Exhibit 10.10
AGREEMENT OF SALE AND PURCHASE
This Agreement of Sale and Purchase ("Agreement") is entered into on
3/29/96, 0000, xxxxxxx Xxxxx X. Xxxxx, (Xxxxx Family Trust), Xxxx/aka/May
Xxxxx (Xxxxxx Xxxxx, Estate), Xxxx X. Xxxxxxx, Xxxx X. Xxxxx, and Xxxxx X.
Xxxx, (hereinafter referred to as "Seller(s)") and Golden Queen Mining
Company, Inc., a California Corporation, ("Buyer").
RECITALS
A. Seller(s) is the owner of certain unpatented mining claims and millsite
known as Tepeyac Hill, CAMC # 34226, Homestake, CAMC # 36726 located in
Section 6, T10N,R12W SBM and Xxxxxxxxx Xxxxxxxx XXXX #00000 located in
Section 32, T11N,R12W SBM, situated in the Mojave Mining District, Xxxx
County, State of California, ("Property") more particularly described on
the document attached hereto as Exhibit "A" and incorporated by
reference.
B. Seller(s) desires to sell and Buyer desires to purchase the Property on
the terms and conditions provided in this Agreement.
In consideration of the mutual covenants and conditions contained
herein, Seller(s) and Buyer agree as follows:
1. SALE AND PURCHASE. Seller(s) shall sell to Buyer and Buyer shall
purchase from Seller(s) the Property, on the terms and conditions set
forth herein.
2. PURCHASE PRICE. The purchase price ("Purchase Price") for the Property
shall be $65,000.00. Seller(s) hereby acknowledges receipt of a payment
made by Buyer to Seller(s) in the amount $2,000.00 in consideration for
a certain Letter of Intent dated October 27, 1995, described in "Exhibit
B" and attached and incorporated by reference herein.
3. PAYMENT OF PURCHASE PRICE. The purchase price shall be payable by Buyer
to Seller(s) as outlined below:
a) Upon the signing of this Agreement a down payment of Eleven
thousand dollars ($11,000.00) payable to each owner, according to
percentage of ownership (as set forth below). This payment is
non-refundable.
b) The principle balance of $52,000.00 is to be carried at an interest
rate of 10% per annum for a term of three (3) years, exclusive of
the retained royalty. See attached Payment Schedule, Exhibit C.
c) Monthly payments in the amount of One thousand five hundred dollars
($1,500.00) are to be made payable to each owner according to
percentage of ownership (as set forth below). Payments are due on
the first (1st) day of each month beginning on May 1, 1996. Any
payments made later than twenty (20) days will cause this Agreement
to be subject to forfeit. After thirty (30) days of non-payment a
written notice will be sent via Certified mail - return receipt
requested to notify the Golden Queen that this Sales Agreement is
terminated. All payments received are non-refundable.
d) A Quit Claim Deed shall be completed and executed by all Seller(s)s
to be held in escrow by Mission Valley Escrow. Upon payment of the
full Purchase Price, Mission Valley Escrow will record the Quit
Claim Deed and forward all necessary documents to Buyer. The Quit
Claim Deed shall be in the form attached as Exhibit D.
Owners Percentage of Ownership
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Xxxxx X. Xxxxx, Xxxxx Family Trust 44.5%
Xxxx (May) Xxxxx (Xxxxxx Xxxxx, Estate) 33.3%
Xxxx X. Xxxxxxx 7.4%
Xxxx X. Xxxxx 7.4%
Xxxxx X. Xxxx 7.4%
4. GRANT. Seller(s) hereby grants to Buyer during the term of this
Agreement free and unrestricted access to the Property, and the
exclusive right; (1) to explore, sample and test Property, (2) to
construct, use, and maintain on the Property such roads, buildings,
structures, machinery, equipment, personal property, fixtures, and
improvements as may be required for the conduct of its exploration and
related operations, and (3) to extract and remove from the Property such
materials as may be removed in the normal course of exploration or
mining operations on the Property.
5. PRODUCTION ROYALTY. A production royalty of 3% NSR (with expenses not to
exceed 5% of the gross smelter returns) for a term of 20 years from the
date of this agreement and not to exceed $500,000.00 will be paid to
Seller(s) on a quarterly basis. (Not to be included in payments outlined
in paragraph 3 above). Complete production and progress reports and
records are to be available to Seller(s) or Seller(s)s representative at
all reasonable times. Payments are to be made within thirty (30)
working days after the end of the production quarter. If payments are
not made within the required time, action may be taken by Seller(s) to
recover the funds due, and 10% interest will be assessed to Buyer, and
any legal costs will be paid by Buyer should Seller(s) prevail as
provided for in section 19 of this Agreement.
a) The NET SMELTER RETURN (NSR) is defined as the net dollar amount
received by Seller(s) from the sale of minerals produced from the
Ore mined from the Property in the corresponding calendar quarter,
after deducting: (1) all charges, penalties, umpire charges, and
deductions of any nature made by the smelter, refinery, or other
treatment plant or other purchaser arising out of the receipt,
processing or handling of production; and (ii) the following items
attributable to production paid by or for the account of Buyer; (a)
all brokers' or agents' commissions negotiated at arms length with
an independent party on the sale and all other costs of sale, (b)
all cost of transportation (including forwarding, port, demurrage,
delay, and other like charges and expenses) from mine, mill, or
refinery, as the case may be, to the delivery destination specified
in the purchase contract, and (c) any sales, severance, gross
production, privilege, or similar tax assessed on or in connection
with the minerals or measured by the value thereof. Mining and
milling costs shall not be deducted in calculating Net Smelter
Returns.
6. COMMINGLING. Any minerals produced from the Property may be mixed or
commingled with any other minerals or materials from other properties if
they have first been weighed and assayed or if other procedures
consistent with good mining industry practices are used by Golden Queen
Mining Company, Inc. to determine the quantity and grade of minerals,
valuable ores and substances produced from the Property with prior
written disclosure to Seller(s).
7. REPRESENTATIONS OF SELLER(S). In addition to all other representations
and warranties under the Agreement, Seller(s) represents that it is the
owner of any and all rights, title and interest of the Property and that
to the best of their knowledge it is lawfully seized, and that to the
best of their knowledge is free and clear of any liens or encumbrances
of any nature; that, to the best of their knowledge, no suit, action or
other proceeding is pending or threatened before any court or
governmental entity and no cause of action exists that relates to the
Property; that to the best of their knowledge it has not received nor
has reason to receive notice of violation of any local, state or federal
law, regulation, rule, ordinance or order or of any permit, license,
consent or authorization; and that, to the best of their knowledge, no
condition exists on the Property which would result in any action under
the Comprehensive Environmental Response, Compensation and Liability Act
(Superfund) 42 U.S.C. 9601-9657, as amended, nor any other federal,
state or local environmental or other law, regulation, rule, ordinance
or order.
8. OPERATIONS. Buyer shall conduct all of its operations on the Property
in a good and xxxxxxx like manner and in accordance with accepted mining
practice. All decisions with respect to exploration of the Property,
including all decisions regarding the commencement, suspension,
resumption, or termination of any operation, shall be made by Golden
Queen in its sole discretion. There are no covenants or agreements
regarding this matter other than those expressly set forth herein.
9. PROTECTION FROM LIENS AND DAMAGES. Buyer shall keep the Property free
of liens for labor performed or materials or merchandise furnished for
use on the Property pursuant to this Agreement, and shall hold Seller(s)
harmless from all costs, loss, or damage which may result from any work
or operations of Buyer or its possessions of the Property. Buyer shall
conduct business in such a manner that will to insure that Seller(s) are
free from Mechanics' Lien Law liability.
10. TAXES, BUREAU OF LAND MANAGEMENT FEES, ETC. Buyer shall pay prior to
being due all taxes, Bureau of Land Management fees, and file in a
timely manner all necessary documentation to all appropriate agencies to
insure the title to the Property during the term of this Agreement.
Buyer will furnish Seller(s) with proof that this work has been done
prior to the date due required by law. Buyer will pay any and all fees,
taxes or other levies for any buildings, structures, machinery,
equipment, personal property, fixtures, and or improvements placed upon
the Property by Buyer, as an employer of labor.
11. INSURANCE. Buyer shall carry insurance at all times during the terms of
this Agreement. Xxxxxxx Compensation insurance, and other insurance
required by state laws and mining regulations, or Buyer may self insure
if it qualified as a self-insurer under the appropriate laws and
regulations. Proof of insurance is to be provided to Seller(s) upon
request.
12. INSPECTION. Seller(s) or its authorized representative may at
reasonable intervals enter on the Property at any reasonable time during
normal business hours for the purpose of inspection, but shall enter at
Seller(s)s sole cost, risk, and expense and so as not to hinder
unreasonably the operations of Buyer. Seller(s) shall indemnify and
hold Buyer harmless from any damage, claim, or demand by reason of
injury to, or the presence of Seller(s), its agents or representatives
on the Property unless caused by the gross negligence or willful
misconduct of Buyer.
13. DATA. Upon the surrender or termination of this Agreement, Buyer shall,
upon written request of Seller(s), within ninety (90) days after
termination, deliver to Seller(s) copies of all non interpretive factual
geological and geophysical data and maps, logs of drill holes, results
of assays and sampling and reports pertaining to the Property which
Buyer has obtained or prepared as a result of its exploration work under
this Agreement. Upon written request of Seller(s), Buyer shall also
make available for delivery to Seller(s) any available drill core
obtained from the Property. Buyer makes no representation or warranty
as to the accuracy of completeness of any such data or information.
14. TERMINATION AND SURRENDER. If Buyer fails to comply with any of the
provisions of this Agreement and if Buyer does not initiate and
diligently pursue steps to correct such default within thirty (30) days
after notice has been given to it by Seller(s) detailing the nature of
such default, then upon the expiration of the thirty day period all
rights of Buyer under this Agreement (except as provided in paragraph
16) shall terminate, and all liabilities and obligations of Buyer
(except liability existing on the date of termination and (except as
provided in paragraphs 13 and 17) shall terminate. Any default claimed
with respect to the payment of money may be cured by the deposit in
escrow of the amount in controversy (not including claimed consequences
special exemplary, or punitive damages) and the giving of notice of the
deposit to Owners the amount to remain in escrow until the controversy
is resolved by decision of a court or arbitration, or otherwise. If
Buyer by notice to Seller(s) disputes the existence of a default, then
this Agreement shall not terminate hereunder unless Buyer does not
initiate and diligently pursue steps to correct the default within
thirty (30) days after the existence of a default has been determined by
decision of a court or arbitration or otherwise;
Subject to the right of Seller(s) to terminate this Agreement as
provided in the foregoing subparagraph (a), controversy between the
parties hereto shall not interrupt performance of this Agreement or
continuation of operations hereunder. In the event of any controversy,
Buyer may continue operating hereunder and shall make the payments
provided for herein not withstanding the existence of such controversy.
Upon the resolution of the controversy, such payments or restitution
shall be made as required by the terms of the decision of a court or
arbitration or otherwise.
Buyer may at any time terminate this Agreement as to the Property by
delivering to Seller(s) or by filing for record in the appropriate
office, with a copy to Seller(s), a good and sufficient Surrender of
this Agreement. Upon mailing the Surrender to, or to the appropriate
office, all rights of Buyer under this Agreement (except as provided in
paragraph 16) shall terminate and all liabilities and obligation of
Buyer with respect to the Property (except liabilities existing the date
of termination and except as provided in the paragraphs 13 and 17) shall
terminate.
Notwithstanding the foregoing, either (a) the appointment of a receiver
to take possession of all or substantially all of the assets of Buyer,
or (b) a general assignment by Buyer for the benefit of creditors, or
(c) any action taken or suffered by Buyer under any insolvency or
bankruptcy act shall constitute a breach of this Agreement by Buyer, and
shall, at the option of Seller(s), terminate this Agreement.
15. CONFIDENTIALITY. Seller(s) and authorized representatives of Seller(s)
agree to treat all proprietary information received under this Agreement
as confidential and shall not disclose any information obtained here
under without prior written consent of Buyer.
16. REMOVAL OF PROPERTY. For a period of six (6) months after the
termination of this Agreement Buyer shall have the right, but not the
obligation, to remove from the Property all buildings, structures,
machinery, equipment, personal property, fixtures, and improvements
owned by Buyer or erected or placed on or placed in the Property by
Buyer except mine timber in place. Buyer may keep one (1) or more
watchman on the Property during the six (6) month period.
17. RECLAMATION. Buyer shall comply with all state and federal laws and
regulations, as well as all regulations from the Bureau of Land
Management, relating to mining land reclamation. Should Buyer terminate
this Agreement prior to final payment, Buyer agrees to reclaim surface
disturbances resulting from its exploration activities on the property
to conditions that conform to state and federal requirements are
reasonably comparable on the effective date of this Agreement.
18. NOTICES. Any and all notices or other communications required or
permitted by this Agreement or by law to be served on or given to
Seller(s) or Buyer by the other party hereto, shall be in writing and
shall be deemed duly served and given when personally delivered to
Seller(s) or in lieu of such personal service, forty-eight (48) hours
from the time that it is deposited in the United States mail, first-
class postage prepaid, addressed to Seller(s) or Buyer at the addresses
shown below. Either this paragraph by giving written notice of such
change to the other party in the manner provided herein.
Seller(s): Xxxxx X. Xxxxx, Xxxx (May) Xxxxx
Xxxxx Xxxxxx Xxxxx (Xxxxxx Xxxxx, Xxxxxx)
000 Xxxxxx Xxxxxx 0000 Xxxxxxx Xxxxx
Xxxxxx, XX 00000 Xxxxxxxx, XX 00000
Xxxx X. Xxxxxxx Xxxx X. Xxxxx
000 Xxxxxxxx Xxxxxx 000 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000 XxxXxxxx, XX 00000
Xxxxx X. Xxxx
000 Xxxxxx Xxxxxx
Xxxxxx,XX 00000
Buyer: Golden Queen Mining Company, Inc.
Xxx 000
Xxxxxxxx, XX 00000-0000
19. ATTORNEYS' FEES. If either Buyer or Seller(s) bring an action against
the other by reason of the breach of any covenant, provision of
condition hereof, or otherwise arising out of this Agreement, the
unsuccessful party shall pay to the prevailing party all attorneys' fees
and costs actually incurred by the prevailing party, in addition to any
other relief to which it may be entitled.
20. SEVERABILITY. In the event that any provision contained with this
Agreement is rendered by a court of competent jurisdiction to be void,
invalid or unenforceable, Seller(s) and Buyer agree that such invalidity
or unenforceability shall have no effect whatsoever on the balance of
the Agreement.
21. INUREMENT. All covenants, conditions, limitations, and provisions
herein contained apply to and are binding upon the parties hereto, their
heirs, representatives, successor, and all assignee.
22. COUNTERPARTS. This Agreement may be executed and delivered in any
number of counterparts, each of which, when executed and delivered, will
be an original, but all of which together constitute on and the same
agreement.
23. ENTIRE AGREEMENT. This Agreement contains the entire agreement between
Seller(s) and Buyer respecting the Property, and any agreement of
representation respecting the Property or the duties of either Seller(s)
or Buyer in relation thereto not expressly set forth in the Agreement is
null and void.
24. GOVERNING LAW. The formation, interpretation, and performance of this
Agreement shall be governed by the law of the State of California.
SELLER(S)
s/ Xxxxx X. Xxxxx 3/27/96 s/ Xxxx (May) Xxxxx 3-30-96
------------------------------ ------------------------------
Xxxxx Family Trust Date (Xxxxxx Xxxxx Estate) Date
SS# ###-##-#### SS# ###-##-####
s/ Xxxx X. Xxxxxxx 4-5-96 s/ Xxxx X. Xxxxx 4-2-96
------------------------------ ------------------------------
SS# ###-##-#### Date SS# ###-##-#### Date
s/ Xxxxx X. Xxxx 3/27/96
------------------------------
SS# ###-##-#### Date
BUYER
GOLDEN QUEEN MINING COMPANY, INC.
s/ Xxxxxxx X. Graeme March 26, 1996
--------------------------------------------
Vice President, Operations Date
EXHIBIT "A"
Property Description
"TEPEYAC HILL", "HOMESTAKE", AND "HOMESTAKE" - Millsite
Mining Claims:
"Tepeyac Hill" XXXX #00000 Xxxxxxx 0, X00X,X00X SBM
"Homestake" CAMC #36726 Section 6, T10N,R12W SBM
"Homestake" - Millsite CAMC # 42415 Section 32, T11N,R12W SBM
GUARANTEE AGREEMENT
This Agreement, effective on this 31st day of March, 1996 is between
"Owners": Xxxxx X. Xxxxx, (Xxxxx Family Trust), Xxxx/aka/May Xxxxx, (Xxxxxx
Xxxxx, Estate), Xxxx X. Xxxxxxx, Xxxx X. Xxxxx, Xxxxx X. Xxxx, and Golden
Queen Mining Company, Ltd., a Canadian Corporation (Golden Queen) agree to
the following facts.
A. Owners of unpatented mining claims: "Tepeyac Hill", "Homestake", and
"Homestake" - Millsite, located in Xxxx County, state of California are
entering in to a Option, Purchase, Agreement with Golden Queen Mining
Company, Ltd. a wholly-owned California subsidiary, Golden Queen Mining
Company, Inc.
B. Owners ask Golden Queen Mining Company, Ltd. to guarantee the
performance of the Agreement.
X. Xxxxxx Queen Mining Company, Ltd. is willing to make such guarantee,
as to the terms and subject to conditions hereinafter set forth.
Therefore, the parties agree to the following:
In consideration of Owners entering into this Agreement with Golden
Queen Mining Company, Inc., then Golden Queen Mining Company, Ltd. guarantees
all obligations which Golden Queen Mining Company, Inc. is obligated to
perform under terms of this Agreement. Golden Queen Mining Company, Ltd. is
liable for any default of Golden Queen Mining Company, Inc. to the same
extent as if it were a signatory to this Agreement.
It is acknowledged that Golden Queen Mining Company, Ltd. has the right
and the power to enter into this Guarantee Agreement and carry out this
transaction contemplated hereby.
This Guarantee Agreement has been signed this 26th day of March, 1996,
in Witness whereof:
GOLDEN QUEEN MINING COMPANY, LTD.
s/ R.W. Graeme
-----------------------------------
Vice-President Operations (Title)
