Document:

ex10-1.htm

    PROMISSORY
NOTE

    

    $6,000                                                                                                                                                           
                                                                                                Cornelius,
North Carolina

    July 29, 2010

    

    

            FOR
VALUE RECEIVED, the undersigned, Bluesky Systems Corporation, a corporation
organized under the laws of Pennsylvania (the "Borrower"), promise to pay to JPF
Securities Law, LLC, a Nevada limited liability company (the "Lender"), the
principal amount of SIX THOUSAND ($6,000) DOLLARS, together with interest at the
rate of ten percent (10%) per annum until paid.  All principal and
interest, together with any and all costs and expenses provided for under this
Note, shall be due and payable in full within ONE YEAR from the date hereof (the
"Maturity Date").

    

    Interest
shall be computed on the basis of a 365-day year or 366-day year as applicable
and actual days lapsed.  All interest due and payable hereunder which
is not paid when due for any reason shall be cumulated and accrue interest at
the rate hereunder.

    

            1.     This
Promissory Note (the “Note”) is issued to Lender in connection legal services
rendered in preparing the SEC filings and acting as special securities counsel
for the Borrower.

    

            2.     Payment
under this Note shall be made to the Lender, in lawful money of the United
States of America and in immediately available funds delivered to the Lender at
the offices of the Lender at its then principal place of business or at such
other place as the Lender or any holder hereof shall designate in writing for
such purpose from time to time. If the payment under this Note otherwise would
become due and payable on a Saturday, Sunday or legal holiday, the due date
thereof shall be extended to the next day which is not a Saturday, Sunday or
legal holiday, and interest shall be payable thereon during such extension. All
amounts due under this Note shall be payable without defense, set off or
counterclaim.

    

            3.     Payment
under this Note shall be applied in the following order: (i) to the payment of
interest on the Note; (ii) to the payment of costs and expenses which the
Borrower is required to pay pursuant to the provisions of this Note; (iii) to
the payment of outstanding principal.

    

            4.     This
Note may be prepaid in whole, but not in part, at any time upon not less than
five (5) days written notice of the Borrower's intention to make any such
prepayment, which notice shall specify the date of such prepayment.

    

            5.     Upon
the occurrence of any of the following (each an "Event of Default"), all unpaid
principal, accrued interest and other amounts owing hereunder shall, at the
option of the Lender, and, in the case of an Event of Default pursuant to (a),
(b), (c) or (d) below, automatically, be immediately due, payable and
collectible by the Lender pursuant to applicable law. The Lender shall have all
rights and may exercise any remedies available to it under law, successively or
concurrently. The Borrower expressly acknowledges and agrees that the Lender
shall have the right to offset any obligations of the Borrower hereunder against
other amounts that may be payable to the Borrower by the Lender:

    

               (a)   Failure
to make the principal or interest payment by the due date (whether by
acceleration or otherwise) or failure to pay in full;

    

               (b)
The Borrower commences or proposes to commence any bankruptcy, reorganization,
arrangement or adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar proceeding under any federal, state or other law for the
relief of debtors (an "Insolvency Proceeding"); The Borrower fails to obtain the
dismissal, within thirty (30) days after the commencement thereof, of any
Insolvency Proceeding instituted by one or more third parties, fails actively to
oppose any such Insolvency Proceeding, or, in any such Insolvency Proceeding,
defaults or files an answer admitting the material allegations upon which such
Insolvency Proceeding was based or alleges its willingness to have an order for
relief entered;

    

               (c)  Any
receiver, trustee or custodian is appointed by a court of competent jurisdiction
to take possession of all or any substantial portion of the assets of the
Borrower, the holder of this Note may, at its option, without notice to or
demand upon the Borrower or any other party, declare immediately due and payable
the entire principal balance hereof together with all accrued and unpaid
interest thereon, plus any other amounts then owing pursuant to this Note,
whereupon the same shall be immediately due and payable; provided that upon the
occurrence of an Event of Default under clause (ii) above, the unpaid principal
amount hereof shall become immediately due and payable without presentment,
demand, protest of notice of any kind in connection with this Note;

     

    (d)  Be,
or suffer to have the Borrower be, a party to any Change of Control
Transaction1, or sell or dispose of all or in
excess of forty-nine (49%) percent of its respective assets (based on book value
calculation as reflected in the its most recent financial statements) in one or
more transactions (whether or not such sale would constitute a Change of Control
Transaction);

    

    In
addition, upon the occurrence of an Event of Default, interest shall thereafter
accrue on the entire unpaid principal balance under this Note at the rate of
eighteen percent (18%) per annum (on the basis of a 360-day year and the actual
number of days elapsed) or the highest amount legally permissible. On each
anniversary of the date of any Event of Default, all interest which has become
payable and is then delinquent shall, without curing the default under this Note
by reason of such delinquency, be added to the principal amount due under this
Note, and shall thereafter bear interest at the same rate as is applicable to
principal, with interest on overdue interest to bear interest, in each case to
the fullest extent permitted by applicable law, both before and after default,
maturity, foreclosure, judgment and the filing of any petition in a bankruptcy
proceeding. In no event shall interest be charged under this Note which would
violate any applicable law. If the rate of interest provided for herein would
otherwise exceed the maximum rate permitted by applicable law, then the interest
rate shall be reduced to the maximum rate permitted by applicable
law;

    

            6.     No
waiver or modification of any of the terms of this Note shall be valid or
binding unless set forth in a writing specifically referring to this Note and
signed by a duly authorized officer of the Lender or any holder of this Note,
and then only to the extent specifically set forth therein.

    

            7.     If
any default occurs in any payment due under this Note, the Borrower and all
guarantors and endorsers hereof, and their successors and assigns, promise to
pay all costs and expenses, including attorneys' fees, incurred by each holder
hereof in collecting or attempting to collect the indebtedness under this Note,
whether or not any action or proceeding is commenced. None of the provisions
hereof and none of the holder's rights or remedies under this Note on account of
any past or future defaults shall be deemed to have been waived by any
indulgence granted by the holder to the Borrower.

    

            8.     The
Borrower and all guarantors and endorsers hereof, and their successors and
assigns, hereby waive presentment, demand, diligence, protest and notice of
every kind, and agree that, they shall remain liable for all amounts due under
this Note notwithstanding any extension of time or change in the terms of
payment of this Note granted by any holder hereof, any change, alteration or
release of any property now or hereafter securing the payment hereof or any
delay or failure by the holder hereof to exercise any rights under this Note.
The Borrower and all guarantors and endorsers hereof, and their successors and
assigns, hereby waive the right to plead any and all statutes of limitation as a
defense to a demand under this Note to the full extent permitted by
law.

    

            9.   This
Note shall inure to the benefit of the Lender, its successors and assigns and
shall bind the heirs, executors, administrators, successors and assigns of the
Borrower. Each reference herein to powers or rights of the Lender shall also be
deemed a reference to the same power or right of such assignees, to the extent
of the interest assigned to them.

    

            10.   In
the event that any one or more provisions of this Note shall be held to be
illegal, invalid or otherwise unenforceable, the same shall not affect any other
provision of this Note and the remaining provisions of this Note shall remain in
full force and effect.

    

            11.   This
Note shall be governed by and construed in accordance with the laws of the State
of Nevada, without giving effect to the principles thereof relating to conflicts
of law; provided, that the Lender and each holder hereof reserves any and all
rights it may have under federal law, including without limitation those
relating to the charging of interest.

    

    IN WITNESS WHEREOF, the Borrower has
caused this Promissory Note to be duly executed the day and year first above
written.

    

    

    BORROWER,

    

    

    Bluesky
Systems Corporation

     

    

    By: 
 /s/Duane
Bennett

            Duane
Bennett

            President

    

    

    

    

    

      

    

     

      1 "Change of Control
Transaction" means the occurrence of any of (i) an acquisition after the
date hereof by an individual or legal entity or "group" (as described in Rule
13d-5(b)(1) promulgated under the Exchange Act) of in excess of 49% of the
voting securities of a person, coupled with a replacement of more than one-half
of the members of such person's board of directors which is not approved by
those individuals who are members of the board of directors on the date hereof
in one or a series of related transactions, or (ii) the merger of such person
with or into another entity, consolidation or sale of all or substantially all
of the assets of such person in one or a series of related transactions, unless
following such transaction, the holders of such person's securities continue to
hold at least 40% of such securities following such transaction. The execution
by such person of an agreement to which such person is a party or by which it is
bound providing for any of the events set forth above in (i) or (ii) does not
constitute the occurrence of the event until after the event in fact
occurs.ex4-9.htm

EXHIBIT 4.9

 

MANAGEMENT SERVICES AGREEMENT

BETWEEN

EGM EXPLORATION GROUP MANAGEMENT CORP.

AND

CROSSHAIR EXPLORATION & MINING CORP.

January 1, 2010

50683016.4

  

  

  

TABLE OF CONTENTS

 

	
  

	
 

	
 

	
Page

 

	
ARTICLE 1

	
INTERPRETATION 

	
1

 

	
  

	
1.1

	
Definitions 

	
1

 

	
  

	
1.2

	
Headings 

	
3

 

	
  

	
1.3

	
Number and Gender 

	
3

 

	
  

	
1.4

	
Choice of Law 

	
3

 

	
  

	
1.5

	
Attornment 

	
3

 

	
ARTICLE 2

	
APPOINTMENT AND DELEGATION 

	
4

 

	
  

	
2.1

	
Appointment as Manager and Delegation: Management Services 

	
4

 

	
ARTICLE 3

	
CONCERNING MANAGER 

	
5

 

	
  

	
3.1

	
Standard of Care 

	
5

 

	
  

	
3.2

	
Representations and Warranties 

	
6

 

	
  

	
3.3

	
Liability of Manager 

	
7

 

	
  

	
3.4

	
Appointment of Agents 

	
7

 

	
  

	
3.5

	
Relationship of Manager and the Managed Entity 

	
8

 

	
  

	
3.6

	
Other Activities of Manager 

	
8

 

	
ARTICLE 4

	
SHARED FACILITIES 

	
8

 

	
  

	
4.1

	
Use of Shared Facilities 

	
8

 

	
ARTICLE 5

	
FEES AND PAYMENT 

	
8

 

	
  

	
5.1

	
Budgets Relating to Services 

	
8

 

	
  

	
5.2

	
Fees Payable by Managed Entity 

	
9

 

	
  

	
5.3

	
Change in Services 

	
9

 

	
  

	
5.4

	
Invoice 

	
9

 

	
  

	
5.5

	
Payment 

	
9

 

	
  

	
5.6

	
Proration 

	
9

 

	
  

	
5.7

	
Payments in Respect of Taxes 

	
9

 

	
  

	
5.8

	
Severance Pay 

	
9

 

	
  

	
5.9

	
Annual Fees Adjustment 

	
10

 

	
  

	
5.10

	
Excluded Services 

	
10

 

	
ARTICLE 6

	
TERM AND TERMINATION 

	
11

 

	
  

	
6.1

	
Term of Agreement 

	
11

 

	
  

	
6.2

	
Termination of Agreement 

	
11

 

	
  

	
6.3

	
Delivery of Records 

	
11

 

	
ARTICLE 7

	
RECORDS AND REPORTING

	
12

 

	
  

	
7.1

	
Records and Reporting 

	
12

 

	
  

	
7.2

	
Audit and Inspection Right 

	
12

 

	
ARTICLE 8

	
INDEMNIFICATION 

	
12

 

	
  

	
8.1

	
Indemnification of Manager 

	
12

 

	
ARTICLE 9

	
CONFIDENTIALITY 

	
13

 

	
  

	
9.1

	
Confidentiality 

	
13

 

	
  

	
9.2

	
Injunctive Relief 

	
14

 

	
  

	
9.3

	
Return of Confidential Information 

	
14

 

	
  

	
9.4

	
Survival 

	
15

 

	
ARTICLE 10

	

FORCE MAJEURE

	
15

 

	
  

	
10.1

	
Force Majeure 

	
15

 

	
ARTICLE 11

	

GENERAL PROVISIONS

	
16

 

	
  

	
11.1

	
Stock Exchange Acceptance 

	
16

 

	
  

	
11.2

	
Further Assurances 

	
16

 

	
  

	
11.3

	
Assignment 

	
16

 

	
  

	
11.4

	
Enurement 

	
16

 

	
  

	
11.5

	
Entire Agreement 

	
16

 

	
  

	
11.6

	
Notice 

	
16

 

	
  

	
11.7

	
Amendment 

	
17

 

	
  

	
11.8

	
Severability 

	
17

 

	
  

	
11.9

	
Counterpart Execution 

	
17

 

	
  

	
11.10

	
Effective Date 

	
18

 

	
50683016.4

	
 

	  

 

  

 

MANAGEMENT SERVICES AGREEMENT

 

THIS MANAGEMENT SERVICES AGREEMENT made effective as of the 1st day of January, 2010.

 

BETWEEN:

 

EGM EXPLORATION GROUP MANAGEMENT CORP., a company incorporated under the laws of the Province of British Columbia (“Manager”)

 

- and -

 

CROSSHAIR EXPLORATION & MINING CORP., a company incorporated under the laws of the Province of British Columbia (the “Managed Entity”)

 

WHEREAS the Managed Entity requires office space, furnishings and equipment, communications facilities, accounting services, secretarial services and the administrative services and personnel necessary to fulfil the basic day-to-day responsibilities imposed on the Managed Entity, to carry out and ensure compliance with the requirements of a reporting issuer, and to generally carry on its business, and has no permanent staff to perform these duties;

 

AND WHEREAS Manager has the necessary space, equipment, personnel and expertise to provide all of the services and facilities required by the Managed Entity and the Managed Entity wishes to engage Manager to provide such services and facilities;

 

NOW THEREFORE, THIS AGREEMENT WITNESSETH that in consideration of the covenants herein contained and such other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged by the Parties), the Parties hereby agree as follows:

 

ARTICLE 1

INTERPRETATION

 

	
1.1

	
Definitions

 

In this Agreement, the following terms will have the meanings set out below unless the context otherwise requires:

 

“Affiliate” of a person (the “Subject Person”) means any other person that directly or indirectly controls, is controlled by or is under common control with the Subject Person.  For purposes of this definition, “control” of a person means (i) ownership of more than 50% of the shares in issue or other equity interests of such person or (ii) the power to direct the management or policies of a person, whether through the ownership of more than 50% of the voting power of such person, through the power to appoint more than half of the members of the board of directors or similar governing body of such person, or through contractual or other arrangements;

 

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- 2 -

“Agreement” means this Agreement including the Schedules to this Agreement as it or they may be amended or supplemented from time to time, and the expressions “hereof”, “herein”, “hereto”, “hereunder”, “hereby” and similar expressions refer to this Agreement and not to any particular Section or other portion of this Agreement;

 

“Annual Budget” means, in respect of any Fiscal Year, an annual budget estimating the costs, on a monthly basis, of providing the Services and access to, and use of the assets contained in, the Shared Facilities, such budget to include a reasonable description of the method and basis for determining the costs to be allocated;

 

“Approved Annual Budget” means an Annual Budget that has been approved by the Managed Entity in accordance with the provisions of Section 5.1;

 

“herein”, “hereto”, “hereunder”, “hereby” and similar expressions refer to this Agreement and not to any particular Section or other portion of this Agreement;

 

“Applicable Law” means, with respect to any person, property, transaction, event or other matter, any law, rule, statute, regulation, order, judgement, decree, treaty or other requirement having the force of law (collectively the “Law”) relating or applicable to such person, property, transaction, event or other matter.  Applicable Law also includes, where appropriate, any interpretation of the Law (or any part) by any person having jurisdiction over it, or charged with its administration or interpretation;

 

“Confidential Information” means the confidential, secret or proprietary information of one Party or any of its Affiliates or Customers (the “Disclosing Party”), including data, technical information, financial information including prices, business information including business plans, strategies and practices, information relating to customers and prospective customers, trade secrets, know-how, methods, procedures, reports, budgets, computer tapes and other storage media, technology, files, documentation, and software of the Disclosing Party which has been or may hereafter be disclosed, directly or indirectly, to any other Party (the “Receiving Party”) either orally, in writing or in any other material form pursuant to and in conjunction with this Agreement;

 

“Disclosing Party” has the meaning ascribed thereto in the definition of “Confidential Information” set out herein;

 

“Documentation” has the meaning ascribed thereto in Section 7.1;

 

“Exchange” means the Toronto Stock Exchange;

 

“Fiscal Year” means the twelve month period commencing on January 1 of each year and terminating on December 31 of each year;

 

“Force Majeure Event” has the meaning ascribed thereto in Section 10.1;

 

“Governmental Authority” means any nation, federal government, province, state, municipality or other political subdivision of any of the foregoing, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or

 

50683016.4

  

  

- 3 -

pertaining to government, and any corporation or other entity owned or controlled (through stock or capital ownership or otherwise) by any of the foregoing;

 

“Group Entity” means the Managed Entity and any other person that the Manager provides management services to pursuant to an agreement similar to this Agreement;

 

“including” means including, without limitation, and “includes” means includes, without limitation;

 

“Parties” means Manager and Managed Entity and “Party” means any one of them;

 

“Receiving Party” has the meaning ascribed thereto in the definition of “Confidential Information”;

 

“Services” has the meaning ascribed thereto in Section 2.1;

 

“Shared Facilities” has the meaning ascribed thereto in Section 4.1; and

 

“Taxes” includes all goods and services, sales, use, transfer, stamp, value added, gross receipts or excise tax or any similar taxes, fees, duties or imposts.

 

	
1.2

	
Headings

 

The headings in this Agreement are included for convenience only and in no way define or limit any of the provisions hereof or otherwise affect their construction or interpretation.

 

	
1.3

	
Number and Gender

 

Words importing the singular number include the plural and vice versa and words importing gender include the masculine, feminine and neuter genders.

 

	
1.4

	
Choice of Law

 

This Agreement will be governed by the laws of the Province of British Columbia and the laws of Canada applicable therein and shall be construed, interpreted and performed in accordance therewith.

 

	
1.5

	
Attornment

 

Any legal action or proceedings with respect to this Agreement shall be brought in the courts of the Province of British Columbia and the courts of appeal therefrom. Each Party hereby attorns to and accepts for itself and in respect of its assets, irrevocably and unconditionally, the jurisdiction of such courts.

 

50683016.4

  

  

- 4 -

ARTICLE 2

APPOINTMENT AND DELEGATION

 

	
2.1

	
Appointment as Manager and Delegation: Management Services

 

The Managed Entity hereby appoints Manager as the manager of the Managed Entity and delegates to Manager, and Manager hereby accepts the delegation of, authority to manage the assets, operations, business and administrative affairs of the Managed Entity. Manager hereby agrees to supply to the Managed Entity all services, staff and expertise as determined necessary to properly and efficiently manage the assets, operations, business and administrative affairs of the Managed Entity. In particular, but without limitation, Manager agrees to provide, as may be required:

 

	
  

	
(a)

	
senior executive services including, without limitation, business planning, support, guidance and policy making in respect of the Managed Entity;

 

	
  

	
(b)

	
(i) individuals to serve as directors of the Managed Entity; (ii) an individual to serve as the chief executive officer of the Managed Entity; (iii) an individual to serve as the chief financial officer of the Managed Entity; and (iv) individuals for such other executive positions as may be required by the Managed Entity;

 

	
  

	
(c)

	
general management services in respect of the business and affairs of the Managed Entity including providing the individual services of senior officers of Manager to act as executive officers of the Managed Entity, including the direct employment by the Managed Entity of officers of Manager;

 

	
  

	
(d)

	
accounting and financial services including coordination and management of the Managed Entity's accounting, treasury, information, income tax and reporting systems;

 

	
  

	
(e)

	
cash management and investment services including arranging, assisting and negotiating banking and financing arrangements for the Managed Entity and assisting in the preparation of financial statements and other financial reports, coordinating external audits and financial planning and budgeting;

 

	
  

	
(f)

	
reporting services to the Managed Entity's directors with respect to the business and affairs of the Managed Entity as may be requested by the Managed Entity's directors from time to time;

 

	
  

	
(g)

	
corporate secretarial services including, without limitation, assistance with the maintenance of corporate records and minutes of meetings;

 

	
  

	
(h)

	
governmental relations services including, without limitation, assisting in the representation of the Managed Entity to governmental and regulatory agencies;

 

	
  

	
(i)

	
the coordination of such audit, legal, insurance and other third party professional or non-professional services in respect of the Managed Entity as determined necessary by Manager (it being understood and agreed that the fees and expenses of third parties will be expenses of the Managed Entity);

 

50683016.4

  

  

- 5 -

 

	
  

	
(j)

	
the coordination of risk management services including, without limitation, risk assessment, evaluation of insurance coverages, negotiation with insurance brokers, carriers and underwriters and processing and administration of insurance claims and including loss prevention services, health and safety advisory services and property risk management;

 

	
  

	
(k)

	
procurement and logistical services including the acquisition of equipment, supplies and services and the administration of the Managed Entity's commercial agreements;

 

	
  

	
(l)

	
negotiation, on behalf of and in the name of the Managed Entity, of agreements with the Managed Entity's customers and other material contracts with third parties necessary for the proper operation of business and assets of the Managed Entity, including with respect to the items listed in this Section 2.1;

 

	
  

	
(m)

	
human resources and staffing services including, without limitation, advisory and administration services relating to employee hiring, employee relations, compensation programs, employee benefit programs and personnel and industrial relations matters;

 

	
  

	
(n)

	
assessment, negotiation and implementation, on behalf of and in the name of the Managed Entity, of major acquisitions and sales of subsidiaries, businesses and/or assets;

 

	
  

	
(o)

	
the preparation and filing of all required tax returns for the Managed Entity and reports to governmental and regulatory agencies;

 

	
  

	
(p)

	
the management of the defence and prosecution of litigation and other legal services furnished by independent counsel and providing advice and recommendations with respect thereto;

 

	
  

	
(q)

	
the furnishing of technical and evaluation services on equipment, processes and techniques related to the operations of the Managed Entity; and

 

	
  

	
(r)

	
such other executive functions in connection with the management of the business and affairs of the Managed Entity as determined necessary or advisable by Manager.

 

(collectively, the “Services”)

 

ARTICLE 3

CONCERNING MANAGER

 

	
3.1

	
Standard of Care

 

Manager shall exercise its powers and discharge its duties honestly, in good faith and in the best interests of the Managed Entity and shall exercise that degree of care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. The Managed Entity 

50683016.4

  

  

- 6 -

acknowledges that conflicts of interest may arise between Manager, the Managed Entity and other members of the Group Entity, and that in resolving such conflicts Manager shall take such actions and do such things as Manager considers are in the best interests of the Managed Entity.

 

	
3.2

	
Representations and Warranties

 

	
  

	
(a)

	
Manager represents and warrants to the Managed Entity, and acknowledges that the Managed Entity is relying thereon, that:

 

	
  

	
(i)

	
it is a valid and subsisting corporation duly incorporated under the laws of its jurisdiction of incorporation and has full corporate power and authority to execute and deliver this Agreement and to observe and perform its covenants and obligations hereunder and has taken all necessary corporate proceedings and obtained all necessary approvals in respect thereof and, upon execution and delivery of this Agreement by it, this Agreement will constitute a legal, valid and binding obligation of Manager enforceable against it in accordance with its terms except that:

 

	
  

	
(A)

	
enforceability may be limited by bankruptcy, insolvency or other laws affecting creditors’ rights generally;

 

	
  

	
(B)

	
equitable remedies, including the remedies of specific performance and injunctive relief, are available only in the discretion of the applicable court;

 

	
  

	
(C)

	
a court may stay proceedings before them by virtue of equitable or statutory powers; and

 

	
  

	
(D)

	
rights of indemnity and contribution hereunder may be limited under applicable law;

 

	
  

	
(ii)

	
neither the execution of this Agreement nor the consummation of the transactions contemplated hereby conflict with, result in a breach of or accelerate the performance required by any agreement to which it is a party; and

 

	
  

	
(iii)

	
neither the execution of this Agreement nor the consummation of the transactions contemplated hereby, result in a breach of the laws of any applicable jurisdiction or its constating documents.

 

	
  

	
(b)

	
Managed Entity represents and warrants to the Manager, and acknowledges that Manager is relying thereon, that:

 

	
  

	
(i)

	
it is a valid and subsisting corporation duly incorporated under the laws of its jurisdiction of incorporation and has full corporate power and authority to execute and deliver this Agreement and to observe and perform its covenants and obligations hereunder and has taken all necessary corporate proceedings and obtained all necessary approvals in respect thereof and, 

 

50683016.4

  

  

- 7 -

 

	
  

	
 

	

upon execution and delivery of this Agreement by it, this Agreement will constitute a legal, valid and binding obligation of Managed Entity enforceable against it in accordance with its terms except that:

 

	
  

	
(A)

	
enforceability may be limited by bankruptcy, insolvency or other laws affecting creditors’ rights generally;

 

	
  

	
(B)

	
equitable remedies, including the remedies of specific performance and injunctive relief, are available only in the discretion of the applicable court;

 

	
  

	
(C)

	
a court may stay proceedings before them by virtue of equitable or statutory powers; and

 

	
  

	
(D)

	
rights of indemnity and contribution hereunder may be limited under applicable law;

 

	
  

	
(ii)

	
neither the execution of this Agreement nor the consummation of the transactions contemplated hereby conflict with, result in a breach of or accelerate the performance required by any agreement to which it is a party; and

 

	
  

	
(iii)

	
neither the execution of this Agreement nor the consummation of the transactions contemplated hereby, result in a breach of the laws of any applicable jurisdiction or its constating documents.

 

	
3.3

	
Liability of Manager

 

Manager shall not be liable for any error of judgement or for any loss suffered by the Managed Entity in connection with the matters to which this Agreement relates, except a loss resulting from wilful misconduct, bad faith, gross negligence or reckless disregard by it of its obligations and duties under this Agreement or in cases where Manager fails to act honestly and in good faith with a view to the best interests of the Managed Entity or to exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Manager and any agent to whom Manager has delegated any of its duties hereunder will perform all of its duties hereunder in accordance with the same standards of care exercised by a reasonably prudent person in similar circumstances.

 

	
3.4

	
Appointment of Agents

 

Manager may employ or engage or appoint as agent and rely and act upon information or advice received from advisors, accountants, legal counsel and others, provided Manager satisfies the standard of care described in Section 3.3 in relying and acting upon information received from such person.

 

50683016.4

  

  

- 8 -

 

	
3.5

	
Relationship of Manager and the Managed Entity

 

	
  

	
(a)

	
The performance by Manager of its duties and obligations under this Agreement shall be strictly as an independent contractor.  Except as may be expressly set out herein, nothing contained in this Agreement shall create or imply any agency relationship among or between any of the Parties, nor shall this Agreement be deemed to constitute a joint venture or partnership between the Parties.

 

	
  

	
(b)

	
Any directors, officers or employees of Manager or its Affiliates who are also directors, officers and employees of the Managed Entity shall be paid by the Manager for serving in such capacity and shall not receive any remuneration from the Managed Entity therefore, except for stock options or other share based compensation granted by the Managed Entity in its sole discretion.

 

	
3.6

	
Other Activities of Manager

 

The Managed Entity acknowledges that Manager has management and administrative responsibilities and contracts with other persons, companies and other entities. The Managed Entity therefore agrees that Manager may provide management and administrative services to such other persons and entities which are the same or different from the services provided to the Managed Entity by Manager even though such other persons or entities may be the same or similar to the Managed Entity.

 

ARTICLE 4

SHARED FACILITIES

 

	
4.1

	
Use of Shared Facilities

 

The Managed Entity shall have access to, and use of the assets contained in, the facilities set out on Schedule 4.1 (the “Shared Facilities”).  The allocation of costs for the Shared Facilities shall be determined annually by the Manager in an equitable basis generally reflecting the head count of the individuals providing services to the Managed Entity as compared to the head count of the individuals providing services to other Group Entities that have access to the Shared Facilities and the Managed Entity shall contribute to the costs of the Shared Facilities on this basis.

ARTICLE 5

FEES AND PAYMENT

 

	
5.1

	
Budgets Relating to Services

 

Within thirty days following the date hereof, Manager shall prepare and deliver to the Managed Entity an Annual Budget for the Managed Entity’s written approval.  Thereafter, not less than sixty days prior to the commencement of each Fiscal Year, Manager shall prepare and deliver to Managed Entity an Annual Budget for the Managed Entity’s written approval.  In the event that Manager anticipates that the total annual costs of providing the Services will exceed the costs outlined in an Approved Annual Budget by greater than 10%, Manager shall use commercially reasonable efforts to obtain the prior written consent of the Managed Entity as soon as the Manager is aware of such cost. Any additional cost shall be allocated in the same manner and on 

 

 

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the same basis as costs for similar line items have been allocated in the Approved Annual Budget for that Fiscal Year.

 

	
5.2

	
Fees Payable by Managed Entity

 

The Services will be provided by Manager to the Managed Entity on an “at cost” and “not for profit” basis, which costs shall be determined and allocated to the Managed Entity based on the cost or value of the Services provided to the Managed Entity as determined by Manager in its sole discretion, and Managed Entity shall reimburse Manager for such costs on a monthly basis.

 

	
5.3

	
Change in Services

 

In the event that the Managed Entity determines during a Fiscal Year, following the approval of an Approved Annual Budget, that it requires any change in the Services it receives, the Managed Entity shall provide notice to Manager and the costs of such change shall be (i) determined in the same manner and on the same basis as in the Approved Annual Budget, and (ii) allocated to, and paid by, the Managed Entity, unless otherwise agreed by the Parties. The quantity and level of Services provided at the end of a Fiscal Year shall form the basis of the quantity and level of Services to be included in the Annual Budget for the following Fiscal Year, unless otherwise agreed by the Parties.  Manager cannot change the quantity or level of Services provided to the Managed Entity without the prior written consent of the Managed Entity.

 

	
5.4

	
Invoice

 

During the term of this Agreement, the Manager shall prepare, issue and deliver to the Managed Entity, on quarterly basis, a consolidated detailed invoice for all amounts payable with respect to the Services provided during the prior quarter.

 

	
5.5

	
Payment

 

The Parties shall make automatic payments at the beginning of each month based on the Approved Annual Budget.  Thereafter within 30 days of receipt of the invoice delivered pursuant to Section 5.4, the Managed Entity shall pay such invoice, as adjusted by deducting the amount of the automatic payments.

 

The Managed Entity shall also pay to the Manager a security deposit equal to two months of services.

 

	
5.6

	
Proration

 

All fees payable under this Agreement shall be computed on a calendar month basis and shall be prorated for any partial month.

 

	
5.7

	
Payments in Respect of Taxes

 

All payments required to be made pursuant to this Agreement shall be plus all applicable Taxes.

 

 

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5.8

	
Severance Pay

 

	
(a)

	
Severance Pay for Past Services

 

The Parties acknowledge that certain employees and consultants of the Manager have had their employment or consulting services transferred to the Manager from the Managed Entity effective as of January 1, 2010 (“the Employee Transfer Date”), and the Managed Entity consents to such transfer.  Up to the Employee Transfer Date, these employees and consultants have been entitled to receive severance pay or termination payments (“Severance Pay for Past Services”) if their employment or consulting contracts are terminated by the Managed Entity.  The Managed Entity is responsible for all severance costs accrued as of December 31, 2009.  Details are set out on Schedule 5.8.

 

	
(b)

	

New Severance Pay Liabilities

 

Any new severance pay obligations after the Employee Transfer Date would be accrued as liability to the Manager as these obligations arise, and will be billed to Group Entity in the same manner and on the same basis as salaries and benefits allocation presented in the approved Annual Budget.

 

	
(c)

	

Allocation of New Severance Pay Obligations to Group Entity

 

All new severance pay or termination obligations of the Manager will be accrued commencing on January 1, 2010 and will be billed to Group Entity in the same manner and on the same basis as salaries and benefits allocation presented in the approved Annual Budget.  Funds collected from the Group Entity for new severance pay obligation will be deposited in a separate bank account of the Manager as an internally restricted contingency fund.  All severance payments will be made from this contingency fund.

 

When an employee or a consultant stops performing services for the Manager and no severance pay is owing to that person (for example the employee voluntarily terminates his employment contract with the Manager), then the severance pay related to this employee will be reversed and the credit will be passed on to the Group Entity as part of the annual fees adjustment set out in Section 5.9.

 

	
5.9

	
Annual Fees Adjustment

 

The parties acknowledge that the Manager will not generate any profits, but has to recover its costs.  At the end of each Fiscal Year, the Manager will compare its actual costs for the year with the costs billed.  If the costs billed exceed the actual costs, the Managed Entity will receive a credit.  If the costs billed are less than the actual costs,  than the Managed Entity will be billed for its share of the unbilled costs, which will be determined in the same manner and on the same basis as in the Approved Annual Budget.

 

	
5.10

	
Excluded Services

 

Services provided by the Manager are described in section 2.1.  The following is a non-inclusive listing of services and costs that are not included in the services provided by the Manager: legal, 

 

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audit, insurance, tax returns preparation, filing fees, regulatory fees, travel, interest and bank charges, costs related to raising capital, costs related to business and property acquisitions.

 

ARTICLE 6

TERM AND TERMINATION

 

	
6.1

	
Term of Agreement

 

This Agreement is for an initial term commencing on the date hereof and expiring on December 31, 2010 and shall be automatically renewed from time to time thereafter for additional terms of one year unless otherwise terminated pursuant to Section 6.2 hereof.

 

	
6.2

	
Termination of Agreement

 

	
  

	
(a)

	
This Agreement may be terminated by either Party giving at least 180 days’ prior written notice (or such shorter period as the Parties may mutually agree upon) to the other Party of termination.

 

	
  

	
(b)

	
This Agreement may be terminated on 60 days' written notice to Manager in the event of the persistent failure of Manager to perform its duties and discharge its obligations under this Agreement, or the continuing malfeasance or misfeasance of Manager in the performance of its duties under this Agreement.

 

	
  

	
(c)

	
This Agreement may be terminated immediately in the event of the commission by Manager of any fraudulent act.

 

	
  

	
(d)

	
This Agreement shall terminate immediately where a winding-up, liquidation, dissolution, bankruptcy, sale of substantially all assets, sale of business or insolvency proceeding have been commenced or are being contemplated by Manager, and terminated upon the completion of any such proceeding by the Managed Entity.

 

	
6.3

	
Delivery of Records

 

If this Agreement is terminated, Manager shall immediately furnish to the Managed Entity at Managed Entity’s cost, all books, records, electronic data and other information pertaining to the Managed Entity and, upon the effective date of the termination of this Agreement, Manager shall forthwith transfer all books, records, electronic data and other information pertaining to the Managed Entity together with all other materials pertaining to the Managed Entity, in its possession, at Managed Entity’s cost, to any successor thereof. For a period of six years following the effective date of the termination of this Agreement, Manager shall provide the Managed Entity and any successor manager of the Managed Entity with any information from its records that the Managed Entity may reasonably require and shall be reimbursed for its reasonable costs and expenses thereof.

 

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ARTICLE 7

RECORDS AND REPORTING

 

	
7.1

	
Records and Reporting

 

Manager shall maintain, at all times, copies of all records related to the Services and the fees invoiced to the Managed Entity for such Services (collectively, “Documentation”).  Manager will retain such Documentation for not less than seven years from the date of its creation. Manager shall prepare such other reports as may be reasonably required by the Managed Entity from time to time.

 

	
7.2

	
Audit and Inspection Right

 

	
  

	
(a)

	
Upon reasonable notice from the Managed Entity, Manager shall provide to the Managed Entity and its internal and external auditors, inspectors, advisors, and such other representatives as such parties may designate from time to time, access to Manager’s locations during normal business hours for the purposes of performing audits and inspections relating to the Services, including access to:

 

	
  

	
(i)

	
the parts of a facility at or from which Manager is providing the Services;

 

	
  

	
(ii)

	
Manager’s personnel who are providing the Services;

 

	
  

	
(iii)

	
all Documentation relating to the Services;

 

	
  

	
(iv)

	
all physical assets that belong to or are charged to the Managed Entity;

 

	
  

	
 

	
to examine Manager’s  performance of the Services under this Agreement.  Manager shall provide full co-operation and assistance to any such entity exercising the right of audit and inspection hereunder and to its internal and external auditors, inspectors and designated representatives as may reasonably be required.

 

	
  

	
(b)

	
The Managed Entity shall be responsible for any additional costs or expenses reasonably incurred by Manager in connection with any audits or inspections conducted as provided for hereunder.

 

ARTICLE 8

INDEMNIFICATION

 

	
8.1

	
Indemnification of Manager

 

Manager (and each of its directors, officers, employees, consultants, agents and shareholders) shall be indemnified and saved harmless by the Managed Entity from and against all liabilities and expenses (including judgements, fines, penalties, amounts paid in settlement and counsel fees), reasonably incurred in connection with any action, suit or proceeding to which Manager may hereafter be made a Party by reason of providing services hereunder to the Managed Entity provided that Manager shall not be finally adjudged in such action, suit or proceeding as liable for or guilty of wilful misconduct, bad faith, gross negligence or reckless disregard of duty to the

 

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Managed Entity, in relation to the matter or matters in respect of which indemnification is claimed.

 

For purposes of the preceding paragraph: (i) “action, suit or proceeding” shall include every action, suit or proceeding, civil, criminal or other; (ii) the right of indemnification conferred thereby shall extend to any threatened action, suit or proceeding and the failure to institute it shall be deemed its final determination; and (iii) advances may be made by the Managed Entity against costs, expenses and fees incurred in respect of the matter or matters as to which indemnification is claimed, provided that any advance shall be made only if the Managed Entity receives advice of legal counsel to the effect that, on the basis of the facts known to such counsel, the person seeking such advance is anticipated to achieve substantial success and on the condition that Manager receiving such advance agrees to repay to the Managed Entity any amounts so advanced if the Managed Entity does not receive, substantially concurrently with the termination of the matter or matters as to which such advances were made, advice of legal counsel to the effect that Manager is entitled to indemnification under this Agreement. The foregoing right of indemnification shall not be exclusive of any other rights to which Manager may be entitled as a matter of law or which may be lawfully granted to Manager.

 

The provisions of Article 8 shall survive termination of this Agreement.

 

ARTICLE 9

CONFIDENTIALITY

 

	
9.1

	
Confidentiality

 

Each Party shall use the Confidential Information of the other Parties only for the purposes contemplated by this Agreement.  The Receiving Party shall use commercially reasonable efforts to ensure that the Confidential Information of a Disclosing Party is not used, disclosed, published, released, transferred or otherwise made available in any form to, for the use or benefit of, any person (other than its Affiliates) except as provided in this Article 9, without such Disclosing Party’s approval, which may be unreasonably withheld.  Each Receiving Party shall, however, be permitted to disclose relevant aspects of a Disclosing Party’s Confidential Information to its officers and employees, and to the officers and employees of its Affiliates, to the extent that such disclosure is reasonably necessary for the performance of its duties and obligations under this Agreement; provided, however, that such Party shall take all commercially reasonable measures to ensure that Confidential Information of another Party is not disclosed or duplicated in contravention of the provisions of this Agreement by such officers and employees and such officers and employees are familiar with the requirements of this Article 9.  A Receiving Party shall also be permitted to disclose relevant aspects of a Disclosing Party’s Confidential Information to its directors, professional advisors, subcontractors, suppliers and agents on such terms which are reasonable considering the sensitivity of the Confidential Information, legal requirements and the identity of the disclose, which terms shall at least include the requirements set forth in this Section 9.1.  The obligations in this Article 9 shall not restrict any disclosure by any Receiving Party pursuant to:

 

(1)           any Applicable Law;

 

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(2)           by order of any court of competent jurisdiction or Governmental Authority;

 

(3)           disclosure as is required in the course of judicial proceedings to enforce rights or remedies under this Agreement, providing that the Receiving Party has taken all reasonable steps to obtain a judicial order to close such proceedings and files relating to such information to all Persons other than the parties thereto, unless such process has been waived in writing by the Party whose Confidential Information is to be disclosed, provided that the Receiving Party shall endeavour to give prompt notice to the Disclosing Party of any such requirement to disclose; and provided further that the obligation in this Article 9 shall not apply with respect to information that:

 

(4)           is independently developed by the Receiving Party;

 

(5)           is or becomes publicly available (other than through unauthorized disclosure by the Receiving Party); or

 

(6)           is disclosed by the owner of such information to a third party free of any obligation of confidentiality or of which a Party gained knowledge or possession of free of any obligation of confidentiality.

 

	
9.2

	
Injunctive Relief

 

Each Receiving Party recognizes that its unauthorized disclosure of Confidential Information of a Disclosing Party may give rise to irreparable injury to the Disclosing Party and acknowledges that remedies other than injunctive relief may not be adequate.  Accordingly, each Party has the right to seek equitable and injunctive relief on an interim and interlocutory basis in the Supreme Court of British Columbia to prevent the unauthorized possession, use, or disclosure or knowledge of any Confidential Information of that Party, as well as to such damages or other relief as is occasioned by such unauthorized possession, use, disclosure or knowledge.

 

	
9.3

	
Return of Confidential Information.

 

Each Party shall:

 

(1)           at the request of the Disclosing Party at any time;

 

(2)           after the Receiving Party’s need for it has expired; or

 

(3)           in connection with the termination of this Agreement, whether in whole or in part,

 

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promptly return to the Disclosing Party, or use all reasonable efforts to erase and destroy, all of the Confidential Information of the Disclosing Party in possession or control or such portion of it as has been requested by the Disclosing Party.

 

	
9.4

	
Survival.

 

This Article 9 shall survive the termination or expiry of this Agreement.

 

ARTICLE 10

FORCE MAJEURE

 

	
10.1

	
Force Majeure

 

	
  

	
(a)

	
Neither Party shall be liable for a failure or delay in the performance of its obligations pursuant to this Agreement, provided that such failure or delay is caused, directly or indirectly, by fire, flood, earthquake, elements of nature or acts of God, acts of war, terrorism, riots, civil disorders, rebellions or revolutions, or strikes, lock outs or labour disruptions, or any other causes beyond the reasonable control of such Party (each, a “Force Majeure Event”).  Upon the occurrence of a Force Majeure Event, the affected Party shall be excused from any further performance of those of its obligations pursuant to this Agreement affected by the Force Majeure Event only for so long as:

 

	
  

	
(i)

	
such Force Majeure Event continues and for so long after as such Party may reasonably require to alleviate the effect of the Force Majeure Event; and

 

	
  

	
(ii)

	
such Party continues to use commercially reasonable efforts to recommence performance whenever and to whatever extent possible without delay.

 

	
  

	
(b)

	
If a Force Majeure Event prevents, or in all likelihood will prevent, Manager from providing all or part of a Service, the Managed Entity may at its option, procure any affected Service or portion thereof from alternate sources until Manager is again able to provide such Service.  Manager shall not be required to compensate the Managed Entity for any costs and expenses relating to the services obtained from such alternate sources.

 

	
  

	
(c)

	
The Parties agree that the fees payable hereunder shall be equitably reduced in the event of a Force Majeure Event to reflect Services not received by the Managed Entity during the duration of the Force Majeure Event.

 

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ARTICLE 11

GENERAL PROVISIONS

 

	
11.1

	
Stock Exchange Acceptance

 

This Agreement is subject to the acceptance for filing thereof by the stock exchange on which the Managed Entity’s shares are listed for trading. If this Agreement is not accepted for filing by the Exchange, the Parties will forthwith negotiate such amendments to this Agreement as may be necessary to secure such acceptance for filing.  If such amendments cannot be mutually agreed upon, then either party may, by notice to the other, terminate this Agreement, provided that in such case all amounts owing for services pursuant to Section 2.1 incurred prior to the date of such termination will be a debt of the Managed Entity owing to Manager and due and payable forthwith.

 

	
11.2

	
Further Assurances

 

A Party shall, upon request of the other Party, execute and deliver or cause to be executed and delivered all such documents, deeds and other instruments of further assurance and do or cause to be done all such acts and things as may be reasonably necessary or advisable to implement and give full effect to the provisions of this Agreement.

 

	
11.3

	
Assignment

 

This Agreement shall not be assigned by the Managed Entity without the prior written consent of Manager. Upon notice to the Managed Entity, Manager may transfer or assign any and all rights granted hereunder to any of its successors or Affiliates.

 

	
11.4

	
Enurement

 

This Agreement shall enure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.

 

	
11.5

	
Entire Agreement

 

This Agreement constitutes the entire agreement between the Parties pertaining to the subject matter hereof and supersedes and replaces all prior understandings, agreements, negotiations or discussions, whether written or oral, between the Parties with respect thereto. There are no representations, warranties, terms, conditions, undertakings or collateral agreements or understanding, express or implied, between the Parties other than those expressly set forth in this Agreement.

 

	
11.6

	
Notice

 

Any notice required or permitted to be given hereunder shall be in writing and shall be properly given, if delivered personally, or by mail or by facsimile or other similar form of communication addressed:

 

	
  

	
(a)

	
to the Managed Entity at:

 

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Crosshair Exploration & Mining Corp.

Suite 1240, 1140 West Pender Street

Vancouver, BC

V6E 4G1

Attention:  Stewart Wallis

Facsimile No.: 604 681-8039

 

	
  

	
(b)

	
to Manager at:

EGM. Exploration Group Management Corp.

Suite 1240, 1140 West Pender Street

Vancouver, BC

V6E 4G1

Attention:  Mark Morabito

Facsimile No.: 604 681-8039

 

Any notice, direction or other instrument given as aforesaid shall be deemed to have been effectively given, if sent by facsimile or other similar form of telecommunications on the next business day following such transmission or, if delivered, to have been received on the date of such delivery or, if mailed, to have been received seven days after the mailing thereof. Either Party may change its address for service from time to time by notice given in accordance with the foregoing and any subsequent notice shall be sent to the Party at its changed address.

 

	
11.7

	
Amendment

 

This Agreement may not be amended, changed, supplemented or otherwise modified in any respect except by written instrument executed by the Parties hereto or their respective successors or permitted assigns.

 

	
11.8

	
Severability.

 

Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction will, as to that jurisdiction, be ineffective to the extent of such prohibition or unenforceability and will be severed from the balance of this Agreement, all without affecting the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

 

	
11.9

	
Counterpart Execution

 

This Agreement may be executed by facsimile or other electronic means and in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute one and the same instrument.

 

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11.10

	
Effective Date

 

Notwithstanding the date or dates upon which this Agreement is executed by either Party, this Agreement shall be in full force and effect between the Parties effective as of and from the date first above written.

 

IN WITNESS WHEREOF the Parties have caused this Agreement to be duly executed as of the date and year first above written.

 

 

	 	
EGM EXPLORATION GROUP MANAGEMENT CORP.

	 	  	  	  
	 	  	  	  
	 	
Per:

	
(signed)

	
 “Mark J. Morabito”

	 	  	
Name:

	
  Mark J. Morabito

	 	  	
Title:

	
  Chief Executive Officer

 

 

	 	
CROSSHAIR EXPLORATION & MINING CORP.

	 	  	  	  
	 	  	  	  
	 	
Per:

	
(signed)

	
Stewart Wallis”

	 	  	
Name:

	
  Stewart Wallis

	 	  	
Title:

	
  President

	  	  

50683016.4

  

  

  

SCHEDULE 4.1

 

Shared Facilities

 

	
1.

	
Suite 1240 - 1140 West Pender Street

Vancouver, BC

V6E 4G1

 

 

SCHEDULE 5.8

 

Severance Pay Obligation of the Managed Entity

 

[REDACTED: Description of the severance pay obligation of the Managed Entity to cetain employees and consultants accrued as of December 31, 2009.]

 

 

  

50683016.4

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