EXHIBIT 10.49
EXPLORATION AGREEMENT AND OPTION TO 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 (hereinafter referred to as "LICENSOR") and SHOSHONE MINING CO., a
Delaware corporation, (hereinafter referred to as "LICENSEE"), agree as follows:
39. 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").
40. 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.
41. 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
27
DESERT MINERALS, INC./XXXXXXX XXXXXXX, et al.
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
42. 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.
43. 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
28
DESERT MINERALS, INC./XXXXXXX XXXXXXX, et al.
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: Shoshone Mining Co.
c/o LS Capital Corporation
00000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
LICENSOR: Xxxx Xxxxxxx
--------
X.X. Xxx 000
Xxxxxxxxxxxx, XX 00000
44. 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.
45. 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.
46. 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.
29
DESERT MINERALS, INC./XXXXXXX XXXXXXX, et al.
47. 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.
48. 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.
49. 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.
50. Information.
30
DESERT MINERALS, INC./XXXXXXX XXXXXXX, et al.
50.1 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.
50.2 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.
51. Default and Termination. 51.1 Default. The occurrence of any of the
following events shall constitute an event of default on the part of LICENSEE:
51.1.1 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. 51.1.2 Assignments.
31
DESERT MINERALS, INC./XXXXXXX XXXXXXX, et al.
The making of a general assignment by LICENSEE for the benefit of creditors.
51.1.3 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. 51.1.4
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. 51.1.5 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 undismissed or
undischarged for a period of thirty (30) days after the levy thereof. 51.2
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. 52. Inurement. All covenants, conditions,
limitations and provisions herein contained apply and are binding upon the
parties hereto and their heirs, devisees, successors and assigns.
32
DESERT MINERALS, INC./XXXXXXX XXXXXXX, et al.
53. 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.
54. 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.
55. Counterparts.
33
DESERT MINERALS, INC./XXXXXXX XXXXXXX, et al.
This Agreement may be signed in counterparts and shall be deemed
effective when all parties have executed this Agreement or any counterpart
thereof.
56. 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.
57. 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:
-----------------------------------
XXXXXXX XXXXXXX
-----------------------------------
XXXXX XXXXX
-----------------------------------
XXXXX XXXXXXX, SR.
-----------------------------------
XXXXX XXXXXXX
-----------------------------------
XXXX XXXXXXX
-----------------------------------
XXXX XXXXXXX
34
DESERT MINERALS, INC./XXXXXXX XXXXXXX, et al.
-----------------------------------
XXXX XXXXXXX
-----------------------------------
XXXXX XXXXXXX
LICENSEE:
SHOSHONE MINING CO.
By ____________________________________
Xxxx X. Xxxxxx
Its Vice-President
35
SHOSHONE MINING CO./XXXXXXX XXXXXXX, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
Table of Contents
1. Description of Property/Grant of Exploration Rights................ 1
---------------------------------------------------
2. Term................................................................ 1
----
3. Consideration....................................................... 1
4. Conduct of Operations.............................................. 2
---------------------
5. Notice.............................................................. 2
------
6. Termination........................................................ 3
-----------
7. Insurance.......................................................... 3
---------
8. Indemnity.......................................................... 3
---------
9. Compliance With Laws............................................... 3
--------------------
10. Option to Lease.................................................... 4
---------------
11. Removal of Property................................................ 4
-------------------
12. Information........................................................ 4
-----------
13. Default and Termination............................................ 5
-----------------------
13.1 Default................................................... 5
-------
13.1.1 Breach of Covenants.............................. 5
-------------------
13.1.2 Assignments....................................... 5
-----------
13.1.3 Bankruptcy........................................ 5
----------
13.1.4 Receivership..................................... 6
------------
13.1.5 Attachment........................................ 6
----------
36
SHOSHONE MINING CO./XXXXXXX XXXXXXX, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
13.2 Remedies.................................................. 6
--------
LICENSOR:
-----------------------------------
XXXXXXX XXXXXXX
-----------------------------------
XXXXX XXXXX
-----------------------------------
XXXXX XXXXXXX, SR.
-----------------------------------
XXXXX XXXXXXX
-----------------------------------
XXXX XXXXXXX
-----------------------------------
XXXX XXXXXXX
-----------------------------------
XXXX XXXXXXX
----------------------------------
XXXXX XXXXXXX
LICENSEE:
SHOSHONE MINING CO.
37
SHOSHONE MINING CO./XXXXXXX XXXXXXX, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
By________________________________
Xxxx X. Xxxxxx
Its Vice-President
38
SHOSHONE MINING CO./XXXXXXX XXXXXXX, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
STATE OF OREGON )
) ss.
COUNTY OF XXXXXXX )
On this the ___ day of _____________, 19__, before me,
______________________, the undersigned officer, personally appeared XXXXXXX
XXXXXXX, known to me (or satisfactorily proven) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
---------------------------------------
---------------------------------------
Title of Officer
My Commission Expires: ________________
STATE OF OREGON )
) ss.
COUNTY OF XXXXXXX )
On this the ___ day of ____________, 19__, before me,
_______________________, the undersigned officer, personally appeared XXXXX
XXXXX, known to me (or satisfactorily proven) to be the person whose name is
subscribed to the within instrument and acknowledged to me that she executed the
same for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
---------------------------------------
---------------------------------------
Title of Officer
My Commission Expires: ________________
39
SHOSHONE MINING CO./XXXXXXX XXXXXXX, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
STATE OF OREGON )
) ss.
COUNTY OF XXXXXXX )
On this the ___ day of ____________, 19__, before me,
_______________________, the undersigned officer, personally appeared XXXXX
XXXXXXX, SR., known to me (or satisfactorily proven) to be the person whose name
is subscribed to the within instrument and acknowledged to me that he executed
the same for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
---------------------------------------
---------------------------------------
Title of Officer
My Commission Expires: ________________
STATE OF OREGON )
) ss.
COUNTY OF XXXXXXX )
On this the ___ day of ____________, 19__, before me,
_______________________, the undersigned officer, personally appeared XXXXX
XXXXXXX, known to me (or satisfactorily proven) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
---------------------------------------
---------------------------------------
Title of Officer
My Commission Expires: ________________
40
SHOSHONE MINING CO./XXXXXXX XXXXXXX, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
STATE OF OREGON )
) ss.
COUNTY OF XXXXXXX )
On this the ___ day of ____________, 19__, before me,
_______________________, the undersigned officer, personally appeared XXXX
XXXXXXX, known to me (or satisfactorily proven) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
---------------------------------------
---------------------------------------
Title of Officer
My Commission Expires: ________________
STATE OF OREGON )
) ss.
COUNTY OF XXXXXXX )
On this the ___ day of ____________, 19__, before me,
_______________________, the undersigned officer, personally appeared XXXX
XXXXXXX, known to me (or satisfactorily proven) to be the person whose name is
subscribed to the within instrument and acknowledged to me that she executed the
same for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
---------------------------------------
---------------------------------------
Title of Officer
My Commission Expires: ________________
41
SHOSHONE MINING CO./XXXXXXX XXXXXXX, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
STATE OF OREGON )
) ss.
COUNTY OF XXXXXXX )
On this the ___ day of ____________, 19__, before me,
_______________________, the undersigned officer, personally appeared XXXX
XXXXXXX known to me (or satisfactorily proven) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
---------------------------------------
---------------------------------------
Title of Officer
My Commission Expires: ________________
STATE OF OREGON )
) ss.
COUNTY OF XXXXXXX )
On this the ___ day of ____________, 19__, before me,
_______________________, the undersigned officer, personally appeared XXXXX
XXXXXXX, known to me (or satisfactorily proven) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he executed the
same for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
---------------------------------------
---------------------------------------
Title of Officer
My Commission Expires: ________________
42
SHOSHONE MINING CO./XXXXXXX XXXXXXX, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
STATE OF TEXAS )
) ss.
COUNTY OF XXXXXX )
On this the ___ day of _____________, 19__, before me,
______________________, the undersigned officer, personally appeared XXXX X.
XXXXXX, who acknowledged himself to be the Vice-President of Shoshone Mining
Co., a Delaware corporation, and that he, as such Vice-President, being
authorized so to do, executed the foregoing instrument for the purposes therein
contained, by signing the name of the corporation by himself as Vice-President.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
---------------------------------------
---------------------------------------
Title of Officer
My Commission Expires: ________________
43
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 #17 12 10 N./4 E. 6-18-96 96-0260792 269307
Kurtise #18 12 10 N./4 E. 6-18-96 96-0260793 269308
Kurtise #19 12 10 N./4 E. 6-18-96 96-0260794 269309
Kurtise #20 12 10 N./4 E. 6-18-96 96-0260795 269310
Kurtise #21 6 10 N./5 E. 6-16-96 96-0260796 269311
Kurtise #22 6 10 N./5 E. 6-16-96 96-0260797 269312
Kurtise #23 6 10 N./5 E. 6-16-96 96-0260798 269313
Kurtise #24 6 10 N./5 E. 6-16-96 96-0260799 269314
Kurtise #25 7 10 N./5 E. 6-18-96 96-0260800 269315
Kurtise #26 7 10 N./5 E. 6-18-96 96-0260801 269316
Kurtise #27 7 10 N./5 E. 6-18-96 96-0260802 269317
Kurtise #28 31 11 N./5 E. 6-20-96 96-0260803 269318
Kurtise #29 8 10 N./5 E. 6-18-96 96-0260804 269319
Kurtise #30 31 11 N./5 E. 6-20-96 96-0260805 269320
Kurtise #31 31 11 N./5 E. 6-20-96 96-0260806 269321
Kurtise #32 31 11 N./5 E. 6-20-96 96-0260807 269322
EXHIBIT "A"
UNPATENTED PLACER MINING CLAIMS
Located in Inyo County, California
Inyo County
Township/Range Date of Document
Claim Name Section SBB&M Location Number CAMC
OBOE #88 25 21 N./6 E. 4-12-97 00-0000 000000
OBOE #90 25 21 N./6 E. 4-12-97 00-0000 000000
OBOE 91 25 21 N./6 E. 3-14-97 00-0000 000000
OBOE 92 25 21 N./6 E. 3-14-97 00-0000 000000
OBOE 93 35 21 N./6 E. 3-14-97 00-0000 000000
OBOE 94 35 21 N./6 E. 3-14-97 00-0000 000000
OBOE 95 35 21 N./6 E. 3-14-97 00-0000 000000
OBOE 96 23 21 N./6 E. 3-15-97 00-0000 000000
OBOE 97 23 21 N./6 E. 3-15-97 00-0000 000000
OBOE 98 14 21 N./6 E. 3-15-97 00-0000 000000
OBOE 99 14 21 N./6 E. 3-15-97 00-0000 000000
OBOE 100 14 21 N./6 E. 3-15-97 00-0000 000000
OBOE 101 14 21 N./6 E. 3-15-97 00-0000 000000
OBOE 102 15 21 N./6 E. 3-15-97 00-0000 000000
OBOE 103 15 21 N./6 E. 3-15-97 00-0000 000000
OBOE 104 15 21 N./6 E. 3-15-97 00-0000 000000
OBOE 105 9 21 N./6 E. 3-15-97 00-0000 000000
OBOE 106 9 21 N./6 E. 3-15-97 00-0000 000000
OBOE 107 9 21 N./6 E. 3-15-97 00-0000 000000
OBOE 108 9 21 N./6 E. 3-15-97 00-0000 000000
OBOE 109 5 21 N./6 E. 3-15-97 00-0000 000000
OBOE 110 5 21 N./6 E. 3-15-97 00-0000 000000
OBOE 111 8 21 N./6 E. 3-15-97 00-0000 000000
OBOE 112 5 21 N./6 E. 3-15-97 00-0000 000000
L.S. #1 2 21 N./7 E. 3-8-97 00-0000 000000
L.S. #2 2 21 N./7 E. 3-8-97 00-0000 000000
L.S. #3 11 21 N./7 E. 3-8-97 00-0000 000000
L.S. #4 11 21 N./7 E. 3-8-97 00-0000 000000
L.S. #5 2 21 N./7 E. 3-9-97 00-0000 000000
L.S. #6 34 22 N./7 E. 3-9-97 00-0000 000000
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 SHOSHONE MINING CO.., 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. 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 im provements 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: 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 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 accounting 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 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 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 and addresses given below or to such other
person or address as the parties may designate by written notice from time to
time.
LICENSEE:Shoshone Mining Co.
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. 12.1Each LESSOR warrants that said LESSOR 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. 13.1Default. The occurrence of any of the following events
shall constitute an event of default on the part of LESSEE: 13.1.1Breach 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. 13.1.2Assignments. The making of a general assignment by LESSEE for
the benefit of creditors. 13.1.3Bankruptcy. 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. 13.1.4Receivership. 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. 13.1.5Attachment.
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. 13.2Remedies. 13.2.1Termination. 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. 13.2.2Eviction. 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 that LESSOR may have under
this lease, or at law or equity, by reason of LESSEE's default or of such
termination. 13.2.3Damages. In 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. 13.2.4Remedies 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. 13.2.5Default 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. 13.3Termination by
LESSEE. This agreement may be terminated by LESSEE at any time by the giving of
three (3) months written notice. 13.4Information. 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. 13.4.1Upon 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. 13.4.2Any
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. 17. ASSIGNMENT. 17.1Assignment 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 offer, and the offers and counter offers
shall thereafter be limited to a response time of fifteen (15) days from
receipt of notice. 17.2Assignment 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. Atthe 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. 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 Agreement. LESSEE:
SHOSHONE MINING CO.
By ____________________________________
Its______________________________
By ____________________________________
Its______________________________
LESSOR:
-----------------------------------
XXXXXXX XXXXXXX
-----------------------------------
XXXXX XXXXX
-----------------------------------
XXXXX XXXXXXX, SR.
-----------------------------------
XXXXX XXXXXXX
-----------------------------------
XXXX XXXXXXX
-----------------------------------
XXXX XXXXXXX
-----------------------------------
XXXX XXXXXXX
-----------------------------------
XXXXX XXXXXXX
SHOSHONE MINING CO./XXXXXXX XXXXXXX, et al.
MINING LEASE
Table of Contents
1. DESCRIPTION OF PROPERTY........................................... 1
-----------------------
2. GRANT OF LEASE.................................................... 1
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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
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13.2 Remedies.................................................. 10
--------
13.2.1 Termination...................................... 10
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
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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
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20. COMPLETE AGREEMENT................................................. 14
------------------
21. CALIFORNIA LAW..................................................... 14
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22. SEVERABILITY....................................................... 14
------------
23. TITLE HEADINGS..................................................... 15
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