Exhibit 10.1(i)
MINING LEASE WITH OPTION TO PURCHASE
THIS MINING LEASE AGREEMENT MADE AND ENTERED INTO on this 19th day of April,
2004, by and between NORTH XXXX JOINT VENTURE, L.L.C., a Utah limited
liability company (hereinafter referred to as "Lessor") and VALLEY HIGH MINING
COMPANY., a Nevada corporation (hereinafter referred to as "Lessee").
IN CONSIDERATION of a total of 5,000,000 (five million) post- merger/change of
domicile "restricted" common capital shares of Lessee to be issued to and in
the name of Lessor, par value $0.001 per share, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Lessor does hereby grant, demise and let exclusively unto Lessee for the
duration and for the purposes herein specified, all of Lessor's right, title
and interest in and to the following described patented lode mining claims
comprising 470.097 acres, more or less, and situated in the Tintic Mining
District of Juab County, State of Utah; including all dips, spurs and
appurtenant rights, including water rights, hereinafter collectively referred
to as the "Leased Premises."
FOR "LEASED PREMISES" DESCRIPTION, SEE EXHIBIT "A"
ATTACHED HERETO AND MADE A PART HEREOF
I. EXCLUSIVE RIGHTS GRANTED
1.1 The Leased Premises are hereby leased exclusively to Lessee and its
successor-in-interest for the following purposes, all or any of which may be
performed by Lessee in such manner and at such time or times as Lessee may
determine in its absolute discretion, subject to the terms hereof:
a. Exploring and prospecting for, developing, mining, excavating, leaching,
milling, processing and smelting, whether by open pit, underground, strip
mining, solution mining, heap leaching, or any other methods deemed desirable
by Lessee in its sole discretion, all minerals, ores, valuable rocks, rare
earths and materials of all kinds, including mine dumps and tailings
(hereinafter collectively referred to as "Leased Substances");
b. Processing, concentrating, beneficiating, treating, milling, smelting,
shipping, selling and otherwise disposing of the Leased Substances and
receiving the proceeds of any such sale;
c. Erecting, constructing, maintaining, using and operating in and on the
Leased Premises such buildings, structures, machinery, facilities and
equipment as Lessee deems necessary; and
d. Engaging in any other activity that Lessee deems reasonable and necessary
to achieve the foregoing purposes.
II. TERM OF LEASE
2.1 The term of this Mining Lease shall be for five (5) years from the
effective date set forth above, and may be renewed by Lessee for successive
five (5) year periods upon substantially the same terms and provisions as set
forth herein based upon the then-capital structure of the Lessee, until
declared forfeited and canceled by Lessor or relinquished by Lessee as
provided herein. Lessee shall give Lessor written notice of each renewal at
least thirty (30) days prior to expiration of the respective five-year term.
III. ADVANCE ROYALTY AND WORK COMMITMENT
3.1 A portion of the "restricted" stock received by Lessor shall constitute an
Advance Royalty paid the Lessor as initial consideration upon execution of
this Mining Lease. Such shall further constitute the minimum advance royalty
on or before the anniversary date of each succeeding lease year.
3.2 Lessee shall be entitled to a $30,000 credit in the amount of all such
Advance Royalties paid against Production Royalties otherwise owing to Lessor
pursuant to Article IV of this Lease.
3.3 Lessee shall perform exploration, mining, development, production,
processing or any other activity ("work" herein) which benefits the Leased
Premises at a minimum cost of $15,000 for each successive five (5) year term
during the term of this Mining Lease and commencing on the date of this Lease.
All work on other lands within 500 feet of the boundary of any portion of the
Leased Premises shall be deemed to benefit the Leased Premises for the work
commitment if such work is part of an overall plan or project that includes
the Leased Premises. All costs expended for work in excess of $15,000 for any
five (5) year term shall accrue and be applied to the work commitment for the
next successive 5-year term only; however, the maximum amount that can so
accrue for the next succeeding lease term shall be no more than $15,000.
3.4 In the event that Lessee does not perform work in the amount of the entire
$15,000 minimum expenditure (which amount will include any excess amount
accrued from the prior five year term), Lessee shall pay Lessor the amount of
any such shortage in cash. Within 30 days after the end of each five (5) year
term, Lessee shall submit an accounting report of the expenditures toward the
work commitment and a report containing factual, non- interpretive data
concerning the work of Lessee during the preceding 5-year term. On or before
August 10 of each year, a separate one-year report shall be prepared and
furnished to Lessor containing factual, non-interpretive data concerning work
of Lessee, if any, during the preceding calendar year.
3.5. The breach, by Lessee, of paragraphs 3.3 and/or 3.4 above shall entitle
Lessor to immediately terminate the Lease and in such event, Lessor waives the
right to xxx for monetary damages.
IV. PRODUCTION ROYALTY
4.1 In addition to the consideration set forth herein, Lessee shall pay Lessor
a Three and One Half percent (3.5%) Net Smelter Royalty on all mineral bearing
ores.
4.2 The payment of Production Royalty shall be made not more than 45 days
after the close of the month during which the payment is received from the
smelter or buyer on which such Royalty is calculated.
4.3 "Net Smelter Returns" shall mean the net amount of money received by
Lessee from the sale of Leased Substances to a smelter, refinery or other
buyer, after deduction of costs of transportation to point of sale and costs
of any concentration of Leased Substances prior to delivery to the smelter,
refinery or other buyer, and less the deduction of all cost, penalties or
charges required by said smelter, refinery or other buyer to be paid by Lessee
as a condition of sale. In the event a Leased Substance is sold to any buyer
other than a smelter, all costs incurred by Lessee after mining for processing
or treating such substances, including refining, shall be deductible costs.
4.4 The payment of Production Royalty shall be made not more than 45 days
after the close of the month during which the payment is received from the
smelter or buyer on which such Royalty is calculated.
4.5 All Leased Substances which the Lessee chooses to market shall be marketed
at the best terms reasonably obtainable, with due regard to freight
differentials, and if such ores or concentrates or other products shall be
treated at a smelter or refinery of Lessee, the smelter or refinery schedules
used for determining the Net Smelter Returns thereon shall not be less
favorable than the terms and conditions either being offered to others or
being contracted with others at the time for products of like character and in
similar quantities for delivery to Lessee's smelters or refineries.
4.6 Lessee shall be entitled to credit all Advance Royalty payments paid to
Lessor pursuant to Article III of this Mining Lease against all Production
Royalties payable to Lessor under this Article IV.
V. INSPECTION, REPORTS, BOOKS AND RECORDS
5.1 Lessor, or its duly authorized agent or representative, shall be permitted
to enter into or upon the Leased Premises for the purpose of inspection, at
all reasonable times during business hours, after 48 hours advance notice in
writing to Lessee. Lessor shall enter upon said Leased Premises at Lessor's
own risk and so as not to hinder the operations of Lessee. Lessor shall
indemnify and hold harmless Lessee from any damage, claim or demand arising
from the entry or inspection by Lessor or its agent or representatives, or any
of them, on the Leased Premises or the approaches thereto.
5.2 The books and records of Lessee insofar as they relate to operations on
the Leased Premises pursuant to this Mining Lease shall be open to inspection
and copying by Lessor or its duly authorized representatives, at the expenses
of Lessor, during regular business hours, after 48 hours advance request in
writing to Lessee. Within twenty-four (24) months after the end of each
calendar year, Lessor may at its sole cost and expense make or have made an
audit of the accounts and records of Lessee concerning operations on the
Leased Premises for that calendar year; provided that Lessor may audit the
accounts for a calendar year only once and provided further that Lessor must
notify Lessee in writing of its intention to cause such an audit to be made
sixty (60) days in advance of such date.
VI. DATA ON THE PROPERTY
6.1 Upon execution of this Mining Lease, Lessor will provide Lessee with
access to all data concerning the Leased Premises then in possession of Lessor
or its agents. Lessee shall have the right to make and remove copies of all
such data at the expense of Lessee, but Lessee shall not remove original
documents without written consent of Lessor. Lessee hereby acknowledges that
Lessor has provided all data in its possession.
VII. PROTECTION FROM LIENS, DAMAGES AND LIABILITY
7.1 Lessee shall keep the Leased Premises free and clear of liens for labor
done or performed or materials furnished on or for the development or
operation of the Leased Premises under this Mining Lease. Lessee will not be
considered in breach of this provision so long as Lessee, in good faith,
contests the validity of any liens or claims against the Leased Premises.
7.2 Lessee shall indemnify and shall hold harmless Lessor and all of Lessor's
partners, agents, and employees, and each of them, from and against any and
all obligations, debts, loss, damage, claims, demands, suits, controversies,
costs, fees, liens, encumbrances, and liabilities whatsoever, including
attorneys' fees, in any way resulting from or arising out of any failure by
Lessee to abide by any material term of the Mining Lease or any negligent or
intentional act or omission by Lessee's contractors arising out of or in
connection with the operations and activities of Lessee hereunder, or out of
its possession and occupancy of the Leased Premises, including environmental
costs resulting from Lessee's operations, or from any similar actions by the
public during the term of this Mining Lease. Lessor shall not be responsible
or liable for any loss or damage to Lessee or to Lessee's property or business
that may be occasioned by or through acts or omissions of persons or entities
(other than for negligent or reckless acts or willful misconduct or omissions
by Lessor or any of its partners, agents or employees) occupying, using, or
passing over any part of the Leased Premises. Lessee shall use and occupy the
Leased Premises at its own risk, and hereby releases Lessor, to the full
extent permitted by law, from all claims of every kind or nature, including
claims for loss of life, personal or bodily injury, or property damage except
as otherwise excluded herein.
7.3 Lessor is informed that the Environmental Protection Agency (EPA) is
involved in a Super Fund clean-up project in the City of Eureka, Utah, an area
near the Leased Premises. This project is based on alleged lead contamination
in the yards of Eureka city dwellers, contamination that is allegedly the
result of mining in the Tintic Mining District. (The actual cause of the
alleged contamination is the fact that Eureka city dwellers reportedly took
and used a variety of mineral tailings for fill dirt in their front and back
yards.) This project has been reported in local newspapers. While Lessor does
not believe that it has any liability whatsoever for creating any lead
contamination in the City of Eureka, Lessor cannot guarantee that the EPA will
not pursue it, along with other, similarly situated landowners, for
reimbursement of part of the cost of such clean-up project. Accordingly,
Lessor hereby indemnifies and holds Lessee harmless from and against any claim
by the EPA or some similar state agency based solely on past mining
contamination or violations. In the event the EPA or a similar state agency
brings suit against Lessee as a person in the chain of title, Lessor further
agrees to defend any such suit on Lessee's behalf at its sole cost and
expense.
VIII. COMPLIANCE WITH LAW
8.1 In conducting its operations hereunder, Lessee will cause all work,
development and mining to be done in a careful and miner-like manner, and
Lessee shall fully comply with the terms and provisions of worker's
compensation laws and other laws governing its operations under this Mining
Lease, including but not limited to any mining or environmental obligation,
under existing or hereafter enacted legislation.
IX. TERMINATION BY LESSEE
9.1 Lessee shall have the continuing right to terminate this Mining Lease at
any time and to surrender the Leased Premises to Lessor by giving Lessor
written notice thereof at least 30 days prior to the stated date of
termination.
9.2 In the event of termination, all sums theretofore paid Lessor by Lessee
shall, except in the case of manifest error, be retained by Lessor, and all
obligations of Lessee to make payments (expect those accruing prior to the
date to termination) and perform any other obligation set forth in this Mining
Lease shall terminate.
9.3 In the event of termination, Lessee, upon request by Lessor, shall make,
execute, acknowledge and deliver to Lessor a written relinquishment of this
Mining Lease in recordable form.
X. DEFAULT
10.1 Lessee shall be in default hereunder if either of the following shall
occur:
a. Lessee fails to fulfill an obligation to Lessor, or does not in good faith
contest in writing the particular obligation, within thirty (30) days after
receipt by Lessee of written notice from Lessor that a required obligation has
become due and has not been satisfied; or
b. Lessee fails to perform any of the other covenants or agreements herein
contained, and such failure continues for a period of 60 days after receipt by
Lessee of written notice from Lessor of such failure, stating how it may be
cured, and Lessee is not diligently proceeding to cure such failure or is not
in good faith contesting the claimed failure.
10.2 In the event of default by Lessee as provided above, Lessor may at once
enter into and upon the Leased Premises or any part thereof and declare a
forfeiture and cancellation of this Mining Lease.
XI. REMOVAL OF EQUIPMENT
11.1 During the term hereof, Lessee is granted exclusive use of all
structures, improvements and personal property located on the Leased Premises
and owned by Lessor as of the date of this Mining Lease. Lessee acknowledges
the existence of a grazing lease held by Xx. Xxx Xxxxxxxx, Xx., as of the date
hereof and will determine ownership of any structures or personal property on
the Leased Premises prior to use.
11.2 In the case of a valid forfeiture, surrender or other termination of this
Mining Lease, Lessee shall have the right for a period of one hundred eighty
(180) days to remove from the Leased Premises all warehouse stocks,
merchandise, materials, tools, hoists, compressors, engines, motors, pumps,
transformers, electrical accessories, metal or wooden tanks and mine cars and
any and all other machinery, trade-fixtures and equipment erected or placed in
or upon sad Leased Premises by it, except only rails, mine timbers, installed
pipes and connections. All property not removed within said period shall be
deemed abandoned to Lessor, unless such period is extended by agreement of
Lessee and Lessor or by reason of force majeure as defined herein.
XII. TITLE
12.1 Lessor warrants and covenants that it holds title and is in actual and
exclusive possession of the Leased Premises free and clear from all grants,
sales, liens, defects, adverse claims and encumbrances of any kind. Lessor
shall deliver said actual, peaceful and exclusive possession of the Leased
Premises to Lessee for the Term of this Mining Lease, and during the Term of
this Mining Lease Lessor shall not encumber or burden title to the Leased
Premises in any way without the prior written consent of Lessee.
12.2 Lessor agrees to furnish Lessee such abstract, deeds or other evidence of
title as may be in Lessor's possession and control, and to allow and cooperate
with Lessee, at Lessee's option and expense, to have abstracts brought to date
and to take such steps and proceedings to establish title as Lessee shall deem
advisable. Lessee hereby acknowledges that Lessor has provided all title
information in its possession.
12.3 Lessee is aware of Lessor's separate grazing lease with Xx. Xxx Xxxxxxxx,
Xx., and Lessee affirms the rights of the Grazing Lessee to conduct grazing
operations on the Leased Premises, provided the same do not interfere with
Lessee's rights hereunder.
XIII. FORCE MAJEURE
13.1 The obligations of Lessee hereunder shall be suspended to the extent and
for the period that performance of any of Lessee's obligations hereunder is
prevented by any cause, whether foreseeable or unforeseeable, which are
determined to be beyond Lessee's reasonable control (hereinafter "an event of
force majeure") including, without limitation any of the following, acts of
nature; labor disputes; strikes or threats of strike; fire; explosion;
earthquake; storm; flood; landslide; avalanche; drought or other adverse
weather condition; interruption or delay in transportation; war ;
insurrection; riot; laws, regulations, orders, proclamations, instructions or
requests of any government or governmental entity; judgments or orders of any
court; inability to obtain, on reasonably acceptable terms, any public or
private license, permit or other authorization; curtailment or suspension of
activities to remedy or avoid an actual or alleged, present or prospective,
enforcement of federal, state or local environmental standards; unavoidable
casualties; shortage of labor, equipment, fuel, material, parts, supplies,
services or equipment; plant breakdown; or any disabling cause, whether
similar or dissimilar to the foregoing enumeration.
13.2 If an event of force majeure occurs, the suspension of Lessee's
performance hereunder during such occurrence shall not be deemed a breach of
the Mining Lease, and the Term of this Mining Lease shall be extended for a
time period equal to the duration of such suspension. Lessee shall promptly
give notice to Lessor of the suspension of performance, stating therein the
cause and duration thereof. Lessee agrees to use reasonable diligence to
remove such causes of suspension as may occur from time to time, but shall not
be required to settle strikes or other labor difficulties contrary to its own
judgment.
XIV. NOTICES
14.1 All notices, payments and elections required, permitted or requested
hereunder shall be made in writing and delivered personally or made in writing
and sent by regular mail, facsimile transmission or e-mail (except notice of
termination or default, which shall be sent by certified mail, return receipt
requested), addressed as follows:
To Lessor: NORTH XXXX JOINT VENTURE, LLC
0000 Xxxxx Xxxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000-0000
To Lessee: VALLEY HIGH MINING COMPANY
c/o MABEY & XXXXXX, X.X.
0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000-0000
Fax No. 000-000-0000
unless otherwise changed or modified by written request of the recipient
party.
XV. COMMINGLING OF ORE
15.1 Lessee may commingle ore from the Leased Premises with ore from other
properties, either before or after concentration or benificiation, so long as
the data necessary to determine the weight and grade both of the ore removed
from the Leased Premises and from the premises with which it is commingled,
are obtained by Lessee. Lessee shall then use that weight and grade data to
allocate Net Smelter Returns from the commingled ore between the Leased
Premises and the other properties from which the commingled ore was removed.
All such weight, grade and allocation calculations by Lessee shall be done in
a manner recognized by the mining industry as practical and sufficient at that
time.
XVI. TAXES
16.1 Lessee agrees to pay all taxes assessed against the Leased Premises
during the term hereof (expect federal, state or local taxes assessed on
income) including, but not limited to, ad valorem property taxes, net proceeds
or mine taxes, and all taxes for ores mined and ores treated under this Mining
Lease. Payment of such taxes shall be made prior to the delinquency date of
the tax.
XVII. INCIDENTAL USE OF PROPERTY
17.1 Lessee may possess, occupy and use, in the course of and as pertinent to
its operations in the vicinity of, or upon the Leased Premises, all or any of
the structures owned by Lessor located upon or within the Leased Premises.
Lessee shall maintain in reasonably good state of repair all such structures
which it elects to use to which it is granted exclusive use within the scope
of such grant in Article XI, except for the ordinary wear and tear and
reasonable depreciation resulting from Lessee's said use and possession.
During the period of use by Lessee, Lessee shall pay the insurance, power,
light and miscellaneous costs that accrue on such structures as Lessee elects
to use. Lessor makes no warranty as to the condition or safety of any
structures upon the Leased Premises and Lessee agrees to accept the risk of
loss resulting from its use of structures.
XVIII. ASSIGNMENT
18.1 Each party reserves the right to assign or convey all or part of its
interest in this Mining Lease or the Leased Premises to any person or entity,
and any such assignment shall be made expressly subject to the terms hereof.
No such assignment shall be valid and effective until the assigning party has
delivered written notice of such assignment to the other party.
XIX. INUREMENT
19.1 The terms, provisions, covenants, warranties and agreements herein
contained shall extend to, be binding upon and inure to the benefit of the
heirs, personal representatives, successors and assigns of the parties.
XX. MEMORANDUM OF LEASE
20.1 Lessor and Lessee agree to execute a Memorandum setting forth the basic
terms and conditions of this Mining Lease. Said Memorandum may be recorded in
all public records where such documents are customarily recorded. Lessor and
Lessee agree that this Mining Lease shall not be recorded.
XXI. PUBLIC ANNOUNCEMENTS
21.1 Except as to public disclosures which are required by law or regulations,
all public announcements in respect of this Mining Lease shall be made only
after both Lessor and Lessee have each consented, in writing, to the form and
content of said announcement.
XXII. OPTION TO PURCHASE
Lessor grants to Lessee the sole and exclusive option to purchase all of
Lessor's right, title and interest in the property (the Leased Premises) for a
total purchase price of THREE MILLION dollars ($3,000,000.00) (hereinafter
referred to as the "Purchase Price"). Exercise of the option shall be
effective upon delivery of written notice thereof to Lessor at Lessor's
business address or the address of Lessor's registered agent. Lessee shall
deliver to Lessor a negotiable instrument in the full amount of the Purchase
Price in exchange for a properly executed and acknowledged Mining Deed in
recordable form. Closing shall occur within sixty (60) days after exercise of
the option.
IN WITNESS WHEREOF, the parties undersigned warrant that they are properly
authorized to bind their respective organizations and enter into this Mining
Lease according to all terms and provisions hereof, effective as of the day
and year first above written.
Lessor:
NORTH XXXX JOINT VENTURE, a Utah limited liability
company
By: /s/Xxxx Xxxxxxx Xxxxxx
Xxxx Xxxxxxx Xxxxxx, Managing Member
Lessee:
VALLEY HIGH MINING COMPANY, a Nevada corporation
By: /s/Xxxx Xxxxxxx Xxxxxx
Xxxx Xxxxxxx Xxxxxx, President
Exhibit "A"
to the Mining Lease with Option to Purchase dated April 19, 2004, by and
between North Xxxx Joint Venture, a Utah LLC, as Lessor, and VALLEY MINING
COMPANY, a Nevada corporation, as Lessee, and covering the following patented
lode mining claims situate in the State of Utah, County of Juab, Tintic Mining
District to wit:
TOWNSHIP 10 SOUTH, RANGE 3 WEST, USB&M
SECTIONS 11, 12, 13, 24
CLAIM NAME SURVEY OR ACRES XXX XXXXXX
Xxxxx Xxxx, Xxxxxx & Xxxxxxxxx Xxxxx # 000 34.24
Lulu Lode #4306 12.238
Peru Lode # 341 20.090
Wedge Lode #4448 1.667
Xxxxxxxx & Xxxxxxxxxx Xxxxx # 000 12.240
Pinion & Fraction Lodes #4553 12.859
Black Warrior #3 Lode #4620 6.318
Black Warrior & Fraction Lodes #4552 24.789
West Cable, Cable Fraction, Columbia Xxxxxxx,
Xxx Xxxx & Xxxx Xxxxx #0000 42.339
Magazine Lode #6622 3.041
Xxxxxx #2 Lode #3275 13.652
Revenue, Manhattan, Outcast Lodes #3277 61.025
Stipended Lode #3276 18.750
Xxxx Xxxxx Xxxx #4101 2.305
Last Resort Lode #3215 20.659
Rescue Lode #5347 16.958
North Xxxx & Jorave Lodes #0000 0.000
Xxxxx Xxxx, Xxxxx Bear Fraction, North Seneca Lodes #6795 28.732
Damfino Lode # 262 20.511
Xxxxx Consolidated Lode #4584 13.307
Equator, Cable Lode and Jumbo Lode #4302
#4303
#4304 16.323
Magnet Lode #3968 20.661
Bellmont Lode #4789 19.111
Blossom Lode #4556 0.806
St. Louis Mining Claims #1, 2, 3 and 4 #5267 51.446
containing in all 470.097 acres, more or less
INVESTMENT LETTER
April 19, 2004
The Board of Directors
VALLEY HIGH MINING COMPANY
0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000-0000
RE: Acquisition of 5,000,000 (five million) "restricted" common capital shares
of VALLEY HIGH MINING COMPANY, a Nevada corporation ("VALLEY HIGH"), by North
Xxxx Joint Venture, LLC ("North Xxxx"), a Utah limited liability company
Gentlemen:
In connection with the execution on this day of a certain Mining Lease by and
between VALLEY HIGH MINING COMPANY, a Nevada corporation ("Lessee" or "VALLEY
HIGH") and North Xxxx Joint Venture, LLC, a Utah limited liability company
("Lessor" or "North Xxxx") by which Lessor is leasing 470.097 acres of mining
claims located in the Tintic Mining District of Juab County, State of Utah, to
Lessee for five (5) years commencing on this day, April 19, 2004, and pursuant
to which Lessor is entitled to receive a total of 5,000,000 (five million)
"restricted" shares of VALLEY HIGH, North Xxxx hereby represents and warrants
to VALLEY HIGH as follows:
1. The 5,000,000 shares of common capital stock of VALLEY HIGH, par value
$0.001, (the "Securities") are being acquired by the undersigned for the
undersigned's account exclusively without a view to, or for, resale in
connection with any distribution of such Securities or any interest therein
without registration or other compliance under the Securities Act of 1933, as
amended (the "Act"), and that the undersigned has no direct or indirect
participation in any such undertaking or in the underwriting of such an
undertaking.
2. The undersigned, as set forth further below, will not take, or cause to be
taken, any action that would cause the undersigned to be deemed an
underwriter, as defined in Section 2(11) of the Act, as amended.
3. The undersigned's managing member is currently an officer and director of
the VALLEY HIGH and therefore he is thoroughly familiar with VALLEY HIGH and
the nature of its development stage business, including all risks attendant
thereto.
4. The undersigned has had an opportunity to ask questions of, and receive
answers from others acting on behalf of the VALLEY HIGH, including
professionals such as its auditors or other accountants or expects, to verify
the accuracy and completeness of information the undersigned has received
while determining whether to enter into the subject Mining Lease with VALLEY
HIGH.
5. By reason of the undersigned's knowledge and experience in financial and
business matters in general, and investments in particular, the undersigned
and its individual members are capable of evaluating the merits and risks of
an investment in VALLEY HIGH.
6. The undersigned and each of its three members is capable of bearing the
economic risks of the subject investment. Moreover, the undersigned's present
financial condition is such that the undersigned is under no present or
contemplated future need to dispose of any portion of the stock to satisfy any
existing or contemplated undertaking, need or indebtedness. Further, the
undersigned does not contemplate or foresee a change of circumstances in this
regard.
7. The undersigned understands that the Securities have not been registered,
but are being acquired by reason of a specific exemption under the Act as well
as under certain state statutes for transactions by an issuer not involving
any public offering and that any disposition of the subject Securities may,
under certain circumstances, be inconsistent with this exemption and may make
the undersigned an "underwriter" within the meaning of the Act. It is
understood that the definition of an "underwriter" focuses on the concept of
"distribution" and that any subsequent disposition of the subject Securities
can only be effected in transactions that are not considered distributions.
Generally, the term "distribution" is considered synonymous with "public
offering" or any other offer or sale involving general solicitation or general
advertising. Under present law, in determining whether a distribution occurs
when securities are sold into the public market, under certain circumstances
one must consider the availability of public information regarding the issuer,
a holding period for the securities sufficient to assure that the persons
desiring to sell the securities without registration first bear the economic
risk of their investment, and a limitation on the number of securities which
the stockholder is permitted to sell and on the manner of sale, thereby
reducing the potential impact of the sale on the trading markets. These
criteria are set forth specifically in Rule 144 of the General Rules and
Regulations of the Commission promulgated under the Act. After one (1) year
from the date the Securities are fully paid for, all as calculated in
accordance with Rule 144(d), sales of the Securities in reliance on Rule 144
can only be made in limited amounts in accordance with the terms and
conditions of the rule. After two (2) years from the date the Securities are
fully paid for, as calculated in accordance with Rule 144(d), they can
generally be sold in interstate commerce and otherwise without meeting these
conditions, provided the holder is not (and has not been, for the preceding
three (3) months) an affiliate of the issuer.
8. The undersigned acknowledges that the Securities must be held and may not
be sold, transferred, or otherwise disposed of for value unless they are
subsequently registered under the Act or an exemption from such registration
is available; the issuer is under no obligation to register the Securities
under the Act or under Section 12 of the Securities Exchange Act of 1934, as
amended, except as may be expressly agreed to by it or its successor-in-
interest in writing; if Rule 144 is available, and no assurance is given that
it will be, initially only routine sales of such Securities in limited amounts
can be made in reliance on Rule 144 in accordance with the terms and
conditions of that rule; the issuer is under no obligation to the undersigned
to made Rule 144 available, except as may be expressly agreed to by it in
writing; in the event Rule 144 is not available, compliance with some other
disclosure exemption may be required before the undersigned can sell,
transfer, or otherwise dispose of such Securities without registration under
the Act; the issuer's registrar and transfer agent, Atlas Stock Transfer, will
maintain a stop transfer order against the registration of transfer of the
Securities; and the certificate representing the Securities will bear a legend
in substantially the following form so restricting the sale of such
Securities:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (the "Act"), AND ARE "RESTRICTED
SECURITIES" WITHIN THE MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES
ACT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE SECURITIES
ACT.
9. The issuer, VALLEY HIGH, may refuse to register transfer of the Securities
in the absence of compliance with Rule 144 unless the undersigned furnishes
the issuer with a "no action" or interpretative letter from the Securities and
Exchange Commission or an opinion of counsel reasonably acceptable to the
issuer stating that the transfer is proper and permissible; further, unless
such letter or opinion states that the Securities are free of any restrictions
under the Act, the issuer may refuse to transfer the Securities to any
transferee who does not furnish in writing to the issuer the same
representations and agree to the same conditions with respect to such
Securities as set forth herein. The issuer may also refuse to transfer the
Securities if any circumstances are present reasonably indicating that the
transferee's representations are not accurate.
This Investment Letter shall be binding upon and shall inure to the benefit of
the parties hereto and to the successors and assigns of the VALLEY HIGH and to
the personal and legal representatives, heirs, guardians, successors, and
permitted assignees of the undersigned.
IN WITNESS WHEREOF, the undersigned has executed this Investment Letter on
behalf of and by and for Lessor, North Xxxx Joint Venture, LLC, effective on
the 19th day of April, 2004.
NORTH XXXX JOINT VENTURE, L.L.C.
/S/Xxxx Xxxxxxx Xxxxxx
By: Xxxx Xxxxxxx Xxxxxx
Its: Managing Member
Signature of Subscriber
NORTH XXXX JOINT VENTURE, L.L.C.
Typed or Printed Name
0000 Xxxxxx Xxxxx
Residence Address
Salt Lake City, Utah 84109-1481
City, State and Zip Code
