EXHIBIT 10.3
OPERATING AGREEMENT
This operating agreement is entered into and becomes this 15th day of July,
1995, and is by and between ATLANTIC PACIFIC TRUST, hereinafter referred to as
"ATLANTIC," and EMTEC, Inc., a Nevada corporation, hereinafter referred to as
"EMTEC."
RECITALS
WHEREAS, ATLANTIC owns eight (8) mineral claims and leases on three (3) patented
mining claims located on Piute Mountain, Xxxx County; and leases on the Weldon
Research Center, located in Xxxxxx, Xxxx County, California.
WHEREAS, ATLANTIC wishes to employ EMTEC to do conduct all necessary work to put
the mineral properties in to full production on a turn-key basis.
WHEREAS, EMTEC wishes to do all the necessary work providing a full turn-key
mining and refining operation for ATLANTIC on a cost plus basis.
NOW THEREFORE, in consideration of mutual covenants and promises contained
herein the parties do hereby agree as follows:
AGREEMENT
1. ATLANTIC will reimburse EMTEC for all expenses and costs at the rate of
cost plus 18%. An invoice must be presented to ATLANTIC on the 1st and 15th
of each month. ATLANTIC will make payment to EMTEC within 5 days of receipt
of invoice. Costs shall be defined as all costs directly and indirectly
related to EMTEC performing its duties in the exploration, development,
production and support facilities of the Evening Star Mine and other duties
requested by ATLANTIC.
2. EMTEC shall perform all exploration, development, and production of the
Evening Star Mine and its ores. EMTEC will proceed with developments in
phases.
Phase I: Determination of ore reserves to be refined.
Phase II: Develop a working pilot plant of one ton per hour or more to
determine the extraction parameters for a larger refinery.
Phase III: The construction and operation of a large production refinery
and development of a turn-key mining and milling operation including all
support operations and facilities.
3. EMTEC shall be the operator for all operations. All permits will be in the
name of EMTEC. EMTEC will obtain all permits necessary before start of
operations.
EXHIBIT 10.3
4. EMTEC will work in an environmentally safe manner. EMTEC will hold ATLANTIC
harmless for any and all environmental violations, accidents, or deaths
which may occur.
5. EMTEC will carry all the necessary insurances required by law, and carry
liability insurance of $5,000,000 for Auto, Trust, Theft and Fire on items
built or acquired by EMTEC.
6. EMTEC will be responsible for all security, and guarding against theft of
equipment, refined precious metals, and for public safety.
7. EMTEC will deliver to ATLANTIC all precious metals. EMTEC may sell other
base metals and mined substances upon per written approval from ATLANTIC.
All proceeds form the sale of other minerals or equipment will be paid
directly to ATLANTIC.
8. EMTEC will be solely responsible and hold harmless ATLANTIC against any
hazardous waste discharges, whether the discharges are tailing from the
refinery operation or by direct spills of oils, fuels, human waste,
garbage, or any substance identified by any regulatory body as "Hazardous
Waste."
9. EMTEC will provide all necessary reclamation bonding and be solely
responsible for all reclamation required by the controlling regulatory
agency.
10. EMTEC will provide total and unrestricted access to all books and records
of EMTEC for ATLANTIC auditors or representatives at any time without
notice. If in the event ATLANTIC's auditors discover any abuse or over
expensing of items ATLANTIC shall immediately deliver to EMTEC a report and
documentation of such abuse and over expensing along with a demand notice
to reconcile the accounts and for repayment of any overpayments made by
ATLANTIC due to said abuse. If in the event EMTEC does not immediately pay
to ATLANTIC any overages or if EMTEC does not correct the abuse within five
(5) days then ATLANTIC shall immediately terminate this Agreement and
assume possession of all facilities and operations and EMTEC hereby agrees
to vacate all facilities and operations without protest. EMTEC will still
be liable to pay to ATLANTIC all of the overages due to abuse or over
expensing.
11. In the event of a default, termination of this Agreement, or if any
unforeseen event causes a cessation of operation for 60 (sixty) days or
more, then in such event of cessation all equipment, support building,
machinery, nuts, bolts, office supplies and equipment, reports, permits, or
more particularly any thing acquired by EMTEC during its employment with
ATLANTIC that ATLANTIC has reimbursed EMTEC for, will automatically, on the
61 day after cessation of operation, or sooner if agreed to, become the
sole and absolute property of ATLANTIC. However, if the cessation of
operations is due to an act of God, then ATLANTIC will have the sole right
to determine whether this Agreement is in default. If ATLANTIC does declare
a default then it must do so in writing to EMTEC stating its declaration of
default.
EXHIBIT 10.3
12. ATLANTIC will have the right to examine and EMTEC will provide during
regular business hours, all books, records, maps, assays, reports,
engineering or otherwise or anything else which the personnel of Atlantic
wish to inspect, and further shall be allowed to make copies of any
information that is requested. Failure to do so will result in the
termination of this Agreement.
13. EMTEC will allow representative of ATLANTIC free and unhindered access to
all operations under the management of EMTEC or its associates. EMTEC will
allow and ATLANTIC will have the right to have a representative at the
refinery 24 hours a day for added security. The ATLANTIC representative
will have full access to all refining assays, books, records, and all
mining areas. The ATLANTIC representative will request from time to time
control assays to be performed and other tests and means by which to
determine the accuracy of the recovery of the precious metals.
14. EMTEC will turn over all precious metals to the ATLANTIC representative
daily and the ATLANTIC representative will deliver to EMTEC a receipt for
the precious metals received.
15. In the event of a default under this Agreement ATLANTIC will deliver to
EMTEC a written statement of default by certified United States Mail. EMTEC
will have up to 30 days to cure said default. If in the event EMTEC does
not cure said default within the 30-day time period than this Agreement
will be in default and the remedies listed in Section 10- shall e
initiated. In the event of an uncured default EMTEC is to vacate all
premises without protest.
15. NOTICES: Any notices, communication, request, approval or consent that may
be given or that is required to be given under the terms of this Agreement
shall be in writing, and shall be sent certified mail, return receipt
requested or by overnight courier, to the address for each party as
follows:
TO ATLANTIC: Xxxxxx X. Xxxxxxxxx, Trustee, 0000 Xxxxx Xxxxx Xxxx, Xxxxxx,
XX 00000
TO EMTEC: Xxxxxxx X. Xxxxxxxx, CEO, 0000 Xxxxx Xxxxx Xxxx, Xxxxxx, XX 00000
16. GOVERNING LAW: This Agreement shall be governed in its enforcement
construction and interpretation by the laws of State of Nevada.
17. INVALIDITY OF PROVISIONS: The unenforceability, for any reason, of any
term, condition, covenant or provision of this agreement shall neither
limit nor impair the operation, enforceability or validity of any other
terms, conditions, provisions or covenants of the Agreement so long as the
remaining provisions still fulfill the original intent of the parties.
18. CAPTIONS: The captions of this Agreement are for convenience and reference
only and in no way define, describe, extent or limit the scope or intent of
this agreement or the intent of any provisions in it.
19. ENTIRE AGREEMENT: This Agreement constitutes the entire agreement of the
parties and may not be amended or modified except in a writing signed by
both parties. All other agreements, drafts, notes, tapes, whether verbal or
written, shall have no force or effect on this Agreement. All prior
EXHIBIT 10.3
understanding and agreements between the parties are merged in this
Agreement, which alone fully and completely expresses their understanding.
20. Successors: This Agreement shall be binding on and inure to the benefit of
the parties and their respective successors, assigned and personal
representatives.
21. Survival of Representations, Warranties, Et Cetera: The representations,
warranties, covenants, and agreements of the parties contained herein shall
survive this Agreement.
IN WITNESS WHEREOF, the parties have executed this Operating Agreement on the
date first above stated.
ATLANTIC PACIFIC TRUST EMTEC, INC.
/s/ Xxxxxx X. Xxxxxxxxx /s/ Xxxxxxx X. Xxxxxxxx
----------------------- ------------------------
Xxxxxx X. Xxxxxxxxx, Xxxxxxx X. Xxxxxxxx
Trustee in Trust of CEO of EMTEC, INC.
Atlantic Pacific Trust
EXHIBIT 10.3
