Exhibit
10.1
JOINT
VENTURE AGREEMENT
THIS
AGREEMENT is made the 6th day of
October, 2006
XSTATE
RESOURCES LIMITED (ABN 96 009 217 154) of Level
2, 45 Stirling Highway Nedlands, Western Australia ( Xstate
);
AND
LIBERTY STAR
GOLD CORP INC, a company incorporated in
Nevada, of 2766 North Country Club Road, Tucson A2 85716, United
Sates of America ( Liberty Star ).
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A.
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On 11 July 2006,
Xstate and Liberty Star entered into an agreement ( Heads of
Agreement ) whereby the Parties agreed to form the Joint
Venture for the purpose of exploring, developing and, if warranted,
mining the JV Pipes located within the Joint Venture
Area.
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B.
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This
Agreement replaces the Heads of Agreement and sets out the terms of
the Joint Venture between the Parties.
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C.
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The
Parties acknowledge that it is Xstate’s intention to
incorporate a subsidiary entity in the United States ( USCO
) and that Xstate will assign its interest in this Agreement to
USCO prior to the Commencement Date.
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IT IS AGREED as follows:
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1.
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DEFINITIONS AND INTERPRETATION
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In this Agreement:
Advance means a cash payment of $100,000 that has already
been paid by Xstate to Liberty Star in accordance with the terms of
the Heads of Agreement.
Agreement means this Agreement including the recitals,
schedules and annexures.
Area of Interest has the meaning ascribed to it in clause
19.1.
Assigning Party has the meaning given to it in clause
10.1.
ASX means the Australian Stock Exchange Limited ACN 008 624
691.
Bankable Feasibility Study means a detailed study which
could reasonably serve as the basis for a favourable decision by a
financial institution to finance Mine Development. The Bankable
Feasibility Study shall:
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(a)
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provide estimates of the tonnes of proven and probable reserves of
ore and the Mineral grades thereof;
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(b)
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contain estimates of both capital costs and operating costs likely
to be incurred in establishing and conducting Mining Operations,
including costs to be incurred in Mine Development, pre-production
and crushing and treatment;
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(c)
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analyze how to proceed with Mining Operations to economically and
commercially extract Minerals;
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(d)
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include reference to relevant marketing and financial aspects;
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(e)
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state that the proposed Mining Operations is commercially viable
and recommends the parameters for the most viable operations;
and
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(f)
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include a schedule of relevant approvals necessary before
production may commence.
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Business Day means a day upon which trading banks are open
for business in Perth, Western Australia, not being a Saturday or a
Sunday.
Commencement Date means the date all of the conditions
precedent set out in clause 2.1 have been satisfied or waived.
End Date means 5:00 pm Western Standard Time in Perth,
Western Australia, on 14 December 2006 (or such later date as the
Parties agree).
Environmental Law means any law concerning environmental
matters which regulates or affects the U.S. Federal Lode Mining
Claims, and includes, but is not limited to, laws concerning land
use, development, pollution, waste disposal, toxic and hazardous
substances, conservation of natural or cultural resources and
resource allocation including any law relating to exploration for
or development of any natural resource.
Environmental Liability means any obligation, expense,
penalty or fine under Environmental Law, including, rehabilitation
and rectification work of whatsoever nature or kind.
Expert means such independent person as is agreed between
the Parties or failing expeditious agreement as is appointed at the
request of any Party by the then President of the Canadian
Institute of Mining, Metallurgy and Petroleum.
Exploration Operations means all activities up to the date
one or both Parties elect to participate in the Mining Operations
pursuant to clause 9.2 which include activities aimed at the
discovery, location and delineation of Minerals and all activities
as are necessary or expedient for the purpose of exploring the
Joint Venture Area, conducting a Bankable Feasibility Study and all
activities to produce the same.
First Right Expiry Date means the date that is 3 years from
the Commencement Date.
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Heads of Agreement means the agreement dated July 11, 2006
between Liberty Star and Xstate.
Initial JV Pipes means the Pipes as detailed in Item 1 of
Appendix 3, located within the Joint Venture Area, in which Xstate
will obtain a 50% interest pursuant to the terms and conditions of
this Agreement.
Joint Venture means the unincorporated joint venture formed
by the Parties in respect of the Joint Venture Area upon the terms
and conditions set out in this Agreement.
Joint Venture Area means the Elle Joint Venture lands which
encompasses an area of approximately 22 square miles allocated by
Liberty Star to the Joint Venture, plus the area on which any
after-acquired property in the Area of Interest is located, as more
specifically identified in Appendix 2.
Joint Venture Assets means all property held or acquired or
created by or on behalf of the Parties for the purposes of the
Joint Venture including (without limitation):
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(b)
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the
Mining Information;
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(c)
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equipment, vehicles, and plants; and
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(d)
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the
Minerals, concentrate and ore prior to their being taken in kind by
the Parties.
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Joint Venture Expenditure(s) means all costs reasonably and
properly incurred by or on behalf of the Joint Venture in
connection with Joint Venture Operations.
Joint Venture Interest means the following obligations,
benefits and rights of a Party expressed as a percentage determined
in accordance with this Agreement:
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(a)
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the
obligation, subject to the terms of this Agreement, to contribute
that percentage of all Joint Venture Expenditure;
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(b)
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the
ownership of and the obligation right and benefit as a tenant in
common to receive in kind and to dispose of for its own account
that percentage of Minerals produced by the Joint Venture; and
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(c)
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the
beneficial ownership as a tenant in common of an undivided share in
that percentage of all Joint Venture Property.
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Joint Venture Operations means all activities as are
necessary or desirable in order to implement and give full effect
to the provisions and purposes of this Agreement incidental to the
Exploration Operations and, subject to clause 9 Mining Operations,
related to the JV Pipes.
JV Bank Account has the meaning given to that term in clause
3.3.
JV General Plan means the general plan of the Joint Venture
as detailed in Appendix 1.
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JV Mining Claims mean the U.S. Federal Lode Mining Claims on
which the JV Pipes are located (as set out in Appendix 3) and any
mining claim or interest in a JV Mining Claim (or equivalent)
otherwise acquired by the Joint Venture after the date of this
Agreement. The JV Mining Claims include all rights to mine and
other privileges appurtenant to those JV Mining Claims and all ore
and mineral-bearing material, sand, slimes, tailings and residues
located on and under those JV Mining Claims.
JV Pipes means both the Initial JV Pipes and any Other Pipes
allocated to the Joint Venture pursuant to clause 7, as identified
in Appendix 3 as amended from time to time.
Listing Rules means the official Listing Rules of ASX.
Management Committee has the meaning given to that term in
clause 4.1.
Manager means the Party appointed by the Parties in
accordance with this Agreement, to manage the Joint Venture.
Mine Development means the location, opening and development
of mines and all activities necessary, expedient, conducive or
incidental thereto including without limitation pre-stripping and
the removal and disposal of over-burden and waste.
Minerals means all naturally occurring substances obtained
or obtainable by Joint Venture Operations carried out on or under
the surface of the land the subject of the JV Pipes and includes
(without limitation) uranium, gold and other precious metals.
Mining Information means all technical information including
(without limitation) geological, geochemical and geophysical
reports, surveys, mosaics, serial photographs, samples, drill core,
drill logs, drill pulp, assay results, maps and plans relating to
the JV Pipes and/or Joint Venture Operations, whether in physical,
written or electronic form.
Mining Laws means the applicable rules, regulations,
statutes and directives that apply to exploration and mining
activities in Arizona.
Mining Operations means commercial mining operations and all
activities necessary, expedient, conducive or incidental thereto
including without limitation:
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(a)
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Mine
Development; and
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(b)
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the
weighing, sampling, assaying, mining, extraction, crushing,
refining, treatment, transportation, handling, storage, loading and
delivery of Minerals.
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Native Title means a right, interest or entitlement to the
occupation or use of the Joint Venture Area by indigenous
inhabitants in accordance with the laws and customs of the
indigenous inhabitants and recognised by statute or by common
law.
Non-Assigning Parties has the meaning given to it in clause
10.2.
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Other Pipes means other pipe targets held by Liberty Star
within the Joint Venture Area as detailed in Appendix 4 which may
be allocated to the Joint Venture in accordance with clause 7 or
otherwise.
Party means Xstate and Liberty Star and their respective
successors and permitted assigns and the successors and permitted
assigns and (where applicable) legal personal representatives of
any person which at any time hereafter becomes a Party and each of
those persons and Parties means any one of the Party.
Pipe(s) means an area within the JV Mining Claims designated
as a breccia pipe target.
Prime Rate means the prime rate, as reported by the Wall
Street Journal's bank survey.
Program means operating plans, mine maintenance plans,
development plans, exploration plans, mine closure plans and
related budgets, for the Joint Venture Operations or any part
thereof, as approved in accordance with the Management Committee
pursuant to this Agreement.
Related Body Corporate in relation to a Party which is a
corporation, means a company which is related to that Party if the
Party and the corporation is the subsidiary of the other, or both
are subsidiaries of the same body corporate, or each of them is
construed by the same person.
Right of First Refusal has the meaning given to it in clause
7.
Sole Funding Amount means the amount of $2,900,000 that
Xstate agrees to make available for Joint Venture Operations during
the Sole Funding Period in return for a 50% Joint Venture
Interest.
Sole Funding Period means a 3 year period commencing on the
Commencement Date.
Subcontracting Agreement means the subcontracting agreement
between Xstate as Manager and Liberty Star as subcontractor in a
form to be agreed between the Parties.
Xstate means Xstate Resources Ltd (formerly Oriental Crystal
(International) Limited) (ABN 96 009 217 154).
In this Agreement unless the context otherwise requires:
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(a)
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references to a recital, clause, schedule, annexure or exhibit is
to a recital, clause, schedule, annexure or exhibit of or to this
Agreement;
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(b)
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a
reference to this Agreement or another instrument includes any
variation or replacement of any of them;
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(c)
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a
reference to any statute shall include any amendment, replacement
or re-enactment thereof for the time being in force and any
by-laws, statutory
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instruments, rules, regulations, notices, orders, directions,
consents or permission’s made thereunder and any conditions
attaching thereto;
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(d)
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the
singular includes the plural and vice versa;
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(e)
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a
reference to any gender includes all genders;
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(f)
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a
reference to a person includes a reference to the person’s
executors, administrators, substitutes, successors and permitted
assigns;
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(g)
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a
reference to $ or dollars is to the currency of the United States
of America;
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(h)
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a
reference to AUD$ is to the currency of Australia; and
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(i)
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the
headings in this Agreement shall not affect its interpretation.
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The formation of the Joint Venture is subject to and conditional
upon:
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(a)
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Xstate obtaining all necessary governmental consents and approvals
to the matters set out in this Agreement including any consent
required pursuant to the Mining Laws for the transactions
contemplated by this Agreement;
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(b)
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Xstate completing a capital raising of a minimum of AUD$5,000,000
through the issue of fully paid ordinary shares at a price of
AUD$0.20 each ( Capital Raising );
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(c)
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Xstate preparing a prospectus for the Capital Raising (
Prospectus ) and lodging it with the Australian Securities
and Investments Commission;
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(d)
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Xstate obtaining shareholder approval to change the nature and/or
scale of its activities in accordance with Chapter 11 of the
Listing Rules;
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(e)
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Xstate satisfying the requirements of Chapters 1 and 2 of the
Listing Rules as if Xstate was applying to be admitted to the
official list of ASX; and
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(f)
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Xstate depositing the Sole Funding Amount in the Joint Venture Bank
Account, in accordance with clause 3.3.
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2.2
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Efforts to Satisfy Conditions
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Xstate shall use commercially reasonable efforts to:
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(a)
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satisfy the conditions set out in clause 2.1(a) to 2.1(f)
inclusive, as soon as practicable after the date of this Agreement;
and
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(b)
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execute and do all such acts and things as are necessary or
desirable to ensure that the conditions set out in clause 2.1(a) to
2.1(f) are fulfilled as expeditiously as possible.
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If the conditions set out in clause 2.1 are not satisfied or waived
in accordance with the terms of this Agreement on or before the End
Date, either Party may elect to immediately terminate this
Agreement by written notice to the other Party.
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2.4
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Effect of Termination
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If this Agreement is terminated pursuant to clause 2.3:
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(a)
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this
Agreement shall be deemed to be at an end and shall have no force
or effect;
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(b)
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neither Party shall be subject to any of the obligations contained
in this Agreement;
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(c)
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no
Party may claim any rights at law or equity against the other
Party; and
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(d)
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Liberty Star will be entitled to retain the Advance.
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2.5
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Benefit of Conditions
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The conditions in clause 2.1 are inserted in this Agreement for the
benefit of both Parties and the Parties may, by mutual written
consent on or before the End Date, waive the benefit of one or more
of the conditions.
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3.1
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Establishment of the Joint Venture
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Xstate and Liberty Star shall form the Joint Venture on and from
the Commencement Date, for the purpose of the Joint Venture
Operations on the commercial terms set out in this Agreement and
otherwise on terms and conditions acceptable to both Parties.
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3.2
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Initial Joint Venture Interests
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Prior to the Commencement Date, the Parties agree the initial Joint
Venture Interests of Liberty Star and Xstate in the Joint Venture
are:
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(a)
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Liberty Star – 100%; and
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3.3
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Joint Venture Bank Account
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(a)
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As
soon as practicable after the execution of this Agreement, the
Parties agree to set up a bank account to hold funds on behalf of
the Joint Venture ( JV Bank Account ).
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(b)
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No
disbursements may be made from the JV Bank Account unless the Party
seeking to make the disbursement obtains the written approval from
the other Party.
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(c)
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The
Sole Funding Amount will be paid into the JV Bank Account.
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3.4
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Xstate’s 50% Interest
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Upon fulfillment or waiver of all of the conditions set out in
clause 2.1(a) to 2.1(f) inclusive:
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(a)
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Liberty Star shall immediately transfer to Xstate a 50% interest in
the Initial JV Pipes; and
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(b)
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Xstate will immediately earn a 50% Joint Venture Interest.
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The Joint Venture shall commence and deem to have been formed on
the Commencement Date.
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(i)
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the
Sole Funding Amount will be expended on Exploration Operations in
accordance with the programs and budgets approved by the Management
Committee;
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(ii)
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subject to clause 3.6(b), the entire Sole Funding Amount shall be
spent during the Sole Funding Period; and
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(iii)
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to
the terms of the JV General Plan.
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(b)
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The
Management Committee may elect to cease further exploration work in
relation to any of the JV Pipes if the initial exploration that is
undertaken does not warrant further follow up work on any
particular JV Pipe. In these circumstances, some or all of the Sole
Funding Amount may be allocated to the Other Pipes.
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(c)
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If,
prior to the completion of the Exploration Operations, the entire
Sole Funding Amount has been expended, each Party agrees to
contribute to expenditure made or incurred in respect of the
Exploration Operations in accordance with clause 8.1.
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(d)
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If,
after the completion of the Exploration Operations part of the Sole
Funding Amount has not yet been expended, then those funds will be
applied to the costs of the Bankable Feasibility Study, and if any
funds yet remain, for the Mining Operations.
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(a)
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Liberty Star shall do everything necessary to confirm and effect
the transfer to Xstate of any beneficial interest, and
corresponding legal interest, in the JV Pipes acquired by Xstate
pursuant to this Agreement. Pending any required transfer, Liberty
Star shall hold that interest in trust for Xstate.
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(b)
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Each
Party shall be the beneficial owner as tenant in common of an
undivided share of the Joint Venture Property in proportion to
their Joint Venture Interest.
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(c)
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Each
Party shall be entitled to take in kind and separately dispose of,
in proportion to their Joint Venture Interest, all Minerals
produced by the Joint Venture.
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(d)
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The
rights, interests, liabilities and obligations of the Parties
respectively under this Agreement will be individual and separate
and will not be joint or collective and each Party will be
responsible only for its own obligations and will be liable only
for its own proportionate share of any Joint Venture Expenditure
and will be entitled only to its own proportionate share of any
property and assets of the Joint Venture. The rights and
obligations of the Parties pursuant to this Agreement will be
several and neither joint nor joint and several.
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(e)
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The
Parties agree that sufficient expenditure will be incurred in
relation to the JV Pipes to meet the minimum expenditure
commitments, if any, set out by regulatory authorities having
jurisdiction.
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(a)
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After the Commencement Date, the Parties will form a Management
Committee ( Management Committee ).
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(b)
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Each
Party may appoint one member to the Management Committee.
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(c)
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Each
Party may appoint one alternate member ( Alternate ) for any
members appointed by it.
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(d)
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Each
Party must give notice to the other Party of the appointment of its
members and Alternate.
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(e)
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An
Alternate may act only if the member for whom the Alternate is
appointed Alternate is not present at a meeting of the Management
Committee, in which event the Alternate will be deemed to be that
member and may exercise all powers of that member to the extent
that the member has not exercised them.
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(f)
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Each
Party has the right to change any of its members and Alternates at
any time by notifying the other Party to that effect.
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(a)
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Voting on any issue requiring a decision by the Management
Committee will be by a simple majority with the vote of each Party
being in proportion to its Joint Venture Interest at the time. Any
Party may arrange at its own expense to have further consultants,
acceptable to the Management Committee or technical personnel
(being bona fide employees of the particular Party which they
represent) present at the meetings of the
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Management Committee to assist the representatives but those
persons will not be entitled to vote at those meetings.
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(b)
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In
the event of a deadlock, the Parties agree that the dispute
resolution process set out in clause 12 will be followed.
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The Management Committee will have the power to:
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(a)
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approve, disapprove or amend any Program;
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(b)
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review the status of the Mine Operations from time to time;
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(c)
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approve parts of the Joint Venture Area to be surrendered or
otherwise removed from the Joint Venture Area;
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(d)
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approve the acquisition of JV Mining Claims, or other interests in
mining assets; and
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(e)
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provide advice to and instruct the Manager from time to time.
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4.4
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Frequency of Meetings
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(a)
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The
Management Committee will meet on any date nominated by the Manager
but not less than once a fortnight (or such other period as may be
mutually agreed between the Parties from time to time) while
Exploration Operations or Mine Development is being conducted.
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(b)
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The
Manager may also call a meeting of the Management Committee at any
time on no less than 7 days, notice if it reasonably considers that
the meeting is necessary.
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(c)
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The
Manager will prepare and send to all the other members of the
Management Committee notice of all meetings and the proposed
agenda, to be received not less than 7 days during Exploration
Operations or not less than 14 days during Mine Development (or
shorter period as may be agreed by the members of the Management
Committee), before the respective meeting date.
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Provided the Management Committee has acted within the scope of its
powers granted to it under this Agreement, all decisions of the
Management Committee are binding on all Parties.
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4.6
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Meetings by Electronic Means
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(a)
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If
all representatives of the Parties agree, meetings of the
Management Committee may be held by radio, telephone, closed
circuit television or other electronic means of audio or
audio-visual communication.
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(b)
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Notwithstanding that the members of the Management Committee are
not present together in one place at the time of the communication,
a
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resolution passed by that communication will be deemed to have been
passed at a meeting of the Management Committee held on the day on
which and at the time at which the communication took place.
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(a)
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Each
notice convening a meeting must enclose the agenda for that meeting
and must be sent by facsimile, letter or email.
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(b)
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Not
less than two Business Days before the meeting, a member may
request that an item be included in the agenda and the agenda will
be amended accordingly.
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(c)
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A
copy of the amended agenda must be given or sent to each member not
less than one Business Day before the meeting in accordance with
paragraph (a).
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(d)
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Any
matter not included in the agenda must not be dealt with at the
meeting unless all members present agree.
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4.8
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Written records of meetings
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(a)
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The
secretary of the Management Committee must keep a written record of
decisions made at each meeting of the Management Committee and
distribute copies of the record to each Participant and to the
Manager, as soon as practicable following the meeting.
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(b)
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If a
Party has not commented on the written record within 20 Business
Days after receipt, it will be taken to have accepted the written
record as an accurate recording of the decisions noted in that
record.
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(c)
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On
the written record being accepted by the Parties under
paragraph (b) and being signed by the chairperson, it will be
prima facie evidence of the decisions and proceedings of the
meeting to which it relates.
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Any decision of the Management Committee may be evidenced by a
resolution signed by representatives having a majority of the votes
at any meeting of the Management Committee notwithstanding any
failure of any Party to approve the minutes of each meeting and the
same will be contractually binding on the Parties. A resolution in
writing signed by one representative of each of the Parties will be
as valid and effectual as if it had been passed at a duly convened
meeting of the Management Committee.
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4.10
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Representative of Assignee
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If a Party assigns its Joint Venture Interest to a Related Body
Corporate pursuant to clause 10.1, there will be no increase in the
number of representatives comprising the Management Committee. In
such event, the appointment of the representative of the assignor
on the Management Committee will automatically cease and the
assignee will be entitled to appoint one representative and
one alternate representative on the Management Committee.
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4.11
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Power of representatives
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Each representative nominated by any Party pursuant to clause
4.1(a) will be duly authorised and empowered to make decisions on
behalf of, and to bind contractually, that Party in all matters
raised for the determination of, and properly within the
jurisdiction of, the Management Committee in accordance with clause
4.3.
The Management Committee may establish subcommittees and determine
their functions (which will be advisory to the Management Committee
only).
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(a)
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Costs and expenses incurred by the Parties relating to the
attendance in their capacity as members of the Management Committee
meetings, will be borne by them and are not part of the Joint
Venture Expenditure.
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(b)
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As
long as the Manager and Subcontractor are Xstate and Liberty Star
respectively, then costs and expenses incurred by the
Manager’s or Subcontractor’s representatives to attend
Management Committee meetings will be borne by each of them
respectively.
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(c)
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If
the Management Committee requests that additional representatives
attend the Management Committee meetings in furtherance of the
obligations of the Manager under this Agreement, or the
Subcontractor under the Subcontracting Agreement, then such costs
and expenses to attend the Management Committee meeting will form
part of the Joint Venture Expenditure.
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5.
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APPOINTMENT AND DUTIES OF MANAGER
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(a)
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During the Sole Funding Period, Xstate will be the Manager of the
Joint Venture.
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(b)
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After the Sole Funding Period, the Manager will be appointed by the
Party holding the largest Joint Venture Interest at the time, or if
the Parties hold equal Joint Venture Interests, by the Management
Committee.
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(a)
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The
Manager will (by itself or through its employees, agents or
contractors) have the conduct of all the Joint Venture Operations
on behalf of the Parties, subject at all times to the directions of
the Management Committee, and for this purpose shall have
possession and control of the Joint Venture Property.
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(b)
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The
Manager must consult freely with members of the Management
Committee and keep them fully advised of present and prospective
operations.
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(c)
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The
Manager in its operations hereunder shall be deemed to be an
independent contractor. The Manager shall not act or hold itself
out as agent for any of the Parties nor make any commitments on
behalf of any of the Parties unless specifically permitted by this
Agreement or directed in writing by a Party.
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(d)
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Subject to any specific provision of this Agreement and subject to
it having the right to reject any direction on reasonable grounds
by virtue of its status as an independent contractor, the Manager
shall perform its duties hereunder in accordance with the
directions of the Management Committee and in accordance with this
Agreement.
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(e)
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The
Manager shall manage and carry out Joint Venture Operations
substantially in accordance with Programs, Bankable Feasibility
Study, adopted by the Management Committee and in connection
therewith shall, in advance if reasonably possible, notify the
Management Committee of any change in Joint Venture Operations
which the Manager considers material and if it is not reasonably
possible, the Manager shall notify the Management Committee so soon
thereafter as its reasonably possible.
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(f)
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The
Manager shall have the sole and exclusive right and authority to
manage and carry out all Joint Venture Operations in accordance
herewith and to incur the costs required for that purpose. In so
doing, the Manager shall:
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(i)
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comply with the provisions of all agreements or instruments of
title under which the Joint Venture Assets are held;
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(ii)
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pay
all Joint Venture Costs properly incurred promptly as and when
due;
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(iii)
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keep
the Joint Venture Assets free of all liens and encumbrances (other
than those, if any, permitted pursuant to this Agreement) arising
out of the Joint Venture Operations and, in the event of any lien
being filed as aforesaid, proceed with diligence to contest or
discharge the same;
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(iv)
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with
the approval of the Management Committee, prosecute claims and,
where a defence is available, defend litigation arising out of the
Joint Venture Operations, provided that any Party may join in the
prosecution or defence at its own expense;
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(v)
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perform such assessment work or make payments in lieu thereof and
pay such rentals, taxes or other payments and do all such other
things as may be necessary to maintain the JV Mining Claims in good
standing, including, without limiting generality, staking and
restaking mining claims, and applying for licenses, leases, grants,
concessions, permits, patents and other rights to and interest in
the Minerals;
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(vi)
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maintain books of account in accordance with accounting principles
generally accepted in the mining industry in the United States;
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(vii)
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perform its duties and obligations hereunder in a sound and
workmanlike manner, in accordance with sound mining and engineering
practices and other practices customary in the mining industry, and
in substantial compliance with all applicable federal, state,
territorial and municipal laws, by-laws, ordinances, rules and
regulations and this Agreement;
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(viii)
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prepare and deliver all Programs and other reports reasonably
required by the Management Committee or pursuant to this Agreement;
and
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(ix)
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have
such additional duties and obligations as the Management Committee
may from time to time determine.
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It is a condition of this Agreement that Xstate will engage Liberty
Star as a subcontractor to carry out certain of its obligations as
Manager of the Joint Venture on the terms and conditions of the
Subcontracting Agreement.
The Manager is not responsible to the Parties for any liability,
loss, harm, damage, cost or expense (including legal fees)
that:
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(a)
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any
of them may suffer, incur or sustain; and
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(b)
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arises out of the activities of the Manager in performing its
duties or obligations under this Agreement,
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except to the extent that that liability, loss, harm, damage, cost
or expense arises from the Manager's wilful misconduct, bad faith
or gross negligence.
The Parties indemnify the Manager against any liability, loss,
harm, damage, cost or expense (including legal fees), that the
Manager may suffer, incur or sustain:
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(a)
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as a
result of any suit, claim or demand brought or made against the
Manager; or
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(b)
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arising out of the activities of the Manager in performing its
duties or obligations under this Agreement,
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except to the extent that that liability, loss, harm, damage, cost
or expense arises from the Manager's wilful misconduct, bad faith
or gross negligence.
In this clause 5
