")
OF THE FIRST PART
- and -
HALO RESOURCES LTD.
a corporation duly continued under the laws of [o]
("Halo")
OF THE SECOND PART
WHEREAS Goldcorp and Halo entered into an option agreement dated as of the day
of June, 2006 (the "Option Agreement") with respect to the Property (as
hereinafter defined) wherein Goldcorp granted Halo an exclusive option (the
"Option") to earn (i) an undivided 60% recorded or registered and beneficial
interest in and to the Unpatented Property (as hereinafter defined), (ii) an
undivided 45% registered and beneficial interest in and to the Seventy-Five %
Claims (as hereinafter defined), and (iii) a 30% registered and beneficial
interest in and to the Patented Property (as hereinafter defined);
AND WHEREAS the Option Agreement provides that upon the due exercise of the
Option by Halo, Goldcorp and Halo shall enter into this Agreement; and
AND WHEREAS Halo has duly exercised the Option.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual
covenants, conditions and premises herein contained, the sum of Two Dollars now
paid by each of the Parties (as hereinafter defined) to the other and for other
good and valuable consideration (the receipt and sufficiency of which is hereby
acknowledged) the Parties do hereby covenant and agree as follows:
1. DEFINITIONS
1.1 DEFINITIONS. In this Agreement:
"this Agreement", "herein", "hereby", "hereof", "hereunder" and similar
expressions shall mean or refer to this Joint Venture Agreement and all
schedules hereto and any and all agreements or instruments supplemental
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or ancillary hereto and the expression "section" followed by a number
means and refers to the specified section of this Agreement.
"Accounting Procedure" shall mean the procedures set forth in Schedule
"III".
"Affiliate" shall mean 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. "Control" means possession, directly or indirectly, of the
power to direct or cause direction of management decisions and policies
through ownership of voting securities, contract, voting trust or
otherwise.
"Agents" shall mean consultants (including financial advisors),
servants, employees, agents, workmen, contractors and subcontractors.
"Assets" shall mean the Property, all Products and all other real and
personal property, tangible and intangible, held by or for the benefit
of the Participants hereunder.
"Auditor" means the auditors for the Venture as determined by a
unanimous decision of the Management Committee.
"Back-in Right" has the meaning set forth in section 7.3.
"Budget" shall mean a detailed estimate of all costs to be incurred
with respect to a Program and a schedule of cash advances to be made by
the Participants.
"Capital Expenditures" shall mean those items presented in Programs and
Budgets approved by the Management Committee and which are capital
expenditures under Canadian generally accepted accounting principles.
"Claims" shall mean any and all debts, claims, actions, lawsuits,
causes of action, demands, duties and obligations of whatsoever nature
and howsoever incurred.
"Commercial Production" shall mean the commercial exploitation of
Products, but shall not include treating, shipping or milling of
Products for the purposes of testing or milling or leaching by a pilot
plant or during an initial tune-up period of a plant. Commercial
Production shall be deemed to have commenced:
(i) If a plant is located on the Property, on the first
day of the month following the first period of 30
consecutive days during which Products have been
processed through such plant at an average rate of
not less than 60% of the initial rated capacity of
such plant; or
(ii) If no plant is located on the Property, on the first
day of the month following the first period of 30
consecutive days during which Products have been
shipped from the Property on a reasonably regular
basis for the purpose of earning revenue.
- 3 -
"Development" shall mean all preparation for the removal and recovery
of Products including the construction or installation of a mill,
processing plant, leach pads or any other improvements to be used for
the mining, handling, milling, treatment, processing or other
beneficiation of Products and the preparation of feasibility studies
and financing plans.
"Effective Date" shall mean the date of this Agreement.
"Encumbrances" shall mean any and all mortgages, pledges, security
interests, liens, charges, encumbrances, contractual obligations and
claims of others, whether recorded or unrecorded, or registered or
unregistered.
"Expenditures" shall mean all expenditures, expenses, obligations and
liabilities of whatever kind or nature reasonably spent or incurred by
the Manager in doing Work from and after the Effective Date, including
for greater certainty and without limitation, moneys expended in
maintaining the Property in good standing, expenses paid for or
incurred in connection with any program of surface or underground
prospecting, exploring, geological, geophysical and geochemical
surveying, diamond drilling, drifting, raising and other underground
work, assaying, metallurgical testing, environmental studies,
submissions to any Governmental Authority and other agencies with
respect to all required production and other permits, licenses and
approvals, moneys expended in acquiring or constructing facilities and
in developing and mining the Property and all field costs incurred by
employees and Agents with respect to Work conducted on the Property
together with all administrative and overhead costs directly incurred
by the Manager and relating directly to the administration of the
Property or Work done on the Property, provided that in no event shall
such administrative and overhead costs exceed seven and one half
percent (7.5%) of all other Expenditures directly related to the
Property or Work done on the Property and directly incurred or
performed by the Manager or seven and one half percent (7.5%) of the
contract price in respect of all other Expenditures directly related to
the Property or Work done on the Property performed by any agent,
contractor or subcontractor of Halo and provided always that in no
event shall such costs include non-project related overhead or legal or
other consultants' fees related to the negotiation (including the
conduct of due diligence) execution and delivery of this Agreement.
"Exploration" shall mean all activities directed toward ascertaining
the existence, location, quantity, quality or commercial value of
deposits of Products on, in or under the Property.
"Facilities" shall mean all mines and plants including without
limitation all pits, shafts, drifts, haulage ways and other underground
workings and all buildings, plants and other structures, fixtures and
improvements and all other property, whether fixed or moveable, as the
same may exist at any time in or on the Property if for the exclusive
benefit of the Property.
"Feasibility Study" means a detailed report or reports prepared by or
for the Manager evaluating the feasibility of placing the Property, or
any part thereof, into production and operation as a mine, which
- 4 -
detailed report or reports shall include, without limitation, a
reasonable assessment of the mineable mineral reserves and their
amenability to metallurgical treatment, a complete description of the
Work, equipment and supplies required to bring the Property into
mineral production and the estimated cost thereof, a description of the
mining methods to be employed and a financial appraisal of possible
mining operations. Such detailed report or reports shall be, in the
opinion of the person or firm commissioning such report or reports, or,
in the event of a dispute between the Parties, in the opinion of such
qualified independent firm of consultants as the Manager shall select
in good faith, in such form and of such substance which is normally
accepted by substantial, recognized financial institutions for the
purpose of lending funds for the development of mineral deposits, and
shall include and be supported by at least the following:
(i) a description of the Property and that part of the
Property proposed to be the subject of a mine;
(ii) the estimated recoverable reserves of minerals and
the estimated composition and content thereof;
(iii) the procedure for the Development, Mining and
production of Products from the Property;
(iv) results of mineral processing tests and ore
amenability tests;
(v) the nature and extent of the Facilities which it
might be necessary to acquire or construct, which may
include ore processing facilities if the nature,
volume and location of the ore makes such ore
processing facilities necessary and feasible, in
which event the study shall also include a design for
such ore processing facilities;
(vi) a detailed cost and timing analysis, including a
capital cost budget, of the total estimated costs and
expenses required to develop a mine on the Property
and to purchase, construct and install all
structures, machinery and equipment required for such
mine including an ore processing facility, if so
included in accordance with the terms hereof;
(vii) detailed operating cost estimates, including working
capital requirements for the initial three months of
operation of the mine or such longer period as may be
reasonably justified;
(viii) all necessary environmental impact and mitigation
studies and costs including planned rehabilitation of
the Property with estimated costs thereof;
(ix) a critical path time schedule for bringing the
Property or any part thereof to Commercial
Production;
- 5 -
(x) such other data and information as are reasonably
necessary to substantiate the existence of a mineral
deposit of sufficient size and grade to justify
development of a mine on the Property, taking into
account all relevant business, tax and other economic
considerations;
(xi) disclosure of all price assumptions, together with a
market analysis;
(xii) a transportation cost analysis;
(xiii) a proposed procedure or method of disposing of
tailings as required under the environmental and
mining laws of all Governmental Authorities having
jurisdiction;
(xiv) a detailed discussion and analysis of governmental
requirements with respect to the development of a
mine on the Property including time schedules;
(xv) a discounted cash flow (net of income taxes) and
return on investment analysis, including an economic
forecast for the life of the proposed mine; and
(xvi) appropriate sensitivity analyses.
"Governmental Authority" means any federal, provincial, municipal or
other governmental department, commission, board, bureau, agency,
government-owned corporation or instrumentality, or any court having
jurisdiction.
"Initial Contributions" shall have the meanings set forth in section
7.1.
"Initial Participating Interests" shall mean the Initial Participating
Interest of each Participant as set forth in section 7.2.
"Management Committee" shall mean the committee established under
Article 8.
"Manager" shall mean the person or entity appointed under Article 9 to
manage Operations and any successor Manager.
"Mining" shall mean the mining, extracting, producing, treating,
handling, milling or other processing of Products.
"Non-Manager's Program and Budget" shall have the meaning set forth in
section 10.2.
"Operations" shall mean Exploration, Development, Mining and all other
activities carried out pursuant to this Agreement.
"Party" shall mean Halo or Goldcorp, as the case may be and "Parties"
means such parties together.
- 6 -
"Participant" and "Participants" mean the Persons that from time to
time have Participating Interests being initially, Goldcorp and Halo.
"Participating Interest" shall mean the percentage interest
representing the ownership interest of a Participant in and to the
Assets and all other rights and obligations arising under this
Agreement, as such interest may from time to time be adjusted
hereunder.
"Patented Property" means the interests of the Participants in and to
the patented mining claims described in Schedule "II".
"Penalty Amount" shall have the meaning set forth in section 7.8(a).
"Permitted Encumbrances" shall have the meaning set forth in the Option
Agreement.
"Person" shall mean any natural person, partnership, company,
corporation, unincorporated association, joint venture, trust, trustee,
Governmental Authority or other entity howsoever designated or
constituted.
"Prime Rate" shall mean the interest rate quoted from time to time as
"Prime" by The Toronto-Dominion Bank to its most creditworthy
customers.
"Products" shall mean all ores, minerals and mineral products located
on, in or under or delivered from the Property and all beneficiated and
other products produced therefrom under this Agreement.
"Program" shall mean a description in reasonable detail of Operations
to be conducted and objectives to be accomplished by the Manager with
respect to the Property.
"Property" shall mean the Unpatented Property, the Seventy-Five %
Claims and the Patented Property collectively.
"Seventy-Five % Claims" means the leasehold patent mining claims
KRL47707 and KRL47708 described in Schedule "I".
"Transfer" when used as a verb, shall mean to sell, grant, assign, or
otherwise dispose of, directly or indirectly, including through
mergers, consolidations or asset purchases and when used as a noun,
shall mean a sale, grant, assignment, or disposal or the commitment to
do any of the foregoing, directly or indirectly, including through
mergers, consolidation or asset purchase.
"Unpatented Property" means the unpatented mining claims and leased
mining claims described in Schedule "I", save and except for the
Seventy-Five % Claims.
"Venture" shall mean the business arrangement of the Participants under
this Agreement.
"Work" means Exploration, Development or Mining work performed
exclusively on or directly in relation to the Property or Products by
- 7 -
or through the Manager for the benefit of and on the account of the
Venture and the Participants, in accordance with the terms of this
Agreement.
1.2 GENDER AND EXTENDED MEANINGS. In this Agreement all words and personal
pronouns relating thereto shall be read and construed as the number and gender
of the party or parties referred to in each case require and the verb shall be
construed as agreeing with the required word and pronoun. In this Agreement
words importing the singular number include the plural and vice versa.
1.3 CURRENCY. All references to currency in this Agreement, including
"dollars" and "$", are in Canadian funds.
1.4 BUSINESS DAYS. All references in this Agreement to business days are to
days excluding Saturdays, Sundays and banking or statutory holidays in the
Province of Ontario.
1.5 PERIOD OF TIME/TIME OF ESSENCE. When calculating the period of time
within which or following which any act is to be done or step is to be taken
pursuant to this Agreement, the date which is the reference date in calculating
such period shall be excluded. If the last day of such period is a non-business
day, the period in question shall end on the next business day. Time is of the
essence of this Agreement.
1.6 SECTION HEADINGS. The section and other headings contained in this
Agreement or in the Schedules are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.
2. SCHEDULES
2.1 SCHEDULES. The following are the schedules attached to and incorporated
in this Agreement by reference and deemed to be a part hereof:
Schedule "I" - Description of the Unpatented Property
Schedule "II" - Description of the Patented Property
Schedule "III" - Accounting Procedure
Schedule "IV" - Net Smelter Returns Royalty Interest
Schedule "V" - Rules for Arbitration
3. REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATION AND WARRANTIES OF THE PARTIES. Each Party hereby
represents and warrants to the other Party as follows and acknowledges that the
other Party is relying on such representations and warranties in entering into
this Agreement:
(a) It is a company duly existing under the laws of its governing
jurisdiction and it is duly organized and validly subsisting
under such laws.
(b) It has full power and authority to carry on its business and
to enter into this Agreement and any agreement or instrument
- 8 -
referred to or contemplated by this Agreement and to carry out
and perform all of its obligations and duties hereunder and
thereunder.
(c) It has duly obtained all corporate and regulatory
authorizations for the execution, delivery and performance of
this Agreement and such execution, delivery and performance
and the consummation of the transactions herein and therein
contemplated does not conflict with or result in a breach of
any covenants or agreements contained in, or constitute a
default under or result in the creation of any Encumbrance
under, the provisions of its constating documents or any
shareholders' or directors' resolution or any indenture,
agreement or other instrument whatsoever to which it is a
party or by which it is bound and does not contravene any
applicable laws of any Governmental Authority.
(d) This Agreement has been duly executed and delivered by it and
is valid, binding and enforceable against it in accordance
with its terms, subject to applicable bankruptcy, insolvency,
reorganization, and other laws of general application limiting
the enforcement of creditors rights generally and to the fact
that specific performance is an equitable remedy available
only in the discretion of a court.
(e) It has not committed an act of bankruptcy, is not insolvent,
has not proposed a compromising arrangement to its creditors
generally, has not had any petition for a receiving order in
bankruptcy filed against it, has not made a voluntary
assignment in bankruptcy, has not taken any proceedings with
respect to a compromise or arrangement, has not taken any
proceeding to have itself declared bankrupt or wound-up, has
not taken any proceeding to have a receiver appointed in
respect of any part of its assets, has not had any
encumbrancer take possession of any of its property and has
not had any execution or distress become enforceable or become
levied upon any of its property.
(f) As of the Effective Date it owns its right, title and interest
in and to the Property free and clear of all Encumbrances,
other than the Permitted Encumbrances.
4. COMMENCEMENT OF AGREEMENT
4.1 EFFECTIVE DATE. This Agreement shall be operative and shall take effect
as of the Effective Date.
5. NAME, PURPOSES AND TERM
5.1 GENERAL. The Parties hereby enter into this Agreement for the purposes
herein stated. All of the Participants' rights with respect to the Assets and
all of the Operations on or in connection with the Property shall be subject to
and governed by this Agreement.
5.2 NAME. The name of the Venture may be as determined by mutual agreement
of the Participants in writing.
5.3 PURPOSES. The Venture shall be entered into for the following purposes
and shall serve as the exclusive means by which the Participants or either of
them accomplish such purposes:
- 9 -
(a) To conduct Exploration on, in and under the Property.
(b) To engage in Development and Mining on the Property.
(c) To evaluate the possible further Development of the Property.
(d) To perform any other activity necessary, appropriate or
incidental to any of the foregoing.
Unless the Participants otherwise agree in writing, Operations shall be limited
to the purposes described in this section.
5.4 TERM OF THE VENTURE. The term of the Venture shall be for 50 years from
the Effective Date and for so long thereafter as Products are produced from the
Property unless this Agreement is terminated earlier as herein provided. If any
right, power or interest of any Party under this Agreement would violate the
rule against perpetuities, then such right, power or interest shall terminate at
the expiration of 20 years after the death of the last survivor of all the
lineal descendants of Her Majesty, Queen Elizabeth II of England, living on the
date of this Agreement.
5.5 FISCAL YEAR. The fiscal year end of the Venture shall be December 31
commencing on December 31 in the year in which this Agreement takes effect,
unless otherwise determined in accordance with the terms of this Agreement.
6. RELATIONSHIP
6.1 NO PARTNERSHIP. Nothing contained in this Agreement shall be deemed to
constitute either Party the partner of the other nor, except as otherwise herein
expressly provided, to constitute either Party the agent or legal representative
of the other nor to create any fiduciary relationship between the Parties. It is
not the intention of the Parties to create nor shall this Agreement be construed
to create any mining, commercial or other partnership. Neither Party shall have
any authority to act for or to assume any obligation or responsibility on behalf
of the other Party except as otherwise expressly provided herein. The rights,
duties, obligations and liabilities of the Parties 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 their
respective rights acquired under this Agreement shall be as tenants in common.
Each Party shall indemnify, defend and hold harmless the other Party, its
directors, officers and Agents from and against any and all losses, claims,
damages and liabilities arising out of any act or any assumption of liability by
the indemnifying Party or any of its directors, officers and Agents done or
undertaken or apparently done or undertaken on behalf of the other Party, except
pursuant to the authority expressly granted herein or as otherwise agreed in
writing between the Parties.
6.2 OTHER BUSINESS OPPORTUNITIES. Except as expressly provided in this
Agreement, each Party shall have the right independently to engage in and
receive full benefits from other business activities, whether or not competitive
with Operations, without consulting the other Party. The doctrines of "corporate
opportunity" or "business opportunity" shall not be applied to any other
- 10 -
activity, venture or operation of either Participant and, except as expressly
provided in this Agreement, neither Party shall have any obligation to the other
with respect to any opportunity to acquire property at any time. Unless
otherwise agreed in writing by the Participants, neither 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.
6.3 TITLE. Title to the Assets shall be held jointly in the name of the
Participants in accordance with their Initial Participating Interests provided,
however, that each of the Participants shall be entitled to file and record such
documents as may be required to document or provide notice of its Participating
Interest in and to any or all of the Assets.
6.4 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 the
Assets including any such rights provided by statute.
6.5 PREPARATION OF TECHNICAL REPORTS. Nothing in this Agreement will
obligate either Party to (i) prepare, or assist the other Party in the
preparation of, any technical report or reports relating to the Property that
the other Party might be required to prepare and file with any Canadian
regulatory authority at any time pursuant to National Instrument 43-101
"Standards of Disclosure for Mineral Projects", or any similar regulatory
policy; or (ii) provide the services of, or assist the other Party in procuring
the services of, a "qualified person" (as that term is defined in National
Instrument 43-101) to produce, or to oversee the production of, any such
technical report or reports.
7. INTERESTS OF PARTICIPANTS
7.1 INITIAL CONTRIBUTIONS. The value of each Participant's initial
contribution (an "Initial Contribution") shall be deemed to be as set forth
below, notwithstanding the provisions of the Option Agreement or the amounts
spent by each Participant in acquiring its right, title and interest in and to
the Property:
Halo - $3,000,000
Goldcorp - $2,000,000
In the event that Goldcorp exercises its Back-in Right pursuant to section 7.3,
the value of each Participants Initial Contribution shall be deemed to be as set
forth below:
Halo - $3,000,000
Goldcorp - $5,571,428.50
7.2 INITIAL PARTICIPATING INTERESTS. Subject to section 7.3, the
Participants shall have the following initial Participating Interests (an
"Initial Participating Interest"):
Halo - 60%
Goldcorp - 40%
- 11 -
In the event that Goldcorp exercises its Back-in Right pursuant to section 7.3,
the Participants shall have the following Initial Participating Interests:
Halo - 35%
Goldcorp - 65%
7.3 BACK-IN RIGHT. For a period of ninety (90) days following the date of
this Agreement, Goldcorp shall, at its sole discretion, have the right to elect
by notice in writing delivered to Halo to exercise the right (the "Back-in
Right") to acquire from Halo (i) a twenty-five (25%) percent interest in and to
the Unpatented Property such that Goldcorp will thereafter have a sixty-five
(65%) percent undivided recorded and beneficial interest in and to the
Unpatented Property and Halo will have a thirty-five (35%) percent undivided
recorded and beneficial interest in and to the Unpatented Property, (ii) an
eighteen and three-quarters (18.75%) percent interest in and to the Seventy-Five
% Claims such that Goldcorp will thereafter have a forty-eight and three
quarters (48.75%) percent undivided registered and beneficial interest in and to
the Seventy-Five % Claims and Halo will have a twenty-six and one-quarter
(26.25%) percent undivided registered and beneficial interest in and to the
Seventy-Five % Claims and (iii) a twelve and one-half (12.5%) percent interest
in and to the Patented Property such that Goldcorp will thereafter have a
thirty-two and one-half (32.5%) percent undivided registered and beneficial
interest in and to the Patented Property and Halo will have a seventeen (17.5%)
percent undivided registered and beneficial interest in and to the Patented
Property, by giving notice of such election in writing to Halo and by paying
Halo $6,000,000.00 on or before the expiration of such ninety (90) day period.
If Goldcorp advises Halo in writing that it does not intend to exercise the
Back-in Right or fails to give such a notice and make such payment within the
ninety (90) day time frame for doing so, Halo shall issue and deliver one
million (1,000,000) fully paid and non-assessable common shares of Halo, free
and clear of all Encumbrances (the "Option Shares") to Goldcorp in accordance
with and subject to section 7.4 below.
7.4 OPTION SHARES.
(a) For the purposes of section 7.3, the Option Shares issued
shall be deemed to have a value per share equal to the volume
weighted average closing price of Halo's common shares on the
TSX Venture Exchange for the thirty trading days immediately
prior to the date that Goldcorp advises Halo that it will not
exercise the Back-in Right or otherwise fails to exercise the
Back-in-Right. If Goldcorp does not exercise the Back-in
Right, Halo shall take all necessary corporate action to issue
and deliver the Option Shares to Goldcorp and to record the
Option Shares on the books of Halo in the name of Goldcorp.
Halo shall comply with applicable securities laws in
connection with the issuance of such Option Shares.
(b) The Option Shares to be issued by Halo to Goldcorp shall be
subject to all applicable hold periods required by applicable
securities laws and the TSX Venture Exchange (not to exceed
four months from the date of issuance). The issuance of any
Option Shares shall be conditional upon Halo obtaining all
regulatory consents or approvals being received, including
those of the TSX Venture Exchange and Halo will ensure that
all filings required to be made with all applicable securities
regulatory authorities are made in a prompt and timely manner
- 12 -
to allow for the issuance of the Option Shares on a basis that
is exempt from all prospectus and registration requirements
under applicable securities laws. In the event that Halo is
unable to issue the Option Shares to Goldcorp on an exempt
basis within ten business days of the date Goldcorp advises
Halo that it will not exercise the Back-in Right or otherwise
fails to exercise the Back-in Right, Halo shall promptly pay
Goldcorp the cash value of the Option Shares, as determined in
accordance with section 7.4(a), in cash, by certified cheque
or wire transfer in immediately available funds.
(c) The Option Shares shall be listed and posted for trading on
the TSX Venture Exchange at the time they are issued and
delivered to Goldcorp in accordance with the terms hereof.
(d) At the time of issuance of the Option Shares, Halo will be for
the preceding four months a reporting issuer, not in default
of the requirements of the SECURITIES ACT (British Columbia)
and no order ceasing or suspending trading in any securities
of Halo will have been issued or pending.
(e) Halo represents and warrants to Goldcorp that (i) the
outstanding common shares of Halo are listed and posted for
trading on the TSX Venture Exchange; and (ii) Halo has
obtained regulatory and TSX Venture Exchange conditional
pre-approval of the issuance and delivery of the Option
Shares.
7.5 CASH CONTRIBUTIONS. Subject to any election permitted by section 7.7
the Participants shall be obligated to contribute funds to approved Programs and
Budgets in proportion to their respective Participating Interests.
7.6 CHANGES IN PARTICIPATING INTERESTS. The Participants' Participating
Interests shall be changed as follows:
(a) In the event of an election by a Participant pursuant to
section 7.7 to not contribute to an approved Program and
Budget or contribute to Expenditures which are a part of an
approved Program and Budget less than the percentage reflected
by its then current Participating Interest; or
(b) In the event of default by a Participant in making its agreed
contribution to an approved Program and Budget; or
(c) In the event of an acquisition of less than all of the
Participating Interest of any Participant however arising.
7.7 VOLUNTARY REDUCTION IN PARTICIPATION. A Participant may elect not to
contribute to an approved Program and Budget or to limit its contributions
toward Expenditures which are a part of an approved Program and Budget to some
amount less than its respective Participating Interest (other than in respect of
the then current Program and Budget to the extent to which such Participant has
previously elected to contribute). If a Participant elects not to contribute to
an approved Program and Budget or elects to contribute to an approved Program
and Budget some amount toward Expenditures less than its Participating Interest,
the Participating Interest of that Participant shall be recalculated at the time
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of such election by dividing the sum of, (i) such Participant's Initial
Contribution set forth in section 7.1, (ii) the total of all of such
Participant's contributions toward the Venture's Expenditures to the date of
such election, and (iii) the amount, if any, that such Participant elects to
contribute toward the Venture's Expenditures in the approved Program and Budget,
by the sum of (i), (ii) and (iii) above for both Participants; and then
multiplying the result by 100. The Participating Interest of the other
Participant shall thereupon become the difference between 100% and the
recalculated Participating Interest of the Participant that made such election
pursuant to this section 7.7.
7.8 DEFAULT IN MEETING CASH CALLS.
(a) If a default by a Participant in paying a cash contribution
toward an approved Program and Budget for which a Participant
has agreed to contribute is not cured within 15 days after
notice from the Manager to such defaulting Participant of the
default, the defaulting Participant shall have until the date
that is 30 days after the date of receipt of such notice to
cure the default by paying the Manager an amount equal to the
amount of the cash contribution for which the Participant is
in default plus interest calculated at the Prime Rate plus two
percent calculated from the date of such default to the date
of payment (in the aggregate the "Penalty Amount"). During the
period of default commencing after the initial 15-day period,
the Manager shall be entitled to any proceeds from the
defaulting Participant's share of Products during such 30 day
period to fund the required cash call up to a maximum of the
Penalty Amount. If such proceeds are sufficient to pay the
entire Penalty Amount, the defaulting Participant shall be
deemed to have cured the default. If such proceeds are
insufficient to pay the entire Penalty Amount, the defaulting
Participant may cure the default by paying to the Manager, the
difference between the Penalty Amount and the amount received
from such proceeds within the 30-day period for curing such
default.
(b) If a Participant defaults in paying a cash contribution
pursuant to this Agreement then, in its sole discretion, the
non-defaulting Participant may advance the defaulted amount on
behalf of the defaulting Participant and treat such amount,
together with accrued interest thereon, as a demand loan
bearing interest at the Prime Rate plus two percent from the
date of such advance until repaid. Failure by the defaulting
Participant to repay the loan upon demand shall be a default
in paying a cash contribution under this Agreement.
(c) In the event of the failure of a Participant to cure a default
in paying a cash contribution in accordance with the terms of
sections 7.8(a) and (b) above, then the defaulting
Participant's Participating Interest shall be diluted in
accordance with section 7.7 above.
7.9 ELIMINATION OF MINORITY INTEREST. Upon the dilution of a Participating
Interest to less than 10%, such Participating Interest shall convert to a 1.5%
Net Smelter Returns Royalty interest and the Participant whose Participating
Interest is so converted shall be entitled to receive ongoing royalty payments
equal to 1.5% of net smelter returns as calculated and paid in accordance with
the terms set out in Schedule "IV", and subject as set out in section 7.10
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below, such Participant shall be relieved of all obligations to contribute to
Programs and Budgets, shall be relieved of its share of any liabilities, costs,
penalty or fine arising out of Operations conducted after such conversion and
shall forfeit all of its rights under this Agreement, including the right to
have its representatives appointed as members of the Management Committee, the
right to receive notice of and to attend at Management Committee Meetings, the
right to become Manager, and the right to receive and participate in Feasibility
Studies and Programs and Budgets, except for the rights under this section 7.9
and Schedule "IV" attached hereto.
7.10 CONTINUING LIABILITIES UPON ADJUSTMENT OF PARTICIPATING INTERESTS. Any
reduction or conversion of a Participant's Participating Interest under this
Article 7 shall not relieve such Participant of its share of any liability,
cost, penalty or fine arising out of Operations conducted prior to such
reduction provided that notwithstanding the foregoing, upon the conversion of a
Participating interest to a Net Smelter Returns Royalty interest pursuant to
section 7.9, the holder of such Net Smelter Returns Royalty interest shall not
be obligated to pay or incur any expense or liability related to the costs of
the closure of any mine or processing facility located on the Property or
related to rehabilitation or reclamation of the Property upon the closure of
such mine or processing facility located on the Property. For the purposes of
this Article 7, such Participant's share of such liability, cost, penalty or
fine shall be equal to its Participating Interest at the time the liability,
cost, penalty or fine was incurred and shall continue thereafter to be equal to
its Participating Interest at the time such liability, cost, penalty or fine was
incurred. The increased Participating Interest accruing to a Participant as a
result of the reduction of another Participant's Participating Interest shall be
free of Encumbrances other than those existing at the date of this Agreement or
those arising out of Operations or to which both Participants have given their
written consent. At any time upon the request of any other Participant, a
Participant whose Participating Interest has been adjusted, shall execute and
acknowledge such instruments and perform such acts as may be necessary to
evidence such adjustment, including in such form as may be necessary for
recording or registering notice of such adjustment in the relevant public
offices of all Governmental Authorities having jurisdiction.
8. MANAGEMENT COMMITTEE
8.1 ORGANIZATION AND COMPOSITION. The Participants hereby establish a
Management Committee to determine overall policies, objectives, procedures,
methods and actions under this Agreement. The Management Committee shall be
constituted as at the Effective Date. The Management Committee shall consist of
two members appointed by each of the Participants. 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 of the Management Committee. Appointments
shall be made or changed by notice to the other Participant.
8.2 DECISION. Each Participant acting through its appointed members shall
have the number of votes on the Management Committee equal to its Participating
Interest. Unless otherwise provided in this Agreement, decisions of the
Management Committee shall be determined by a majority vote and the Manager
shall have a tie or casting vote.
8.3 MEETING. The Management Committee shall hold regular meetings at least
every three months in Vancouver, British Columbia or at such other locations
agreed to by the Participants. The Manager shall give 30 days' advance notice to
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the Participants of such regular meetings. Additionally, either Participant may
call a special meeting upon 15 days' advance notice to the Manager and the other
Participant. In the case of an emergency, reasonable notice of a special meeting
shall suffice. A quorum of the Management Committee shall consist of at least
one member representing each Participant present at a duly called meeting of the
Management Committee or in attendance by telephone conference. Each notice of a
meeting shall include an itemized agenda 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 both
Participants. The Manager shall prepare detailed minutes of all meetings and
shall distribute copies of such minutes to the Participants within 15 days after
each meeting. Failure by a Participant to sign or furnish written detailed
notice of objection to the minutes within 15 days after receipt from the Manager
shall be deemed acceptance of such minutes by the Participants. When signed or
deemed accepted by both Participants, the minutes 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.
8.4 ACTION WITHOUT MEETING. In lieu of meetings, the Management Committee
may hold telephone conference meetings provided that all decisions of the
Management Committee are immediately confirmed in minutes in writing by the
Manager and distributed for review, objection and accepted by the Participants
in accordance with section 8.3.
8.5 MATTERS REQUIRING APPROVAL. Except as otherwise provided by this
Agreement, the Management Committee shall have exclusive authority to determine
all management matters related to this Agreement.
8.6 MATTERS REQUIRING UNANIMOUS APPROVAL. Notwithstanding any other
provision of this Agreement the following matters shall require the unanimous
approval of the Management Committee and the Manager shall not have a tie or
casting vote with respect to such items:
(a) Changing the fiscal year end of the Venture.
(b) Selling or otherwise disposing of all or substantially all of
the Assets or any Asset or Assets or Surplus Material in
accordance with Section IV of the Accounting Procedure.
(c) Entering into any transaction with an Affiliate of a
Participant or any party related to a Participant other than
on an arm's length basis.
(d) Entering into any acquisition or investment other than in the
ordinary course of the business of the Venture.
(e) Executing and delivering any agreement with respect to the
disposition or encumbrance of all or any part of the Property.
(f) Carrying on any business other than Operations.
- 16 -
(g) Giving financial assistance to any Participant or Affiliate of
a Participant or any associate or other related party thereof.
(h) Commencing any litigious or administrative claim for an amount
in excess of $50,000.00.
(i) Amending this Agreement.
(j) Appointing the Auditor.
8.7 PARTICIPANT MAY REQUIRE OPERATIONS TO BE SHUT DOWN. Either Participant
shall be entitled, by notice in writing to the Manager and the other
Participant, to require that Operations be suspended if such Participant can
demonstrate (as set forth in such notice) that its proportionate share of
Expenditures based on its Participating Interest has exceeded its proceeds from
the sale of Products for a period of three consecutive months. If such notice is
given to the Manager, the Manager shall prepare a Program and Budget for placing
the mine on care and maintenance and shall convene a meeting of the Management
Committee to approve such Program and Budget.
8.8 RESUMPTION OF OPERATIONS. If at any time after the suspension of
Operations pursuant to section 8.7, the Manager determines that the mine can be
placed back into Commercial Production with the Participants' proportionate
share of Expenditures based on its Participating Interest being not more than
80% of the proceeds which they should realize on the sale of their share of
Products, the Manager shall prepare a Program and Budget for the resumption of
Operations and shall convene a meeting of the Management Committee to approve
such Program and Budget.
8.9 MINE MAINTENANCE PLAN. In addition to the rights of the Participants
under section 8.7, the Manager may, at any time subsequent to the commencement
of Commercial Production, on at least 30 days notice to all Participants,
recommend that the Management Committee approve the suspension of Mining
Operations. In considering whether to make such a recommendation, the Manager
will take into account good and reasonable mining, environmental and commercial
reasons for making the recommendations but will not make a recommendation on the
basis of matters particular to the party acting as Manager. The Manager's
recommendation will include a Program and Budget (the "Mine Maintenance Plan"),
in reasonable detail, of the activities to be performed to maintain the Assets
during the period of suspension and the Expenditures to be incurred. The
Management Committee may:
(a) if the Mine Maintenance Plan provides for a suspension of 180
days or less, then by simple majority; or
(b) if the Mine Maintenance Plan provides for a suspension of more
than 180 days, then by unanimous approval,
approve the Mine Maintenance Plan with such changes as the Management Committee
deems necessary. If the Management Committee approves the Mine Maintenance Plan,
with or without modifications, then the Participants will be committed to pay
their proportionate share of Expenditures incurred in connection with the Mine
- 17 -
Maintenance Plan based on their then Participating Interest. The Manager will
call a meeting of the Management Committee upon the reasons for the suspension
of Mining Operations ceasing to have effect and, in any event, within 90 days of
approval of the Mine Maintenance Plan. The Management Committee may cause Mining
Operations to be resumed at any time (for greater certainty, by unanimous
approval if the suspension has lasted for more than 180 days) and will take all
reasonable steps to cause Mining Operations to be resumed upon the reasons for
the suspension of Mining Operations ceasing to have effect.
8.10 MINE CLOSURE PLAN. The Manager may, at any time following a period of
at least 180 days during which Mining Operations have been suspended, upon at
least 30 days notice to all Participants, recommend that the Management
Committee approve the permanent termination of Mining Operations. The Manager's
recommendation will include a Program and Budget (the "Mine Closure Plan"), in
reasonable detail, of the activities to be performed to cease Mining Operations
and reclaim the Property and the estimated Expenditures to implement the Mine
Closure Plan. The Management Committee may approve the Manager's recommendation
by unanimous approval with such changes to the Mine Closure Plan as the
Management Committee deems necessary.
8.11 IMPLEMENTATION OF MINE CLOSURE PLAN. If the Management Committee
unanimously approves the Mine Closure Plan, then the Manager will:
(a) implement the Mine Closure Plan, whereupon the Participants
will be committed to pay their proportionate share of the
Expenditures required to implement that Mine Closure Plan
based on their then Participating Interest; and
(b) remove, sell and dispose of such Assets as may reasonably be
removed and disposed of profitably and such other Assets as
the Manager may be required to remove pursuant to applicable
environmental and mining laws.
8.12 NON-APPROVAL OF MINE CLOSURE PLAN. If the Management Committee does not
approve the Mine Closure Plan, then the Manager will, unless obliged to
implement the Mine Closure Plan by order or direction of applicable Government
Authorities, maintain Mining Operations in accordance with the Mine Maintenance
Plan as approved pursuant to Section 8.9. If the Mining Operations have been
suspended for a period of one year or more and the Management Committee does not
approve a Mine Closure Plan, either Participant may refer the matter to
arbitration in accordance with section 15.1.
9. MANAGER
9.1 APPOINTMENT. Commencing on the Effective Date, and provided that Halo
holds a minimum 50% Participating Interest in the Venture, Halo shall be
entitled to be and is hereby appointed to be the Manager of the Venture, which
Manager shall have overall management responsibility for Operations, and
Goldcorp hereby agrees to such appointment. In the event that Goldcorp exercises
the Back-in Right, and provided that Goldcorp holds a minimum 50% Participating
Interest in the Venture, Goldcorp shall be entitled to be and is hereby
appointed to be the Manager of the Venture. Any other Participant shall be
entitled to be Manager if such other Participant shall acquire a minimum 51%
Participating Interest in the Venture.
- 18 -
9.2 POWERS AND DUTIES OF MANAGER. Subject to the general oversight and
direction of the Management Committee, the Manager is vested with the full
authority to manage and carry out the day to day management of the Property and
to conduct all Operations pursuant to the terms of this Agreement and the most
recently approved Program and Budget. The Manager agrees to carry out its duties
as Manager itself or through its Agents in accordance with the terms and intent
of this Agreement and on behalf of and for the account of the Participants in
accordance with their Participating Interests. Without limiting the generality
of the foregoing, the Manager shall have the following powers and duties:
(a) The Manager shall manage, direct and control Operations.
(b) The Manager shall implement the decisions of the Management
Committee, make all expenditures necessary to carry out
approved Programs and promptly advise the Management Committee
if it lacks sufficient funds to carry out its responsibilities
under this Agreement.
(c) The Manager shall: (i) purchase or otherwise acquire all
material, supplies, equipment, water, utility and
transportation services required for Operations on the best
terms available, taking into account all of the circumstances;
(ii) obtain such customary warranties and guarantees as are
available in connection with such purchases and acquisitions;
and (iii) keep the Assets free and clear of all Encumbrances
except for those existing at the time of or created concurrent
with the acquisition of such Assets, the terms of any leases
and permits related to the Property and those encumbrances
contemplated in this Agreement, any construction, mechanic's
or materialmen's liens which shall be released or discharged
in a diligent manner by the Manager or Encumbrances
specifically approved by the Management Committee.
(d) The Manager shall preserve and protect title to the Property
at all times (including the renewal of any and all related
leases, mining claims, permits, licences or other approvals or
grants of interest as required) and shall conduct such title
examinations and cure such title defects as may be advisable
in the reasonable judgment of the Manager.
(e) The Manager shall: (i) make or arrange for all payments
required by all leases, licenses, permits, contracts and other
agreements related to the Assets; (ii) pay or arrange for
payment of 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 court 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, but in no event shall the Manager permit
or allow title to the Assets to be lost as the result of the
non-payment of any taxes, assessments or like charges); and
(iii) do or cause to be done all other acts reasonably
- 19 -
necessary to maintain the Assets and to maintain the title
thereto in good standing including, without limitation, the
performance of all assessment and other Work that is required
by applicable law.
(f) The Manager shall: (i) apply for all permits, licenses and
approvals necessary to conduct Operations; (ii) use reasonable
best efforts to comply with all laws, regulations, orders or
policy directions of any Governmental Authority having
jurisdiction; (iii) notify promptly the Management Committee
of any allegations of substantial violation of the foregoing;
and (iv) prepare and file all reports or notices required for
or arising out of the conduct of Operations.
(g) With respect to any joint sale or other joint disposition of
Products that may be agreed to pursuant to section 12.1,
procure and negotiate on behalf of the Participants such
contracts as are required, deposit the proceeds from such
sales to the account of the Venture to the extent applicable
under the terms of this Agreement and distribute the surplus
proceeds to the Participants in accordance with their
respective Participating Interests.
(h) Invest all cash contributions and other revenues of the
Venture for the benefit of the Venture and the participants
and any undistributed proceeds of the sale of Product for the
benefit of the Participants on such basis as will maximize the
returns on such investments but will enable the Manager and
the Venture to comply with their contractual obligations and
to exercise their contractual rights, including pursuant to
the terms of this Agreement.
(i) The Manager shall prosecute and defend, but shall not initiate
without the consent of the Management Committee, all
litigation or administrative proceedings arising out of the
conduct of Operations. The other Participant shall have the
right to participate in such litigation or administrative
proceedings at its own expense. The other Participant shall
approve in advance any settlement of litigation or
administrative proceedings involving payments, commitments or
obligations of the Venture in excess of $50,000.00.
(j) The Manager shall obtain or arrange and keep in force
insurance for the benefit of the Participants, including
comprehensive general public liability and property damage
insurance and automobile insurance, insuring against claims
for bodily injury or death or property damage arising out of
or resulting from Operations, in such amounts and covering
such claims, losses and risks as will adequately protect the
interests of the Participants, including by enabling the
Manager to repair or cause to be repaired or rebuilt all
Facilities on the Property and to continue operations of any
mine or mineral processing facility relating thereto, all in
accordance with sound mining practice and customary industry
standards.
(k) The Manager may dispose of Assets (other than the Property or
part thereof) whether by abandonment, surrender or Transfer in
the ordinary course of business but subject to the terms of
this Agreement, including the Accounting Procedure. The
- 20 -
Manager shall not enter into any sales contracts or
commitments for Product without the prior authorization of
each Participant in respect of its share of Product.
(l) The Manager shall prepare and shall file after approval of the
Management Committee any tax returns or other tax filings
required to be filed on behalf of the Venture. With respect to
the Goods and Services Tax (the "GST") under Part IX of the
EXCISE TAX ACT S.C. 1990, c.45, (the "Act"), the Manager shall
account for all GST in respect of any supplies made to or by
the Venture. The Participants shall be registrants and will
each execute and provide to the Manager a joint venture
election (the "Election") pursuant to section 273 of the Act,
confirming that the Manager shall account for all GST in
respect of any supplies made to or by the Venture and the
Manager shall file the Election with Revenue Canada, Customs
and Excise along with the Manager's return as and when
required under Part IX and section 273 of the Act. Accounting
for GST shall include paying GST on all taxable purchases and
claiming the corresponding input tax credits on behalf of the
Venture.
(m) The Manager shall have the right to carry out its
responsibilities hereunder through its Agents, but shall be
and remain liable during the term of this Agreement for any
acts or omissions of its Agents.
(n) The Manager shall keep and maintain all required accounting
and financial records pursuant to Canadian generally accepted
accounting principles, the Accounting Procedure and in
accordance with customary accounting practices in the mining
industry.
(o) The Manager shall keep the Management Committee advised of all
Operations by submitting in writing to the Management
Committee: (i) monthly progress reports in respect of
Operations which reports shall include statements of
Expenditures and comparisons of such Expenditures to the
adopted Program and Budget and all other pertinent data
including, without limitation, drill and assay results, survey
results, geological and reserve figures and production
reports; (ii) periodic summaries of data acquired as
reasonably required by the Participants; (iii) copies of all
reports concerning Operations, including the immediate
delivery to the Management Committee of all significant
results; (iv) a detailed final report within 30 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 the Program;
and (v) such other reports as the Management Committee may
request. At all reasonable times the Manager shall provide the
Management Committee or the representative of any Participant
access to and the right to 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 other Participant, at its sole risk
and expense and subject to reasonable safety regulations, to
inspect the Assets and Operations at all reasonable times,
provided that such inspection does not unreasonably interfere
with Operations.
- 21 -
(p) The Manager shall undertake all other activities reasonably
necessary to fulfill its obligations as Manager under this
Agreement and shall undertake and is hereby empowered on
behalf of the Venture to take all such other actions and do
all such other things as are reasonably necessary to advance
and conduct the business of the Venture.
(q) The Manager shall keep the financial and accounting records,
to the extent and in such detail and at such places as the
Management Committee may determine, such books and records
pertaining to the Venture and Operations and to the costs and
expenses thereof and the performance of the Manager hereunder,
and to the receipt and disposition of proceeds from any joint
sales agreed to pursuant to section 12.1, as will properly
reflect, in accordance with generally accepted accounting
principles in Canada, to the extent applicable and not in
conflict with the provisions hereof, all transactions of the
Manager in relation to the Venture and Operations and the
performance of its duties hereunder and all costs paid by it
in the performance thereof and for which it will seek
reimbursement hereunder, all of which books and records shall
be made available to each of the Participants and the
Management Committee, upon reasonable notice and at all
reasonable times, for inspection, audit and reproduction. As
soon as possible after the close of each fiscal year of the
Venture, all the books and accounts of the Manager relating to
the Venture and Operations for such fiscal year of the Venture
shall be audited by the Auditor at the expense of the Venture
and Operations and copies of the report of the Auditor shall
be provided to each Participant within 60 days of each fiscal
year end. Any claim of a Participant against the Manager, and
vice versa, relating to any transactions during the period
covered by such audit shall be made within two years after the
receipt of such audit report by the Participant.
(r) Upon termination of the Venture, the Manager shall, at the
cost and expense of the Venture, be responsible for the
rehabilitation and reclamation of the Property as required by
applicable environmental and mining laws and to the standard
required by all Governmental Authorities having jurisdiction
including, without limitation, filing or posting or causing to
be filed or posted, all letters of credit, surety, bonds or
other forms of security for all reclamation or rehabilitation
obligations of the Venture as may be required by any
Governmental Authority having jurisdiction.
9.3 STANDARD OF CARE. The Manager shall conduct all Operations in a good,
workmanlike and efficient manner to the best of its ability, skill and judgment
in accordance with sound mining and other applicable industry standards and
practices and, in accordance with all applicable laws of all Governmental
Authorities having jurisdiction and in compliance with the terms and provisions
of all leases, licenses, permits, contracts and other agreements relating to the
Property.
9.4 RESIGNATION; DEEMED OFFER TO RESIGN. The Manager may resign as Manager
of the Venture upon 90 days prior written notice to the other Participant, in
which case the other Participant may elect to become the new Manager by notice
to the resigning Participant to such effect within 60 days after receipt of the
notice of resignation. Such appointment of the new Manager shall take effect
immediately upon the resignation of the outgoing Manager taking effect. If any
- 22 -
of the following shall occur, the Manager shall be deemed to have offered to
resign as Manager, which offer shall be rejected or accepted by the other
Participant within 90 days following such deemed offer (and if accepted the
other Participant may elect to become the new Manager by notice to the resigning
Participant) and in the absence of written acceptance of such resignation by the
other Participant within such 90 day period, the Manager shall continue to be
Manager hereunder:
(a) The Participating Interest of the Manager becomes less than
50%;
(b) The Manager fails to perform a material obligation imposed
upon the Manager under this Agreement and fails to commence
curing or contesting such default within 30 days after notice
from the other Participant demanding performance of such
material obligation; or
(c) The Manager shall generally not pay its debts as such debts
become due or has committed an act of bankruptcy, is
insolvent, has proposed a compromising arrangement to its
creditors generally, has had any petition for a receiving
order in bankruptcy filed against it, has made a voluntary
assignment in bankruptcy, has taken proceedings with respect
to a compromise or arrangement, has taken proceeding to have
itself declared bankrupt or wound-up, has taken proceeding to
have a receiver appointed of any part of its assets, has had
any encumbrancer take possession of any of its property and
has had any execution or distress become enforceable or become
levied upon any of its property.
9.5 PAYMENTS TO MANAGER. The Manager shall be reimbursed for its costs
hereunder in accordance with the Accounting Procedure.
9.6 TRANSACTIONS WITH AFFILIATES. If the Manager engages Affiliates to
provide services hereunder, it shall do so on terms no less favourable to such
Affiliate than would be the case with unrelated persons in arm's-length
transactions.
10. PROGRAMS AND BUDGETS
10.1 OPERATIONS PURSUANT TO PROGRAMS AND BUDGETS. Except as otherwise
provided in section 10.9, Operations shall be conducted, Expenditures shall be
made or incurred and Assets shall be acquired only pursuant to approved Programs
and Budgets.
10.2 PRESENTATION OF PROGRAMS AND BUDGETS. In each calendar year during the
Venture, the Manager shall submit to the Participants, a proposed Program and
Budget on or before October 31, covering the period from January 1 to December
31 of the following year or such other period as the Management Committee may
unanimously determine having regard to, INTER ALIA, the then current fiscal year
end of the Venture. Each approved Program and Budget shall, regardless of the
term of such Program and Budget, be reviewed at least once a year at a regular
meeting of the Management Committee. If at any time during the term of the
Venture no Work is conducted on the Property during any 18 month period, the
non-Manager Participant shall have the right to submit to the Manager a proposed
Program and Budget for a minimum period of 12 months (the "Non-Manager's Program
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and Budget"). The Non-Manager's Program and Budget shall be reviewed at a
meeting of the Management Committee, which meeting shall be called forthwith for
such purpose pursuant to section 8.3.
10.3 REVIEW AND APPROVAL OF PROPOSED PROGRAMS AND BUDGETS. Within 30 days
after submission of a proposed Program and Budget or a Non-Manager's Program and
Budget, each Participant shall submit to the Management Committee:
(a) Notice that the Participant approves the proposed Program and
Budget or the Non-Manager's Program and Budget, as the case
may be; or
(b) Proposed modifications of the proposed Program and Budget or
the Non-Manager's Program and Budget, as the case may be; or
(c) Notice that the Participant rejects the proposed Program and
Budget or the proposed Non-Manager's Program and Budget, as
the case may be.
If a Participant fails to give any of the foregoing responses within such 30 day
period, such failure shall be deemed to be an approval by the Participant of the
Manager's proposed Program and Budget or the Non-Manager's Program and Budget.
If a Participant makes a timely submission to the Management Committee pursuant
to section 10.3(b) or (c), then the Management Committee shall meet to consider
and develop a Program and Budget acceptable to the Participants. If the
Management Committee does not unanimously approve a Program and Budget or a
Non-Manager's Program and Budget within 30 days after the Manager's receipt of a
notice pursuant to section 10.3(b) or (c), a proposed Program and Budget or
Non-Manager's Program and Budget may be approved by a majority vote of the
Management Committee. If a non-Manager's Program and Budget is not approved or
modified and approved by the Management Committee, then the Non-Manager who has
proposed the Non-Manager's Program and Budget may submit the matter to
arbitration pursuant to Article 15 for determination as to whether such
non-approval is reasonable in the circumstances. If a Non-Manager's Program and
Budget is approved by the Management Committee, then the same shall be deemed to
be a Program and Budget for the purposes of this Agreement.
10.4 PREPARATION OF FEASIBILITY STUDY. At the request of the Management
Committee, the Manager shall prepare or have prepared and submit (i) a
Feasibility Study, or (ii) a pre-Feasibility Study (which study shall be based
on such terms as the Management Committee shall determine), the purpose of which
shall be to establish whether a mineralized deposit on the Property is of
sufficient size and grade to justify development of a mine and such other
related facilities as may be desirable, including, a beneficiation plant for
processing Products.
10.5 REQUEST FOR FEASIBILITY STUDY. Any Participant may request the
Management Committee to instruct the Manager to prepare or have prepared (i) a
Feasibility Study or (ii) a pre-Feasibility Study (which study shall be based on
such terms as such Participant shall propose), prepared when, in the reasonable
good faith opinion of such Participant, sufficient mineralization has been found
to justify preparation of a Feasibility Study or pre-Feasibility Study, and if
the Management Committee fails or refuses to direct the Manager to prepare such
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Feasibility Study or pre-Feasibility Study, such Participant may at its own
expense, prepare and submit such Feasibility Study or pre-Feasibility Study
along with its recommendation to the Management Committee.
10.6 APPROVAL OF FEASIBILITY STUDY. The Management Committee shall have
ninety (90) days after receipt of any Feasibility Study or pre-Feasibility Study
and the recommendations of the Participant commissioning or conducting such
Feasibility Study or pre-Feasibility Study to meet and consider, and to approve
or reject, the Feasibility Study or pre-Feasibility Study and its
recommendations. If the Management Committee approves or makes substantial use
of the Feasibility Study or pre-Feasibility Study prepared by a non-Manager in
its decision to proceed to place the Property into Commercial Production, it
shall reimburse the non-Manager for the reasonable costs of preparing the same.
If the Management Committee rejects a Feasibility Study or pre-Feasibility
Study, it may in its discretion direct the Manager to perform or have performed
such additional work as the Management Committee deems necessary to revise the
Feasibility Study or pre-Feasibility Study. In such event, the Manager shall
promptly perform such additional work, revise the Feasibility Study or
pre-Feasibility Study accordingly and submit it to the Management Committee for
approval or rejection.
10.7 ELECTION TO PARTICIPATE. By notice to the Management Committee within
20 days after the final vote of the Management Committee approving a Program and
Budget, a Participant may elect to contribute to Expenditures which are a part
of such Program and Budget an amount less than its Participating Interest, or to
not contribute to such Expenditures at all, in which case the Participating
Interests shall be recalculated as provided in section 7.4. If a Participant
fails to so notify the Management Committee, the Participant shall be deemed to
have elected to contribute to such Program and Budget, including Capital
Expenditures, in proportion to its respective Participating Interest as of the
beginning of the period covered by the Program and Budget.
10.8 BUDGET DECREASES. If a Program and Budget is subsequently modified to
decrease Expenditures by 15% or more, a non-contributing or partially
contributing Participant shall have the right to contribute the difference
between the amount, if any, it has already contributed and its full
proportionate share, based on its Participating Interest prior to the reduction,
of the modified Program and Budget and thereby avoid any reduction in its
Participating Interest. At such time as the Manager becomes aware that
expenditures for the Budget shall be 85% or less than as originally adopted, the
Manager shall notify the non-contributing or partially-contributing Participant.
Within 30 days thereafter the non-contributing or partially-contributing
Participant may notify the Manager of its election to contribute to its full
share of the modified Program and Budget. Such notice shall include full payment
of the non-contributing or partially-contributing Participant's share of the
modified Program and Budget to the date of the payment.
10.9 BUDGET OVERRUNS; PROGRAM CHANGES. The Manager shall immediately notify
the Management Committee of any departure from an adopted Program and Budget of
an amount equal to ten percent or more of the original budgeted amount of such
Program. The Manager may not exceed an approved Program or Budget by more than
ten percent without the unanimous approval of the Management Committee and the
Manager shall not have a tie or casting vote in respect thereof. If the Manager
exceeds an approved Program or Budget by more than ten percent without the
unanimous approval of the Management Committee; (i) the Manager shall be solely
responsible for Exploration Expenditures which exceed the approved Program or
Budget; (ii) the Manager shall advance the non-Manager's proportionate share of
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Development Expenditures which exceed the approved Program or Budget and the
Manager shall be entitled to receive, for its own benefit, interest at an annual
rate equal to the Prime Rate plus one percent calculated from the date of such
advance until the date of repayment and shall be entitled to repayment by the
non-Manager of such advances on the date that is one year from the date of each
such advance; (iii) the Manager shall advance the non-Manager's proportionate
share of Mining Expenditures which exceed the approved Program or Budget and the
Manager shall be entitled to repayment by Goldcorp of such advances 120 days
after the date of each advance.
10.10 EMERGENCY OR UNEXPECTED EXPENDITURES. In the case of an 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 all laws, regulations,
orders or policy directives of any Governmental Authority having jurisdiction.
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 provided that the Participant that is not the Manager shall have 120
days to contribute its proportionate share of such excess costs.
11. ACCOUNTS AND SETTLEMENTS
11.1 MONTHLY STATEMENTS. Within 30 days of the end of each calendar month,
the Manager shall deliver to each Participant financial statements and other
relevant information reflecting in reasonable detail all transactions of the
Venture during the preceding month.
11.2 CASH CALLS. The Manager shall, at least seven days but not more than 21
days, prior to the start of each calendar month present to each Participant an
invoice based on the most recently approved Program and Budget to each
Participant for their proportionate share based on their then Participating
Interest of:
(i) if advances for the prior month are less than actual
Expenditures, an amount equal to actual Expenditures less
advances for the prior month; and
(ii) estimated Expenditures for the succeeding month; and
(iii) estimated Expenditures for the second succeeding month to
maintain a minimum 30 day cash balance;
less:
(iv) if advances for the prior month are greater than actual
Expenditures, an amount equal to advances less actual
Expenditures for the prior month; and
(v) estimated Expenditures for the second succeeding month from
the prior month billing; and
(vi) interest or other revenues received by the Manager for the
account of the Venture; and
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(vii) any cash receipts from the sale of Assets received by the
Manager for the account of the Venture;
plus or less:
(viii) any other adjustment necessary to comply with this Agreement.
Where a monthly invoicing results in a negative amount the Manager shall at the
sole option of each Participant, refund to the Participants their proportionate
share of the over-contribution or apply such amount as a credit to amounts
invoiced for the next ensuing month. The Manager shall use all reasonable
efforts to maintain at all times a minimum cash balance approximately equal to
the estimated disbursements for the next 60 days.
11.3 SPECIAL CASH CALLS. The Manager may present an invoice at any time to
each Participant for significant Expenditures requiring payment in a timely
manner that were unforeseen at the time of the prior monthly invoicing and for
which such Participant is responsible pursuant to the terms of this Agreement.
11.4 PAYMENT OF CASH CALLS. Each Participant shall advance to the Manager
its proportionate share of the invoicing within 15 days of receipt of the
invoicing.
11.5 FAILURE TO MEET CASH CALLS. A Participant that fails to meet cash calls
in the amount and at the times specified in sections 11.2, 11.3 and 11.4
respectively shall be deemed to be in default of its obligations under this
Agreement and the amounts of the defaulted cash call shall bear interest from
the date due in accordance with section 7.5 and the non-defaulting Participant
shall have those rights, remedies and elections specified in section 7.5.
11.6 AUDITS AND ADJUSTMENTS. The financial records of the Venture shall be
audited annually by the Auditor. The Manager shall arrange to have the audit
report prepared and distributed to each Participant not later than 60 days after
the end of each fiscal year end. Each Participant shall also have the right to
audit the Venture's records on reasonable notice to the Manager and at its own
expense in accordance with the Accounting Procedure. All claims for adjustment
made as a result of audits must be made within twenty-four months of delivery of
the audit report to the Participants making the claim.
12. DISPOSITION OF PRODUCTS
12.1 DIVISION OF PRODUCTION. Each Participant shall take in kind and
separately dispose of its Participating Share of all Products produced by the
Venture from the Property at their highest state of beneficiation on the
Property, and for that purpose shall take delivery of its share of the Products
as the same are produced and placed in the storage facilities for the account of
such Participant. Individual ownership of its share of said Products shall pass
to each Participant concurrently with the taking of delivery thereof in kind.
Notwithstanding the foregoing, the Participants may, upon mutual agreement at
any time and from time to time, jointly sell or otherwise dispose of their
respective shares of the Products and make such arrangements in connection
therewith as they deem mutually advisable, without in any way causing them to be
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deemed to be in partnership. The proceeds from such joint sales shall be to the
account of the Participants in accordance with their Participating Shares or as
they may otherwise agree in writing.
12.2 LIENS. Each Participant shall have a lien on the other Participant's
share of Products to secure payment of such Participant's proportionate share of
Expenditures based on its Participating Interest. If a Participant defaults in
making a cash contribution in accordance with the terms of this Agreement, to
cure such default in accordance with section 7.8 or to repay a loan to the
non-defaulting Participant in accordance with section 7.8, then the
non-defaulting Participant may without limitation to its other rights at law, in
equity or under this Agreement:
(a) Elect to treat the default as an immediate and automatic
assignment to the non-defaulting Participant of the defaulting
Participant's share of the Products and from and after the
non-defaulting Participant making such election, the
non-defaulting Participant may require the purchaser of the
defaulting Participant's share of Products to make payment
therefor to the non-defaulting Participant while the default
continues; and
(b) Enforce the lien created by the default in payment by taking
possession of all or any part of the defaulting Participant's
share of Products and selling the same. The proceeds of the
sale shall be firstly applied by the non-defaulting
Participant in payment of any Expenditures to be paid by the
defaulting Participant and not paid by it and any balance
remaining shall be paid to the defaulting Participant after
deducting reasonable costs of the sale. Any sale made
aforesaid shall be a perpetual bar both at law and in equity
against any claims to the Products sold by the defaulting
Participant and its assigns and against all other Persons
claiming the Products or any part or parcel thereof, sold as
aforesaid, from, through or under the defaulting Participant
or its assigns.
In the event that the value of such Products so assigned to the non-defaulting
Participant or the proceeds thereof are sufficient to cure a default or repay a
loan pursuant to the terms of section 7.8, the defaulting Participant shall be
deemed to be back in good standing under the terms of this Agreement.
12.3 FAILURE OF PARTICIPANT TO TAKE IN KIND. If after reasonable notice by
the Manager, a Participant fails to take in kind its share of Products, the
Manager shall have the right, but not the obligation, to purchase the
Participant's share of Products for its own account or to sell such share as
agent for the Participant on terms and conditions that are not less than the
then prevailing fair market value having regard to the quantity, advanced sales
and other applicable market conditions. The Manager shall facilitate the sale of
Products on behalf of each Participant on such terms as may be agreed in
writing. Subject to the terms of any 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 Product
in kind. The Manager shall be entitled to deduct from proceeds of any sale by it
for the account of a Participant reasonable expenses incurred in such a sale.
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13. WITHDRAWAL AND TERMINATION
13.1 TERMINATION BY EXPIRATION OR AGREEMENT. This Agreement shall terminate
as expressly provided in section 13.2 and additionally shall terminate by
written agreement of both Participants.
13.2 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 date shall be the later of the end of the then current
Program and Budget or 60 days after the date of the notice. Upon any such
withdrawal this Agreement shall terminate and the withdrawing Participant shall
be deemed to have transferred to the remaining Participant or those existing at
the date of this Agreement, all of its Participating Interest in the Assets and
in this Agreement without cost and free and clear of any and all Encumbrances
arising by, through or under such withdrawing Participant, except Permitted
Encumbrances and those to which both Participants have given their written
consent after the date of this Agreement, and subject to the terms and
conditions of all leases, permits, licences or other approvals related to the
Property. No withdrawal under this section 13.2 shall relieve the withdrawing
Participant of its share of liabilities, costs, penalties or fines to
Governmental Authority having jurisdiction or to third Persons (whether such
accrues before or after such withdrawal) arising out of Operations conducted
prior to such withdrawal. For the purposes of this section 13.2, the withdrawing
Participant's proportionate share of such liabilities shall be equal to its
Participating Interest at the time that the conduct of Operations giving rise to
such liability, cost, penalty or fine occurred.
13.3 CONTINUING OBLIGATIONS. On termination of this Agreement under section
13.1, but subject to section 13.2, the Participants shall each remain liable for
continuing obligations hereunder as set out herein 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.
13.4 DISPOSITION OF ASSETS ON TERMINATION. Promptly after termination of the
Venture and this Agreement, 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 capital 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 Persons 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 are
necessary to discharge continuing obligations or to purchase for the account of
Participants, all required letters of credit, surety bonds or other security for
the performance of such obligations as may be required by any Governmental
Authority having jurisdiction. The foregoing shall not be construed to include
the repayment of any Participant's capital contributions. Thereafter any
remaining cash and all other Assets shall be distributed to the Participants in
proportion to their respective Participating Interests, first in the ratio and
to the extent of their respective capital 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
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Participating Interest therein has been terminated pursuant to this Agreement
other than by conversion to a royalty interest in accordance with the terms of
this Agreement.
13.5 RIGHT TO DATA AFTER TERMINATION. Each withdrawing Participant under
section 13.2 shall be entitled to all information acquired in the conduct of the
Venture prior to such withdrawal and pursuant to any Work Plan of which the
withdrawing Participant has duly paid its Proportionate Share of costs and
expenses, including copies of maps, data and reports which can be reproduced and
which have not theretofore been furnished to such withdrawing Participant, but
such withdrawing Participant shall for a period of two years from the date of
such withdrawal or the completion of the aforementioned Work Plan, whichever is
the later, hold in strict confidence all information acquired by it in the
conduct of the Venture.
13.6 CONTINUING AUTHORITY. On termination of the Venture or the deemed
withdrawal of a Participant from the Venture or the withdrawal of a Participant
pursuant to section 13.2 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: (a) wind up
Operations; and (b) 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 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.
14. TRANSFER OF INTEREST
14.1 HALO'S RIGHTS TO TRANSFER. Halo may at any time after execution of this
Agreement Transfer all of its rights, title and interest in and to the Property
and under this Agreement to an Affiliate of Halo or, subject to sections 14.3
and 14.4 below, to a third party, provided Halo provides Goldcorp 30 days notice
of such Transfer and provided such Affiliate or third party shall have agreed in
writing with Goldcorp to be bound by the terms and conditions of this Agreement
and to perform all obligations of Halo hereunder. Notwithstanding such Transfer
to an Affiliate by Halo, Halo shall remain at all times liable for the due
performance of all covenants and obligations of Halo to be performed hereunder.
In the event Halo completes a Transfer to a third party in accordance with the
terms of this section 14.1 Halo shall be released from its obligations under
this Agreement to the extent such third party has agreed in writing to be bound
by and perform the obligations of Halo under this Agreement.
14.2 GOLDCORP'S RIGHT TO TRANSFER. Goldcorp may at any time after execution
of this Agreement Transfer all of its rights, title and interest in and to the
Property and under this Agreement to an Affiliate of Goldcorp or, subject to
sections 14.3 and 14.4 below, to a third party, provided Goldcorp provides Halo
30 days notice to such Transfer and provided such Affiliate or third party shall
have agreed in writing with Halo to be bound by the terms and conditions of this
Agreement and to perform all obligations of Goldcorp hereunder. Notwithstanding
such Transfer by Goldcorp to an Affiliate of Goldcorp, Goldcorp shall remain at
all times liable for the due performance of all covenants and obligations of
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Goldcorp to be performed hereunder. In the event Goldcorp completes a Transfer
to a third party in accordance with the terms of this section 14.2 Goldcorp
shall be released from its obligations under this Agreement to the extent such
third party has agreed in writing to be bound by and perform the obligations of
Goldcorp under this Agreement.
14.3 RIGHT OF FIRST REFUSAL. Neither Participant shall transfer all or any
part of its Participating Interest or its interest in this Agreement other than
in accordance with this Article 14. If a Participant should desire to transfer
to a third party all or part of its Participating Interest and its interest in
this Agreement (the "Offered Interest"), it shall first have received an all
cash BONA FIDE written offer from an arm's length third party (the "Third Party
Offer") which Third Party Offer shall state the price and all other pertinent
terms and conditions upon which it wishes to complete the Transfer and the
Participant (the "Transferring Participant") shall have delivered a copy of the
Third Party Offer to the other Participant (the "Other Participant") together
with the Transferring Participant's own offer to sell to the Other Participant
on the same terms and conditions (the "Offer"). The Other Participant shall have
30 days from the date the Offer is delivered to it, to notify the Transferring
Participant whether it elects to acquire the Offered Interest at the price and
on the terms and conditions set forth in the Offer. If the Other Participant
does so elect the Transfer shall be consummated promptly after notice of such
election is delivered by the Other Participant. If the Other Participant fails
to so elect, within the period provided for in this section, the Transferring
Participant shall have 90 days following the expiration of such period to
consummate the Transfer to a third Person at a price and on terms no less
favourable than those offered in the Offer and in accordance with sections 14.1
or 14.2 above, as the case may be, in this section, the right of first refusal
herein contained shall be deemed to be revived. Any subsequent proposal to
Transfer a Participating Interest and an interest in this Agreement by the
Transferring Participant shall be conducted in accordance with the procedures
set forth in this section 14.3. If the Transferring Participant transfers the
Offered Interest pursuant to this section, it shall be released from all
liabilities and obligations under this Agreement provided that the third Person
delivers to the Other Participant an agreement in writing covenanting to be
bound by this Agreement and the terms hereof in accordance with sections 14.1 or
14.2, as the case may be.
14.4 LIMITATIONS ON FREE TRANSFERABILITY. The Transfer right of a
Participant in this Article 14 shall be subject to the following terms and
conditions:
(a) No transferee of all or part of the interest of a
Participating Interest or an interest in this Agreement shall
have the rights of a Participant unless and until the
transferring Participant has provided to the other Participant
notice of the Transfer and the transferee, as of the effective
date of the Transfer, has committed in writing to be bound by
the terms of this Agreement and the terms of the Venture to
the same extent as the transferring Participant.
(b) No Transfer permitted by this Article 14 shall relieve the
transferring Participant of its share of any liability, cost,
penalty or fine whether accruing before or after such
Transfer, which arises out of Operations conducted prior to
such Transfer.
(c) The transferring Participant and the transferee shall bear all
tax consequences of the Transfer.
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14.5 RESTRICTIONS ON MORTGAGES.
(a) Other than as set out below neither Party shall mortgage,
pledge, charge, hypothecate or otherwise encumber its
Participating Interest or any part thereof without the
approval of the other Party.
(b) Notwithstanding the provisions of subparagraph 14.5(a) above,
each of the Parties shall be entitled to mortgage, pledge,
hypothecate or otherwise encumber its Participating Interest
provided that the proceeds of such mortgage, charge, pledge or
hypothec are applied by such Party to fund its participation
in Programs and Budgets pursuant to this Agreement and then
only if the holder of the mortgage, pledge, charge,
hypothecation or other encumbrance shall have agreed in
writing with the other Participant upon realization of its
security to be bound by the provisions of this Agreement,
including this Article 14, and shall have agreed in writing
with the other Participant to require any purchaser of the
Participating Interest from it to be bound by the terms of
this Agreement.
15. ARBITRATION
15.1 BINDING ARBITRATION. Any matter in this Agreement in dispute between
the Parties which has not been resolved by the Parties within fifteen (15) days
of the delivery of notice by either Party of such dispute shall be referred to
binding arbitration. Such referral to binding arbitration shall be to a single
arbitrator pursuant to the ARBITRATIONS ACT, 1991 (Ontario) and its successor
legislation, which act shall govern such arbitration proceeding in accordance
with its terms except to the extent modified by the rules for arbitration set
out in Schedule "V". Such arbitrator shall be qualified by education and
experience to determine the matter in dispute. The determination of such
arbitrator shall be final and binding upon the Parties hereto and the costs of
such arbitration shall be as determined by the arbitrator. The Parties covenant
that they shall conduct all aspects of such arbitration having regard at all
times to expediting the final resolution of such arbitration.
16. FORCE MAJEURE
16.1 FORCE MAJEURE. Time shall be of the essence of this Agreement, provided
however that notwithstanding anything to the contrary contained herein, if
either Party should at any time or times during the currency of this Agreement
be delayed in or prevented from complying with this Agreement by reason of wars,
acts of God, strike, lockouts or other labour disputes, inability to access its
place of business or the Property (other than the inability to access the
Property because of the seasonality of weather conditions for which a Party has
not properly or adequately planned), acts of public insurrection, riots, fire,
storm, flood, explosion, government restriction, failure to obtain any approvals
required from any Governmental Authority having jurisdiction (but only in the
circumstances where the Manager has filed timely and complete applications for
approval from such Governmental Authorities having jurisdiction), including
environmental protection agencies, interference of persons primarily concerned
about environmental issues or native rights groups or other causes whether of
the kind enumerated above or otherwise which are not reasonably within the
control of the applicable Party, but excluding for greater certainty,
unavailability of funds, the period of all such delays resulting from such
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causes or any of them, shall be excluded in computing the time within which
anything required or permitted by the applicable Party to be done, is to be done
hereunder, and the time within which anything is to be done hereunder shall be
extended by the total period of all such delays. Nothing contained in this
Article shall require the applicable Party to settle any labour dispute or to
test the constitutionality of any enacted law. In the event that any Party
asserts that an event of force majeure has occurred, it shall complete such
reasonable actions or cause such reasonable actions to be completed as may be
necessary to correct or terminate the alleged event of force majeure and give
notice in writing to the other Party specifying the following:
(a) the cause and nature of the alleged event of force majeure;
(b) a summary of the action it or its Agents have taken to the
date of such notice to correct the alleged event of force
majeure;
(c) confirmation as to all acts, actions and things done by it or
its Agents to terminate the event of force majeure; and
(d) the reasonably expected duration of the period of force
majeure.
Any Party asserting an event of force majeure shall provide ongoing periodic
notice in writing to the other Party with respect to such events of force
majeure, including the matters set out above, within 15 days of the end of each
calendar month during the period of force majeure and shall provide prompt
notice in writing to the other Party upon the termination of the event of force
majeure.
17. CONFIDENTIALITY
17.1 CONFIDENTIALITY. All information received by any Party as a result of
or in connection with the Assets or this Agreement shall be confidential, shall
be treated as confidential and shall not be disclosed to any other Person
without the prior written consent of the other Party. Such consent shall not be
unreasonably withheld. Where disclosure is required by law or a regulatory
authority having jurisdiction, a copy of the information required to be
disclosed including, without limitation, any press release, shall be provided to
the other Party in advance of its disclosure. The consent required by this
Article 18 shall not apply to a disclosure: (i) to an Affiliate or Agent that
has a BONA FIDE need to be informed; and (ii) to any third Person to whom the
disclosing Party contemplates a Transfer of all or any part of its interest in
or to the Assets and this Agreement. Only such confidential information as such
third Person shall have a legitimate business need to know shall be disclosed
and such third Person shall first agree in writing to protect the confidential
information from further disclosure to the same extent as the Parties are
obligated under this Article 17. The provisions of this Article 17 shall
continue to apply to any Party which withdraws or which is deemed to have
withdrawn from this Agreement. Where disclosure is required in connection with a
third Person Transfer, any intended third Person transferee must sign a
confidentiality agreement containing provisions similar to this Article 18. No
Party shall be liable to the disclosing Person in respect of any
interpretations, opinions, findings, conclusions or other non-factual
information included by the disclosing Person in any report or other document
provided to the other Party whether included by negligence or otherwise. Each
- 33 -
disclosing Person shall jointly and severally indemnify and save harmless the
other Party from and against all Losses actually incurred by the other Party in
respect of the release by the disclosing Person of such non-factual information
to third Persons, irrespective of whether such release was consented to by the
other Party.
18. EVENT OF DEFAULT OF PARTICIPANT
18.1 EVENT OF DEFAULT. In the event of an occurrence with respect to any
Participant of any one or more of the following:
(a) if the whole or any material part of the Participating
Interest of the Participant shall be the subject of a lien,
charge or attachment other than in accordance with the terms
of this Agreement and such lien, charge or attachment shall
not have been discharged within sixty days thereafter; or
(b) It has committed an act of bankruptcy, is insolvent, has
proposed a compromising arrangement to its creditors
generally, has had any petition for a receiving order in
bankruptcy filed against it, has made a voluntary assignment
in bankruptcy, has taken any proceedings with respect to a
compromise or arrangement, has taken any proceeding to have
itself declared bankrupt or wound-up, has taken any proceeding
to have a receiver appointed in respect of any part of its
assets, has had any encumbrancer take possession of any of its
property and has had any execution or distress become
enforceable or become levied upon any of its property;
then:
(c) if such event occurs, such event shall be a default of such
Participant under this Agreement and the other Participant,
without prejudice to any other remedy it may have, shall have
the right to purchase the Participating Interest of the
defaulting Participant in accordance with the following:
(i) by giving concurrent written notice of its election
to do so to the defaulting Participant and to the
Manager (if it is not the defaulting Participant);
(ii) the completion of the purchase of the said defaulting
Participating Interest shall take place at the time
and place, and the defaulting Participant shall
perform such acts and execute such documents, as the
purchasing Participant may reasonably specify or
provide. The purchase price of the aforesaid
Participating Interest to the purchasing Participant
shall be the fair market value thereof to be
determined, within seventy five days of receipt by
the defaulting Participant of the notice provided for
herein, by an independent appraiser appointed by
mutual agreement of the Participant or failing such
agreement, by arbitration pursuant to Article 15; and
- 34 -
(iii) payment of any purchase price made as aforesaid shall
be a perpetual bar both at law and in equity by the
defaulting Participant and its successors and assigns
against the other Participant, and its successors and
assigns.
18.2 ADDITIONAL REMEDIES. In the event of the occurrence with respect to any
Participant of any of the events referred to in section 18.1, each
non-defaulting Participant, without prejudice to any other remedy it may have,
shall have the right to pursue any remedy available at law or in equity, it
being acknowledged by each of the Participants that specific performance,
injunctive relief (mandatory or otherwise) or other equitable relief may be the
only adequate remedy for a default.
19. NOTICE - GENERAL
19.1 NOTICES. All notices, requests, demands or other communications which
by the terms hereof are permitted to be given by either Party to the other shall
be given in writing by personal delivery delivered by facsimile transmission,
addressed to such other Party or delivered to such other Party as follows:
(a) to Goldcorp at:
Bag 2000
17 Mine Road
Balmertown, Ontario
P0V 1C0
Attention: Regional Exploration Manager
Fax No.: 807-735-3120
and to:
3201-130 Adelaide Street West
Toronto, Ontario
M5H 3P5
Attention: Executive Vice President, Canada and USA
Fax No.: 416-363-5950
(b) to Halo at:
1305-1090 West Georgia Street
Vancouver BC V6E 3V7
Attention: Marc Cernovitch
Fax No.: 604-484-0069
- 35 -
20. MISCELLANEOUS - GENERAL
20.1 ACTS IN GOOD FAITH. The Parties shall at all times during the currency
of this Agreement and after the termination of this Agreement during the period,
if any, when the provisions of this Agreement continue to apply, act in good
faith with respect to the other Party and shall do or cause to be done all
reasonable things within their respective control which may be necessary or
desirable to give full effect to the provisions hereof. The following clauses
shall survive termination of this Agreement: 3.1, 6.2, 6.4, 7.8, 7.9, 11.3,
13.2, 13.3, 13.4, 13.5, 13.6, 15.1 and 17.1.
20.2 SEVERABILITY. Any provision of this Agreement which is invalid or
unenforceable shall not affect any other provision and shall be deemed to be
severable herefrom.
20.3 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario.
20.4 FURTHER ASSURANCES. The Parties shall sign such further and other
documents and do such further acts or things as may be reasonably within their
control as may be necessary or desirable in order to give full force and effect
to this Agreement and every part hereof.
20.5 AMENDMENT. This Agreement may not be amended or modified in any respect
except by written instrument signed by the Parties.
20.6 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the Parties with respect to the subject matter hereof. The execution of
this Agreement has not been induced by nor do the Parties rely upon or regard as
material, any covenants, representations or warranties whatsoever not
incorporated herein and made a part hereof.
20.7 ENUREMENT. This Agreement shall enure to the benefit of and be binding
upon the Parties and each of their successors and permitted assigns, but no
other Person.
20.8 COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which so executed shall be deemed to be an original and such
counterparts together shall constitute one and the same document.
IN WITNESS WHEREOF the Parties have executed these presents as of the Effective
Date.
GOLDCORP INC.
Per:
----------------------------------
Name:
Title:
- 36 -
HALO RESOURCES LTD.
Per: /s/ Marc Cernovitch
----------------------------------
Name: Marc Cernovitch
Title: President & CEO
THIS IS SCHEDULE "I" TO THE JOINT VENUTRE AGREEMENT
DATED AS OF ____________,___________ BETWEEN
GOLDCORP. INC. AND HALO RESOURCES LTD.
UNPATENTED PROPERTYAND SEVENTY-FIVE % CLAIMS
(STK = UNPATENTED, LP = LEASE PATENT)
-----------------------------------------------------------------------
PROPERTY TYPE OFFICIAL NO.
-----------------------------------------------------------------------
UNPATENTED PROPERTY
-----------------------------------------------------------------------
Pipestone Bay STK 1234170
Pipestone Bay STK 1234140
Pipestone Bay STK 1234141
Pipestone Bay STK 1234142
Pipestone Bay STK 1234143
Pipestone Bay STK 1234144
Middle Bay LP 40860
Middle Bay LP 40861
Middle Bay LP 40862
Middle Bay LP 40863
Middle Bay LP 40864
Middle Bay LP 40865
Middle Bay LP 46181
Middle Bay LP 46182
Middle Bay LP 46183
Middle Bay LP 46184
Middle Bay LP 49874
- 2 -
-----------------------------------------------------------------------
PROPERTY TYPE OFFICIAL NO.
-----------------------------------------------------------------------
Middle Bay LP 49875
Middle Bay LP 49897
Middle Bay LP 49898
Middle Bay LP 49899
Middle Bay LP 49900
Middle Bay LP 49901
Middle Bay LP 49902
Middle Bay LP 49903
Middle Bay LP 49904
Middle Bay LP 52174
Middle Bay LP 52175
Middle Bay LP 53397
Middle Bay LP 53398
Middle Bay LP 53399
Middle Bay STK 870130
Middle Bay STK 870131
Middle Bay STK 870132
Middle Bay STK 1143622
Middle Bay STK 1143623
Middle Bay STK 1143624
Middle Bay STK 1143645
Middle Bay STK 1143646
Middle Bay STK 1143647
- 3 -
-----------------------------------------------------------------------
PROPERTY TYPE OFFICIAL NO.
-----------------------------------------------------------------------
Middle Bay STK 1184230
Middle Bay STK 1184316
Middle Bay STK 1184317
Middle Bay STK 1185055
Middle Bay STK 1234022
Middle Bay STK 1234029
Middle Bay STK 1234030
Middle Bay STK 1234039
Middle Bay STK 1234051
Middle Bay STK 1234081
Middle Bay STK 1234082
Middle Bay STK 1234083
Middle Bay STK 1234155
Middle Bay STK 1234156
Middle Bay STK 1234157
Middle Bay STK 1248154
Middle Bay STK 1234259
Middle Bay STK 1234245
Middle Bay STK 1234084
Middle Bay STK 3004674
Middle Bay STK 3004676
Middle Bay STK 1247933
Middle Bay STK 1234401
- 4 -
-----------------------------------------------------------------------
PROPERTY TYPE OFFICIAL NO.
-----------------------------------------------------------------------
Middle Bay STK 1234402
Middle Bay STK 1248171
Middle Bay STK 1248129
Middle Bay STK 1248169
SEVENTY-FIVE % CLAIMS
-----------------------------------------------------------------------
Middle Bay LP 47707
Middle Bay LP 47708
-----------------------------------------------------------------------
THIS IS SCHEDULE "H" TO THE JOINT VENUTRE AGREEMENT
DATED AS OF ____________,___________ BETWEEN
GOLDCORP. INC. AND HALO RESOURCES LTD.
PATENTED PROPERTY
LIST OF PROPERTIES
-------------------------------------------------------
PROPERTY TYPE OFFICIAL NO.
-------------------------------------------------------
Biron Bay Patent 11077
Biron Bay Patent 11078
Biron Bay Patent 11079
Biron Bay Patent 11080
Biron Bay Patent 11081
Biron Bay Patent 11082
Biron Bay Patent 11083
Biron Bay Patent 11104
Biron Bay Patent 11105
Biron Bay Patent 11106
-------------------------------------------------------
THIS IS SCHEDULE "III" TO THE JOINT VENUTRE AGREEMENT
DATED AS OF ____________,___________ BETWEEN
GOLDCORP. INC. AND HALO RESOURCES LTD.
ACCOUNTING PROCEDURE
SECTION I. GENERAL PROVISIONS
1. DEFINITIONS
(a) "Agreement" shall mean the Agreement to which this Accounting
Procedure is attached as Schedule "III".
(b) "Field Office" means any necessary office in each place where
Work is being performed on or solely in relation to the
Property.
(c) "Material" shall mean personal property, equipment or supplies
acquired or held for use in Operations.
(d) "section" or "paragraph" followed by a number shall mean and
refer to the specified section or paragraph of this schedule.
All other terms defined in the Agreement and used herein shall, unless otherwise
defined herein, have the same meaning ascribed thereto in the Agreement.
2. GENERAL ACCOUNTING RECORDS
The Manager shall maintain detailed and comprehensive cost accounting records in
accordance with the requirements of the laws of Canada and in accordance with
this Accounting Procedure and Canadian generally accepted accounting principles,
including general ledgers, supporting and subsidiary journals, invoices, cheques
and other customary documentation sufficient to provide a record of revenues and
expenditures and periodic statements of financial position and the results of
operations for managerial, tax, regulatory or other financial reporting
purposes. Such records shall be retained for the longer of the duration of the
period allowed the Participants for audit or the period necessary to comply with
tax or other regulatory requirements. The records shall include accounts for
each Participant which shall reflect all obligations, advances and credits of
the Participants in accordance with their Participating Interests.
3. REPORTING
The Manager shall provide, not later than 30 days after the end of each fiscal
year financial statements, reports and other information required by
Participants to complete their accounting procedures.
- 2 -
4. BANK ACCOUNTS
The Manager shall maintain one or more separate bank accounts for the payment of
all expenses and the deposit of all cash receipts in respect of Operations.
5. CONFLICT WITH AGREEMENT
In the event of a conflict between the provisions of this Accounting Procedure
and the provisions of the Agreement, the provisions of the Agreement shall take
precedence.
6. STATEMENTS AND INVOICES
The Manager shall invoice each Participant for its proportionate share of
Expenditures in accordance with the terms of the Agreement in respect of a
Program in which such Participant has agreed to participate in accordance with
the terms of the Agreement. Such invoices will be accompanied by complete and
accurate statements reflecting all charges and credits summarized by appropriate
classifications indicative of the nature thereof. Expenditures for all tangible
and intangible assets and any unusual charges shall be detailed. If the Manager
does not request a Participant to pay its share of estimated Expenditures in
advance, the Participant shall pay its share of actual Expenditures within
twenty (20) days following receipt of a Manager's invoice related thereto.
7. ADJUSTMENTS
Payments of invoices shall not prejudice the rights of a Participant to protest
or question the correctness thereof; provided, however, all invoices and
statements rendered to a Participant by the Manager during any fiscal year shall
conclusively be presumed to be true and correct after twenty-four (24) months
following the end of such fiscal year, unless within the said twenty-four (24)
month period a Participant takes written exception thereto and makes a claim on
the Manager for adjustment. No adjustment favourable to the Manager shall be
made unless a claim is made within the same prescribed period. The provisions of
this paragraph shall not prevent adjustments resulting from a physical inventory
of the Material purchased for Operations.
8. REVIEW OF ACCOUNTS
(a) A Participant, upon reasonable notice to the Manager, shall
have access and the right, at its sole expense, to audit all
records relating to the accounting and Operations hereunder,
including any records originating from an Affiliate or other
offices of the Manager for any fiscal year of the Venture or
portion thereof, within the twenty-four (24) month period
following the end of such fiscal year.
(b) The Manager's verification of contractors' invoices shall not
be construed as constituting a bona fide audit of contractors'
records of original entry. In the event that an audit of
contractors' records of original entry is deemed necessary by
the Manager or by a Participant the cost of such audit shall
be charged to the account for Operations.
- 3 -
SECTION II. DIRECT CHARGES
Subject to limitations hereinafter prescribed, the Manager shall charge the
account for Operations for all costs necessary to conduct Operations as follows:
1. FIELD OFFICE EXPENSE
All costs incurred in maintaining and operating a Field Office for Operations.
2. RENTALS AND ROYALTIES
All fees, rent and royalties, including the Existing Royalties, paid in respect
of mining claims, exploration permits, leases, licences, or other similar
grants, forming part of the Property.
3. LABOUR
(a) Salaries and wages of all employees, including the Manager's
employees, directly engaged on a full time basis in the
conduct of the Operations, and a charge for the salaries or
wages of employees who are temporarily assigned on a full time
basis to and directly employed in the Operations in proportion
to the time spent by such employees to provide such services.
No costs will be charged to the Venture for salaries and wages
that relate to employment other than employment in the
Operations.
(b) A percentage of the salaries and wages chargeable to the
account for Operations under paragraph 3(a) of this Section
II, to cover the cost of payroll burden for employee benefits
including vacations, statutory holidays, sickness and
disability benefits, group life insurance, hospitalization,
pensions, dental, major medical and other benefit plans of a
like nature and for mandatory payments to the local,
provincial and federal governments for worker's compensation,
unemployment insurance, pension and any other similar charges
that any government may impose on the Manager based on salary
and wage costs. The percentage will be established based on
the Manager's cost experience and the amount charged will be
adjusted retroactively on an annual basis to reflect the
actual percentage for the previous year when actual costs are
determined. No costs shall be charged to the Venture for
benefits that relate to employment other than employment
directly related to Operations.
(c) Out of pocket expenses applicable to the Operations of those
employees whose salaries and wages are chargeable to the
account for Operations under paragraph 3 (a) and (d) of this
Section II and for which expenses the employees are reimbursed
under the Manager's usual practice (including, without
restriction, any relocation expenses necessarily incurred in
order to properly staff a Program).
(d) A charge for the salaries and the wages of the Manager's
employees and the employees of the other Participant at the
request of the Manager, including corporate office employees
and officers and senior management personnel, not involved in
Operations on a full time or contractual basis, as follows:
- 4 -
(i) during the Exploration phase - the actual costs
directly incurred by the Manager for such employees
in respect of Work actually performed, provided that
in no event shall such costs exceed in aggregate five
percent of all other Expenditures directly related to
the Property or Work done on the Property and
directly incurred or performed by Halo or five
percent of the contract price in respect of all other
Expenditures directly related to the Property or Work
done on the Property performed by any agent,
contractor or subcontractor of Halo; and
(ii) during the Development and Mining phases - the actual
costs directly incurred by the Manager for such
employees in respect of Work actually performed,
provided that in no event shall such costs exceed two
percent of all other Expenditures directly related to
the Property or Work done on the Property whether
directly incurred or performed by the Manager or
performed by any agent, contractor or subcontractor
of the Manager.
4. MATERIAL
All Material purchased or furnished by the Manager for use in Operations. So far
as it is reasonably practical and consistent with efficient and economical
operation, only such Material shall be purchased for or transferred to the
Operations as may be required for immediate use. The accumulation of surplus
stocks shall be avoided.
5. TRANSPORTATION
Reasonable transportation costs of Agents of the Manager (and the Agents of the
other Participant as necessary for the conduct of Operations) and Material
necessary for the conduct of Operations. Such costs shall include transportation
of such Agents' families and their personal effects, household effects, and all
other relocation costs incurred in the staffing of the Operations.
6. SERVICES
(a) The cost of contract services and utilities procured from
outside sources other than services covered by paragraph 8 of
this Section II.
(b) Use and service of equipment and facilities furnished by the
Manager as provided in Section III.
7. DAMAGES AND LOSSES TO ASSETS
All costs or expenses necessary for the repair or replacement of Assets made
necessary because of damages or losses resulting from fire, flood, storm, theft,
accident, or any other cause.
The Manager shall furnish the other Participant with written notice of damages
or losses incurred forthwith after a report thereof has been received by the
Manager.
- 5 -
8. LEGAL EXPENSES
All reasonable costs and expenses of handling, investigating, and settling
litigation or claims arising in respect of the Operations, including but not
limited to, independent counsel's fees, court costs, costs of investigation or
procuring evidence and amounts paid in settlement or satisfaction of any such
litigation or claims, provided that no settlement shall be entered into when the
amount of such settlement exceeds $50,000.00 without the unanimous approval of
the Management Committee as set out in the Agreement.
9. TAXES
All taxes of every kind and nature assessed or levied upon or in connection with
the Operations, which have been paid by or for the benefit of the Venture.
10. INSURANCE PREMIUMS
Premiums paid for insurance required to be carried in respect of the Operations.
11. MARKETING COSTS
All costs incurred in the sale of Products including, but not limited to, labour
costs, as set out in Section II, paragraph 3 of this Schedule, transportation,
insuring sampling, assaying, impurity penalties and marketing fees, including
such marketing fees as are contemplated by the Agreement.
12. OTHER EXPENDITURES
Any other expenditures not covered or dealt with in the foregoing provisions of
this Section II and which are reasonably incurred by the Manager for the
necessary and proper conduct of the Operations.
SECTION III. MATERIAL FURNISHED BY THE MANAGER
1. PURCHASE
Material and equipment purchased and services procured shall be charged at the
price paid by the Manager after deduction of all discounts actually received.
2. MATERIAL FURNISHED BY THE MANAGER
Material required for Operations shall be purchased for direct charge to the
account for Operations whenever practicable, except that the Manager may furnish
such Material from the Manager's own stocks under the following conditions:
(a) New Material (Condition "A")
New Material transferred from the Manager's own warehouse or
other properties shall be priced f.o.b. the nearest reputable
supply store or railway receiving point, where such Material
- 6 -
is available, at current replacement cost of the same kind of
Material.
(b) Used Material (Conditions "B" and "C")
(i) Material which is in sound and serviceable condition
and suitable for reuse without reconditioning shall
be classed as Condition "B" and priced at
seventy-five per cent (75%) of new price.
(ii) Material which cannot be classified as Condition "B"
but which;
after reconditioning will be further serviceable for
its original function as good second-hand Material
(Condition "B"); or
is serviceable for its original function but is
substantially not suitable for reconditioning,
shall be classified as Condition "C" and priced at
fifty per cent (50%) of new price.
(iii) Material which cannot be classified as Condition "B"
or Condition "C" shall be priced at a value
commensurate with its use.
(c) Material Furnished by the Manager when not Readily Available
When Material or supplies are not readily available from
reputable sources, the Manager may furnish such material from
its stock or properties at its nearest available supply and
charge the Manager's full cost of same to the account for
Operations including, without limitation, purchase price,
procurement, warehousing, handling, transportation and all
other costs incurred in connection therewith up to the time of
delivery to the Property.
(d) Material Over $50,000.00
The Manager shall obtain two quotes in advance in respect of
any Material and equipment purchased, other than New Material,
or services procured at a price over $50,000.00 (calculated on
an aggregate basis in respect of all Material or services
procured in any one transaction) and shall make such quotes
available for review to the non-Manager Participant. The
non-Manager Participant shall be entitled to appoint a third
party evaluator when Used Material over $50,000.00 is
furnished by the Manager.
3. PREMIUM PRICES
Whenever Material is not readily obtainable at the customary supply point or at
prices specified in paragraphs 1 and 2 of this Section III because of causes
over which the Manager has no control, the Manager may charge the account for
Operations for the required Material on the basis of the Manager's direct cost
and expense incurred in procuring such Material, in making it suitable for use,
- 7 -
and in moving it to the required location, provided, however, that notice in
writing is furnished to the Participants of the proposed charge prior to
invoicing the Participants for such Material, whereupon the Participants shall
have the right, by so electing and notifying the Manager, within fifteen (15)
days after receiving such notice from the Manager, to furnish in kind, all or
part of its share of such Material which shall be reasonably suitable for use
and acceptable to the Manager. Transportation costs on such Material furnished
by a Participant, at any point other than at the required location, shall be
borne by the Participant. If, a Participant furnishes Material pursuant to the
provisions of this paragraph, the Manager shall make appropriate credits
therefor to the account of such Participant.
4. WARRANTY OF MATERIAL FURNISHED BY THE MANAGER
The Manager does not warrant the Material furnished beyond the dealer's or
manufacturer's guarantee; and in case of defective Material, credit shall not be
passed until adjustment has been received by the Manager from the manufacturers
or their agents.
SECTION IV. DISPOSAL OF EQUIPMENT AND MATERIAL
1. DISPOSITION OF SURPLUS MATERIAL
The Manager shall be under no obligation to purchase surplus, new or second-hand
Material. The disposition of items with a replacement value in excess of $50,000
of surplus Material shall be subject to the unanimous approval of the Management
Committee; provided that the Manager shall dispose of normal accumulations of
junk and scrap Material either by transfer or sale from the Property. Proceeds
of such sale shall be credited to the account for Operations.
2. MATERIAL PURCHASED BY THE MANAGER OR A PARTICIPANT
Material purchased by either the Manager or a Participant shall be credited by
the Manager to the account for Operations at an amount equal to the reasonable
fair market value thereof for the month in which the Material is removed by the
purchaser.
3. SALES TO PARTICIPANTS OR TO THIRD PARTIES
Sales to Participants or third parties of Material from the Operations shall be
credited by the Manager to the account for Operations at the net amount
collected by the Manager from such purchaser. All sales to Participants or third
parties of Material from Operations in excess of $50,000.00 (calculated on an
aggregate basis in respect of all Material or services procured in any one
transaction) shall require prior unanimous approval of the Management Committee.
Any claims by a purchaser for defective Material or otherwise shall be charged
back to the account for Operations if and when paid by the Manager.
SECTION V. INVENTORIES
1. INVENTORIES
(a) At reasonable intervals and, in any event, at least once per
fiscal year of the Venture, inventories shall be taken by the
Manager, which shall include all such Material as is
- 8 -
ordinarily considered controllable by Managers of mining
properties and the expense of conducting such periodic
inventories shall be charged to the account for Operations.
The Manager shall give written notice to the Participants of
its intent to take any inventory at least thirty (30) days
before such inventory is scheduled to take place. A
Participant shall be deemed to have accepted the results of
any inventory taken by the Manager if the Participant fails to
be represented at such inventory.
(b) Reconciliation of the inventory with charges to the account
for Operations shall be made, and a list of overages and
shortages shall be furnished to the Participants within one
month after the inventory is taken. Inventory adjustments
shall be made by the Manager to the accounting records for
overages and shortages, but the Manager shall be held
accountable only for shortages due to lack of reasonable
diligence.
THIS IS SCHEDULE "IV" TO THE JOINT VENTURE AGREEMENT
DATED AS OF ________________, _____ BETWEEN
GOLDCORP INC. AND HALO RESOURCES LTD.
1.5% NET SMELTER RETURNS ROYALTY INTEREST
1. DEFINITIONS
Where used herein:
(a) "Agreement" means the letter agreement to which this schedule
is attached, including any amendments thereto or renewals or
extensions thereof.
(b) "Fiscal Period" means each calendar year or other period of 12
consecutive months adopted by the Venture for accounting
purchases.
(c) "Net Smelter Returns" shall mean the gross proceeds received
from the sale or other disposition of ores, metals (metals
shall include bullion, precious metals and other than precious
metals) or concentrates produced from the Property and sold,
less the following expenses if actually incurred:
(i) Taxes specifically based on mining production, but
excluding any and all taxes (a) based upon the net or
gross income of the owner or other operator of the
Property and (b) based upon the value of the
Property, the privilege of doing business and other
similarly based taxes; and
(ii) Charges and costs, if any, for sales fees,
transportation and insurance of ores, metals (metals
shall include bullion, precious metals and other than
precious metals) or concentrates produced from the
Property to any mint, smelter, or refinery.
(iii) Charges, costs (including assaying and sampling
costs) and all penalties, if any, charged by a
smelter or refiner of ores, metals (metals shall
include bullion, precious metals and other than
precious metals) or concentrates produced from the
Property.
(d) "Payee" means the party under the Agreement entitled to the
payment of the Royalty Interest thereunder.
(e) "Payor" means the Participant or Participants under the
Agreement obligated to make the Royalty Interest payments
thereunder.
(f) "Property" has the meaning ascribed to such definition in the
Agreement.
(g) "Royalty Interest" means the 1.5% Net Smelter Returns which
may become payable under the Agreement.
- 2 -
2. PAYMENT
(a) The Royalty Interest shall be paid in cash only on a quarterly
basis within 45 days after the end of each fiscal quarter in
respect of the actual proceeds received in such fiscal
quarter.
(b) Each payment under subsection 2(a) shall be accompanied by a
statement indicating the calculation of Net Smelter Returns
hereunder. The Payee shall be entitled to audit, during normal
business hours, such books and records as are necessary to
determine the correctness of the payment of the Royalty
Interest, provided however, that such audit shall be made once
only on an annual basis and within 12 months of the end of the
Fiscal Period in respect of which such audit is made.
(c) Payment of the Royalty Interest shall be made to the Payee at
such place or places as it shall advise the Payor from time to
time.
3. TRANSFER OF THE PROPERTY
No sale, assignment or transfer by the Payor of all or any part of its
Participating Interest including all or any part of its right, title and
interest in and to the Property, may be completed unless and until the
purchaser, assignee or transferee therein and thereof delivers a written
agreement with and for the benefit of the Payee, in a form satisfactory to the
Payee, acting reasonably, to assume and agree to pay and perform or guarantee
all or a pro rata portion of the liabilities and obligations of the Payor under
the Agreement in respect of the payment of the Royalty Interest of the Payee and
to comply with this covenant in respect of any subsequent sale, transfer or
assignment. Such assumption shall not serve to release or discharge the Payor
from any of the said liabilities or obligations theretofore accrued with respect
to the Royalty Interest of the Payee or portion thereof being transferred, but
shall release and discharge a transferring Payor from all of the said
liabilities and obligations thereafter accruing with respect to the Royalty
Interest of the Payee or portion thereof being transferred.
4. UNDERPAYMENT
In the event the Payor defaults in payment or is found to have underpaid the
Payee in respect of any Royalty Interest payment due hereunder, the Payor shall
pay interest on such delinquent payment at a rate equal to the Prime Rate plus
two (2%) percent per annum commencing on the date on which such delinquent
payment was due and payable and continuing until the Payee receives payment in
full of such delinquent payment and all accrued interest thereon. Such
delinquent amount and all interest accrued thereon shall be paid with the next
quarterly payment. For the purposes of this subsection, the Prime Rate shall be
determined as of the date on which such delinquent payment was due.
5. REGISTRATION
To the extent permitted by applicable law, the Payee shall be entitled to
register or record a copy of this Agreement establishing its Royalty Interest,
or a notice or memorandum thereof, against title to the Property and to file
such agreement or notice or memorandum in the office of any appropriate
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Governmental Authority, with the intent of the Parties, including the Payor and
the Payee, that such Royalty Interest run with and bind the Property and the
title thereto and the interests of any successor owner, mortgagee, lessee, or
other encumbrancer thereof or therein.
6. DISPUTES
Any dispute between the Parties, including between the Payor and the Payee,
arising in respect of matters related to the net profits royalty interest of the
Payee shall be submitted to and decided by binding arbitration in accordance
with the arbitration provisions of the Agreement.
THIS IS SCHEDULE "V" TO THE JOINT VENTURE AGREEMENT
DATED AS OF ________________, _____ BETWEEN
GOLDCORP INC. AND HALO RESOURCES LTD.
RULES FOR ARBITRATION
The following rules and procedures shall apply with respect to any matter to be
arbitrated by the Parties under the terms of the Agreement.
1. INITIATION OF ARBITRATION PROCEEDINGS
(a) If any Party to this Agreement wishes to have any matter under
this Agreement arbitrated in accordance with the provisions of
this Agreement, it shall give notice to the other Party hereto
specifying particulars of the matter or matters in dispute and
proposing the name of the person it wishes to be the single
arbitrator. Within 20 days after receipt of such notice, the
other Party to this Agreement shall give notice to the first
Party advising whether such Party accepts the arbitrator
proposed by the first Party. If such notice is not given
within such 20 day period, the other Party shall be deemed to
have accepted the arbitrator proposed by the first Party. If
the Parties do not agree upon a single arbitrator within such
20 day period such arbitrator shall be chosen in accordance
with the ARBITRATION ACT, 1991 (Ontario) (the "Arbitration
Act").
(b) The individual selected as Arbitrator shall be qualified by
education and experience to decide the matter in dispute. The
Arbitrator shall be at arm's length from both Parties and
shall not be a member of the audit or legal firm or firms who
advise either Party, nor shall the Arbitrator be a person who
is otherwise regularly retained by either of the Parties.
2. SUBMISSION OF WRITTEN STATEMENTS
(a) Within 20 days of the appointment of the Arbitrator, the Party
initiating the arbitration (the "Claimant") shall send the
other Party (the "Respondent") a statement of claim setting
out in sufficient detail the facts and any contentions of law
on which it relies, and the relief that it claims.
(b) Within 15 days of the receipt of the statement of claim, the
Respondent shall send the Claimant a statement of defence
stating in sufficient detail which of the facts and
contentions of law in the statement of claim it admits or
denies, on what grounds, and on what other facts and
contentions of law he relies.
(c) Within 10 days of receipt of the statement of defence, the
Claimant may send the Respondent a statement of reply.
(d) All statements of claim, defence and reply shall be
accompanied by copies (or, if they are especially voluminous,
lists) of all essential documents on which the Party concerned
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relies and which have not previously been submitted by any
Party, and (where practicable) by any relevant samples.
(e) After submission of all the statements, the Arbitrator will
give directions for the further conduct of the arbitration.
3. MEETINGS AND HEARINGS
(a) The arbitration shall take place in the City of Toronto,
Ontario, or in such other place as the Claimant and the
Respondent shall agree upon in writing. The arbitration shall
be conducted in English unless otherwise agreed by such
Parties and the Arbitrator. Subject to any adjournments which
the Arbitrator allows, the final hearing will be continued on
successive working days until it is concluded.
(b) All meetings and hearings will be in private unless the
Parties otherwise agree.
(c) Any Party may be represented at any meetings or hearings by
legal counsel.
(d) Each Party may examine, cross-examine and re-examine all
witnesses at the arbitration.
4. THE DECISION
(a) The Arbitrator will make a decision in writing and, unless the
Parties otherwise agree, will set out reasons for decision in
the decision.
(b) The Arbitrator will send the decision to the Parties as soon
as practicable after the conclusion of the final hearing, but
in any event no later than 30 days thereafter, unless that
time period is extended for a fixed period by the Arbitrator
on written notice to each Party because of illness or other
cause beyond the Arbitrator's control.
(c) The decision shall determine and award costs.
(d) The decision shall be final and binding on the Parties and
shall not be subject to any appeal or review procedure
provided that the Arbitrator has followed the rules provided
herein in good faith and has proceeded in accordance with the
principles of natural justice. In the event either Party
initiates any court proceeding in respect of the decision of
the Arbitrator or the matter arbitrated, such Party, if
unsuccessful in the court proceeding, shall pay the other
Party's costs on a solicitor/client basis, all reasonable
expenses incurred by such other Party and related to such
court proceeding.
5. JURISDICTION AND POWERS OF THE ARBITRATOR
(a) By submitting to arbitration under these Rules, the Parties
shall be taken to have conferred on the Arbitrator the
following jurisdiction and powers, to be exercised at the
Arbitrator's discretion subject only to these Rules and the
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relevant law with the object of ensuring the just,
expeditious, economical and final determination of the dispute
referred to arbitration.
(b) Without limiting the jurisdiction of the Arbitrator at law,
the Parties agree that the Arbitrator shall have jurisdiction
to:
(i) determine any question of law arising in the
arbitration;
(ii) determine any question as to the Arbitrator's
jurisdiction;
(iii) determine any question of good faith, dishonesty or
fraud arising in the dispute;
(iv) order any Party to furnish further details of that
Party's case, in fact or in law;
(v) proceed in the arbitration notwithstanding the
failure or refusal of any Party to comply with these
Rules or with the Arbitrator's orders or directions,
or to attend any meeting or hearing, but only after
giving that Party written notice that the Arbitrator
intends to do so;
(vi) receive and take into account such written or oral
evidence tendered by the Parties as the Arbitrator
determines is relevant, whether or not strictly
admissible in law;
(vii) make one or more interim awards;
(viii) hold meetings and hearings, and make a decision
(including a final decision) in Toronto, Ontario or
elsewhere with the concurrence of the Parties
thereto;
(ix) order the Parties to produce to the Arbitrator, and
to each other for inspection, and to supply copies
of, any documents or other evidence or classes of
documents in their possession or power which the
Arbitrator determines to be relevant; and
(x) make interim orders to secure all or part of any
amount in dispute in the arbitration.