EXHIBIT 10.2
MEMORANDUM OF AGREEMENT made the 28 day of October, 2003.
CARIBGOLD MINERALS INC., a corporation incorporated under the laws of the
Province of Ontario
(hereinafter called the "Optionor")
OF THE FIRST PART
- -and-
XTRA/GOLD-RESOURCES INC., a corporation incorporated under the laws of Florida
(hereinafter called the "Optionee")
OF THE SECOND PART
WHEREAS the Optionor is the owner of the mining property described in Schedule A
annexed hereto (hereinafter called the "Property");
AND WHEREAS the Optionor is desirous of granting an option to the Optionee to
acquire an interest in the Property, and the Optionee is desirous of acquiring
the option on the terms and conditions the details of which are more
particularly hereinafter set forth;
NOW THEREFORE THIS AGREEMENT WITNESSETH that for valuable consideration the
parties hereto have mutually agreed and by these presents do mutually covenant
and agree each with the other as follows:
COVENANTS, REPRESENTATIONS AND WARRANTIES
1. The Optionor warrants, represents and covenants to the Optionee, upon
which warranties, representations and covenants the Optionee relies, as
follows:
(a) that the Property has been properly acquired in accordance
with the applicable mining laws and regulations of
Switzerland;
(b) that the Property is in good standing under the provisions of
the applicable mining laws and regulations of Switzerland;
(c) that the Optionor is the legal and beneficial owner of the
Property, and the Optionor has the sole and absolute right to
deal with the Property, all as may be permitted in accordance
with applicable law;
(d) that the Property is free and clear of all liens,
encumbrances, and charges except as set out in Schedule AA@
hereto and to the best of the Optionor's knowledge and belief
there are not now any lawsuits or legal proceedings affecting
the Property and the
- 1 -
Property is not subject to any other competing interest or
claim or liable to forfeiture, suspension or cancellation or
encumbered in any way; and
(e) that it is duly organized under the laws of its jurisdiction
of incorporation with power to enter into this agreement and
exercise its rights and perform its obligations hereunder.
The Optionor undertakes and covenants not to do any act or
thing which will in any way encumber the Property during the
currency of this agreement.
2. The Optionee warrants, represents and covenants to the Optionor, upon
which warranties, representations and covenants the Optionor relies,
that it is duly organized under the laws of its jurisdiction of
incorporation with power to enter into this agreement and exercise its
rights and perform its obligations hereunder.
GRANT OF OPTION
3. The Optionor hereby gives, grants and assigns unto the Optionee the
sole and irrevocable right and option to acquire a 90% interest in the
Property, provided that the Optionee expends on exploration work on the
Property the aggregate sum ofC$200,000 (the "Option Expenditures") .
For greater certainty, the parties confirm that, in the event that the
Optionee completes the Option Expenditures, the interest of the parties
in the Property shall be as follows:
the Optionor - 10%
the Optionee - 90%
The Optionor will receive a non-refundable payment of 20,000 common
shares of Xtra-Gold Resources Inc. for granting this option. If the
Optionee completes no work on the property 12 months fom the date of
signing this contract than the option will terminate. If the option
terminates than 90% interest will revert back to the Optionor.
TITLE
4. Upon execution of this agreement, registered title to the Property
shall be held in trust by the Optionor, pursuant to the terms hereof.
Should the Optionee be vested with a 90% interest in the Property, the
Optionor shall forthwith execute and deliver, upon request by the
Optionee, any reasonable documentation necessary to transfer to the
Optionee registered title to a 90% interest in the Property, subject to
applicable governmental regulations and procedures.
EXERCISE OF OPTION AND JOINT VENTURE
5. After the Optionee has completed the Option Expenditures, the parties
shall conclude a joint venture agreement on terms and conditions common
in the mining industry in North
- 2 -
America under which the Optionee shall be the operator; a party who
fails to contribute its pro rata share of the expenditures of the joint
venture shall have its interest diluted provided that it will be
converted to a 10% net profits interest if its interest would otherwise
be diluted below 10%; and the Optionor shall have a right of first
refusal on any sale of the Optionee's interest.
WORK PROGRAM
6. The Optionee warrants and represents that it shall carry out all work
on the Property, including the Option Expenditures, with good
engineering and mining practices and shall do all work on the Property
in a careful and miner-like manner and shall conform in all respects to
the applicable mining laws and regulations of Switzerland and, in
particular, but without in any way limiting the generality of the
foregoing, shall perform within the time required by law that work
required to maintain the Property in good standing and pay all taxes in
connection therewith.
INDEMNITY
7. The Optionee hereby covenants and agrees to protect, indemnify and hold
harmless the Optionor and each and every of its directors, officers,
employees, sub-agents, solicitors and shareholders (the "Indemnified
Parties") from and against any and all expenses, losses (other than
loss of profit), claims, actions, damages or liabilities, whether joint
or several (including the aggregate amount paid in reasonable
settlement of any actions, suits, proceedings or claims), and the
reasonable fees and expenses of its counsel that may be incurred in
advising with respect to and/or defending any claim that may be made
against the Indemnified Parties or to which the Indemnified Parties may
become subject or otherwise involved in any capacity under any statute
or common law or otherwise insofar as such expenses, losses, claims,
damages, liabilities or actions arise out of or are based, directly or
indirectly, the conduct of work on the Property contemplated by this
agreement by the Optionee or any of its employees or agents.
ABANDONMENT OF OPTION
8. If the Optionee at any time gives notice of termination or its
intention to surrender or abandon the Property or fails to satisfy its
obligations pursuant to Article 2 hereof, this agreement shall
forthwith terminate without further obligation on the part of the
Optionor or Optionee other than the Optionee's obligations under
Article 7 which shall continue indefinitely.
9. It is agreed and understood by the Optionee that, should this agreement
be cancelled or terminated, all monies expended by it in, on or under
the Property under the terms of this agreement shall be uncollectible
advances spent in the due performance of the terms and conditions of
this agreement and the Optionee shall have earned no interest in the
Property.
- 3 -
NOTICE AND GENERAL PROVISIONS
10. Any notice or communication required or permitted to be given to any
party under this agreement shall be in writing and may be given by hand
delivery to the party or sent by facsimile or by mailing the same by
prepaid registered mail, addressed as follows:
to the Optionor: Suite 1200, 67 Yonge Street
Toronto, Ontario
M5E 118
Tel: (905) 339-1932
Fax: (416) 955-9538
to the Optionee: Suite 108
2499 Glades Road
Boca Raton, Florida 33431
Tel: (561) 362-9595
Any notice or communication sent by registered mail shall be deemed to
have been given and received five (5) days after the date of
registration. Any notice or communication sent by facsimile shall be
deemed to have been given one (1) day after such notice or
communication was sent by the notifying party. Any notice or
communication hand delivered shall be deemed to have been given and
received on the date of delivery. Any party may change its address for
service at any time by notice in writing given as aforesaid to the
other.
TIME
11. Time shall be of the essence of this agreement.
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
12. The representations and warranties contained in this agreement will not
merge and shall survive the execution and delivery of this agreement
and the performance of the\ obligations hereunder and shall continue in
full force and effect.
ENTIRE AGREEMENT
13. The parties hereto agree that the terms and conditions of this
agreement constitute the entire agreement between them with respect to
the subject matter hereof and there is no warranty, representation,
collateral agreement or condition affecting this agreement other than
those herein set forth.
- 4 -
FURTHER ASSURANCES
14. The parties hereto shall execute and deliver such further assurances as
may be necessary or desirable in order to give full effect to this
agreement.
GOVERNING LAW
15. This agreement shall be governed by and construed in accordance with
the laws of the Province of Florida.
BINDING EFFECT
16. This agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors, assigns and other legal
representatives, provided that this agreement shall not be assignable
by any party without the prior written consent of the other party.
COUNTERPARTS
17. This agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument and
any of the parties hereto may execute this agreement by signing any of
such counterpart and delivering same by telecopier or otherwise in
writing.
NO PARTNERSHIP
18. 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 them. 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 of the parties shall have any authority to
act for or to assume any obligation or responsibility on behalf of the
other, except as otherwise expressly provided herein. The rights,
duties, obligations and liabilities of the parties shall be several and
not joint or collective. Each party 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.
ASSIGNMENT
19. With the consent of the other party, which consent shall not be
unreasonably withheld, each party has the right to assign all or any
part of its interest in this agreement and in the Property, subject to
the terms and conditions of this agreement. It shall be a condition
precedent to any such assignment that the assignee of the interest
being transferred agrees to be bound by the terms of this agreement,
insofar as they are applicable.
- 5 -
IN WITNESS WHEREOF the parties hereto have executed this agreement as
of the day and year first above written.
CARIBGOLD MINERALS INC.
By: /s/ Paul Zyla
Paul Zyla
XTRA-GOLD RESOURCES INC.
By: /s/ William Edward McKechnie
William Edward McKechnie
- 6 -
SCHEDULE "A"
Val Plattas Mineralization in the Micham Exploraation Inc, Medel Property near
Disentis Graubunden Canton, Switzerland
The property comprises most of the area of the commune of Medel/Lucmagn in the
Medel Valley (some 120 square kilometres)
GC. mine is owned 80% subject to a 2% NSR.
- 7 -