EXHIBIT 10.3
No. 19024
ROYALTY AGREEMENT
Parties: Utah State Land Board - "State."
Xxx X. Xxxxxxx - 50%, X.X. Xxxxxx, Xx. - 25%, and Xxxxxx X.
Xxxxxxxx - 25%, "Lessees."
Date: September 1, 1962
WHEREAS, Lessees wish to extract and recover salts and salt
products, or products manufactured from salts, excluding production of Magnesium
Chloride and its derivatives, from Great Salt Lake, and is entering into a lease
of even date for such purpose.
1. As used herein, the word "salts" means sodium chloride and all other
salts, salt products, or products manufactured from salts, except Magnesium
Chloride and derivatives, extracted from Great Salt Lake, and it means and
includes other substances extracted from said waters, sodium chloride produced
or derived from other sources.
The word "dry" used in conjunction with the word "salts" means actual
weight of salt calculated to a moisture-free basis. Methods of sampling. testing
and calculating moisture-free weight shall conform to methods prescribed by
Ass'n of Official Agricultural Chemists and approved by State. "Ton" means 2000
lbs avoirdupois.
"Shipped by Lessees" means "shipped, used or consumed in a manufacturing
process, or sold or disposed of by Lessees.
2. During term of agreement Lessees have continuing right to appropriate,
remove and divert water of and from Great Salt Lake for purpose of extracting
salts; provided agreement shall not be construed to relieve Lessees from full
compliance with Title 73, Utah Code Annotated, 1963, relative to diversion of
waters of State of Utah, where such is applicable.
3. Lessees shall pay royalty to State when and as herein provided. Royalty
on gross value at point of shipment of any and all extracted products sold or
used, except KC1 which shall be not lest than 9%, shall be: 1.6% for first 3
years; 2.0% for next 5 years; and then increase at a rate of 0.2 of 1% per year
until it reaches maximum of 3%. In any event, royalty shall be not less than 30
cents/ton for KC1, 10 cents/ton for Na2SO4, 10 cents/ton for sodium chloride, 40
cents/ton for chlorine.
4. Within 60 days after close of each calendar quarter, Lessees to file
with State a certificate specifying number of tons of dry salts shipped during
such quarters, and pay State appropriate royalty.
5. State or its agents have right at reasonable times to inspect books and
records of Lessees as they pertain to number of tons shipped and computations
relating to moisture content.
6. Lessees have continuing right to construct and maintain ditches, flumes,
etc. where they deem essential for transporting waters of Lake to evaporating
ponds. After installation of any ditches, flumes, etc. Lessees to file with
State a plat or map showing exact location, size and dimensions. Any residue
brines to be returned to the Lake.
7. Terms of agreement 16 years from September 1, 1962, ending August 31,
1979 and thereafter so long as salts are removed from premises and/or from Lake
brines, and State receives a minimum royalty of not less than $10,000 per year,
unless sooner terminated as in this paragraph. This agreement may be terminated
by Lessees on the last day of any calendar year by written notice to State of
intention at least 6 months prior to date specified in said notice. Coincidental
with termination date, Lessees to cease extraction of salts from waters of the
Lake unless and until it shall have once more entered into an agreement therefor
with the State. In event Lessees fail to pay all monies due the State under
terms of this agreement or violate any other term or condition, and within 60
days after written notice of such by State to Lessees, Lessees fail to make
payment or correct default, then State may terminate agreement by written notice
to Lessees not less than 30 days prior to date specified in notice. Coincidental
with termination Lessees shall cease extraction of salt from waters of the Lake
unless and until it has once more entered into an agreement with State and has
cured any and all defaults.
8. In event any other person or company enters into an agreement with State
requiring them to pay monies to State for extraction of salts from Lake in
amounts which, when computed on dry basis shipped, is less than the royalty
stated in Item No. 3, then from the 1st day of the next calendar quarter after
date of such other agreement and while such other agreement remains in effect,
this agreement shall be deemed to be automatically amended so that Lessees pay
an equivalent amount. In event State enters into an agreement with a third party
providing for a royalty less than above for crude salts shipped outside the
State, then this agreement is automatically amended so Lessees pay a like
amount.
9. Any notice to be given by State to Lessees shall be deemed to have been
served when served personally on any individual or when mailed, registered mail
postage prepaid to Lessees at principal office of Lessees.
Any notice to be given by Lessees by State shall be deemed to have been
served when served personally on the Director of Utah State Land Board, or
successor board, commission or agency of State, or when mailed registered mail
postage prepaid addressed to Director, Utah State Land Board, or successor
board, etc.
10. Neither party is liable to the other for loss or damage nor is either
party considered in default if performance is delayed or prevented due to acts
of God, war, revolution, etc., or by any acts, laws, regulations, etc. of U.S.
Government, fires, explosions, cyclones, floods, strikes, embargoes, failure of
transportation or sources of supply, etc.
11. Lessees' benefits and its liabilities binding on its successors and
assigns. State's benefits and its liabilities binding on all boards, commissions
and agencies of the State, including Utah State Land Board and all successor
boards, etc.
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12. State reserves a lien on all unshipped salts for royalties due
hereunder and for such royalties as may be hereafter due from any unshipped
salts.
13. Lessees understand that there is a previous lease for extraction of
Magnesium Chloride and derivatives with Bonneville-on-the-Hill Company and
Lessees agree to hold State harmless against any claims of
Bonneville-on-the-Hill pursuant to their lease.
Utah State Land Board
Xxx X. Xxxxxxx, Director
Xxx X. Xxxxxxx
X.X. Xxxxxx, Xx.
Xxxxxx X. Xxxxxxxx
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No. 19024
LEASE AGREEMENT
Parties: Utah State Land Board - "State."
Xxx X. Xxxxxxx - 50%, X.X. Xxxxxx - 25%, and Xxxxxx X.
Xxxxxxxx, 25% - "Lessees."
Date: September 1, 1962
WHEREAS, State is entering into an Agreement with Lessees for payment of
royalty on salts and salt products extracted from waters of Great Salt Lake,
excluding Magnesium Chloride and its derivatives, referred to as "Royalty
Contract;" and
WHEREAS, Lessees desire to use premises of the State for extraction and
recovery of such salts, etc., excluding Magnesium Chloride and derivatives,
which premise State is authorized by law to lease:
1. Agreed State leases to Lessees land (see lease) in Box Elder County,
Utah:
14,380.66 acres m/1 - unsurveyed - in Twp. 6
North, Range 6 West, and 6,400 acres m/1 -
unsurveyed - in Twp. 6 North, Range 4 West and
Twp. 6 North, Range 5 West.
Total leased 20,780.56 acres
2. Lessees agree to pay rental of fifty cents (50(cent)) per acre per
annum, in advance on January 2nd of each year, except first year paid on
application for lease. State may adjust rentals at end of first 25 years if it
sees fit. All rentals paid to be credited against royalties, if any, which may
accrue during year in which rentals are paid. Minimum rental of $10,000 per
annum whether or not Lessees surrender or contract a portion of the lands under
lease.
3. Lessees have right to use premises for production or manufacture of
salts and salt products, and manufacture of salt production of Magnesium
Chloride and its derivatives.
4. Lease for term of 49 years commencing 9-1-62 and ending 8-31-2011, or
upon termination of Royalty Agreement dated 9-1-62, whichever is sooner.
5. Lease is subject to law and to rules and regulations of Utah State Land
Board and to rules and regulations hereafter promulgated by the State.
6. Lease may not be assigned, mortgaged, encumbered or disposed of in whole
or in part without consent of the State.
7. State has right to enter premises at all reasonable times to inspect
workings thereon.
8. Agreed lease is issued only under such title as the State now holds, and
in event the State is divested of title, State is not liable for damage
sustained by Lessee, nor is Lessee entitled to any refund of rents or royalties
heretofore paid.
9. Agreed that State reserves right to grant easements over and on the
lands for installation and maintenance of roads, power lines, pipe lines, etc.,
and Lessees are not entitled to compensation for loss of land due to granting
such easements. State reserves any and all existing easements and Lessees agree
to use premises in such a manner. State reserves right to grant additional
leases for other purposes providing they do not conflict with use of lands by
Lessees.
State of Utah - State Land Board
Xxx X. Xxxxxxx
Director
Xxx X. Xxxxxxx
X.X. Xxxxxx, Xx.
Xxxxxx X. Xxxxxxxx
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SUPPLEMENTAL AGREEMENT
Parties: Xxxxxx X. Xxxxxxxx, et al. - Nonoperators
Lithium Corporation - Operator
Date: October 1, 1963
Concurrent with execution of this Agreement, parties are entering into an
agreement dated 10-1-63 relating to State of Utah Leases Nos. 19024 and 19059
and State of Utah Royalty Agreement No. 19024, and
WHEREAS, on January 8, 1962, Xxxxxxxx filed in office of Utah State
Engineer his Application to Appropriate Water (No. 34020) - approved by State
Engineer Feb. 28, 1963, and
WHEREAS, on July 16, 1963, Xxxxxxxx filed Application to Appropriate Water
(No. 35428) on which action is pending:
Parties agree:
1. Xxxxxxxx represents and declares that said water applications were filed
for use and benefit of Nonoperators and their successors. Xxxxxxxx agrees that
he will, upon request of owners, transfer and assign all rights under such water
applications.
2. Parties recognize and agree that water applications and rights
thereunder are intended to be subject to Agreement of 10-1-63, and said water
applications and rights are included in the term "Property" as used in Agreement
of 10-1-63, as fully as if specifically referred to and identified therein.
Parties agree that all rights and obligations of both parties under Agreement of
10-1-63 shall extend to and apply to each of said water applications and all
rights thereunder.
/s/ Xxxxxx X. Xxxxxxxx
E.L. Xxxxx Lithium corporation
/s/ F. F. C.
Xxx X. Xxxxxxx
X.X. Xxxxxx, Xx.
Xxxxxx Xxxxxxxx
Xxxxxx-Xxxxxxxx Enterprises
X.X. Xxxxxx, Xx.
19024
L E A S E A G R E E M E N T
THIS AGREEMENT, made and entered into at Salt Lake City, Utah,
by and between the UTAH STATE LAND BOARD, acting in behalf of the STATE OF UTAH,
hereinafter referred to as the "STATE," and XXX X. XXXXXXX - 50% interest, X.X.
XXXXXX - 25% interest, and XXXXXX X. XXXXXXXX - 25% interest, having their
principal place of business at Salt Lake City, Utah, hereinafter referred to as
"LESSEES."
W I T N E S S E T H :
WHEREAS, by instrument of even date herewith the STATE is
entering into an agreement with the LESSEES for the payment of royalty on salts,
and salt products extracted and recovered by LESSEES from the waters of the
Great Salt Lake, excluding the production of Magnesium Chloride and its
derivatives, herein referred to as "Royalty Contract," and
WHEREAS, LESSEES desire to use premises of the STATE for or in
connection with the extraction and recovery of such salts, salt products, or
salt products manufactured therefrom, excluding the production of Magnesium
Chloride and its derivatives, and the STATE has premises suitable for such
purposes which it is authorized by law to lease;
NOW, THEREFORE, it is agreed at follows:
1. The STATE does hereby lease to the LESSEES the following
described tracts of land situated in Box Elder County, State of Utah:
UNSURVEYED LANDS:
Commencing at a point where the meander line of Great Salt
Lake intersects or meets the east line of Section 36, T. 6 N., R.
6 W., SLM, running thence S.3/4mi m/1 to the proposed southeast
corner of Section
36, being a township corner, thence W. 5 mi. m/1, N. 1-1/4 mi. m/1, W. 1
mi. m/1, N.3/4mi m/1, E. 1 mi. m/1, N. 4 mi. m/1, E. 2-7/8 mi. m/1 to a
point where the meander line of Great Salt Lake intersects the north line
of Section 3, T. 6 N., R. 6 W., SLM, thence southerly along said meander
line 3-1/2 mi. m/1 to the north boundary of the north segment of Lake
Crystal Salt Company lease ML 1623, then westerly along the north boundary
to the northwest corner of said lease, thence south along the west boundary
to the southwest corner of said lease, thence south 2376' m/1 to the north
boundary of the south segment of Mineral Lease 01623, thence west 7245' m/1
to the proposed west boundary of Section 27, T. 6 N., R. 6 W., SLM, thence
south along said west boundary 1526' m/1 to the north property line of the
Southern Pacific Company, thence easterly along said property line 2-1/2
miles m/1 to the meander line of Great Salt Lake, thence southeasterly
along said meander line to point of beginning, which when surveyed will
probably be described as:
Xxxxxxxx 0 Xxxxx, Xxxxx 0 Xxxx, XXX
------------------------------------
Sec. 3 - Part, Unsur. Sec. 22 - All
Sec. 4 - All Sec. 23 - Part
Sec. 5 - All Sec. 25 - Part
Sec. 8 - All Sec. 26 - Part
Sec. 9 - All Sec. 27 - Part
Sec. 10 - Part, Unsur. Sec. 28 - All
Sec. 11 - Part, Unsur. Sec. 29 - All
Sec. 00 - Xxxx, Xxxxx. Xxx. 00 - X0/0, X0/0X0/0
Sec. 15 - All Sec. 32 - All
Sec. 16 - All Sec. 33 - All
Sec. 17 - All Sec. 34 - All
Sec. 20 - All Sec. 35 - All
Sec. 21 - All Sec. 36 - Part, Unsur.
Containing 14,380.56 acres m/1
ALSO UNSURVEYED LANDS:
Commencing at a point where the meander line of Great Salt Lake joins
or intersects the south boundary of Xxxxxxx 00, Xxxxxxxx 0 X., X. 0 X.,
XXX, running thence northerly 2-1/2 mi., m/1, to the center line of Sec. 2,
T. 6 N., R. 5 W., SLM, thence E. 1-3/4 mi. m/1, to the proposed west
boundary northwest corner when surveyed of section 7, T. 6 N., R. & W.,
SLM, thence E. 1-1/2 mi. m/1, S. 2 mi. m/1, E.1/2mi. m/1, S. 1 mi. m/1, W.
2 mi. m/1 to the proposed SW corner when surveyed of Sec. 19, T. 6 N., R. 4
W., SLM, thence N.3/4mi. m/1 to the proposed northeast corner, when
surveyed of Section 24, T. 6 N., R. 5 W., SLM, thence W. 2-3/4 mi. m/1, to
point of beginning, which when surveyed will probably be described as:
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Township 6 North, Range 4 West Township 6 North, Range 5 West
------------------------------ ------------------------------
Sec. 7 - All Sec. 1 - S1/2
Sec. 8 - W1/2 Sec. 2 - S1/2 of unsur. part
Sec. 17 - W1/2 Sec. 10 - Part, unsur.
Sec. 18 - All Sec. 11 - Part, unsur.
Sec. 19 - Part Sec. 12 - All
Sec. 20 - Part Sec. 13 - All
Sec. 14 - All
Sec. 15 - Part, unsur.
Containing 6,400.00 acres m/1
TOTAL for lease - 20,780.56 acres m/1
2. LESSEES agree during the term hereof, as rental for land covered by this
lease, to pay the sum of fifty cents ($0.50) per acre per annum, all such
payments of rentals to be made in advance on the second day of January of each
year except the rental for the year in which the lease is issued, which is
payable on the application for this lease. The STATE may adjust lease rentals at
the end of the direct twenty-five years as it shall see fit in the best interest
of the STATE. All rentals paid hereunder shall be credited against the
royalties, if any, which may accrue on production during the year for which such
rentals are paid. There shall be a minimum rental hereunder of Ten Thousand
Dollars ($10,000.00) per annum whether or not LESSEES shall surrender or
contract a portion of the area of lands under lease.
3. LESSEES shall have the right to use the leased premises for the
production manufacture of salts and salt products, and manufacture of salt
products exclusive of the production of Magnesium Chloride and its derivatives.
4. This lease agreement shall be for a term of Forty-Nine (49) years
Commencing at of September 1, 1962, and ending August 31, 2011, or upon
termination of the
Royalty Agreement between the parties dated September 1,
1962, whichever is sooner.
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5. This Lease is made subject to law and to the rules and regulations of
the Utah State Land Board and to such rules and regulations as may be hereafter
promulgated by the STATE.
6. This Lease shall not be assigned, mortgaged, or otherwise encumbered or
disposed of in whole or in part without the consent of the STATE.
7. The STATE or its officers or agents shall have the right to enter upon
the leased premises at all reasonable times to inspect the workings thereon.
8. It is mutually understood and agreed that this Lease is issued only
under such title as the State of Utah may now hold, and that in the event the
STATE is hereafter divested of such title, the STATE shall not be liable for any
damage sustained by the LESSEE, nor shall the LESSEE be entitled to or claim any
refund of rentals or royalties or other moneys theretofore paid to the LESSOR.
9. It is understood and agreed that the STATE reserves the right to grant
and convey easements over and upon the lends hereby leased for the installation
and maintenance of roads, power lines, pipe lines or other facilities, and
LESSEES shall not be entitled to any compensation for loss of lands due to the
granting of such easements. The STATE also reserves any and all existing
easements over and upon the leased premises, and LESSEES agree to use the leased
premises in such a manner. The STATE also reserves the right to grant additional
leases on the above described lands for other purposes, providing such leases
would not conflict with the use of the lands by the LESSEES hereunder.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the first day of September 1962.
STATE OF UTAH - STATE LAND BOARD
By
----------------------------------
Xxx X. Xxxxxxx, Director
LESSEES:
---------------------------
Xxx X. Xxxxxxx
---------------------------
X. X. Xxxxxx, Xx.
---------------------------
Xxxxxx X. Xxxxxxxx
