Owner
Post by Franko10 ™ on Dec 6, 2007 6:30:28 GMT -5
CASAVANT MINERAL CLAIMS PURCHASE AND EXPLORATION
RIGHTS AGREEMENT SUBJECT TO FINDER'S ROYALTY WITH
REGISTRATION RIGHTS AGREEMENT ANNEXED
THIS CLAIMS PURCHASE AND EXPLORATION RIGHTS AGREEMENT (the "Agreement") is made and dated for reference effective as fully executed on the 25th day of November, 2002 as First Restated and Amended this 15th day of January, 2003, as further subject to a Finder's Royalty and Registration Rights Agreement annexed hereto as Addendum 1 and Addendum 2, respectively.
BETWEEN:
CASAVANT MINING KIMBERLITE INTERNATIONAL, INC., (formerly Cyber Mark International Corp.) a corporation duly incorporated under the laws of the State of Nevada, U.S.A.,
("CMKI");
OF THE FIRST PART
AND:
URBAN CASAVANT, INDIVIDUALLY AND AS AGENT FOR, FORT A LA CORNE DIAMOND FIELDS INC., BUCKSHOT HOLDINGS, LTD. ("Buckshot"), COMMANDO HOLDINGS LTD. ("Commando"), 101010307 SASKATCHEWAN LTD. ("Sask 307"), 101012190 SASKATCHEWAN LTD. ("Sask 190"), 101027101 SASKATCHEWAN LTD. ("Sask 101") and MORGAIN MINERALS, INC. ("MMI"), subject to option, (being hereinafter collectively referred to as the "Seller" as the context so requires);
OF THE SECOND PART
(CMKI and the Seller being hereinafter singularly also referred to as a "Party" and collectively referred to as the "Parties" as the context so requires).
WHEREAS IN CONSIDERATION of the payments to be made pursuant to, the mutual covenants contained in, and the mutual benefits to be derived from, this Agreement, the Seller and CMKI hereby agree as follows:
ARTICLE I
CLAIMS PURCHASE AND EXPLORATION RIGHTS
1.1 CONVEYANCE OF CLAIMS. The Seller conveys, assigns, and otherwise transfers "full, complete and good" title to CMKI all rights, title and interest in the exclusive mineral exploration and mining rights on all or any portion of the Property Claims (as defined herein below). As used in this Agreement, the term "Property" shall mean the totality of all rights, title and interests related to or included in the properties described in the October 28, 2002 report prepared by P. Robertshaw, Robershaw Geophysics, 111 Middlecrescent, Saskatoon, Saskatchewan S7J 2W5 Canada for Fort a la Corne Diamond Fields, Inc. which is incorporated herein by reference as if set-forth in its entirety in this Agreement including, without limitation, all minerals in, on and under the Property and the land covered by the Property. The conveyance shall become effective at the Closing Date of this Agreement which shall be set for 2:00 p.m. (Las Vegas Time), on Monday, December 2, 2003 at Suite 202, 6767 Tropicana Boulevard, Las Vegas, NV, unless extended herein below.
1.2 IMMEDIATE CONVEYANCE OF ALL EXPLORATION RIGHTS, TITLE AND INTERESTS UNDER THE CLAIMS. After the Closing Date, the Seller grants to CMKI the full right, title and interest, including the lawful authority, to enter upon the Property and to conduct such exploration and prospecting operations, as CMKI may deem appropriate, to determine the presence, location, quantity and value of minerals contained in the Property with the intention that CMKI's initial exploration efforts will be a systematic and scientific evaluation of the Property. Such operations may include, but shall not be limited to, mapping, sampling, including bulk sampling, trenching, drilling, testing, assaying and conducting environmental studies and other magnetic and geophysical exploration methods whether now known or in the future developed, and CMKI will use its reasonably best efforts to explore the Property. CMKI may also mine and remove such amount of minerals as CMKI may deem appropriate for sampling, assaying, testing and evaluation of the Property provided that the minimum exploration expenditures shall be in conformity with the laws, rules, regulations, policies and directives promulgated by the Province of Saskatchewan relative to the Property and the prospecting, claiming, exploration and mining of diamondiferous kimberlite minerals in particular. In addition, CMKI shall have the right:
(a) to use all easements and all rights-of-way for ingress and egress to and from the Property to which the Seller may be entitled;
(b) to make use of all available facilities located on the Property, including but not limited to, mineral storage and core sample warehouses and outbuildings;
(c) to obtain all permits, approvals and other federal, provincial and local governmental authorizations as CMKI deems necessary to conduct its mineral exploration activities;
(d) to exercise all other rights that are or may be incidental to any or all of the rights granted, expressly or implicitly, to CMKI in this Agreement; and
(e) to the extent Seller possesses the title and authority to grant it, to possess and use all or any part of the Property together with all easements to, across and through the Property, for the purpose of exploring any adjoining or nearby property owned, controlled or operated by CMKI.
1.3 OPERATIONS. CMKI agrees to conduct its operations in a manner as to not unreasonably interfere with the operations of the Seller as contemplated in Section "1.7" hereinbelow and so long as CMKI is able to fulfill the essential purposes desired to be obtained by it in this Agreement. The Parties will mutually discuss the location of operations of both Parties and each Party will make reasonable attempts to notify the other Party prior to any exploration, core drilling, and excavation work being conducted on the Property.
1.4 OWNERSHIP AND PROCESSING OF GEMS. The diamondiferous kinberlite minerals and their matrix materials to be mined by CMKI (collectively, the "Minerals") will be placed in a "controlled", "secured" and "accountable" inventory by CMKI, and all such Minerals will be assayed to determine the Finder's Royalty due the Seller in any manner it may determine reasonable in the circumstances, provided that, at all times, any such process reasonably complies with standard industry practices in connection with the preparation of polished goods and, provided further, that CMKI uses its reasonably best efforts to seek the maximum yield of gems in connection with any such Minerals. In this regard it is hereby also expressly acknowledged and agreed by the Parties hereto that for purposes of the Finder's Royalty, any "facetable" gemstone greater than one (1) carat in weight or any specimen exceeding U.S. $5,000 in wholesale value, will only be processed in such a manner as may be mutually agreed by both Parties, from time to time, acting reasonably. All such facetable gemstones or specimens will be kept in a mutually acceptable controlled, secure, and accountable storage facility with a dual keyed access, of which each Party will hold one key, and which storage facility will be subject to twenty-four hour video surveillance and such other monitoring as may be necessary and proper.
1.5 COOPERATION BY THE SELLER AND ASSESS TO THE PROPERTY. The Seller agrees to cooperate with CMKI in its investigation of the Property by consulting with CMKI with respect to the Property and CMKI's exploration and mining operations on the Property. The Seller further agrees to use its reasonably best efforts to assist CMKI in the exercise of all rights that are or may be incidental to any or all of the rights granted, expressly or implicitly, to CMKI in this Agreement including, without limitation, the necessary securement of all easements and all rights-of-way for ingress and egress to and from the Property presently available to the Seller; provided, however, that, notwithstanding the Seller's reasonably best efforts as aforesaid, the Seller does not hereby warrant or guarantee the availability of any said easements and rights-of-way to CMKI from third parties who previously may have permitted said use or assess to the Seller. The Seller also agrees to use its reasonably best efforts to assist CMKI with the provision of basic technical, gemological and legal and historical information and support which may assist CMKI in its exploration and mining of the Property.
1.6 PAYMENT IN SHARES. On or before Closing of this Agreement or as otherwise agreed to by the Parties, CMKI shall pay to the Seller and its designees the sum of not less than 2,800,000,000 of its common voting shares in certificate form and the sum of $2,000,000. Each share certificate issued by CMKI will be duly endorsed as being "fully paid" and "non-accessable" and will be countersigned by the President and Secretary-Treasurer in their capacity as the duly elected corporate officers and countersigned by the transfer agent. Each certificate will bear a Rule 144 restrictive legend, as more fully described in section "2.2" hereinbelow or shall be otherwise "free trading" shares with the number of Rule 144 shares and free trading shares being agreed upon after a share audit of CMKI and subject to the further approval and ratification by the majority shareholders of CMKI to occur on or before January 15, 2003.
1.7 SELLER'S CONTINUED OPERATIONS. Notwithstanding the powers, rights and authorities granted to CMKI in section "1.2" hereinabove, the Seller shall have the immediate right to conduct operations on the Property before Closing under the following conditions:
(a) the Seller may inspect and inventory its equipment and machinery on the Property, to repair any such mining equipment and machinery on the Property and to complete certain site preparation work in respect of its mining operations on the Property; provided, however, that any said set up, repair and site preparation work does not require more than a combined 30 days to complete; and
(b) the Seller's operations shall not remove any Minerals and/or gemstones of any kind from the Property.
ARTICLE II
CLOSING
2.1 EXCHANGE OF CLOSING DOCUMENTS. The Parties agree to exchange any and all closing documents not otherwise described herein not less than three (3) business days before Closing.
2.2 PURCHASE PRICE. The total purchase price of the Property, as subject to a Finder's Royalty as set-forth in Exhibit 1, payable by CMKI to the Seller in accordance with section "9.1" hereinbelow shall be in the form of cash and common voting shares of CMKI (formerly Cyber Mark International Corp.), a public reporting company whose shares are quoted on the over-the-counter bulletin board ("OTC.BB") under the trading symbol "CMKI" or such other symbol as may be assigned to the Company.
2.3 CLOSING. At the closing (the "Closing") the transfer of title to the Property from the Seller to CMKI shall occur, or on such earlier or later day as may be agreed to in advance and in writing by each of the Parties hereto, and will be closed at the executive offices of CMKI, 6767 West Tropicana Street, Suite 202, Las Vegas, NV, at 2:00 p.m. (Pacific time), or at such other location and at such other time as may be agreed to in advance and in writing by the Parties hereto, on the day of Closing. As soon as conveniently possible after the due and complete execution of this Agreement the Seller shall execute and deliver to CMKI, the name of a mutually acceptable Custodial agent (the "Custodial Agent") as may be agreed to in advance and in writing by the Parties hereto, all such documents, resolutions and instruments as may be necessary, in the opinion of the Parties, acting reasonably, to transfer title to the Property to CMKI free and clear of all title defects, liens and encumbrances (collectively, the "Transfer Documents"), there to be held in Custodial by the Custodial Agent until Shareholder Approval as provided for herein. At the Closing the following shall occur:
(a) the Custodial Agent shall deliver to CMKI the Transfer Documents;
(b) Ad valorem, property and other taxes and assessments imposed upon the Property shall be prorated between the Seller and CMKI as of the date of Closing and the Seller shall be charged for all such taxes and assessments prior to the day of Closing; and
(c) the Parties shall execute and deliver such other documents and shall take such other action as may be necessary to carry out their obligations under this Agreement.
ARTICLE III
TITLES AND INFORMATION
3.1 SELLER'S WARRANTIES. The Seller represents and warrants to CMKI that the Seller is lawfully seized of the entire undivided mineral claim interest in and to the Property as described hereinabove, and that:
(a) the Seller has the right and power to convey the same for the purposes of this Agreement;
(b) the same are free from all title defects and all prior liens or encumbrances, other than as may be described herein;
(c) CMKI shall have quiet and peaceful possession of the Property;
(d) the Seller will defend title to the Property against all persons who may claim the same; and
(e) the Seller has not committed, nor will the Seller during the continuance of this Agreement commit, without the prior written consent of CMKI, any act or acts which will encumber or cause a lien to be placed against the Property.
3.2 TITLE DEFECTS. If title to any of the Property is less than as warranted in section "3.1" hereinabove, CMKI may undertake to cure any such defects or to defend or to initiate litigation to perfect, defend or cure title to the Property. CMKI, at any time, may withdraw from or discontinue any title litigation or any steps it may have taken to perfect, defend or cure title. CMKI shall not be liable to the Seller if CMKI is unsuccessful in, withdraws from or discontinues title litigation or other curative work. The Seller agrees to cooperate fully with CMKI in any and all steps undertaken by CMKI to remedy title defects.
ARTICLE IV
CONDUCT OF OPERATIONS
4.1 STANDARD OF PERFORMANCE. CMKI shall cause all prospecting, exploration and mining work to be done in a careful, safe and good miner-like manner, and to conform in all respects to applicable governmental rules, regulations and statutes; provided, however, that CMKI may use any method it deems reasonable, including experimental or innovative methods, in sampling, evaluating and recovering minerals from the Property in exercising the rights granted in section "1.2" hereinabove, and shall not be liable to the Seller in any way if such methods do not result in full recovery of the minerals being evaluated, or full maximization of the value thereof. Further, CMKI shall conduct its operations under this Agreement in a manner that will not unreasonably damage the surface of the Property and, shall reclaim, in accordance with applicable rules, regulations and statutes, all portions of the surface of the Property that it has disturbed by its operations.
4.2 INDEMNIFICATION AND INSURANCE. CMKI shall assume all liability to third parties in connection with its exploration on the Property and, except as provided in section "6.1" hereinbelow, shall indemnify the Seller against any and all liability that may arise out of CMKI's operations on the Property. CMKI shall, at all times during the continuance of this Agreement, at its sole cost and expense, procure and maintain in full force and effect a policy or policies of comprehensive public liability insurance issued by an insurer which is acceptable to the Seller, such approval not to be unreasonably withheld, insuring against loss, damage or liability for injury to or death of persons or loss or damage to property occurring upon the Property in an amount of not less than U.S. one million dollars (U.S. $1,000,000) for each person injured or killed, and not less than U.S. one million dollars (U.S. $1,000,000) for property damage. Said policy or policies of insurance shall name CMKI and the Seller as insured as their respective interests may appear. CMKI shall also, again at all times during the continuance of this Agreement, at its sole cost and expense, procure and maintain in full force and effect worker's compensation insurance and such other insurance to cover personnel and all of their operations upon the Property in an amount and form as may be required by law; and CMKI shall comply with all laws and regulations pertaining to the performance of work on the Property. Copies of all insurance policies provided for herein shall be furnished to the Seller when purchased, and CMKI shall obtain a written obligation on the part of its insurance carriers to notify the Seller in writing prior to the cancellation of any policy provided for in this Agreement. In the event that CMKI shall fail to either procure or maintain any insurance policy required by this Agreement and such shall continue for period of 60 days from the receipt of written notice by CMKI of such failure, the Seller may terminate this Agreement, immediately, without further obligation or liability to CMKI. CMKI shall not commence any mining or exploration operations upon the Property without procuring the insurance policies (collectively, the "Insurance") as herein required, and shall cease all operations upon the Property should a policy of Insurance required by this Agreement be canceled or terminated.
4.3 PERMITS. The Seller understands that CMKI may make efforts to obtain permits and other authorization of every kind and nature whatsoever from governmental or private entities as may be necessary to conduct mineral exploration activities. While CMKI shall be solely responsible in these efforts, the Seller agrees to assist and cooperate fully with CMKI in any and all such endeavors upon CMKI's written request.
4.4 CERTIFICATE OF QUALIFICATION. Prior to the commencement of any operations or activities upon the Property CMKI shall obtain a "Certificate of Qualification" authorizing it to transact intra-state business in the Province of Saskatchewan, Canada, and CMKI shall provide the Seller with a copy thereof. CMKI shall additionally notify the Seller in writing forthwith should such Certificate of Qualification be surrendered or should CMKI be disqualified in any manner from doing business in the Province of Saskatchewan. All operations and activities of CMKI shall cease during any period of disqualification. In the event that CMKI shall fail to either procure or maintain such Certificate required by this Agreement and such shall continue for a period of 60 days from the receipt of written notice by CMKI of such failure, the Seller may terminate this Agreement, immediately, without further obligation or liability to CMKI.
4.5 LIENS, TAXES. During the Option Period CMKI shall keep the title to the Property free and clear of all valid liens and encumbrances resulting from its exploration operations under this Agreement and shall pay when due all taxes and assessments attributable to its operations under this Agreement or imposed upon any property or improvements placed by CMKI on the Property for its own use. CMKI may refuse to pay and may contest any claim, taxes or assessments asserted against or imposed upon it that it disputes in good faith, but shall not permit all or any portion of the Property to be sold at any time for such taxes or assessments. If the claim is finally resolved against CMKI or the taxes or assessments are finally determined to be valid, CMKI shall pay the same upon such final determination.
4.6 SUBROGATION. CMKI, at its option, shall have the right to redeem for the Seller, by payment of any mortgage, taxes or other liens on the Property in the event of default or non-payment by the Seller. If CMKI pays any such mortgage, taxes or other liens CMKI shall be subrogated to rights of the holder of the mortgage or lien and may deduct any amount so paid from any payment due to the Seller under this Agreement.
4.7 NO IMPLIED COVENANT. CMKI does not make any express or implied covenant, agreement or condition relating to the exploration of the Property. Whether or not any such exploration shall at any time be conducted, and the nature, manner and extent of such operations, shall be determined by CMKI in its sole and absolute discretion.
ARTICLE V
FORCE MAJEURE
5.1 DEFINITION OF FORCE MAJEURE. The term "force majeure" as used in this Agreement includes any cause of any kind or nature whatsoever beyond CMKI's reasonable control including, but not being limited to: laws, ordinances, governmental regulations, restraint or court order; inability to obtain equipment, material, power or fuel or unusual delays in obtaining permits; labor shortages, labor disturbances, strikes, lock-outs and other industrial disturbances to the extent that it or they are beyond the control of CMKI; failure of carriers to transport or furnish facilities for transportation; acts of God, acts of the public enemy, war, blockage, riot, insurrection, lightning, fire, storm, flood, inclement weather, washout, explosion and breakage; or accident of machinery or facilities.
5.2 REMOVAL OF EVENT OF FORCE MAJEURE. CMKI shall exercise reasonable diligence to remove an event of force majeure as quickly as possible, but shall not be required to settle strikes, lock-outs or other labor difficulties contrary to its wishes, accept unusual or onerous permit conditions, or to challenge the validity of any governmental order, request, law or regulation.
RIGHTS AGREEMENT SUBJECT TO FINDER'S ROYALTY WITH
REGISTRATION RIGHTS AGREEMENT ANNEXED
THIS CLAIMS PURCHASE AND EXPLORATION RIGHTS AGREEMENT (the "Agreement") is made and dated for reference effective as fully executed on the 25th day of November, 2002 as First Restated and Amended this 15th day of January, 2003, as further subject to a Finder's Royalty and Registration Rights Agreement annexed hereto as Addendum 1 and Addendum 2, respectively.
BETWEEN:
CASAVANT MINING KIMBERLITE INTERNATIONAL, INC., (formerly Cyber Mark International Corp.) a corporation duly incorporated under the laws of the State of Nevada, U.S.A.,
("CMKI");
OF THE FIRST PART
AND:
URBAN CASAVANT, INDIVIDUALLY AND AS AGENT FOR, FORT A LA CORNE DIAMOND FIELDS INC., BUCKSHOT HOLDINGS, LTD. ("Buckshot"), COMMANDO HOLDINGS LTD. ("Commando"), 101010307 SASKATCHEWAN LTD. ("Sask 307"), 101012190 SASKATCHEWAN LTD. ("Sask 190"), 101027101 SASKATCHEWAN LTD. ("Sask 101") and MORGAIN MINERALS, INC. ("MMI"), subject to option, (being hereinafter collectively referred to as the "Seller" as the context so requires);
OF THE SECOND PART
(CMKI and the Seller being hereinafter singularly also referred to as a "Party" and collectively referred to as the "Parties" as the context so requires).
WHEREAS IN CONSIDERATION of the payments to be made pursuant to, the mutual covenants contained in, and the mutual benefits to be derived from, this Agreement, the Seller and CMKI hereby agree as follows:
ARTICLE I
CLAIMS PURCHASE AND EXPLORATION RIGHTS
1.1 CONVEYANCE OF CLAIMS. The Seller conveys, assigns, and otherwise transfers "full, complete and good" title to CMKI all rights, title and interest in the exclusive mineral exploration and mining rights on all or any portion of the Property Claims (as defined herein below). As used in this Agreement, the term "Property" shall mean the totality of all rights, title and interests related to or included in the properties described in the October 28, 2002 report prepared by P. Robertshaw, Robershaw Geophysics, 111 Middlecrescent, Saskatoon, Saskatchewan S7J 2W5 Canada for Fort a la Corne Diamond Fields, Inc. which is incorporated herein by reference as if set-forth in its entirety in this Agreement including, without limitation, all minerals in, on and under the Property and the land covered by the Property. The conveyance shall become effective at the Closing Date of this Agreement which shall be set for 2:00 p.m. (Las Vegas Time), on Monday, December 2, 2003 at Suite 202, 6767 Tropicana Boulevard, Las Vegas, NV, unless extended herein below.
1.2 IMMEDIATE CONVEYANCE OF ALL EXPLORATION RIGHTS, TITLE AND INTERESTS UNDER THE CLAIMS. After the Closing Date, the Seller grants to CMKI the full right, title and interest, including the lawful authority, to enter upon the Property and to conduct such exploration and prospecting operations, as CMKI may deem appropriate, to determine the presence, location, quantity and value of minerals contained in the Property with the intention that CMKI's initial exploration efforts will be a systematic and scientific evaluation of the Property. Such operations may include, but shall not be limited to, mapping, sampling, including bulk sampling, trenching, drilling, testing, assaying and conducting environmental studies and other magnetic and geophysical exploration methods whether now known or in the future developed, and CMKI will use its reasonably best efforts to explore the Property. CMKI may also mine and remove such amount of minerals as CMKI may deem appropriate for sampling, assaying, testing and evaluation of the Property provided that the minimum exploration expenditures shall be in conformity with the laws, rules, regulations, policies and directives promulgated by the Province of Saskatchewan relative to the Property and the prospecting, claiming, exploration and mining of diamondiferous kimberlite minerals in particular. In addition, CMKI shall have the right:
(a) to use all easements and all rights-of-way for ingress and egress to and from the Property to which the Seller may be entitled;
(b) to make use of all available facilities located on the Property, including but not limited to, mineral storage and core sample warehouses and outbuildings;
(c) to obtain all permits, approvals and other federal, provincial and local governmental authorizations as CMKI deems necessary to conduct its mineral exploration activities;
(d) to exercise all other rights that are or may be incidental to any or all of the rights granted, expressly or implicitly, to CMKI in this Agreement; and
(e) to the extent Seller possesses the title and authority to grant it, to possess and use all or any part of the Property together with all easements to, across and through the Property, for the purpose of exploring any adjoining or nearby property owned, controlled or operated by CMKI.
1.3 OPERATIONS. CMKI agrees to conduct its operations in a manner as to not unreasonably interfere with the operations of the Seller as contemplated in Section "1.7" hereinbelow and so long as CMKI is able to fulfill the essential purposes desired to be obtained by it in this Agreement. The Parties will mutually discuss the location of operations of both Parties and each Party will make reasonable attempts to notify the other Party prior to any exploration, core drilling, and excavation work being conducted on the Property.
1.4 OWNERSHIP AND PROCESSING OF GEMS. The diamondiferous kinberlite minerals and their matrix materials to be mined by CMKI (collectively, the "Minerals") will be placed in a "controlled", "secured" and "accountable" inventory by CMKI, and all such Minerals will be assayed to determine the Finder's Royalty due the Seller in any manner it may determine reasonable in the circumstances, provided that, at all times, any such process reasonably complies with standard industry practices in connection with the preparation of polished goods and, provided further, that CMKI uses its reasonably best efforts to seek the maximum yield of gems in connection with any such Minerals. In this regard it is hereby also expressly acknowledged and agreed by the Parties hereto that for purposes of the Finder's Royalty, any "facetable" gemstone greater than one (1) carat in weight or any specimen exceeding U.S. $5,000 in wholesale value, will only be processed in such a manner as may be mutually agreed by both Parties, from time to time, acting reasonably. All such facetable gemstones or specimens will be kept in a mutually acceptable controlled, secure, and accountable storage facility with a dual keyed access, of which each Party will hold one key, and which storage facility will be subject to twenty-four hour video surveillance and such other monitoring as may be necessary and proper.
1.5 COOPERATION BY THE SELLER AND ASSESS TO THE PROPERTY. The Seller agrees to cooperate with CMKI in its investigation of the Property by consulting with CMKI with respect to the Property and CMKI's exploration and mining operations on the Property. The Seller further agrees to use its reasonably best efforts to assist CMKI in the exercise of all rights that are or may be incidental to any or all of the rights granted, expressly or implicitly, to CMKI in this Agreement including, without limitation, the necessary securement of all easements and all rights-of-way for ingress and egress to and from the Property presently available to the Seller; provided, however, that, notwithstanding the Seller's reasonably best efforts as aforesaid, the Seller does not hereby warrant or guarantee the availability of any said easements and rights-of-way to CMKI from third parties who previously may have permitted said use or assess to the Seller. The Seller also agrees to use its reasonably best efforts to assist CMKI with the provision of basic technical, gemological and legal and historical information and support which may assist CMKI in its exploration and mining of the Property.
1.6 PAYMENT IN SHARES. On or before Closing of this Agreement or as otherwise agreed to by the Parties, CMKI shall pay to the Seller and its designees the sum of not less than 2,800,000,000 of its common voting shares in certificate form and the sum of $2,000,000. Each share certificate issued by CMKI will be duly endorsed as being "fully paid" and "non-accessable" and will be countersigned by the President and Secretary-Treasurer in their capacity as the duly elected corporate officers and countersigned by the transfer agent. Each certificate will bear a Rule 144 restrictive legend, as more fully described in section "2.2" hereinbelow or shall be otherwise "free trading" shares with the number of Rule 144 shares and free trading shares being agreed upon after a share audit of CMKI and subject to the further approval and ratification by the majority shareholders of CMKI to occur on or before January 15, 2003.
1.7 SELLER'S CONTINUED OPERATIONS. Notwithstanding the powers, rights and authorities granted to CMKI in section "1.2" hereinabove, the Seller shall have the immediate right to conduct operations on the Property before Closing under the following conditions:
(a) the Seller may inspect and inventory its equipment and machinery on the Property, to repair any such mining equipment and machinery on the Property and to complete certain site preparation work in respect of its mining operations on the Property; provided, however, that any said set up, repair and site preparation work does not require more than a combined 30 days to complete; and
(b) the Seller's operations shall not remove any Minerals and/or gemstones of any kind from the Property.
ARTICLE II
CLOSING
2.1 EXCHANGE OF CLOSING DOCUMENTS. The Parties agree to exchange any and all closing documents not otherwise described herein not less than three (3) business days before Closing.
2.2 PURCHASE PRICE. The total purchase price of the Property, as subject to a Finder's Royalty as set-forth in Exhibit 1, payable by CMKI to the Seller in accordance with section "9.1" hereinbelow shall be in the form of cash and common voting shares of CMKI (formerly Cyber Mark International Corp.), a public reporting company whose shares are quoted on the over-the-counter bulletin board ("OTC.BB") under the trading symbol "CMKI" or such other symbol as may be assigned to the Company.
2.3 CLOSING. At the closing (the "Closing") the transfer of title to the Property from the Seller to CMKI shall occur, or on such earlier or later day as may be agreed to in advance and in writing by each of the Parties hereto, and will be closed at the executive offices of CMKI, 6767 West Tropicana Street, Suite 202, Las Vegas, NV, at 2:00 p.m. (Pacific time), or at such other location and at such other time as may be agreed to in advance and in writing by the Parties hereto, on the day of Closing. As soon as conveniently possible after the due and complete execution of this Agreement the Seller shall execute and deliver to CMKI, the name of a mutually acceptable Custodial agent (the "Custodial Agent") as may be agreed to in advance and in writing by the Parties hereto, all such documents, resolutions and instruments as may be necessary, in the opinion of the Parties, acting reasonably, to transfer title to the Property to CMKI free and clear of all title defects, liens and encumbrances (collectively, the "Transfer Documents"), there to be held in Custodial by the Custodial Agent until Shareholder Approval as provided for herein. At the Closing the following shall occur:
(a) the Custodial Agent shall deliver to CMKI the Transfer Documents;
(b) Ad valorem, property and other taxes and assessments imposed upon the Property shall be prorated between the Seller and CMKI as of the date of Closing and the Seller shall be charged for all such taxes and assessments prior to the day of Closing; and
(c) the Parties shall execute and deliver such other documents and shall take such other action as may be necessary to carry out their obligations under this Agreement.
ARTICLE III
TITLES AND INFORMATION
3.1 SELLER'S WARRANTIES. The Seller represents and warrants to CMKI that the Seller is lawfully seized of the entire undivided mineral claim interest in and to the Property as described hereinabove, and that:
(a) the Seller has the right and power to convey the same for the purposes of this Agreement;
(b) the same are free from all title defects and all prior liens or encumbrances, other than as may be described herein;
(c) CMKI shall have quiet and peaceful possession of the Property;
(d) the Seller will defend title to the Property against all persons who may claim the same; and
(e) the Seller has not committed, nor will the Seller during the continuance of this Agreement commit, without the prior written consent of CMKI, any act or acts which will encumber or cause a lien to be placed against the Property.
3.2 TITLE DEFECTS. If title to any of the Property is less than as warranted in section "3.1" hereinabove, CMKI may undertake to cure any such defects or to defend or to initiate litigation to perfect, defend or cure title to the Property. CMKI, at any time, may withdraw from or discontinue any title litigation or any steps it may have taken to perfect, defend or cure title. CMKI shall not be liable to the Seller if CMKI is unsuccessful in, withdraws from or discontinues title litigation or other curative work. The Seller agrees to cooperate fully with CMKI in any and all steps undertaken by CMKI to remedy title defects.
ARTICLE IV
CONDUCT OF OPERATIONS
4.1 STANDARD OF PERFORMANCE. CMKI shall cause all prospecting, exploration and mining work to be done in a careful, safe and good miner-like manner, and to conform in all respects to applicable governmental rules, regulations and statutes; provided, however, that CMKI may use any method it deems reasonable, including experimental or innovative methods, in sampling, evaluating and recovering minerals from the Property in exercising the rights granted in section "1.2" hereinabove, and shall not be liable to the Seller in any way if such methods do not result in full recovery of the minerals being evaluated, or full maximization of the value thereof. Further, CMKI shall conduct its operations under this Agreement in a manner that will not unreasonably damage the surface of the Property and, shall reclaim, in accordance with applicable rules, regulations and statutes, all portions of the surface of the Property that it has disturbed by its operations.
4.2 INDEMNIFICATION AND INSURANCE. CMKI shall assume all liability to third parties in connection with its exploration on the Property and, except as provided in section "6.1" hereinbelow, shall indemnify the Seller against any and all liability that may arise out of CMKI's operations on the Property. CMKI shall, at all times during the continuance of this Agreement, at its sole cost and expense, procure and maintain in full force and effect a policy or policies of comprehensive public liability insurance issued by an insurer which is acceptable to the Seller, such approval not to be unreasonably withheld, insuring against loss, damage or liability for injury to or death of persons or loss or damage to property occurring upon the Property in an amount of not less than U.S. one million dollars (U.S. $1,000,000) for each person injured or killed, and not less than U.S. one million dollars (U.S. $1,000,000) for property damage. Said policy or policies of insurance shall name CMKI and the Seller as insured as their respective interests may appear. CMKI shall also, again at all times during the continuance of this Agreement, at its sole cost and expense, procure and maintain in full force and effect worker's compensation insurance and such other insurance to cover personnel and all of their operations upon the Property in an amount and form as may be required by law; and CMKI shall comply with all laws and regulations pertaining to the performance of work on the Property. Copies of all insurance policies provided for herein shall be furnished to the Seller when purchased, and CMKI shall obtain a written obligation on the part of its insurance carriers to notify the Seller in writing prior to the cancellation of any policy provided for in this Agreement. In the event that CMKI shall fail to either procure or maintain any insurance policy required by this Agreement and such shall continue for period of 60 days from the receipt of written notice by CMKI of such failure, the Seller may terminate this Agreement, immediately, without further obligation or liability to CMKI. CMKI shall not commence any mining or exploration operations upon the Property without procuring the insurance policies (collectively, the "Insurance") as herein required, and shall cease all operations upon the Property should a policy of Insurance required by this Agreement be canceled or terminated.
4.3 PERMITS. The Seller understands that CMKI may make efforts to obtain permits and other authorization of every kind and nature whatsoever from governmental or private entities as may be necessary to conduct mineral exploration activities. While CMKI shall be solely responsible in these efforts, the Seller agrees to assist and cooperate fully with CMKI in any and all such endeavors upon CMKI's written request.
4.4 CERTIFICATE OF QUALIFICATION. Prior to the commencement of any operations or activities upon the Property CMKI shall obtain a "Certificate of Qualification" authorizing it to transact intra-state business in the Province of Saskatchewan, Canada, and CMKI shall provide the Seller with a copy thereof. CMKI shall additionally notify the Seller in writing forthwith should such Certificate of Qualification be surrendered or should CMKI be disqualified in any manner from doing business in the Province of Saskatchewan. All operations and activities of CMKI shall cease during any period of disqualification. In the event that CMKI shall fail to either procure or maintain such Certificate required by this Agreement and such shall continue for a period of 60 days from the receipt of written notice by CMKI of such failure, the Seller may terminate this Agreement, immediately, without further obligation or liability to CMKI.
4.5 LIENS, TAXES. During the Option Period CMKI shall keep the title to the Property free and clear of all valid liens and encumbrances resulting from its exploration operations under this Agreement and shall pay when due all taxes and assessments attributable to its operations under this Agreement or imposed upon any property or improvements placed by CMKI on the Property for its own use. CMKI may refuse to pay and may contest any claim, taxes or assessments asserted against or imposed upon it that it disputes in good faith, but shall not permit all or any portion of the Property to be sold at any time for such taxes or assessments. If the claim is finally resolved against CMKI or the taxes or assessments are finally determined to be valid, CMKI shall pay the same upon such final determination.
4.6 SUBROGATION. CMKI, at its option, shall have the right to redeem for the Seller, by payment of any mortgage, taxes or other liens on the Property in the event of default or non-payment by the Seller. If CMKI pays any such mortgage, taxes or other liens CMKI shall be subrogated to rights of the holder of the mortgage or lien and may deduct any amount so paid from any payment due to the Seller under this Agreement.
4.7 NO IMPLIED COVENANT. CMKI does not make any express or implied covenant, agreement or condition relating to the exploration of the Property. Whether or not any such exploration shall at any time be conducted, and the nature, manner and extent of such operations, shall be determined by CMKI in its sole and absolute discretion.
ARTICLE V
FORCE MAJEURE
5.1 DEFINITION OF FORCE MAJEURE. The term "force majeure" as used in this Agreement includes any cause of any kind or nature whatsoever beyond CMKI's reasonable control including, but not being limited to: laws, ordinances, governmental regulations, restraint or court order; inability to obtain equipment, material, power or fuel or unusual delays in obtaining permits; labor shortages, labor disturbances, strikes, lock-outs and other industrial disturbances to the extent that it or they are beyond the control of CMKI; failure of carriers to transport or furnish facilities for transportation; acts of God, acts of the public enemy, war, blockage, riot, insurrection, lightning, fire, storm, flood, inclement weather, washout, explosion and breakage; or accident of machinery or facilities.
5.2 REMOVAL OF EVENT OF FORCE MAJEURE. CMKI shall exercise reasonable diligence to remove an event of force majeure as quickly as possible, but shall not be required to settle strikes, lock-outs or other labor difficulties contrary to its wishes, accept unusual or onerous permit conditions, or to challenge the validity of any governmental order, request, law or regulation.
