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LETTER AGREEMENT BETWEEN
GRAND CENTRAL SILVER MINES & ROYAL SILVER MINES
FOR PURCHASE OF SIERRA MOJADA INTEREST
The parties to this agreement are GRAND CENTRAL SILVER MINES,
INC. (hereinafter "GSLM"), a Utah corporation headquartered in
Coeur d'Alene, Idaho, and ROYAL SILVER MINES, INC. (hereinafter
"RSMI"), a Utah corporation headquartered in Spokane, Washington,
or collectively hereinafter "the Parties".
RECITALS
On January 6, 1998, RSMI acquired a 35% participating
interest in the Sierra Mojada District by acquiring rights held
by Dakota Mining. Dakota's rights were created by that certain
Joint Exploration and Development Agreement ("XXX Agreement")
signed between USMX and Metalline Mining Company ("MMGG") on July
26, 1996. Dakota acquired its rights under the XXX Agreement on
May 31, 1997 by its acquisition of USMX, Inc.
RSMI acquired its 35% participating interest pursuant to a
letter agreement attached as Exhibit A. Such letter agreement
called for RSMI and MMGG to sign a new Joint Venture Agreement to
replace the XXX Agreement cited above. Such new agreement has not
yet been completed and executed.
GSLM desires to acquire and RSMI desires to sell the 35%
participating interest cited above and more specifically
described in paragraph (4) of Exhibit A.
NOW THEREFORE, in consideration of the covenants and
agreements contained herein, GSLM and RSMI agree as follows:
RSMI agrees to transfer its 35% participating interest in
the Sierra Mojada District to GSLM, together with all rights,
responsibilities, obligations, and accrued liabilities which may
be owing.
GSLM agrees to transfer to RSMI 735,000 shares of its common
stock and to execute a $350,000 promissory note in favor of RSMI
payable within one year and bearing interest at a rate of 8% per
annum. In the event such note is declared to be in default, GSLM
shall issue to RSMI $700,000 plus accrued interest in the form of
restricted common stock of GSLM at the average market bid price
of the previous twenty days of trading prior to the date the note
is declared in default.
GSLM agrees to fulfill all obligations of RSMI created by
Appendix A including any ongoing responsibilities or liabilities
pursuant to the original XXX Agreement.
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GSLM agrees to draft and sign a new Joint Venture Agreement
with MMGG as specified by paragraph (7) of Appendix A as soon as
possible.
THE PARTIES, through their executive officers, hereby accept
and agree to the above terms and represent that they are
empowered to make such agreement by their respective Board of
Directors.
_____________________________ ____________________________
Xxxx X. Xxxx, President Xxxxxx Xxxxxx, President
Grand Central Silver Royal Silver Mines, Inc.
Mines, Inc.
Date: __________________ Date: __________________
