A Production, Royalty, and Lease Participation Agreement
This agreement entered into on 6 September, 2000 by and between Xxxxxxx X.
Xxxxxx (SLH) X.X. Xxx 0000, Xxxxxxx, Xxxxxxxxxx 00000 XXX and Charter
Resources International (CRI) with offices at 0000 X. Xxxxxx, #000, Xxx
Xxxxx, Xxxxxx 00000 XXX sets forth the terms and conditions to be followed by
the parties and supercedes any and all previous agreements whether oral or
written.
Whereas the parties have agreed that CRI will lease two different claim
groups from SLH. The first lease is for the Chesco Load Claims which
consists of Bureau of Land Management (BLM) claims (See Exhibit "A" attached)
which are controlled by SLH. The second lease is for the Zeolite Xxxxxxx
Claims which consists of BLM claims (See Exhibit "B") which are controlled by
SLH. and
Whereas it has been agreed by the parties that CRI will pay to SLH the
following fees and royalties for the lease rights to these properties
identified in Exhibit "A" and Exhibit "B". and
Now therefore the parties wish to proceed under the following conditions.
The Chesco Load Claims royalty fees will be as follows: A production royalty
of Three Thousand Dollars ($3,000.00) minimum or Five (5%) of the Net Smelter
Returns (NSR), whichever is greater, will be paid to SLH as the Lessor of
this Claim Group by CRI monthly. This royalty payment will commence on the
first day of the seventh month from the execution of this agreement. CRI
will present a statement identifying how the royalty was arrived at with each
payment. The percentage royalty will be based upon the gross sales of any
and all products from the property. The Production Royalty payment is to be
paid prior to any government royalties, taxes, cost of mining, milling or
transportation costs. Any and all advanced royalty payments are to be
deducted from the NSR at a rate of Fifty Percent (50%) after the minimum of
$3,000.00 per month is made commencing with the first full calendar month of
sales. CRI may purchase SLH's interest in the Chesco Load Claims for One
Million Dollars USD ($1,000,000.00) at
LM SLH
CRI's Initials ________ SLH's Initials ________
Page 1 of 9 A Production, Royalty, and Lease Participation Agreement
anytime from the execution of this agreement until the Thirty-Six (36) month
anniversary. Starting with month Thirty-Seven (37) the purchase price will
be Five Million Dollars USD ($5,000,000.00).
CRI agrees to pay SLH the sum of Four Thousand Five Hundred Dollars
($4.500.00) which will serve as the option payment. This payment will
entitle CRI to prepare the mine site for production during the first six (6)
months. If production starts before the end of the option period the
production royalty payment is to be made per the royalty payment clause.
The Zeolite Xxxxxxx Claims royalty fees will be as follows: A production
royalty of One Thousand Five Hundred Dollars ($1,500.00) minimum or Five
Percent (5%) of the Net Smelter Returns (NSR), whichever is greater, will be
paid to SLH as the Lessor of this Claim Group by CRI, monthly. This royalty
payment will commence on the first day of the seventh month from the
execution of this agreement. CRI will present a statement identifying how
the royalty was arrived at with each payment. The percentage royalty will be
based upon the gross sales of any and all products from the property. The
Production Royalty payment is to be paid prior to any government royalties,
taxes, cost of mining, milling or transportation costs. Any and all advanced
royalty payments are to be deducted from the NSR at a rate of Fifty Percent
(50%) after the minimum of $1,500.00 per month commencing with the first full
calendar month of sales. CRI may purchase SLH's interest in the Zeolite
Xxxxxxx Claims for One Million Dollars USD ($1,000,000.00) at anytime from
the execution of this agreement until the Thirty-Six (36) month anniversary.
Starting with month Thirty-Seven (37) the purchase price would be Five
Million Dollars USD ($5,000,000.00). CRI agrees to pay SLH the sum of Two
Thousand Two Hundred and Fifty Dollars ($2,250.00) which will serve as the
option payment. This payment will entitle CRI to prepare the mine site for
production during the first six (6) months. If production starts before the
end of the option period the production royalty payment is to be made per the
royalty payment clause.
SLH does hereby give and grant to CRI the right to have quiet and exclusive
possession of the property during the lease term. As the Lessee,
LM SLH
CRI's Initials ________ SLH's Initials ________
Page 2 of 9 A Production, Royalty, and Lease Participation Agreement
CRI will have the right to sample, examine, diamond drill, develop or mine
the property. CRI at its sole discretion may deem to erect, transport to,
and install thereon such buildings, machinery, equipment and supplies as CRI
may deem proper.
In the event of termination of this agreement all buildings, equipment,
machinery, tools, and supplies which have been brought onto the property
either before or during the course of CRI's tenancy may be recovered by CRI
at any time after the termination of the lease/royalty agreement but not
later than six (6) months from that termination. If the tangible property is
not removed during that six (6) month time period they will then become the
property of SLH.
CRI will, at their expense, deliver to SLH a complete set of any and all
assays, plans, diamond drill records or other pertinent details, if any, as
generated at the time of preparation by or for CRI relative to any and all
work performed on the Claim Groups sites included in the Exhibits.
All work performed by CRI on the Claim Groups shall be done in accordance
with good mining practice and in compliance with all applicable laws. The
Claim Groups shall be kept in good standing during the term of this
agreement. Assessment work or payment of maintenance fees shall be done,
recorded and presented to SLH thirty (30) days prior to the due dates as
required by applicable government agencies.
During the term of this agreement SLH shall have access to the Claim Groups
at his own risk and expenses to review development work performed on Claim
Groups and shall have access at all times to the records of CRI as it
pertains to the exploration and development work and production and sales
performed on the Claim Groups and the results obtained, provided that this
inspection does not unduly interfere with or disrupt the business activities
of CRI.
In the event of payment default, a payment not received by SLH within 10 days
of the due date, SLH must give written notice to CRI that CRI has thirty (30)
days to correct such default. If CRI does not correct the default
LM SLH
CRI's Initials ________ SLH's Initials ________
Page 3 of 9 A Production, Royalty, and Lease Participation Agreement
within the thirty (30) day time period, then this agreement will be
terminated and CRI will forfeit all interests in the Claim Groups described
in Exhibit "A" and Exhibit "B".
This agreement may be terminated by CRI by giving thirty (30) days written
notice to SLH. In the event of termination CRI must ensure that all claims
are in good standing for the current year including all reclamation work
performed as required.
CRI will indemnify and hold harmless SLH from any and all claims arising out
of the operations which will be conducted on the Claim Groups included in
this agreement during the term of this agreement.
All payments will be made by CRI to SLH to the address specified above. All
payments made to SLH will be made in United States Dollars.
Confidentiality and Non-Circumvention: The parties agree under penalty of
perjury, that information contained herein and in any other agreement(s),
Contract(s) or arrangement(s) between the parties has been developed and/or
obtained by the individual parties at great expense and certain information,
processes and claims are proprietary to the individual parties. The parties
therefore agree that they will protect and not disclose, either directly or
indirectly, any confidential information disclosed by the other without the
prior express written consent of the furnishing party. For the purpose of
this agreement, "confidential information" shall include but not be limited
to; any and all disclosures made by each to the other concerning the facts,
figures, contracts, names or availability of a buyer, seller or agents of
available buyer or seller, contracts, descriptions, addresses, employees
names, telephone numbers, telex numbers, facsimile numbers, or other means of
access thereof, bank information, codes of references, borrowers, companies,
trusts, corporations, groups, individuals, lenders, partners, brokers, and/or
any such other information, known by any party hereto. Such confidential
information is the property and the business secret of the party who
provides, introduces, or makes known confidential information to the other
party. Therefore, the parties will
not in any manner solicit or accept any business from sources that are
LM SLH
CRI's Initials ________ SLH's Initials ________
Page 4 of 9 A Production, Royalty, and Lease Participation Agreement
known to them by another party without the express written permission of the
party who made the source available.
No Waiver: The failure of any party to enforce at any time any of the
provisions hereof shall not be a waiver of that party's rights thereafter to
enforce any such provision or to enforce any other provision of this
agreement.
Attorney's Fees and Costs: Should any dispute or legal action arise out of
this agreement the prevailing parties shall be entitled to recover reasonable
attorney's fees, expenses and costs incurred in connection with such dispute
or action as said court will allow.
Modification: This agreement may only be modified, altered or amended, in
whole or in part, by a written agreement setting forth such changes signed by
all the parties.
Authority: Each party hereto warrants and represents to the other party that
they have full legal authority to bind their respective clients and are
legally free to enter into this agreement and that the execution of this
agreement is duly authorized.
Binding Parties: This agreement shall be binding upon the parties hereto and
their principals, associates, employees, representatives, agents,
consultants, members and representatives of all associated groups, and their
respective heirs, executors, successors, and assigns. This agreement may be
amended, but only in writing. and all amendments must be executed by all of
the parties hereto.
Effectiveness: This agreement becomes effective immediately as to each
signatory upon execution by him. The affixing of the signature by the
signatory and the noting of the date thereof by him constitutes execution of
this agreement. The party shown as the first signatory thereto is referred
to herein as the primary signatory. A copy of this document shall be
provided to the primary signatory hereto immediately upon execution unless
otherwise directed by the primary signatory. All documents provided shall
LM SLH
CRI's Initials ________ SLH's Initials ________
Page 5 of 9 A Production, Royalty, and Lease Participation Agreement
be fully legible and dated.
Facsimile Transmission Validity: This agreement, when executed by facsimile
transmission, shall be considered as original and shall have the same legal
binding force as an original. This agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.
Entire Agreement: This document constitutes the entire agreement between the
parties hereto and supersedes all prior agreements or understandings whether
in writing or oral. This document may not be terminated, amended or altered
unless written consent is obtained and signed by both undersigned
signatories.
Binding Agreement: This is a legally binding document between parties and
each signatory party is entitled to, and advised to, seek independent legal
advice in regards to this agreement. Each signatory hereto acknowledges that
he has read and understands all of the terms, conditions, and provisions of
this agreement and that by his signature hereby accepts and unconditionally
agrees to all of the terms, conditions and provisions. Therefore in full
measure as of the date noted herein, and having read, understood, accepted
all of the terms, conditions and provisions hereof, each signatory hereto
affixes his signature by his decision. The parties agree to be bound by,
governed by, construed and enforced in accordance with, and subject to, the
applicable Laws of the State of Nevada and the United States of America.
Term: This Agreement is valid upon commencement and for a period of 120
months from the date of the execution of this agreement and can be renewed by
Lessee for and additional 120 months for the same terms and conditions as
stated in this agreement.
There will be a two (2) mile area of influence from the boundaries of the
Claim Groups and this area of influence will be binding to all parties to
this agreement.
LM SLH
CRI's Initials ________ SLH's Initials ________
Page 6 of 9 A Production, Royalty, and lease Participation Agreement
Accepted and Agreed to by: Xxxxxxx X. Xxxxxx
Authorized Signatory: Xxxxxxx X. Xxxxxx Date: 9-6-00
/s/Xxxxxxx X. Xxxxxx
Signature:____________________ __________________
Accepted and Agreed to by: Charter Resources International
Authorized Signatory: Xxxxxxxx X. Xxxx Date: 9/6/00
/s/Xxxxxxxx X. Xxxx
Signature & Title:_______________________Chairman______
LM SLH
CRI's Initials ________ SLH's Initials ________
Page 7 of 9 A Production, Royalty, and Lease Participation Agreement
EXHIBIT "A"
Chesco Mine Claims:
18 Claims
799092, 799093, 799094, 799095, 799096, 799097, 799098, 799099, 799100,
799101, 799102, 799103, 799104, 799105, 799106, 799107, 799108, 799109
Claim Owner as registered with the Bureau of Land Management:
Claim Owner:
Xxxxxxx X. Xxxxxx
X.X. Xxx 0000
Xxxxxxx, Xx. 00000
LM SLH
CRI's Initials ________ SLH's Initials ________
Page 8 of 9 A Production, Royalty, and Lease Participation Agreement
EXHIBIT "B"
Zeo 1 Claims:
14 Claims
818494, 818495, 818496, 818497, 818498, 818499, 818500, 818501,
818502, 818503, 818504, 818505, 818506, 818507
Claim Owner as registered with the Bureau of Land Management:
Xxxxxxx X. Xxxxxx
X.X. Xxx 0000
Xxxxxxx, Xx. 00000
LM SLH
CRI's Initials ________ SLH's Initials ________
Page 9 of 9 A Production, Royalty, and Lease Participation Agreement
