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EXHIBIT 10(c)
TABLE OF CONTENTS
SILVER BUCKLE COMPANY LEASE
ARTICLE 1. DESCRIPTION OF THE PROPERTY.....................................................3
ARTICLE 2. GRANT OF LEASE..................................................................3
ARTICLE 3. TERM OF LEASE...................................................................3
ARTICLE 4...................................................................................4
(A) POSSESSION AND CONTROL OF PROPERTY.............................................4
(B) TIMBER.............................................................................5
ARTICLE 5. MANNER OF WORK................................................................5
ARTICLE 6. WORK REQUIREMENTS...............................................................5
ARTICLE 7. ROYALTIES.......................................................................6
(A) ROYALTY SCHEDULE...................................................................6
(1) OPERATING EXPENDITURES........................................................7
(2) EXPLORATION AND DEVELOPMENT EXPENDITURES......................................8
(B) COMMINGLING OF ORE.................................................................8
(C) TREATMENT AT LESSEE'S PROCESSING FACILITIES........................................9
(D) DISPUTES REGARDING ROYALTIES.......................................................9
(E) ADVANCE MINIMUM ROYALTY............................................................9
ARTICLE 8. TAILINGS AND RESIDUE..........................................................10
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SILVER BUCKLE MINES, INC. LEASE CONT'D.
ARTICLE 9. CROSS MINING RIGHTS............................................................10
ARTICLE 10. VERTICAL BOUNDARY PLANES......................................................11
ARTICLE 11. RECORDS AND INSPECTION.......................................................12
ARTICLE 12. TAXES.........................................................................12
ARTICLE 13. STATE AND FEDERAL LAWS AND REGULATIONS........................................12
ARTICLE 14. PROTECTION FROM LIENS AND DAMAGES.............................................13
ARTICLE 15. FORCE MAJEURE.................................................................13
ARTICLE 16. DEFAULT......................................................................15
ARTICLE 17. CANCELLATION.................................................................15
ARTICLE 18. SURRENDER OF PROPERTY.........................................................16
ARTICLE 19. REMOVAL OF EQUIPMENT..........................................................16
ARTICLE 20. TITLE AND PATENT..............................................................17
ARTICLE 21. ARBITRATION OF DISPUTES.......................................................17
ARTICLE 22. RECORDATION OF SHORT FORM NOTICE..............................................18
ARTICLE 23. NOTICES.......................................................................19
ARTICLE 24. INUREMENT.....................................................................20
ARTICLE 25. CONSTRUCTION..................................................................20
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SILVER BUCKLE MINES, INC. LEASE
THIS MINING LEASE, effective as of the 21st day of March, 1997, regardless
of the actual times of signing and acknowledgment, between SILVER BUCKLE MINES,
INC, an Idaho corporation, hereinafter called Lessor, and SILVER VALLEY
RESOURCES CORPORATION, a Delaware Corporation, hereinafter called Lessee,
WITNESSETH:
ARTICLE 1. DESCRIPTION OF THE PROPERTY.
Lessor represents that it is the owner of 0 patented and 87 unpatented lode
mining claims situated in Shoshone County, Idaho, as described on Exhibit A
which by this reference is made a part of this Lease.
ARTICLE 2. GRANT OF LEASE.
The Lessor in consideration of the royalties herein reserved and the
covenants to be performed by Lessee, does hereby lease, let and demise unto
Lessee, its successors and assigns, all of the above described property
(hereinafter referred to as the "leased premises" or "demised premises").
ARTICLE 3. TERM OF LEASE.
The primary term of this lease shall be twenty (20) years to commence on
March 21, 1997. Upon written notice, which must be sent to Lessor at least
thirty (30) days prior to the expiration of the primary term in order to be
effective, Lessee may extend this lease for a successive term of twenty (20)
years and so long thereafter as ores or minerals from the leased premises are
being developed, mined, processed or marketed on a continuing basis. Whenever
the continued term of this Lease is dependent upon continuing development,
mining, processing or marketing by Lessee and there occur periods (i) when there
is no reasonable market for ores or minerals which are or could be produced by
Lessee from the leased premises, or (ii) when the continuing development,
mining, processing or marketing by Lessee of ores or minerals from the leased
premises is prevented or interrupted by a condition or happening of force
majeure, the term of this Lease shall nevertheless continue during such periods,
subject to termination by Lessor if the suspension of operations for the
enumerated causes has continued without interruption for at least five (5)
years. When a satisfactory
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SILVER BUCKLE MINES, INC. LEASE CONT'D.
market becomes available, or upon cessation of any period of force majeure,
Lessee shall have a reasonable time thereafter within which to resume
development, mining, processing or marketing of ores and minerals from the
leased premises. No cessation of operations for one hundred eighty (180)
consecutive days or less, when such cessation is caused by any other reason,
shall be considered a break in the continuity of development, mining, processing
or marketing. A "reasonable market" shall not be deemed to exist and Lessee may
suspend operations during periods when the products of the leased premises
cannot be produced and sold at a profit by reason of low metal prices or
otherwise or when such products cannot be readily sold at prevailing prices so
that an unreasonable inventory thereof has accumulated or otherwise would
accumulate.
ARTICLE 4.
(a) POSSESSION AND CONTROL OF PROPERTY.
Lessee shall have, and it is hereby given and granted, the right to enter upon
and take over, at the beginning of the primary term hereof, the sole and
exclusive possession and control of the leased premises and the whole and every
part thereof, and, during the term of this lease, to remain in the sole and
exclusive possession and control thereof, and to investigate, measure, sample,
examine, test, develop, work, mine, operate, use, manage, and control the same
and the water and water rights appurtenant thereto, and to mine, extract and
remove from said property the ores and minerals therein and appurtenant and
belonging thereto, and to treat, mill, ship, sell or otherwise dispose of the
same and receive the full proceeds therefrom; and to erect, construct,
maintain, use and operate thereon and therein buildings, structures, machinery
and equipment. The time, nature, location and extent of such or any or all the
above activities and mining or mining operations and the cessation and
resumption thereof shall be at the sole discretion of Lessee, and may include,
without limitation, open pit, underground, strip, or solution mining methods,
together with the right to use so much of the surface as may be necessary,
useful or convenient for the enjoyment of all rights herein granted including
construction of a surface mine waste rock dump, if necessary, from development
of Lessor's property. Any surface mine waste dump constructed
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during the life of this lease shall be reclaimed to industry standards by Lessee
at lease termination.
(b) TIMBER. Lessee shall have the right, pursuant to applicable law, to
manage and use timber upon the property in accordance with law. In addition, in
the event Lessee elects to seek patents for the property described on Exhibit A,
Lessee shall have the right to manage and harvest the timber situated thereon.
In either event Lessee shall account for the value of timber removed and the
value shall be treated just as proceeds from the sale of metal is treated and
accounted for under this lease.
ARTICLE 5. MANNER OF WORK.
Lessee agrees to cause all work, development and mining to be done in a
careful and minerlike manner, and to conform in all respects to the mining laws
and regulations of the United States and the State of Idaho.
ARTICLE 6. WORK REQUIREMENTS.
During the first five years of the primary term hereof Lessee shall perform
$125,000 of work upon, towards or for the eventual benefit of the leased
premises. Thereafter, for each five year period this lease is in effect, an
additional $125,000 of work upon, toward or for the eventual benefit of the
leased premises shall be performed.
The term "upon" means exploration or development work performed within the
exterior vertical boundaries of the leased premises. The work may include, but
is not limited to diamond drilling, drifting, shaft sinking, raising,
rehabilitation of existing underground openings in advance of any such work,
surface mapping, geochemical surveys, stratigraphic and structural
investigations, metallurgical and other physical analytical work, mine
engineering and geological analysis which enhances the understanding of the
geology and possible mineralization of the leased premises, and in addition all
unpatented claim holding costs.
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The term "toward" means the kind of work described above, but performed
within 1,000 feet of any exterior boundary of the leased premises.
The phrase "for the eventual benefit of" means the kinds of work described
above and shall also include seventeen and one-half percent (17 1/2%) of the
cost of shaft sinking which may not be within 1,000 feet of the exterior
boundary of the leased premises.
In the event work is performed in excess of the $125,000 minimum during any
period, the excess may be carried forward to the credit of the Lessee for the
next five year period, but not beyond the succeeding five year period.
ARTICLE 7. ROYALTIES.
(a) Royalty Schedule. Lessee shall pay Lessor a 20% Net Profits Royalty,
as defined in Exhibit B, on all development and production ores and minerals
extracted, milled and sold from the leased premises in accordance with Exhibit B
which is attached hereto and by this reference is made a part of this Lease.
The Net Profits Royalty shall be increased above twenty percent (20%), or
decreased to not less than twenty percent (20%), in accordance with the
quarterly average price of silver, as shown on the schedule which follows:
Sliding Scale Royalty Payments
-------------------------------------------
Net Profit Royalty Quarterly Average
Percentage Silver Price
------------------ -----------------
20% less than $11.00
21% greater than $11.00
22% greater than $11.25
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23% greater than $11.50
24% greater than $11.75
25% greater than $12.00
30% greater than $13.50
35% greater than $15.00
40% greater than $16.50
The term "quarterly average price of silver" means the sum of all closing
prices as quoted by the Comex Metals Exchange for each day of the calendar
quarter that a quote is given, divided by the number of days quoted.
Obligation for quarterly payment of the Net Profits Royalty shall commence after
Lessee has recovered all operating, exploration and development expenditures
incurred by Lessee attributed to the leased premises following the effective
date of this lease. For the purpose of calculating these costs, all applicable
operating, exploration and development expenditures shall be determined in
accordance with generally accepted accounting principles for metallic mining
ventures within the United States applied on a consistent basis ("GAAP") which
are incurred after the effective date of this lease, as follows (calculation of
Net Profits Royalty shall be determined exclusively under Exhibit B after these
operating, exploration and development expenditures have been recovered):
(1) Operating expenditures include:
(i) Mining Costs. Costs incurred by Lessee in
exploring for, mining, extracting, removing
and transporting to a mill ores and minerals
produced from the leased premises. Such
costs shall include, without limitation,
those incurred for labor, machinery
operation, fuel, explosives and other
materials, exploration drilling,
develop-mental or ore delineation drilling,
allowance for depreciation and depletion of
mining equipment and machinery acquired
after the effective date of this Lease.
Mining costs shall not include amortization
or income taxes.
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(ii) Milling and Processing Costs. Costs incurred
in milling or processing ores and minerals
produced from the leased premises at a mill
or central processing facility utilized to
process ores and minerals produced from the
leased premises, if any, (hereinafter
referred to as the "Mill").
(iii) General and Administrative Costs. Costs
incurred as a direct result of the
administration of the leased premises, and
the production of ores and minerals
therefrom, including costs incurred in
connection with the marketing, selling, and
collection of proceeds from sale of ores and
minerals produced from the leased premises.
(iv) Taxes. All taxes levied against Lessee's
operation of the leased premises, excluding
income taxes but including mining and
property taxes.
(2) Exploration and Development Expenditures. Costs incurred by Lessee
after the effective date hereof with respect to exploring and developing the
leased premises and all matters connected therewith including, but not limited
to, costs relating to geological, geochemical and geophysical studies,
exploration and developmental drilling, sampling and assaying, mine design and
development, acquisition of mining or processing equipment or machinery, direct
expenses of making application for and obtaining environmental and regulatory
permits from government agencies (including reasonable attorney's fees), costs
to patent the unpatented claims and any other costs which would be included
within mining costs and/or milling and processing costs if such costs were
incurred after the Commencement of Commercial Production.
If any of the costs otherwise includable in Lessee's costs as set
forth above are incurred partly for the benefit of any other properties or
interests of Lessee, only the portion of such costs reasonably attributable to
development and operation of the leased premises in accordance with GAAP shall
be included.
(b) Commingling of Ore.
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Lessee may commingle ore from the leased premises with ore from other
properties, either before or after concentration or beneficiation, so long as
the data necessary to determine the weight and grade, both of the ore removed
from the leased premises and the ore with which it is commingled, are obtained
by Lessee. Lessee shall then use that weight and grade data to allocate Gross
Sales (as defined in Exhibit B) from the commingled ore between the leased
premises and the other properties from which the other commingled ore was
removed. All such weight, grade and allocation calculations by Lessee shall be
done in a manner recognized by the mining industry as practical and sufficient
at that time. If, in Lessee's judgment, it is impractical to determine which
portions of any of the costs and expenses described in Paragraph (a) above are
directly attributable to ore removed from the leased premises, Lessee may
allocate all such costs and expenses on a straight-line, per-ton basis among all
ores that give rise to those expenses, in accordance with GAAP.
(c) Treatment at Lessee's Processing Facilities.
Lessee shall have the right to purchase and to treat concentrates and
smelting ores produced from the leased premises at its own metallurgical
facility; provided, however, that any such purchase and treatment shall be made
under comparable terms as the metallurgical facility is then offering to other
shippers of concentrates and smelting ores on purchases of like quantities and
qualities.
(d) Disputes Regarding Royalties.
Lessor shall be deemed to have waived any right the Lessor may have had
to object to the royalty settlement made by Lessee in accordance with Exhibit B
for any calendar quarter, unless Lessor notifies Lessee in writing of such
objection within twelve (12) months after such royalty is due under this Lease.
If Lessor and Lessee are unable to resolve the question by agreement within
thirty (30) days after Lessee's receipt of Lessor's notice, the dispute shall be
resolved by arbitration, in accordance with the provisions of Article 21.
(e) Advance Minimum Royalty.
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Commencing with the month this lease is executed and for each month
thereafter that this lease continues and while it remains undertermined, Lessee
shall pay an advance minimum royalty of $500 per month. This advance minimum
royalty shall be credited to the Net Profits Royalty obligation referred to
above in this Article 7. The royalty shall be paid during the month this lease
is executed on or before the last day of the month, and thereafter on or before
the last day of each succeeding month. Also, the $500 sum, the "base amount",
shall be increased ten percent (10%) of the base amount, or $50.00, at the
commencement of each successive five year period.
ARTICLE 8. TAILINGS AND RESIDUE.
Tailings and other residue resulting from the milling or other
beneficiating of ores produced from the leased premises and subsequently
utilized in mining operations shall be the sole and exclusive property of Lessee
prior to termination of this lease. Tailings and other residue remaining
underground in the leased premises shall become the property of the Lessor upon
termination of this lease. A separate written agreement will be negotiated by
the parties in good faith for the construction of a surface mill tailings
impoundment on the leased premises if determined necessary by the Lessee. The
terms of such agreement shall be consistent with industry standards and the
parties agree to submit to arbitration any matter to which the parties can not
agree during the negotiation of such an agreement.
ARTICLE 9. CROSS-MINING RIGHTS.
Lessee is hereby granted the right, if it so desires, to mine or remove
from the leased premises 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 adjoining or nearby property
owned or controlled by Lessee, and may stockpile any ores, waste, or other
materials and/or concentrated products of ores or materials from the leased
premises or any part thereof, upon stockpile grounds situated upon any such
adjoining or nearby property; and Lessee may, if it so desires, use the leased
premises and any part thereof and any shafts, openings, pits and stockpile
grounds sunk
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or made thereon for the mining, removal and/or stockpiling of any ores, waste,
water and other materials and/or concentrated products of ores or materials from
any such adjoining or nearby property, or for any purpose or purposes connected
therewith, not, however, preventing or interfering with the mining or removal of
ore from the leased premises. If, after this lease expires or terminates, Lessee
is exploring, mining or developing adjacent properties thereto, it may use any
haulageways developed during the terms of the lease for ingress and egress
reasonably necessary to explore, develop or mine such adjacent properties. The
Lessee shall be responsible for haulageway maintenance costs and liabilities
resulting from its negligent acts. The Lessee's right of ingress and egress
shall not interfere with future development of the property by the Lessor. This
provision for ingress and egress to and from such adjacent properties shall
survive the expiration or termination of this lease.
ARTICLE 10. VERTICAL BOUNDARY PLANES.
In consideration of Lessee's execution of this mining lease, and the
reciprocal benefits received by reason of the terms of this Article by the
Lessor and the Lessee, Lessor and Lessee hereby agree with each other that any
and all ores and minerals within the surface boundaries extended downward
vertically of any claim so held under lease and herein defined as leased
premises shall belong to such claim. It is understood that the concept of
vertical boundaries applies only as between Lessor and Lessee, and that neither
party intends to, or will, give up any extralateral rights to third parties. In
the case of extralateral rights extending from the leased premises, then Lessee
will either lease the adjacent property or mine it by exercising extralateral
rights. In both cases, the Lessee and Lessor interests shall be diluted
proportionately based on the cost of leasing or acquiring the adjacent property.
For example, if it costs a twenty percent (20%) NPR to lease an adjacent
property of a third party, the Lessor in our agreement would suffer a twenty
percent (20%) reduction in its net profit interest, and the Lessee in our
agreement would suffer a twenty percent (20%) reduction as below:
Net Profits = $100 from Third Party Property
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SILVER BUCKLE MINES, INC. LEASE CONT'▇.
▇▇▇▇▇▇ Dilution
---------------
20% of 20% = $4 (or 4% Net Reduction)
Lessee Dilution
---------------
20% of 80% = $16 (or 16% Net Reduction)
ARTICLE 11. RECORDS AND INSPECTION.
Lessee's engineering progress maps and all factual exploration, development
and production data including drill core and assay results (but excluding
interpretive information or data) from the leased premises shall be available
upon reasonable request for Lessor's inspection. The Lessor may enter said
property at reasonable times for the purpose of inspecting the same, and Lessee
shall facilitate such inspection in reasonable ways, but Lessor shall enter upon
said leased premises at Lessor's own risk and so as not to hinder unreasonably
the operations of Lessee; and the Lessor shall indemnify and hold harmless the
Lessee from any damage, claim or demand by reason of injury to or the presence
of the Lessor or the Lessor's agents, representatives, licensees, or guests or
any of them on the leased premises or approaches thereto.
ARTICLE 12. TAXES.
Lessee shall pay before they are delinquent all general property taxes and
governmental rental fees for unpatented claims assessed against the Lessor's
ownership in the leased premises during the term of this lease, beginning with
the year 1997. Lessee shall also pay, before they are delinquent, all taxes
levied or assessed against any or all personal property, machinery and equipment
placed upon the leased premises by the Lessee during the term of this lease and
beginning in the year 1997. As to severance tax and all other taxes that are now
or may be hereafter levied and computed on the amount or value of ores produced
from the leased premises, Lessee shall pay the same.
ARTICLE 13. STATE AND FEDERAL LAWS AND REGULATIONS.
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Lessee shall comply with the Workmen's Compensation laws of Idaho and with
Social Security, Unemployment Insurance and all other state and federal laws and
regulations relating to Lessee's operations and shall save Lessor harmless from
any claim for damages or liability by reason thereof.
ARTICLE 14. PROTECTION FROM LIENS AND DAMAGES.
Lessee shall keep the leased premises and the whole and every part thereof
free and clear of liens for labor done or work performed upon the leased
premises or materials furnished to it for the development or operation thereof
under this lease while the same is in force and effect, and will save and keep
harmless Lessor from all costs, loss or damage which may arise by reason of
injury to any persons employed by Lessee in or upon the leased premises or any
part thereof or which may arise by reason of injury to any persons or damage to
any property as the result of any work or operations of the Lessee or of its
possession and occupancy of the leased premises. A lien upon the property shall
not constitute a default if the Lessee in good faith disputes the validity of
the claim, in which event the existence of the lien shall constitute a default
only from and after the validity of the lien has been adjudicated.
ARTICLE 15. FORCE MAJEURE.
If Lessee is unable to perform any of the terms or covenants of this lease
by reason of damage or delay resulting from disaster, labor disturbances,
shortage of labor, strikes, lockouts, act of God, or from any regulations or
restrictions of any governmental agency, or on account of any eventuality beyond
the reasonable control of Lessee, including state and federal environmental
statute or regulation, Lessee shall be excused from performance during the
period of such prevention and the time for performance of such obligations shall
be extended for a period equal to the period or periods of prevention. In the
event Lessee or its purchaser of concentrates or crude ore is, becomes or
believes it is about to become subject, at any time, to environmental
regulations (which shall include any governmental law, rule, order, regulation,
policy, proposal or restriction relating to environmental pollution) which will
prohibit or
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materially affect any operation Lessee is carrying out, or planning to carry out
hereunder, Lessee shall have the right to declare the existence of a condition
of force majeure during the period in which it is in good faith seeking a
feasible method to comply with, be exempted from, modify, obtain necessary
permits or licenses under, or prevent the enactment or promulgation of said
environmental regulations. Lessee agrees to use reasonable diligence to remove
causes of force majeure as may occur from time to time, but shall not be
required to settle strikes or other labor difficulties contrary to its own
judgment.
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ARTICLE 16. DEFAULT.
The failure of Lessee to make or cause to be made any of the material
payments herein provided for or to keep or perform any material agreement on its
part to be kept or performed according to the terms and provisions of this
lease, shall, at the election of the Lessor, work a forfeiture hereof; provided,
however, that in the event of a default on the part of the Lessee, the Lessor
shall give to the Lessee a written notice of its intention to declare a
forfeiture of this lease and to terminate the same on account thereof, or of its
intention to take other action to enforce this lease, specifying the particular
default or defaults relied upon by it, and Lessee shall have a reasonable time
(which in any case shall not be less than sixty (60) days) after receipt of such
notice in which to make good such default or defaults, in which event there
shall be no forfeiture therefor, and no other action may be taken for
enforcement. If Lessee disagrees that such default occurred, it shall so advise
Lessor in writing thirty (30) days after receipt of the notice of default. If,
within fifteen (15) days thereafter, the parties have not resolved the dispute
by mutual agreement, the issue of default shall then be submitted to arbitration
under Article 21 below. In the event that Lessor does terminate this lease on
account of a breach by Lessee, Lessee shall be under no further obligation or
liability hereunder to Lessor from and after the date of such termination except
for the performance of obligations and the satisfaction of liabilities to Lessor
or third parties or respecting the leased premises, which have accrued to the
date of such termination.
ARTICLE 17. CANCELLATION.
Notwithstanding any provision herein to the contrary, Lessee may at any
time upon 30 days' written notice, cancel and terminate this lease in its
entirety. Upon total cancellation and termination of this lease, Lessee shall be
under no further obligation of whatsoever kind or nature to the Lessor except
for the making of payments which have already accrued to the date of such
cancellation and termination, including governmental rental fees for unpatented
claims and for the payment of Lessee's proportion of the aforesaid property
taxes accrued while this
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lease was in effect. If Lessee shall have included any part of the leased
premises in a "producing group" for assessment purposes, and taxes based on such
assessment shall have been levied but shall not have been paid at the time of
cancellation and termination Lessee shall pay such taxes before they are
delinquent. Work requirements specified in Article 6 shall cease upon the date
such notice is given.
ARTICLE 18. SURRENDER OF PROPERTY.
In the event of a valid forfeiture, cancellation, or other termination of
this lease, Lessee shall surrender to Lessor peaceable possession of the leased
premises and at the written request of Lessor shall deliver to the Lessor a
written relinquishment hereof, together with a copy, if requested by Lessor
within thirty (30) days after termination of this lease, of its engineering
progress maps showing any workings made or uncovered by Lessee on the
above-described leased premises. The Lessee's factual exploration, development
and production data including drill core and assay results (but excluding
interpretive information or data) from the leased premises shall be available
upon request to the Lessor.
ARTICLE 19. REMOVAL OF EQUIPMENT.
Lessee shall have and is hereby given and granted twelve (12) months after
a valid forfeiture, cancellation or other termination of this lease to remove
from said property all buildings, structures, warehouse stocks, merchandise,
materials, tools, hoists, compressors, engines, motors, pumps, transformers,
electrical accessories, metal or wooden tanks, pipes and connections, rails,
mine cars and any and all machinery, trade fixtures, and equipment erected or
placed in or upon said property by it, provided that such right of removal shall
not extend to foundations and mine timbers in place unless Lessor shall have
given his previous written consent thereto. If Lessee is hampered by snowdrifts,
washouts, inclement weather, or other climatic conditions, from completing the
removal of said property and equipment within the time specified, then Lessor
agrees to extend the time by a reasonable period if requested by Lessee.
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ARTICLE 20. TITLE AND PATENT.
Lessor covenants that Lessor now holds title and possession of the leased
premises free and clear from all former grants, sales, liens, or encumbrances of
any kind, and that there are no delinquent taxes and all government rental fees
are current; that Lessor has no knowledge of any defects in title or adverse
claims and agrees to furnish Lessee such abstracts, deeds, or other evidences of
title as may be in Lessor's possession and control, and to allow and cooperate
with Lessee, at Lessee's option and initial expense, to have abstracts brought
to date and to take such steps and proceedings to search and perfect title as
Lessee shall deem advisable. All reasonable expense so incurred by Lessee shall
apply as a credit against royalties. Lessee shall have the right to seek to
patent the leased premises or any portion thereof in the name of Lessor if it so
elects, and the cost thereof may be charged as operating costs hereunder. Lessor
agrees to cooperate to a reasonable extent in any patent proceedings.
ARTICLE 21. ARBITRATION OF DISPUTES.
Any controversy, dispute or claim arising out of or from this lease, or
alleged breach thereof, shall be settled by arbitration pursuant to the Uniform
Arbitration Act of the State of Idaho (Sections 7-901, et.seq., Idaho Code)
as amended and as in effect on the date either party commences arbitration
proceedings. Said Act shall control the substantive and procedural aspects of
the proceedings unless otherwise agreed in this lease. Judicial review may be
had pursuant to said Act.
(a) Proceedings shall be initiated by the complaining party serving upon
the other party a complaint, as would be done in court proceedings.
The allegations regarding the circumstances giving rise to the issues
to be arbitrated shall be stated in detail and with particularity. The
party upon whom the complaint is served shall answer or otherwise
respond with a pleading just as is required by the Idaho Rules of
Civil Procedure for a court action. Except, however, the response
shall be served upon the initiating party
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within 30 days from the date of service of the complaint.
(b) The parties shall agree upon an arbitrator, who shall be a retired
State of Idaho District Court judge (not a retired Magistrate) who is
neutral, competent and willing to serve and, if possible, who has
experience in cases involving mining and mining contracts. Should the
parties fail to reach agreement within 20 days from the date
proceedings are initiated, either party may apply to the court for
appointment of an arbitrator who meets the criteria set forth herein
pursuant to the provisions of section ▇-▇▇▇ ▇▇▇▇▇ Code.
(c) Prehearing discovery shall not be allowed except upon order of the
arbitrator for good cause shown, the parties being in agreement that
the expense and time associated with discovery should be minimized,
and that this desire should, however, be balanced against the need for
each party to be able to effectively present its case.
(d) Each party to the arbitration proceedings shall bear one-half of the
arbitrator's fees and expenses, which shall be promptly paid by each
party monthly within 15 days from the submission by the arbitrator to
the parties of his reasonably detailed and itemized statement for
services rendered, which statement shall be submitted by the
arbitrator at the end of each month.
(e) Each party shall bear its own attorney's fees and costs of litigation
for the proceedings before the arbitrator. This subparagraph (e) is
not applicable to court proceedings, in which event the parties
recognize that applicable law shall govern and the matter will be
decided by the court.
ARTICLE 22. RECORDATION OF SHORT FORM NOTICE.
18
19
SILVER BUCKLE MINES, INC. LEASE CONT'▇.
▇▇▇▇▇▇ agrees to execute, upon request by Lessee, a short-form notice of
this lease, which notice shall be for purposes of recordation in the real
property records of Shoshone County, Idaho.
ARTICLE 23. NOTICES.
Any notices required or permitted to be given to the Lessor hereunder shall
be considered as delivered forty-eight (48) hours after the same shall have been
deposited in the United States mail, duly registered, with postage thereon
prepaid. All notices given hereunder shall be addressed to the respective
addresses given below:
If to Lessor,
SILVER BUCKLE MINES, INC.
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
19
20
SILVER BUCKLE MINES, INC. LEASE CONT'D.
and if to Lessee,
Silver Valley Resources Corporation
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Said addresses for receiving notices may be changed by either party upon
two (2) days previous notice to the other party.
ARTICLE 24. INUREMENT.
These presents shall inure to the benefit of and be binding upon the
respective heirs, executors, administrators, successors and assigns of the
parties hereto.
ARTICLE 25. CONSTRUCTION.
Titles to the respective articles hereof shall not be deemed a part of this
lease but shall be regarded as having been used for convenience only.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the day and year first above written.
LESSOR
SILVER BUCKLE MINES, INC.
By
---------------------------------
Attest:
------------------------
Secretary
20
21
SILVER BUCKLE MINES, INC. LEASE CONT'D.
STATE OF IDAHO )
) ss.
COUNTY OF )
On this _____ day of _________, 1997, before me, ________________, the
undersigned, a Notary Public in and for the State of Idaho, personally appeared,
___________________, known to me to be the _____________ of Silver Buckle Mines,
Inc. and whose name is subscribed to the within instrument, and acknowledged to
me that he executed the same on behalf of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
---------------------------------
Notary Public for Idaho
Residing at
---------- -----------
My Commission expires
-----------
LESSEE
SILVER VALLEY RESOURCES CORPORATION
By
-----------------------------------
Attest:
------------------------
Secretary
STATE OF IDAHO )
) ss.
21
22
SILVER BUCKLE MINES, INC. LEASE CONT'D.
COUNTY OF )
On this _____ day of __________, 1997, before me, ________________, the
undersigned, a Notary Public in and for the State of Idaho, personally appeared,
___________________, known to me to be the _____________ of Silver Valley
Resources Corporation and whose name is subscribed to the within instrument, and
acknowledged to me that he executed the same on behalf of said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
---------------------------------
Notary Public for Idaho
Residing at
---------------------
My Commission expires
-----------
22