EXHIBIT 10.08
EXPLORATION AGREEMENT AND OPTION TO LEASE
This Agreement is made and effective as of the 5th day of June, 1997,
by and between XXXXXXX XXXXXXX, XXXXX XXXXX, XXXXX XXXXXXX, SR., XXXXX XXXXXXX,
XXXX XXXXXXX, XXXX XXXXXXX, XXXX XXXXXXX and XXXXX XXXXXXX (hereinafter referred
to as "LICENSOR") and XXXXXXX GOLD GROUP, INC., a Delaware corporation,
(hereinafter referred to as "LICENSEE"), agree as follows:
1. Description of Property/Grant of Exploration Rights.
LICENSOR is the owner of all or part of the unpatented placer mining
claims described in EXHIBIT "A" attached hereto. LICENSOR grants to LICENSEE the
exclusive right to explore LICENSOR's ownership interest in the property set
forth in EXHIBIT "A" (LICENSOR's interest is hereinafter referred to as the
"PREMISES").
2. Term.
The term of this Agreement shall be five (5) years, unless terminated
earlier or extended. LICENSEE shall have the right to extend for two additional
five (5) year terms upon the payment of Five Hundred Dollars ($500.00) for each
such extension.
3. Consideration.
In consideration for the granting of the exploration rights set forth
herein, LICENSEE agrees to pay to LICENSOR each year in which this Agreement is
in effect on or before the anniversary date,
the sum of Five Hundred Dollars ($500.00). Upon execution of this Agreement,
LICENSEE shall pay the sum of One Thousand Dollars ($1,000.00) which shall be
full consideration for the first and second year's payments. LICENSORS authorize
Xxxx Xxxxxxx to receive such payments for them, for their benefit, as follows:
Xxxx Xxxxxxx
X.X. Xxx 000
Xxxxxxxxxxxx, XX 00000
4. Conduct of Operations.
During the term of this Agreement, LICENSEE shall have possession of,
and free and unrestricted access to, the PREMISES and shall have the right to
explore, investigate, measure, sample (including bulk sample), examine, test,
work, use, manage, control and develop the PREMISES. LICENSOR shall receive an
accounting and production royalty, pursuant to the terms of the Mining Lease
attached hereto as EXHIBIT "B", for all ores, minerals and concentrates removed
and sold from the PREMISES. LICENSEE may trench or drill any part of the
PREMISES, may rehabilitate existing mine workings, construct new workings, and
may erect, construct, use, and maintain on the PREMISES such roads, building
structures, equipment and machinery as in its sole discretion it may deem
necessary to its operations.
5. Notice.
Any notices required or permitted to be given to LICENSOR or LICENSEE
hereunder shall be given in the manner provided herein and be considered as
delivered and received when the same are delivered in person or received by the
addressee following deposit in the United States mail by registered mail, return
receipt requested, with postage prepaid. All notices given hereunder shall be
addressed to the persons and addresses given below or such other persons or
addresses as the parties may designate from time to time. Any change in the
names and/or addresses of the persons listed below shall be effective thirty
(30) days from the giving of the notice to the other party as provided herein.
LICENSEE: Xxxxxxx Gold Group, Inc.
c/o LS Capital Corporation
00000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
LICENSOR: Xxxx Xxxxxxx
--------
X.X. Xxx 000
Xxxxxxxxxxxx, XX 00000
6. Termination.
Upon termination or surrender under the terms of this License, all
rights of LICENSEE under this Agreement, except as provided in Paragraph 11.,
shall terminate and all payments heretofore made under this Agreement shall be
retained by LICENSOR as full compensation, as rental, for the use and occupancy
of said PREMISES and as consideration for which this Agreement is given.
7. Insurance.
LICENSEE shall, at its sole expense, cause to be issued and maintained
during the term of this Agreement, or any extension thereof, workmen's
compensation insurance coverage in accordance with the provisions of California
law.
8. Indemnity.
LICENSEE shall protect and indemnify and hold LICENSOR harmless from
and against any and all claims, actions or causes of action, including, without
limitation, employees of LICENSEE, contractors and employees of contractors of
LICENSEE, for injury to or death of persons or damage to property arising out of
or in connection with LICENSEE's exploration activities.
9. Compliance With Laws.
LICENSEE shall conduct all exploration activities in full compliance
with the applicable laws and regulations of the State of California and the
United States of America including, but not limited to, the provisions of the
Federal Land Management and Policy Act of 1976 and the regulations promulgated
pursuant thereto.
10. Option to Lease.
During the term of this Agreement, or during the term of any extension
hereof, LICENSEE may exercise an option to lease the PREMISES pursuant to the
terms and conditions set forth in the Mining Lease attached hereto as EXHIBIT
"B" and made a part hereof as though set forth in its entirety. The option to
lease shall be deemed exercised when LICENSOR has received a certified check in
the amount of Five Thousand Dollars ($5,000.00), together with two (2) copies of
EXHIBIT
"B" that have been executed by LICENSEE. LICENSOR shall sign one copy and return
it promptly to LICENSEE. If LICENSOR is the owner at the date of exercise of
this option of less than one hundred percent (100%) of the title to the
PREMISES, LICENSOR shall receive an amount equal to LICENSOR's percentage
ownership multiplied by Five Thousand Dollars ($5,000.00) pursuant to this
paragraph.
11. Removal of Property.
LICENSEE shall have, and it is hereby given and granted, ninety (90)
days after a valid forfeiture, surrender, or other termination of this
Agreement, to remove from the PREMISES all machinery, equipment, personal
property and improvements erected or placed in or upon the said property by it.
If not so removed by LICENSEE within said ninety (90) day period, titles to
unremoved property will then vest in LICENSOR.
12. Information.
12.1 If the Option to Lease contained in Paragraph 10 is not
exercised and this Agreement is terminated, LICENSOR may, within ninety (90)
days, request, and if requested, LICENSEE shall supply LICENSOR copies of all
Information as defined below. As used in this Agreement, "Information" shall
mean all geological, geophysical and geochemical data, maps and reports, whether
acquired, generated or compiled by or for LICENSEE. LICENSEE warrants that all
information supplied to LICENSOR pursuant to the terms of this provision shall
be true and accurate copies of the Information acquired, generated or compiled
by or for LICENSEE; provided, however, that LICENSEE does not warrant that the
data contained therein is an accurate interpretation of the geology described
therein.
12.2 Any and all data, information, reports and samples
provided by LICENSEE to LICENSOR under the terms of this Agreement shall be
treated and held confidential for the term of this Agreement, and for the term
of the Mining Lease attached as EXHIBIT "B", if LICENSEE should exercise its
Option to Lease.
13. Default and Termination.
13.1 Default.
The occurrence of any of the following events shall constitute
an event of default on the part of LICENSEE:
13.1.1 Breach of Covenants.
Failure (i) to perform any of LICENSEE's covenants hereunder, including, but
not limited to the failure to make a payment under Paragraph 3 herein, and (ii)
to remedy such failure within ninety (90) days after written demand is made
therefor.
13.1.2 Assignments.
The making of a general assignment by LICENSEE for the benefit of creditors.
13.1.3 Bankruptcy.
The filing of any form of voluntary petition in bankruptcy by LICENSEE, or the
filing of an involuntary petition by LICENSEE's creditors, if such petition
remains undischarged for a period of thirty (30) days.
13.1.4 Receivership.
The appointment of a receiver to take possession of substantially all of
LICENSEE's assets or of the interest held by LICENSEE under this Agreement, if
such receivership remains undissolved for a period of thirty (30) days.
13.1.5 Attachment.
The attachment or other judicial seizure of substantially all of LICENSEE's
assets or of the interest held under this Agreement, if such attachment or other
seizure remains un dismissed or undischarged for a period of thirty (30) days
after the levy thereof.
13.2 Remedies.
In the event of the occurrence of any event of default
mentioned in Paragraph 13.1 hereof, LICENSOR shall have the right, so long as
default continues, to immediately terminate this Agreement by giving LICENSEE
written notice of such termination.
14. Inurement.
All covenants, conditions, limitations and provisions herein contained
apply and are binding upon the parties hereto and their heirs, devisees,
successors and assigns.
15. Force Majeure.
If, because of force majeure, LICENSEE is unable to carry out any of
its obligations under this Agreement, the obligation of LICENSEE shall be
excused to the extent made necessary by such force majeure and this Agreement
shall be extended by a length of time equal to its continuance not to exceed
maximum term permitted by law. The term "force majeure" as used herein shall
include, but not be limited to, acts of God, acts of civil or military
authority, acts of war or the public enemy, legislation, acts or orders of any
court, acts or failure to act of regulatory agencies or administrative bodies
having jurisdiction with respect to the performance of this Agreement,
insurrections, riots, strikes, boycotts or other labor disturbances, fire,
flood, windstorm, explosion and other causes not within the reasonable control
of the parties directly affected and claiming suspension of its obligation
whether or not like or similar to the causes or occurrences specifically
enumerated above.
16. Title.
Each LICENSOR covenants that said LICENSOR now owns and is in actual
possession of an undivided one-eighth interest in the PREMISES free and clear
from all former grants, sales, liens, or encumbrances of any kind, and that
there are no delinquent taxes; and agrees to furnish LICENSEE upon request such
abstracts, deeds, or other evidence of title as may be in LICENSOR's possession
and control. LICENSEE may elect to correct any defects it determines exist in
title to the PREMISES, including, but not limited to, amendment, relinquishment,
relocation of existing claims and location of additional claims over fractions
within the PREMISES.
17. Counterparts.
This Agreement may be signed in counterparts and shall be deemed
effective when all parties have executed this Agreement or any counterpart
thereof.
18. Complete Agreement.
This Agreement and all the terms and covenants contained herein are
deemed to be the complete and unequivocal written agreement of the parties and
no other agreements, either written or oral, are contemplated with respect to
said PREMISES.
19. Recordation.
This Agreement shall not be recorded, however, the Memorandum of
Exploration Agreement with Option to Lease attached hereto as EXHIBIT "C" shall
be executed and recorded promptly following the execution of this Agreement.
LICENSOR:
/s/ Xxxxxxx Xxxxxxx
-----------------------------------
XXXXXXX XXXXXXX
/s/ Xxxxx Xxxxx
---------------------------------
XXXXX XXXXX
/s/ Xxxxx Xxxxxxx, Sr.
-----------------------------------
XXXXX XXXXXXX, SR.
/s/ Xxxxx Xxxxxxx
-----------------------------------
XXXXX XXXXXXX
/s/ Xxxx Xxxxxxx
-----------------------------------
XXXX XXXXXXX
/s/ Xxxx Xxxxxxx
-----------------------------------
XXXX XXXXXXX
/s/ Xxxx Xxxxxxx
-----------------------------------
XXXX XXXXXXX
/s/ Xxxxx Xxxxxxx
-----------------------------------
XXXXX XXXXXXX
LICENSEE:
XXXXXXX GOLD GROUP, INC.
By /s/ Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
Its Vice-President
XXXXXXX GOLD GROUP, INC./XXXXXXX XXXXXXX, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
Table of Contents
1. Description of Property/Grant of Exploration Rights............................................................ 1
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2. Term........................................................................................................... 1
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3. Consideration.................................................................................................. 1
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4. Conduct of Operations.......................................................................................... 2
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5. Notice......................................................................................................... 2
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6. Termination.................................................................................................... 3
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7. Insurance...................................................................................................... 3
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8. Indemnity...................................................................................................... 3
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9. Compliance With Laws........................................................................................... 3
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10. Option to Lease................................................................................................ 4
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11. Removal of Property............................................................................................ 4
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12. Information.................................................................................................... 4
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13. Default and Termination........................................................................................ 5
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13.1 Default............................................................................................... 5
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13.1.1 Breach of Covenants.............................................................. 5
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13.1.2 Assignments...................................................................... 5
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13.1.3 Bankruptcy....................................................................... 5
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13.1.4 Receivership..................................................................... 6
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13.1.5 Attachment....................................................................... 6
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13.2 Remedies.............................................................................................. 6
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14. Inurement...................................................................................................... 6
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15. Force Majeure.................................................................................................. 6
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16. Title.......................................................................................................... 7
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17. Counterparts................................................................................................... 7
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18. Complete Agreement............................................................................................. 7
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19. Recordation.................................................................................................... 8
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EXHIBIT "A"
UNPATENTED PLACER MINING CLAIMS
XXXXXXX GOLD GROUP, INC./XXXXXXX XXXXXXX, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
Located in Inyo County, California
Inyo County
Township/Range Date of Document
Claim Name Section SBB&M Location Number CAMC
Xxxxxx #7 6 20 N./7 E. 5-4-96 00-0000 000000
Xxxxxx #8 6 20 N./7 E. 5-4-96 00-0000 000000
Xxxxxx #9 6 20 N./7 E. 5-5-96 00-0000 000000
Xxxxxx #10 5 20 N./7 E. 5-5-96 00-0000 000000
Xxxxxx #11 6 20 N./7 E. 5-5-96 00-0000 000000
Xxxxxx #12 7 20 N./7 E. 5-5-96 00-0000 000000
Xxxxxx #13 7 20 N./7 E. 5-5-96 00-0000 000000
Xxxxxx #15 8 20 N./7 E. 5-5-96 00-0000 000000
Xxxxxx #19 9 20 N./7 E. 5-6-96 00-0000 000000
Xxxxxx #20 4 20 N./7 E. 5-6-96 00-0000 000000
XXXXXXX GOLD GROUP, INC./XXXXXXX XXXXXXX, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
EXHIBIT "A"
UNPATENTED PLACER MINING CLAIMS
Located in San Bernardino County, California
San Bernardino County
Township/Range Date of Document
Claim Name Section SBB&M Location Number CAMC
Kurtise #1 35 11 N./4 E. 6-16-96 1996-0260770 269295
Kurtise #2 35 11 N./4 E. 6-16-96 1996-0260773 269296
Kurtise #3 35 11 N./4 E. 6-16-96 1996-0260775 269297
Kurtise #4 35 11 N./4 E. 6-16-96 1996-0260778 269298
Kurtise #9 2 10 N./4 E. 6-16-96 1996-0260781 269299
Kurtise #10 2 10 N./4 E. 6-16-96 1996-0260780 269300
Kurtise #11 2 10 N./4 E. 6-17-96 1996-0260783 269301
Kurtise #12 2 10 N./4 E. 6-17-96 1996-0260784 269302
Kurtise #13 11 10 N./4 E. 6-17-96 1996-0260786 269303
Kurtise #14 11 10 N./4 E. 6-17-96 1996-0260787 269304
Kurtise #15 11 10 N./4 E. 6-18-96 1996-0260788 269305
Kurtise #16 11 10 N./4 E. 6-18-96 1996-0260790 269306
EXHIBIT "B"
MINING LEASE
This Agreement is made and effective as of the ___ day of _______________,
19__, by and between XXXXXXX XXXXXXX, XXXXX XXXXX, XXXXX XXXXXXX, SR., XXXXX
XXXXXXX, XXXX XXXXXXX, XXXX XXXXXXX, XXXX XXXXXXX and XXXXX XXXXXXX (hereafter
referred to as "LESSOR"), and XXXXXXX GOLD GROUP, INC., a Delaware corporation,
(hereafter "LESSEE").
1. DESCRIPTION OF PROPERTY.
LESSOR is the owner of all or part of the unpatented placer mining claims
described on EXHIBIT "A" attached hereto.
XXXXXXX GOLD GROUP, INC./XXXXXXX XXXXXXX, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
2. GRANT OF LEASE.
2.1 LESSOR hereby leases
exclusively to LESSEE, subject to the terms and conditions hereinafter
expressed,
LESSOR's interest in the property set forth in EXHIBIT "A" attached hereto
(LESSOR's interest is hereafter referred to as "LEASED PROPERTY").
2.2 This lease is granted for
the purpose of the exploration, development, and mining of the LEASED PROPERTY
for
minerals as may be found therein (hereinafter referred to as the "Leased
Minerals"). LESSEE is hereby granted the exclusive right to enter into
possession of the LEASED PROPERTY, and during the term of this lease, to remain
in possession thereof, and to develop, mine, operate and use the property and
any surface or underground rights, including but not limited to access, and
water or water rights, and to mine, extract and remove from the LEASED PROPERTY
the Leased Minerals and to treat, mill, ship, sell or otherwise dispose of the
same and receive the full proceeds thereof (subject to the obligation of royalty
payment as specified below); and to construct, use and operate thereon and
therein structures, excavations, roads, equipment and other improvements or
facilities which LESSEE shall deem reasonably required for, or in connection
with, the full enjoyment of the rights and interests granted to LESSEE by this
lease.
3. TERM OF LEASE.
The term of this Mining Lease shall be for twenty (20) years from and after the
date of this lease and for so long thereafter as LESSEE is in production on
properties located within a five (5) mile radius of the nearest LEASED PROPERTY.
For purposes of this paragraph, production shall be defined as the processing of
ore. LESSEE may terminate this lease at any time by delivery to LESSOR of a
quitclaim deed to the LEASED PROPERTY, provided that LESSEE is not then in
default under the terms of this lease.
4. ROYALTIES AND CONSIDERATION.
4.1 Advance Minimum Royalty.
LESSEE shall pay to LESSOR advance minimum royalties
as follows:
XXXXXXX GOLD GROUP, INC./XXXXXXX XXXXXXX, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
a) Upon execution of this agreement $1,000.00
b) On or before the anniversary date
and each anniversary date thereafter $1,000.00
4.2 Production Royalties.
4.2.1A
production royalty for all minerals mined, removed, and sold from the property
set forth in EXHIBIT "A" equal to
2.5 percent (2.5%) of the Smelter Returns shall be calculated. LESSOR, as
defined in this Agreement, shall receive a percentage of the production royalty
calculated equal to LESSOR's actual ownership interest of the property described
in EXHIBIT "A".
4.2.2The
term "Smelter Returns" shall be defined to be the gross amount received from the
sale of valuable minerals
after recovery of all exploration, development, and capital costs and less all
taxes levied, incurred or imposed on the sale, severance or production of such
minerals and less costs of extraction, mining, milling, treating, transportation
to the smelter and/or refinery, smelting and refining charges and costs of sale.
4.3 Manner of Payment.
4.3.1All
minerals mined, removed and extracted from the LEASED PROPERTY shall be sold
under the name of LESSEE
and a royalty settlement sheet accounting for such transactions shall be
furnished to LESSOR on or before the twenty-fifth (25th) day of the next
succeeding calendar month for all sales made and received during the preceding
calendar quarter. All production royalty payments, accompanied by a settlement
sheet required by this lease, shall be made to LESSOR at the address set forth
in Paragraph 12.1 below, or such other person or address as LESSOR shall
designate by written notice pursuant to the provisions of Paragraph 8 by mail or
personal delivery. LESSEE shall receive a cumulative credit against production
royalties for all minimum royalties paid pursuant to this lease agreement
regardless of the year in which said minimum royalties are paid and production
royalties shall not be payable until the production royalty set forth in
Paragraph 4.2 exceeds the cumulative
XXXXXXX GOLD GROUP, INC./XXXXXXX XXXXXXX, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
sums paid by LESSEE pursuant to Paragraph 4.1. If the Leased Minerals are sold
to, or processed by, a smelter or refinery owned, operated, affiliated with or
controlled by LESSEE, in no event shall the royalties computed herein be less
than would have been paid had the ore been sold to or processed by a major
smelter or refinery not owned, operated, affiliated with, or controlled by
LESSEE.
5. CONDUCT OF MINING OPERATIONS.
5.1 General.
LESSEE shall conduct, and cause all mining activities to be
conducted in a prudent, workmanlike, miner-like manner in accordance with
established mining practices.
5.2 Commingling of Ore.
LESSEE may commingle ore from the LEASED PROPERTY
with ore from other properties, either before or after concentration or
beneficiation, provided that the method and procedures LESSEE uses to commingle
the ore and to determine the weight and grade of the ore removed from the LEASED
PROPERTY and of the ore with which it is commingled shall be a method recognized
by the mining industry and conducted in accordance with generally accepted ac
counting principles. LESSEE shall use that method to determine weight and grade
and to allocate net returns from the commingled ore between the LEASED PROPERTY
and the other properties from which the other commingled ore was removed and to
assure that the share of production received by LESSOR is representative of the
ore that was produced from the LEASED PROPERTY. All such weight, grade and
allocation calculations by LESSEE shall be done in accordance with generally
accepted accounting principles and in a manner recognized by the mining industry
as practical and sufficient at that time. If it is impractical to determine
which portions of any of the costs and expenses described in Paragraph 4.2.2
above are directly attributable to ore removed from the LEASED
XXXXXXX GOLD GROUP, INC./XXXXXXX XXXXXXX, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
PROPERTY, such costs and expenses shall be allocated on a straight-line, per-ton
basis among all ores that give rise to those expenses, in accordance with
acceptable accounting standards.
5.3 Cross-Mining Rights.
LESSEE is hereby granted the right, if it so desires, to mine or remove from the
LEASED PROPERTY any ores, waste, water and other materials existing therein
or thereon or in any part thereof, through or by means of shafts, openings or
pits which may be sunk or made upon other property owned, controlled, or
operated by or for LESSEE (hereinafter "Other Property"). LESSEE also may
stockpile any ores, waste, or other materials and/or concentrated products of
ores or materials (collectively "Products") from the LEASED PROPERTY, or
any part thereof, upon stockpile grounds situated upon such Other Property.
In the event LESSEE stockpiles Products from the LEASED PROPERTY on Other
Properties, LESSEE shall execute or cause to be executed such instruments as
LESSOR may reasonably request in writing to evidence LESSOR's royalty interest
in the Products so stockpiled. Any such instrument executed by LESSEE,
however, expressly shall acknowledge LESSEE's right to sell the stockpiled
Products. LESSEE also, if it so desires, may use the LEASED PROPERTY and any
shafts, openings, pits and stockpile grounds sunk or made for the mining,
removal and/or stockpiling of any Products from the LEASED PROPERTY and/or from
the Other Property, or for any purpose or purposes connected therewith,
provided, however, that such use of the LEASED PROPERTY does not prevent or
interfere with the mining or removal of ore from the LEASED PROPERTY.
6. RECORDS AND BOOKS OF ACCOUNT.
6.1 Books of Account.
LESSEE shall keep complete, true and proper books and
records of account showing all minerals mined and
removed from the LEASED PROPERTY and recording all sales, transfers, conveyances
or other dispositions of ores, minerals or other materials taken from the LEASED
PROPERTY in accordance with generally accepted accounting principles. Said books
and records shall be open to examination by LESSOR or its duly authorized
representative during regular business hours and shall include any
XXXXXXX GOLD GROUP, INC./XXXXXXX XXXXXXX, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
and all documents necessary to establish a gross selling price of the ores,
minerals or other materials taken from the Leased Premises. LESSOR is hereby
granted the right at LESSOR's expense to examine and make a copy or copies of
said books or records or any portion thereof.
6.2 Inspection.
LESSOR or its duly authorized agents shall have, following
advanced notice, the right at reasonable times under reasonable circumstances to
enter upon the LEASED PROPERTY for the purpose of inspecting operations and work
being performed by LESSEE pursuant to this lease. Such entry shall be at
LESSOR's risk and LESSEE shall not be liable for injury to LESSOR unless such
injury is caused by the willful or grossly negligent conduct of LESSEE.
7. PROTECTING FROM LIENS AND TAXES.
7.1 LESSEE shall keep the
subject premises and every part thereof free and clear of any and all liens and
encumbrances for work performed upon the subject premises, or for materials
furnished to it while this agreement remains in force and effect.
7.2 LESSEE shall pay not later
than ten (10) days before due, one hundred percent (100%) of all taxes and
assessments that may be levied or assessed against the premises, including all
taxes that may be levied or assessed as a direct or indirect result of LESSEE's
mining activities, and including, but not limited to, taxes on the mineral
estate, real property improvements and personal property and possessory interest
taxes. LESSOR shall forward to LESSEE, upon receipt, all notices of taxes and
assessments due. LESSOR shall be responsible for payment of all taxes or
assessments due as a result of its activities.
8. NOTICE.
Any notices required or permitted to be given to LESSOR or LESSEE hereunder
shall be considered as delivered when received by the parties to whom they shall
be directed. Notice shall be given by personal delivery or by registered mail,
postage prepaid and return receipt requested, addressed to the persons
XXXXXXX GOLD GROUP, INC./XXXXXXX XXXXXXX, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
and addresses given below or to such other person or address as the parties may
designate by written notice from time to time.
LICENSEE: Xxxxxxx Gold Group, Inc.
c/o LS Capital Corporation
00000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
LICENSOR: Xxxx Xxxxxxx
X.X. Xxx 000
Xxxxxxxxxxxx, XX 00000
Changes in the above names and addresses shall be
effected by sending notice as set forth herein and said change shall be
effective fifteen (15) days from receipt thereof.
9. WASTE AND REFUSE.
LESSEE agrees to dispose of refuse from all mining activities conducted pursuant
to this lease in accordance with good mining practice and in accordance with the
provisions of applicable ordinances, laws and regulations.
10. INSURANCE.
LESSEE shall, at its sole cost and expense, cause to be issued and maintained
during the term of this lease or any extension thereof workers' compensation
insurance coverage in accordance with the provisions of California law.
11. COMPLIANCE WITH LAWS.
LESSEE shall conduct and cause to be conducted all mining activities in full
compliance with the applicable laws of the State of California and the United
States of America.
12. TITLE.
XXXXXXX GOLD GROUP, INC./XXXXXXX XXXXXXX, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
EACH LESSOR warrants that it is the owner of an undivided 1/8th interest in the
LEASED PROPERTY and that there are no defects in LESSOR's title which would
affect LESSEE's right to possession and use pursuant to the terms of this lease.
LESSORS authorize Xxxx Xxxxxxx to receive all payments
for them, for their benefit, as follows:
Xxxx Xxxxxxx
X.X. Xxx 000
Xxxxxxxxxxxx, XX 00000
12.2 In the event that any
defect in LESSOR's title is determined to exist, LESSOR shall, at its
sole cost and expense, take such steps as may be required, including, but not
limited to, the commencement of litigation, the location of additional claims,
relinquishment, amendment or relocation of existing claims held by LESSOR. In
the event LESSOR fails or refuses to take or complete appropriate steps to
correct any defect in LESSOR's title, LESSEE may elect to correct such defect
and deduct the cost of such correction, including attorneys fees, from the
payment obligations contained in this lease. LESSEE also may make such
deductions for costs or corrections to title to the LEASED PROPERTY incurred by
LESSEE prior to the date of this Lease.
12.3In the event it is
determined that LESSOR owns less than one hundred percent (100%) of the LEASED
PROPERTY, then LESSOR's rights under this Agreement shall be adjusted so as to
reflect the actual interest owned. It is the intention of the parties that the
full ownership of LESSOR be included in this Mining Lease.
13. DEFAULT AND TERMINATION.
13.1 Default.
The occurrence of any of the following events shall constitute an event of
default on the part of LESSEE:
13.1.1 Breach of Covenants.
Failure (i) to perform any of LESSEE's covenants hereunder, and (ii) to remedy
such failure within ninety (90) days after written demand is made therefore.
XXXXXXX GOLD GROUP, INC./XXXXXXX XXXXXXX, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
13.1.2 Assignments.
The making of a general assignment by LESSEE for the benefit of creditors.
13.1.3 Bankruptcy.
The filing of any form of voluntary petition in bankruptcy by LESSEE, or the
filing of an involuntary petition by LESSEE's creditors, if such petition
remains undischarged for a period of thirty (30) days.
13.1.4 Receivership.
The appointment of a receiver to take possession of substantially all of
LESSEE's assets or of the interest held by LESSEE under this lease, if such
receivership remains undissolved for a period of thirty (30) days.
13.1.5 Attachment.
The attachment or other judicial seizure of substantially all of LESSEE's assets
or of the interest held under this lease, if such attachment or other seizure
remains undismissed or undischarged for a period of thirty (30) days after the
levy thereof.
13.2 Remedies.
13.2.1 Termination.
In the event of the occurrence of any event of default mentioned in Paragraph
13.1 hereof, LESSOR, shall have the right, so long as default continues, to
immediately terminate this lease by giving LESSEE written notice of such
termination.
13.2.2 Eviction.
In the event of any such termination of this lease, LESSOR may then or at any
time thereafter, re-enter the LEASED PROPERTY, or any part thereof, and expel or
remove therefrom LESSEE and any other person occupying the same, using such
force as may be necessary so to do, and again repossess and enjoy the LEASED
PROPERTY, without prejudice to any other remedies
XXXXXXX GOLD GROUP, INC./XXXXXXX XXXXXXX, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
that LESSOR may have under this lease, or at law or equity, by reason of
LESSEE's default or of such termination.
13.2.3 Damages.
the event of any such termination of this lease, LESSOR shall have all of the
rights and remedies of a landlord provided by Section 1951.2 of the Civil Code
of the State of California.
13.2.4 Remedies of LESSOR.
In the event LESSEE breaches this lease and abandons the LEASED
PROPERTY, LESSOR shall have all of the remedies of a landlord provided by the
Civil Code of the State of California.
13.2.5 Default by Landlord.
In the event of default by LESSOR, LESSEE shall have all of the remedies of a
tenant provided by the laws of the State of California.
13.3 Termination by LESSEE.
This agreement may be terminated by LESSEE at any time by the
giving of three (3) months written notice.
13.4 Information.
Upon termination of this Agreement LESSEE shall (upon the
request of LESSOR made within 60 days of termination) provide LESSOR with copies
of all Information as defined below. As used in this Agreement, "Information"
shall mean all geological, geophysical and geochemical data, all laboratory
testing results, maps and reports, whether acquired, generated or compiled by or
for LESSEE. LESSEE warrants that all Information supplied to LESSOR pursuant to
the terms of this provision shall be true and accurate copies of the Information
acquired, generated or compiled by or for LESSEE; provided, however, that LESSEE
does not warrant that the data contained therein is an accurate interpretation
of the geology described therein.
XXXXXXX GOLD GROUP, INC./XXXXXXX XXXXXXX, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
13.4.1 Upon execution of this Agreement, LESSOR shall provide LESSEE
access to all geologic, geophysical and geochemical data concerning the LEASED
PROPERTY which has been acquired, generated, or compiled by LESSOR.
13.4.2 Any and all data, information, reports and samples provided by LESSEE
to LESSOR under the terms of this Agreement shall be treated and held
confidential for the term of this Agreement.
14. FORCE MAJEURE.
The failure to perform or comply with any of the covenants or
conditions hereof on the part of LESSEE (including, but not limited to,
production requirements set forth in Paragraph 3 above) will not be grounds for
cancellation, penalty, termination or forfeiture hereof, during such time as
failure to perform is caused or compliance is prevented by severe weather,
explosion, unusual mining casualty, mill shutdowns, damage to or destruction of
mill or mill plant facility, fire, flood, civil or military authority,
insurrection, strikes, riots, inability after diligent effort to obtain
competent workmen or material or necessary permits, fuel shortages, inadequate
or shortages of transportation facilities not due to the negligence or lack of
diligence by LESSEE, governmental actions or policies which substantially
restrict the legality or profitability of extracting and selling any of the
valuable minerals produced under the Mining Lease, acts of God, or any
circumstances or conditions beyond the control of LESSEE, and in such an event,
LESSEE shall be excused from, and not held liable for, such failure to perform
or comply.
15. INUREMENT.
This lease shall inure to the benefit of and be binding upon their
respective heirs, trustees, conservators, successors and assigns of the parties.
16. RECORDATION.
This agreement is not to be recorded. LESSEE may, however, prepare and
submit to LESSOR for signature, a memorandum of this agreement for recordation.
XXXXXXX GOLD GROUP, INC./XXXXXXX XXXXXXX, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
17. ASSIGNMENT.
17.1 Assignment by LESSOR.
LESSOR agrees that it shall give notice to LESSEE of its
intention to sell or otherwise assign the Lease or LEASED PROPERTY. Upon receipt
of a bona fide offer to purchase the Lease or LEASED PROPERTY, the LESSOR shall
forthwith give notice, to be accompanied by a true copy of such offer to
purchase attached thereto, to LESSEE, and LESSEE shall have ninety (90) days in
which to present to LESSOR a written counter offer, such counter offer to be for
greater consideration than the offer, expressed in cash or marketable
securities. Upon receipt of such counter offer, LESSOR will have thirty (30)
days to sell to LESSEE or to give notice to LESSEE of receipt of a further
counter offer for greater consideration than LESSEE's counter offer. In the
event of a further counter offer being presented, LESSEE will have fifteen (15)
days from receipt of notice to raise its of fer, and the offers and counter
offers shall thereafter be limited to a response time of fifteen (15) days from
receipt of notice.
17.2 Assignment by LESSEE.
LESSEE may assign this Lease without the prior written consent
of LESSOR provided LESSEE guarantees the obligations of the assignee; otherwise,
this Lease shall not be assigned by LESSEE without the prior written consent of
LESSOR which consent shall not be unreasonably withheld.
18. REMOVAL OF EQUIPMENT.
At the termination of this lease, LESSEE may remove any and all
equipment it placed on the property during the term of this lease, or any
extension thereof, provided said removal is completed within one (1) year of the
termination date.
19. COUNTERPARTS.
This agreement may be signed in counterparts and shall be deemed
effective when all parties have executed this agreement or any counterpart
thereof.
XXXXXXX GOLD GROUP, INC./XXXXXXX XXXXXXX, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
20. COMPLETE AGREEMENT.
This writing and all terms and covenants contained herein are deemed to
be the complete and unequivocal written agreement of the parties, and no other
agreements, either written or oral, are contemplated with respect to said
property.
21. CALIFORNIA LAW.
This lease shall be governed by and construed and interpreted under the
internal laws of the State of California.
22. SEVERABILITY.
If any term, covenant, condition or provision of this agreement is held
by a court of competent jurisdiction to be invalid, void, or unenforceable, the
remainder of the provisions hereof shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
23. TITLE HEADINGS.
The headings of the respective paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to be a part of this
Agreement and considered in construing this Agree ment.
LESSEE:
XXXXXXX GOLD GROUP, INC.
By _________________________________
Its______________________________
By _________________________________
Its______________________________
LESSOR:
---------------------------------
XXXXXXX XXXXXXX
----------------------------------
XXXXX XXXXX
XXXXXXX GOLD GROUP, INC./XXXXXXX XXXXXXX, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
-----------------------------------
XXXXX XXXXXXX, SR.
-----------------------------------
XXXXX XXXXXXX
-----------------------------------
XXXX XXXXXXX
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
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XXXX XXXXXXX
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XXXX XXXXXXX
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XXXXX XXXXXXX
XXXXXXX GOLD GROUP, INC./XXXXXXX XXXXXXX, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
XXXXXXX GOLD GROUP, INC./XXXXXXX XXXXXXX, et al.
MINING LEASE
Table of Contents
1. DESCRIPTION OF PROPERTY........................................................................................ 1
-----------------------
2. GRANT OF LEASE................................................................................................. 1
--------------
3. TERM OF LEASE.................................................................................................. 2
-------------
4. ROYALTIES AND CONSIDERATION.................................................................................... 2
---------------------------
4.1 Advance Minimum Royalty............................................................................... 2
-----------------------
4.2 Production Royalties.................................................................................. 2
--------------------
4.3 Manner of Payment..................................................................................... 3
-----------------
5. CONDUCT OF MINING OPERATIONS................................................................................... 4
----------------------------
5.1 General............................................................................................... 4
-------
5.2 Commingling of Ore.................................................................................... 4
------------------
5.3 Cross-Mining Rights................................................................................... 5
-------------------
6. RECORDS AND BOOKS OF ACCOUNT................................................................................... 5
----------------------------
6.1 Books of Account...................................................................................... 5
----------------
6.2 Inspection............................................................................................ 6
----------
7. PROTECTING FROM LIENS AND TAXES................................................................................ 6
-------------------------------
8. NOTICE......................................................................................................... 7
------
9. WASTE AND REFUSE............................................................................................... 7
----------------
10. INSURANCE...................................................................................................... 8
---------
11. COMPLIANCE WITH LAWS........................................................................................... 8
--------------------
12. TITLE.......................................................................................................... 8
-----
13. DEFAULT AND TERMINATION........................................................................................ 9
-----------------------
13.1 Default............................................................................................... 9
-------
13.1.1 Breach of Covenants.......................................................................... 9
-------------------
13.1.2 Assignments.................................................................................. 9
-----------
13.1.3 Bankruptcy................................................................................... 9
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13.1.4 Receivership................................................................................. 10
------------
13.1.5 Attachment................................................................................... 10
----------
13.2 Remedies.............................................................................................. 10
--------
13.2.1 Termination.................................................................................. 10
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13.2.2 Eviction..................................................................................... 10
--------
13.2.3 Damages...................................................................................... 11
-------
13.2.4 Remedies of LESSOR........................................................................... 11
------------------
13.2.5 Default by Landlord.......................................................................... 11
-------------------
13.3 Termination by LESSEE................................................................................. 11
---------------------
13.4 Information........................................................................................... 11
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14. FORCE MAJEURE.................................................................................................. 12
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15. INUREMENT...................................................................................................... 13
---------
16. RECORDATION.................................................................................................... 13
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17. ASSIGNMENT..................................................................................................... 13
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17.1 Assignment by LESSOR.................................................................................. 13
--------------------
17.2 Assignment by LESSEE.................................................................................. 14
--------------------
18. REMOVAL OF EQUIPMENT........................................................................................... 14
--------------------
19. COUNTERPARTS................................................................................................... 14
------------
20. COMPLETE AGREEMENT............................................................................................. 14
------------------
21. CALIFORNIA LAW................................................................................................. 14
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22. SEVERABILITY................................................................................................... 14
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23. TITLE HEADINGS................................................................................................. 15
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