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Exhibit 10.1
MINERAL PROPERTY OPTION AGREEMENT
THIS AGREEMENT made as of the ___ th
day of _____, 2007.
BETWEEN :
(the "Optionor")
OF THE FIRST PART
AND :
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BLACK HAWK EXPLORATION, a Nevada
corporation with its business office located at 8391 Beverly Blvd.,
#305 Los Angeles CA, 90048.
(the "Optionee")
OF THE SECOND PART
WHEREAS :
A. The Optionor is the owner of certain mineral
claims known as the North West Territories Property (the
"Property"), more particularly described in Schedule "A" attached
hereto;
B. The Optionor has agreed to grant an exclusive option to the
Optionee to acquire an undivided 100% interest in and to the
Property subject only to the Royalty, on the terms and conditions
hereinafter set forth;
NOW THEREFORE THIS AGREEMENT WITNESSES that in
consideration of the sum of $10.00 now paid by the Optionee to the
Optionor (the receipt and sufficiency of which is hereby
acknowledged), the parties agree as follows:
DEFINITIONS
1. For the purposes of this Agreement the following words and
phrases shall have the following meanings, namely:
(a) "Option" means the option to acquire up to a undivided 100%
interest in and to the Property as provided in this Agreement;
(b) "Option Period" means the period from the date of this
Agreement to and including the date of exercise or termination of
the Option;
(c) "Property" means the mineral claims described in Schedule
"A" hereto including any replacement or successor claims, and all
mining leases and other mining interests derived from any such
claims. Any reference herein to any mineral claim comprising the
Property includes any mineral leases or other interests into which
such mineral claim may have been converted;
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(d) "Property Rights" means all licenses, permits, easements,
rights-of-way, certificates and other approvals obtained by either
of the parties either before or after the date of this Agreement
and necessary for the exploration of the Property, or for the
purpose of placing the Property into production or continuing
production therefrom;
(e) "Royalty" means the net smelter returns royalty and the
gross overriding royalty of 2% payable to the Optionor under this
Agreement, which Royalty shall be calculated and payable in the
same manner as the Underlying Royalty;
(f) "Royalty Holder" means the Optionor under this Agreement;
and
(g) "Shares" means the 150,000 common shares in the capital of
the Optionee to be issued to the Optionor, pursuant to the exercise
of the Option.
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE OPTIONOR
2. (a) The Optionor represents and warrants to and covenants
with the Optionee, with the knowledge that the Optionee relies upon
same in entering into this Agreement, that:
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(i) it is legally entitled to hold the Property and the Property
Rights and will remain so entitled until the interest of the
Optionor in the Property which is subject to the Option has been
duly transferred to the Optionee as contemplated hereby;
(ii) it is and, at the time of each transfer to the Optionee of
an interest in the mineral claims comprising the Property pursuant
to the exercise of the Option, will be the recorded holder and
beneficial owner of all of the mineral claims comprising the
Property, free and clear of all liens, charges and claims of
others, except as noted on Schedule "A" hereto, and no taxes or
rentals are or will be due in respect of any of the mineral
claims;
(iii) the mineral claims comprising the Property have been duly
and validly located and recorded pursuant to the laws of the
jurisdiction in which the Property is situate and are in good
standing with respect to all filings, fees, taxes, assessments,
work commitments or other conditions on the date hereof and until
the dates set opposite the respective names thereof in Schedule "A"
hereto;
(iv) there are not any adverse claims or challenges against or
to the ownership of or title to any of the mineral claims
comprising the Property, nor to the knowledge of the Optionor is
there any basis therefor, and there are no outstanding agreements
or options to acquire or purchase the Property or any portion
thereof, and other than the Royalty, no person has any royalty or
other interest whatsoever in production from any of the mineral
claims comprising the Property;
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(v) it has been duly incorporated, amalgamated or continued and
validly exists as a corporation in good standing with respect to
the filing of its annual reports under the laws of its jurisdiction
of incorporation, amalgamation or continuation;
(vi) it has duly obtained all corporate authorizations for the
execution of this Agreement and for the performance of this
Agreement by it, and the consummation of the transactions herein
contemplated will not conflict with or result in any 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 the Articles or the constating documents of the
Optionor or any shareholders' or directors' resolution, indenture,
agreement or other instrument whatsoever to which the Optionor is a
party or by which it is bound or to which it or the Property may be
subject;
(vii) no proceedings are pending for, and the Optionor is
unaware of any basis for the institution of any proceedings leading
to, the dissolution or winding up of the Optionor or the placing of
the Optionor into bankruptcy or subject to any other laws governing
the affairs of insolvent corporations; and
(viii) the Property is not the whole or substantially the whole
of the undertaking of the Optionor.
(b) The representations and warranties contained in this section
are provided for the exclusive benefit of the Optionee, and a
breach of any one or more thereof may be waived by the Optionee in
whole or in part at any time without prejudice to its rights in
respect of any other breach of the same or any other representation
or warranty, and the representations and warranties contained in
this section shall survive the execution of this Agreement and of
any transfers, assignments, deeds or further documents respecting
the Property.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
OPTIONEE
3. (a) The Optionee represents and warrants to and covenants
with the Optionor, with the knowledge that the Optionor relies upon
same in entering into this Agreement, that:
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(i) it has been duly incorporated, amalgamated or continued and
validly exists as a corporation in good standing with respect to
the filing of annual reports under the laws of its jurisdiction of
incorporation, amalgamation or continuation;
(ii) it is lawfully authorized to hold mineral claims and real
property under the laws of the jurisdiction in which the Property
are situate;
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(iii) it has duly obtained all corporate authorizations for the
execution of this Agreement and for the performance of this
Agreement by it, and the consummation of the transactions herein
contemplated will not conflict with or result in any 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 the Articles or the constating documents of the
Optionee or any shareholders' or directors' resolution, indenture,
agreement or other instrument whatsoever to which the Optionee is a
party or by which it is bound or to which it or the Property may be
subject;
(iv) no proceedings are pending for, and the Optionee is unaware
of any basis for the institution of any proceedings leading to, the
dissolution or winding up of the Optionee or the placing of the
Optionee into bankruptcy or subject to any other laws governing the
affairs of insolvent corporations;
(v) the Shares will, at the time of delivery to the Optionor, be
duly authorized and validly allotted and issued as fully paid and
non-assessable common shares, free of any liens, charges or
encumbrances other than resale restrictions under Rule 144 of the
Exchange Act of 1934 (United States);
(b) The representations and warranties contained in this section
are provided for the exclusive benefit of the Optionor and a breach
of any one or more thereof may be waived by the Optionor in whole
or in part at any time without prejudice to its rights in respect
of any other breach of the same or any other representation or
warranty, and the representations and warranties contained in this
section shall survive the execution hereof.
GRANT AND EXERCISE OF OPTION
4. (a) The Optionor hereby grants to the Optionee the sole and
exclusive right and option to acquire a 100% undivided interest in
and to the Property, free and clear of all charges, encumbrances
and claims, except for the Royalty.
(b) The Option shall be exercised by the Optionee making the
following cash and Share issuances to the Optionor:
(i) $86,000 cash and 50,000 Shares upon signing of this
Agreement
(ii) $12,000 cash and 50,000 Shares on or before August __,
2008;
(iii) $18,000 cash and 50,000 Shares on or before August__,
2009;
(iv) $25,000 cash on or before August __, 2010; and
(v) $40,000 cash on or before August__, 2011.
(c) If and when the Option has been exercised, a 100% undivided
right, title and interest in and to the Property shall vest in the
Optionee, free and clear of all charges, encumbrances and claims
except for the Royalty.
TRANSFER OF PROPERTY
5. The Optionor shall, forthwith after the exercise of the
Option, file duly executed transfers of the 100% interest in the
Property which shall have been acquired by the Optionee, subject
only to the Royalty.
RIGHT OF ENTRY
6. Throughout the Option Period the directors and officers of
the Optionee and its servants, agents and independent contractors,
shall have the sole and exclusive right in respect of the Property
to:
(a) enter thereon;
(b) have exclusive and quiet possession thereof;
(c) do such prospecting, exploration, development and other
mining work thereon and thereunder as the Optionee in its sole
discretion may determine advisable;
(d) bring upon and erect upon the Property such buildings,
plant, machinery and equipment as the Optionee may deem advisable;
and
(e) remove therefrom and dispose of reasonable quantities of
ores, minerals and metals for the purposes of obtaining assays or
making other tests.
OBLIGATIONS OF THE OPTIONEE DURING OPTION
PERIOD
7. During the Option Period the Optionee shall be the operator
of the Property and shall:
(a) maintain in good standing those mineral
claims comprising the Property by the doing and filing of
assessment work or the making of payments in lieu thereof, by the
payment of taxes and rentals, and the performance of all other
actions which may be necessary in that regard and in order to keep
such mineral claims free and clear of all liens and other charges
arising from the Optionee's activities thereon except those at the
time contested in good faith by the Optionee;
(b) duly record all exploration work carried out on the Property
by the Optionee as assessment work;
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(c) permit the directors, officers, employees and designated
consultants of the Optionor, at their own risk and expense, access
to the Property at all reasonable times, and the Optionor agrees to
indemnify the Optionee against and to save it harmless from all
costs, claims, liabilities and expenses that the Optionee may incur
or suffer as a result of any injury (including injury causing
death) to any director, officer, employee or designated consultant
of the Optionor while on the Property;
(d) permit the Optionor, or its representative duly authorized
in writing, at its own cost and upon three days notice to the
Optionee, to visit and inspect the Property at all reasonable times
and intervals, and data obtained by the Optionee as a result of its
operations thereon, provided always that the Optionor or its
representative shall abide by the rules and regulations laid down
by the Optionee relating to matters of safety and efficiency in its
operations and, notwithstanding, the Optionee shall be under no
liability to the Optionor or its representative for any personal
injury, including death, or any damage to property other than such
as might be occasioned by or through any negligence on the part of
the Optionee, its servants or agents;
(e) do all work on the Property in a good and workmanlike
fashion and in accordance with all applicable laws, regulations,
orders and ordinances of any governmental authority;
(f) indemnify and save the Optionor harmless in respect of any
and all costs, claims, liabilities and expenses arising out of the
Optionee's activities on the Property, but the Optionee shall incur
no obligation hereunder in respect of claims arising or damages
suffered after termination of the Option if upon termination of the
Option any workings on or improvements to the Property made by the
Optionee are left in a safe condition and in full compliance with
requirements of all environmental laws and regulations;
(g) permit the Optionor, at its own expense, reasonable access
to the results of the work done on the Property during the last
completed calendar year;
(h) deliver to the Optionor, forthwith upon receipt thereof,
copies of all reports, maps, assay results and other technical data
compiled by or prepared at the direction of the Optionee with
respect to the Property.
(i) obtain and maintain or cause any contractor engaged by it
hereunder to obtain and maintain, during any period in which active
work is carried out hereunder, not less than the following:
TERMINATION OF OPTION
8. (a) The Option shall terminate:
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(i) upon exercise in accordance with the terms of this
Agreement;
(ii) upon the Optionee failing to pay the cash component of the
consideration payable or failing to issue the Shares in accordance
with subparagraph 4(b);
(iii) subject to paragraph 15 hereof, upon the Optionee failing
to remedy a default as provided therein;
(iv) at any other time, by the Optionee giving notice of such
termination to the Optionor;
(b) If the Option is terminated otherwise than upon the exercise
thereof, the Optionee shall:
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(i) leave in good standing for a period of at least 12 months
from the termination of the Option Period those mineral claims
comprising the Property;
(ii) deliver or make available at no cost to the Optionor within
45 days of such termina
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