EXHIBIT 10.12
OPTION AGREEMENT
THIS OPTION AGREEMENT made as of this 27 day of September, 1993, by
and between those persons whose names and addresses are shown on EXHIBIT A
attached hereto and made a part hereof (individually an "Owner" and
collectively the "Owners") and ST. ▇▇▇▇ MINERALS INC., a Colorado
corporation, whose address is ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
(hereinafter referred to as "St. ▇▇▇▇");
WHEREAS, Owners are the owners of certain patented and unpatented
mining claims situate in Montrose County, Colorado, herein referred to as
"the Property," and more particularly described on EXHIBIT B attached hereto
and made a part hereof; and
WHEREAS, St. ▇▇▇▇ desires to carry out exploration work and to
acquire the Option to Purchase the Property,
WHEREAS, Owners desire to make the Property available for the
conduct by St. ▇▇▇▇ of certain mineral exploration work thereon and to grant
St. ▇▇▇▇ the option to purchase the Property,
NOW THEREFORE, in consideration of Ten Dollars ($ 10.00) in hand
paid to Owners, the receipt and sufficiency of which are hereby acknowledged,
and further in consideration of the mutual covenants, agreements, and
promises herein contained, the parties agree as follows:
1. OPTION. Owners grant to St. ▇▇▇▇ during the term of this Agreement the
sole and exclusive option (the "Option") to purchase the Property, together
with all appurtenances and water rights incident thereto and all improvements
and personal property thereon, free and clear of all liens and encumbrances,
for a total purchase price of Five Hundred Fifty Thousand Dollars
($550,000.00). St. ▇▇▇▇ shall be entitled to a credit against the purchase
price for all amounts paid under the provisions of Section 7 hereof and for
all costs and expenses incurred under the provisions of Section 5 hereof and
the balance of the purchase price will be payable within thirty (30) days
after St. ▇▇▇▇ gives notice that it elects to exercise the Option.
2. ESCROW. Contemporaneously with the execution of this Agreement, Owners
shall execute, acknowledge, and deliver to the Escrow Agent one or more
special warranty deeds conveying the Property to St. ▇▇▇▇ in the form
(without legal descriptions) of Exhibit C attached hereto and incorporated
herein.
Owners and St. ▇▇▇▇ hereby appoint ____________________________ as their
Escrow Agent to receive and distribute all payments and to hold the deed and
deliver it to the party entitled hereunder to receive the same. The parties
hereto agree. that the Escrow Agent shall act pursuant to Escrow Instructions
executed contemporaneously herewith.
3. EXCLUSIVE POSSESSION. St. ▇▇▇▇ shall have the exclusive possession of
the Property during the term of this Agreement.
4. TITLE.
(a) Owners warrant that they are in possession of the Property, that
they have the right to enter into this Agreement, that they know of no other
person claiming any interest in the Property or the ground covered thereby,
and that the Property is free from all liens and encumbrances, except liens
for property taxes not yet due and payable. Owners further warrant to St.
▇▇▇▇ the quiet enjoyment of the Property and the right to explore, develop
and mine the same.
(b) Owners warrant that the unpatented mining claims included in the
Property have been properly located, and that for each assessment year
assessment work has been performed (or other steps taken in accordance with
the law) for the benefit of the claims. Owners warrant and shall defend title
to the Property against all persons whomsoever.
2
(c) Owners shall provide St. ▇▇▇▇ with recording data with respect to
location notices and certificates, affidavits of annual labor, deeds,
easements or other documents which bear upon Owners' title to the Property,
and shall provide St. ▇▇▇▇ with copies of all such documents and all title
reports and abstracts in Owners' possession or control. Owners shall, upon
St. Mary's request, record any such document in Owners' possession or control
which has not been recorded.
(d) At St. Mary's request, Owners shall take all action necessary
(including judicial proceedings) to remove any cloud from or cure any defect
in their title to the Property or the ground covered thereby. If Owners fail
or refuse to take any such action, St. ▇▇▇▇ ▇▇▇ take any such action in
Owners' names. Owners agree to cooperate with St. ▇▇▇▇ in any such action
taken. St. ▇▇▇▇ ▇▇▇ recover from Owners or from any payments thereafter to
become due to Owners hereunder all costs and expenses (including attorneys'
fees) incurred by St. ▇▇▇▇ in any such action. If the United States or any
third person attacks the validity of any of the patented mining claims
included in the Property for any reason, St. ▇▇▇▇ shall have no obligation to
defend the validity of the claim.
(e) St. ▇▇▇▇ shall not be estopped to deny the validity of Owners'
title.
5. UNDIVIDED INTEREST. If the interest claimed by any Owner in any portion
of the Property is less than one hundred percent (100%), the interest claimed
by such Owner is set forth in exhibit A. Any representation or warranty of
title made by any Owner shall apply only to the interest set forth in Exhibit
A.
6. OPTION PAYMENTS.
(a) Concurrent with the execution of this Agreement by Owners, St. ▇▇▇▇
has made an option payment to Owners in the amount of $10,000, receipt of
which is hereby acknowledged by Owners.
(b) St. ▇▇▇▇ shall pay to Owners further option payments on the dates
and in the amounts as follows:
3
March 1, 1994 20,000
September 1, 1994 20,000
September 1, 1995 50,000
September 1, 1996 100,000
September 1, 1997 150,000
September 1, 1998 200,000
--------
$540,000
7. MANNER OF FURTHER OPTION PAYMENTS. St. ▇▇▇▇ shall make all further
option payments due Owners hereunder by check which shall be made payable to
and shall be transmitted to the Escrow Agent. The Escrow Instructions to be
executed contemporaneously herewith will instruct the Escrow Agent how the
payments shall be disbursed. Upon making the payments to the Escrow Agent,
St. ▇▇▇▇ shall be deemed to have made the payments to Owners, their heirs,
representatives, successors, and assigns, and thereupon St. ▇▇▇▇ shall be
discharged to the extent thereof as if the payments had been made directly to
Owners, or to any person, firm or corporation entitled thereto, and St. ▇▇▇▇
shall not be liable for the ultimate distribution or receipt of any payment
or payments.
8. OPERATIONS.
(a) SCOPE. During the term of this Agreement, St. ▇▇▇▇ shall have free
and unrestricted access to the Property, and shall have the right and
privilege of conducting exploratory investigations and prospecting for
mineral deposits on the Property, effective during the life of the Option,
and such prospecting shall include, but not be limited to, soil testing,
geophysical surveys, core drilling, shaft sinking, tunnel and mine building
and the removal of ore for testing purposes but not removal of ore for sale.
St. ▇▇▇▇ shall have the right to erect and maintain upon the Property any
improvements, structures, or facilities including mines, shafts and tunnels
as may be necessary or convenient for the conduct of its operations.
4
(b) STANDARDS OF OPERATIONS. St. ▇▇▇▇ shall conduct all operations on
the Property in a good and workmanlike manner and in accordance with accepted
mining practice.
(c) COMPLIANCE WITH LAW; RECLAMATION: St. ▇▇▇▇ shall endeavor in good
faith to comply with applicable provisions of federal, state and local laws
and regulations, as required by the operating permits issued to St. ▇▇▇▇ by
these agencies under which St. ▇▇▇▇ shall conduct its operations. If this
Agreement is terminated, St. ▇▇▇▇ shall reclaim only those portions of the
Property actually disturbed by its operations and only to the extent of St.
Mary's disturbance thereof whether or not such reclamation then complies with
applicable governmental laws, regulations and orders. St. ▇▇▇▇ shall have the
right, without payment of any additional consideration to Owners, to enter
upon the Property subsequent to termination of this Agreement for purposes of
performing such reclamation work. Owners shall be notified prior to St. ▇▇▇▇
re-entering the Property for reclamation purposes.
(d) ANNUAL REPORTS: During the term of this Agreement, St. ▇▇▇▇ shall
furnish to Owners annual summaries of work performed on or for the benefit of
the Property. Such summaries may include, raw data relating to the Property,
but shall not include any interpretative data with respect thereto.
9. NO IMPLIED COVENANTS. No covenants or conditions relating to the
exploration or related operations on or in connection with the Property, or
the timing thereof, other than those expressly provided in this Agreement,
shall be implied. After commencing any exploration or related operations on
or in connection with the Property and so long as this Agreement has not been
terminated before the expiration of its term, St. ▇▇▇▇ ▇▇▇ in its sole
discretion curtail or cease such operations so long as it continues to make
any payments due Owners under this Agreement, subject to the provisions of
Section 16 hereof.
10. PROTECTION FROM LIENS AND DAMAGES. St. ▇▇▇▇ shall keep the Property free
of liens for labor performed or materials or merchandise furnished for use on
the Property under
5
this Agreement, and shall hold Owners harmless from all costs, loss or damage
which may result from any work or operations of St. ▇▇▇▇ or its occupancy of
the Property.
11. TAXES. Owners shall pay all taxes levied against the Property prior to
the date of this Agreement. St. ▇▇▇▇ shall pay or reimburse Owners for all
taxes levied against the Property during the term of this Agreement. In the
case of taxes for the calendar year in which this Agreement commences, and
for the calendar year in which this Agreement ends, there shall be an
apportionment between the parties, St. ▇▇▇▇ to bear the proportion of taxes
upon the Property applicable to the part of the calendar year included
hereunder and Owners to bear the balance of the taxes. St. ▇▇▇▇ shall pay all
taxes levied during the term of this Agreement against all buildings,
structures, machinery, equipment, personal property, fixtures and
improvements placed upon the Property by St. ▇▇▇▇, and all taxes levied
against St. ▇▇▇▇ as an employer of labor. All taxes shall be paid when due
and before delinquent, but St. ▇▇▇▇ shall be under no obligation to pay any
tax so long as the tax is being contested in good faith and by appropriate
legal proceedings and the nonpayment thereof does not adversely affect any
rights, title or interest of Owners in or to the Property.
12. INSURANCE. St. ▇▇▇▇ shall carry at all times during the term of this
Agreement worker's compensation and other insurance required by state laws
and mining regulations, or St. ▇▇▇▇ ▇▇▇ self-insure as to such matters if it
qualifies as a self-insurer under the appropriate laws and regulations.
13. INSPECTION.
(a) Owners or their authorized representative may enter on the Property
at any reasonable time, and with reasonable notice to St. ▇▇▇▇, for the
purpose of inspection, but shall enter at Owners' own risk and so as not to
hinder unreasonably the operations of St. ▇▇▇▇. Owners shall indemnify and
hold St. ▇▇▇▇ harmless from any damage, claim or demand by reason of injury
to or the presence of Owners, their agents or representatives on the Property.
6
(b) Owners or their authorized representative may, at any reasonable
time, and with reasonable notice to St. ▇▇▇▇, inspect any records pertinent
and necessary for substantiating the compliance of St. ▇▇▇▇ with the
provisions of this Agreement.
14. DATA. (a) Upon the execution of this Agreement, Owners shall deliver to St.
▇▇▇▇ all drill core, all geological, geophysical and engineering data and maps,
logs of drill holes, results of assaying and sampling, and similar data
concerning the Property (or copies thereof) which are in Owners' possession or
control.
(b) Upon the surrender or other termination of this Agreement (except
upon exercise of the Option and payment of the full purchase price as
provided in Section 6 hereof, St. ▇▇▇▇ shall, within 60 days after
termination, (i) return to Owners all drill core and original data delivered
by Owners to St. ▇▇▇▇ which are then in St. Mary's possession or control, and
(ii) make available for inspection by Owners all factual geological and
geophysical data and maps (not including interpretive data), logs of drill
holes, drill core or cuttings and results of assaying and sampling pertaining
to the Property which St. ▇▇▇▇ has obtained as a result of its exploration
work under this Agreement and which are then in St. Mary's possession or
control. Upon Owners' request made within ninety (90) days after termination
of this Agreement, St. ▇▇▇▇ shall at Owners' expense, provide Owners with the
drill core or cuttings designated by Owners and with copies of any portion of
the factual geological and geophysical data and maps (not including
interpretive data), logs of drill holes, and results of assaying and sampling
designated by Owners. St. ▇▇▇▇ makes no representation or warranty as to the
accuracy or completeness of, any such data or information, and shall not be
liable on account of any use by Owners or any other person of any such data
or information. St. ▇▇▇▇ shall not be liable for the loss or destruction of
any drill core or cutting.
15. CONFIDENTIALITY. During the term of this Agreement all information
obtained by Owners or their authorized representatives from St. ▇▇▇▇ or
arising out of St. Mary's activities on the Property pursuant to this
Agreement shall be kept strictly confidential by
7
Owners and shall not be released to any third party except upon the prior
written consent of St. ▇▇▇▇.
16. TERMINATION AND SURRENDER.
(a) The term of this Agreement shall be for a period of five years from
the date hereof unless sooner surrendered or otherwise terminated, or until
the earlier exercise of the Option.
(b) It is also agreed that a failure by St. ▇▇▇▇ to make an option
payment within 60 days of the due date, therefor as provided in Section 6(b)
hereof shall constitute also a termination of this Agreement effective upon
the expiration of such 60 day period. Upon the effective date of such
termination, all rights of St. ▇▇▇▇ under this Agreement, except as provided
in Sections 17 and 18 hereof, shall terminate and all liabilities and
obligations of St. ▇▇▇▇ hereunder (including the obligation of making any
further payments under Section 6(b) hereof) shall likewise thereupon
terminate except as provided in Sections 8(c) and 14(b) hereof.
(c) St. ▇▇▇▇ ▇▇▇ also at any time terminate this Agreement as to all or
any part of the Property by delivering to Owners or by filing for record in
the appropriate office (with a copy to Owners) a good and sufficient
Surrender of this Agreement. Upon mailing the Surrender to Owners or to the
appropriate office, all rights of St. ▇▇▇▇ under this Agreement shall
terminate, except as provided in Sections 17 and 18 hereof, and all
liabilities and obligations of St. ▇▇▇▇ under this agreement shall likewise
terminate except as provided in Section 8(c) and 14(b) hereof and except
liability for payments under Section 6(b) hereof that became due more than 60
days prior to the date of such termination.
17. REMOVAL OF PROPERTY. For a period of six (6) months after the
termination of this Agreement St. ▇▇▇▇ shall have the right (but not the
obligation except to the extent set forth in Section 8(c) hereof) to remove
from the Property all buildings, structures, machinery, equipment, personal
property, fixtures, and improvements owned by St. ▇▇▇▇ or
8
erected or placed on or in the Property by St. ▇▇▇▇, except mine timbers in
place. St. ▇▇▇▇ ▇▇▇ keep one or more watchmen on the Property during the
six-month period.
18. ACCESS. For as long as necessary after termination of this Agreement or
following, the exercise of the Option, St. ▇▇▇▇ shall have the right of
access to and across the Property for reclamation purposes.
19. EASEMENTS. If requested by St. ▇▇▇▇ during the term of this Agreement or
following, the exercise of the Option, Owners shall execute one or more
instruments granting to St. ▇▇▇▇ without cost to St. ▇▇▇▇ easements upon,
over or through the Property or upon, over or through other property owned by
Owners, for the construction, maintenance, use, and removal of pipe lines,
telephone lines, electrical power or transmission lines, roads, railroads,
tramways, flumes, ditches, shafts, drifts, tunnels and other facilities
necessary or convenient for St. Mary's operations on the Property or on other
property.
20. AMENDMENTS, RELOCATIONS AND PATENTS. During the term of this Agreement,
St. ▇▇▇▇ shall have the right (but not the obligation), in the name of
Owners, to amend or relocate any or all of the unpatented mining claims
included in the Property, to locate placer claims on ground theretofore
covered by lode claims and vice versa, and to locate any millsites on ground
theretofore covered by mining claims and vice versa, and to locate any
fractions resulting from the location, amendment or relocations of mining
claims or millsites. At the request of St. ▇▇▇▇, Owners shall apply for a
patent for any or all of the unpatented mining claims and millsites. For
purposes of implementing the provisions of this Section, Owners do hereby
nominate, constitute and appoint St. ▇▇▇▇ as their true and lawful
attorney-in-fact to execute, deliver and record on behalf of the Owners and
in their name, place and ▇▇▇▇▇ all such documents as St. ▇▇▇▇ ▇▇▇ ▇▇▇▇
necessary or appropriate for such purposes. All expenses authorized by St.
▇▇▇▇ in connection with locating, amending, or relocating mining claims or
millsites or prosecuting patent proceedings shall be borne by St. ▇▇▇▇. The
rights
9
of St. ▇▇▇▇ under this Agreement shall extend to all such locations, amended
locations, relocations and patented mining claims and millsites.
21. COMPLIANCE WITH FEDERAL LAND POLICY AND MANAGEMENT ACT.
(a) Owners warrant that the location notices or location certificates
for the unpatented mining claims included in the Property have been properly
filed in the proper office of the Bureau of Land Management pursuant to 43
U.S.C. Section 1744 (b).
(b) Owners warrant that evidence of assessment work or notices of
intention to hold have been properly recorded in the proper county (or
recording district) office and filed in the proper office of the Bureau of
Land Management pursuant to 43 U.S.C. Section 1744(a), as required, for each
assessment year to and including the assessment year ending September 1, 1992.
22. Assessment Work.
(a) Owners warrant that the annual assessment work required to hold the
Property has been performed for each assessment year to and including the
assessment year sending September 1, 1992. For every assessment year
thereafter in which St. ▇▇▇▇ continues this Agreement beyond the 1st day of
August of any year, St. ▇▇▇▇ shall perform assessment work or pay any rental
fee required by the Department of the Interior. If any court or governmental
agency decides that the work performed by St. ▇▇▇▇ does not constitute the
kind of work required by federal or state law, St. ▇▇▇▇ shall nevertheless be
deemed to have complied with the terms of this Agreement if the work done by
St. ▇▇▇▇ is the kind generally accepted in the mining industry as assessment
work under existing law.
(b) St. ▇▇▇▇ shall be relieved of its obligation to perform assessment
work for any period in which assessment work is not required or is suspended,
and St. ▇▇▇▇ shall have the benefit of subsequent laws enacted which relate
to assessment work, including any laws extending the time within which to
perform assessment work. For each year in which St. ▇▇▇▇ performs assessment
work, it will record in the office where the location notice or location
certificate is recorded, and in any other proper office in the county (or
recording
10
district) in which the claims are located, and in the proper office of the
Bureau of Land Management, an affidavit of assessment work or other documents
complying with the requirements of state law and the Federal land Policy and
Management Act of 1976 and the regulations implementing and supplementing the
Act.
(c) Owners represent that the Property is one contiguous group of mining
claims, and agree that work on any one or more of the claims will be for the
benefit of all of the claims.
(d) Owners represent that no report of geological, geophysical, and
geochemical work (30 U.S.C. Sections 28-1 and 28-2) on the Property has been
filed for assessment years commencing September 1, 1990 and thereafter.
23. NOTICES. All notices and other communications to either party shall be in
writing and shall be sufficiently given if delivered in person or sent by
certified or registered mail, return receipt requested, addressed as
hereinafter set forth. Notices given by mail shall be deemed delivered as of
the date of mailing. Until a change of address is communicated as indicated
above, all notices to Owners shall be addressed:
c/o ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
and all notices to St. ▇▇▇▇ shall be addressed,
St. ▇▇▇▇ Minerals Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
24. ASSIGNMENT.
(a) The rights of either party hereunder may be assigned in whole or in
part without the consent of the other party hereto, subject to the provisions
hereinafter set forth.
(b) No change or division in the ownership of the Property or the
payments provided for herein, however accomplished, shall enlarge the
obligations or diminish the rights of St. ▇▇▇▇ hereunder. Owners covenant
that any change in their ownership shall be
11
accomplished in such a manner that St. ▇▇▇▇ shall be required to make payments
and to give notices to but one person, firm or corporation, and upon breach of
this covenant, St. ▇▇▇▇ ▇▇▇ retain all monies otherwise due to Owners until
the breach has been cured. No change or division in ownership shall be
binding on St. ▇▇▇▇ until 30 days after Owners have given St. ▇▇▇▇ a
certified copy of the recorded instrument evidencing the change or division.
(c) If St. ▇▇▇▇ assigns the whole of or an undivided interest in this
Agreement, liability for breach of any obligation hereunder shall rest
exclusively upon the holder of the Agreement or of an undivided interest
herein who commits the breach. If this Agreement is assigned as to a
segregated portion of the Property, default by the holder hereunder of that
portion shall not affect the rights of holders hereunder of any other portion.
(d) If Owners receive and propose to accept a bona fide written offer
from an unrelated third party to purchase, subject to the terms of this
Agreement, and purpose to accept all or any part of Owners' interest in the
Property or in this Agreement, Owners shall first offer the interest to St.
▇▇▇▇ stating the interest proposed to be sold or otherwise disposed of, the
offering price from such third party and other terms and conditions of sale.
St. ▇▇▇▇ ▇▇▇ accept the offer on the same terms and conditions as such third
party offer by notice to Owners given within 60 days following the date of
Owners' offer. If St. ▇▇▇▇ does not accept Owners' offer, Owners may sell or
otherwise dispose of the interest offered to St. ▇▇▇▇ at a price and upon
terms and conditions equal to or less favorable to the third party than those
offered to St. ▇▇▇▇ provided that the sale or other disposition is
effectuated within 120 days from the effective date of Owners' offer. Any
sale or other disposition shall be subject to the terms of this Agreement,
including this subsection (d), all of which shall survive the closing of any
such sale in full force and effect. If Owners do not sell or otherwise
dispose of the interest offered within 120 days, the provisions of this
subsection
(d) shall apply to any subsequent offer received by Owners.
25. NO TRANSFER OR ENCUMBRANCE. Without St. Mary's prior written consent,
neither Owners nor any Owner during term of this Agreement shall (a) sell,
transfer, assign or convey any interest in the Property without St. Mary's
prior written consent or otherwise in
12
accordance with the provisions of Section 25(d) hereof; (b) do or fail to do
any act or thing which would cause or permit any part of the Property to be
pledged, collateralized or stand as security for any matter whatsoever; or
(c) enter into any leases or other agreements concerning the Property or any
part thereof.
26. FORCE MAJEURE.
(a) If St. ▇▇▇▇ shall be prevented by Force Majeure from timely
performance of any of its obligations hereunder (except the payment of money
to Owners), the failure of performance shall be excused and the period for
performance and the term of this Agreement shall be extended for an
additional period equal to the duration of the Force Majeure. Upon the
occurrence and upon the termination of any Force Majeure, St. ▇▇▇▇ shall
promptly notify Owners. St. ▇▇▇▇ shall use reasonable diligence to remedy a
Force Majeure, but shall not be required against its better judgment to
settle any labor dispute or contest the validity of any law or regulation or
any action or inaction of civil or military authority.
(b) "Force Majeure" means any cause beyond St. Mary's reasonable
control, including law or regulation, action or inaction of civil or military
authority, inability to obtain any license, permit, or other authorization
that may be required to conduct operations on or in connection with the
Property, unusually severe weather, mining casualty, fire, explosion,
insurrection, riot, labor dispute, inability after diligent effort to obtain
workmen or material, delay in transportation and acts of God.
27. SHORT FORM. Contemporaneously herewith, St. ▇▇▇▇ and Owners have executed
and delivered a Short Form of Agreement. St. ▇▇▇▇ ▇▇▇ record the Short Form
or this Agreement, or both, as it may elect.
28. INUREMENT. All covenants, conditions, limitations and provisions herein
contained apply to and are binding upon the parties hereto, their heirs,
representatives, successors and assigns.
13
29. MODIFICATION. No modification, variation, or amendment of this Agreement
shall be effective unless the modification, variation or amendment is in
writing and is signed by Owners and St. ▇▇▇▇.
30. WAIVER. No waiver of any breach or default under this Agreement shall be
effective unless the waiver is in writing and signed by the party against
whom the waiver is claimed. No waiver of any breach or default shall be
deemed to be a waiver of any other or subsequent breach or default.
31. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement of the
parties and, except as herein expressly provided, supersedes all previous and
contemporaneous agreements, representations, warranties or understandings,
written or oral.
32. CONSTRUCTION. The paragraph headings are for convenience only, and shall
not be used in the construction of this Agreement.
33. GOVERNING LAW. The formation, interpretation, and performance of this
Agreement shall be governed by the law of the state of Colorado.
34. TIME OF ESSENCE. Except as set forth in Section 26 hereof, time is of the
essence in the performance of each and every term, condition, and covenant of
this Agreement.
35. TIME COMPUTATIONS. In computing the time permitted or required for
performance or payment as provided hereunder, the first day shall be excluded
and the last day shall be included. If the last day of any such period is a
Saturday, Sunday or legal holiday, the period shall extend to include the
next day which is not a Saturday, Sunday, or legal holiday. Any performance
or payment which must be taken or made under this Agreement must be taken or
made prior to 5:00 p.m. (Denver, Colorado time) of the last day of the
applicable period provided hereunder for such action, unless another time is
expressly specified. All
14
references to time shall be Denver, Colorado time. If a date for performance
or payment falls on a holiday or weekend, the time for performance or payment
shall be extended to the next business day, and if performance or payment has
occurred on such weekend or holiday, it shall be deemed to have occurred on
the next business day.
36. INVALIDITY. The invalidity of any provision, of this Agreement shall not
affect the enforceability of any other provision of this Agreement.
37. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of
which together shall constitute one and the same agreement. If any person
named as one of the Owners does not execute this Agreement, it nevertheless
shall be binding upon those persons executing it.
38. ADDITIONAL DOCUMENTS. Owners will provide St. ▇▇▇▇ with such additional
documents as may be necessary to carry out the purposes of this Agreement. If
conditions change by reason of conveyances, assignments or other matters
relating to the title to or description of the Property, Owners and St. ▇▇▇▇
shall execute amendments of this Agreement, the Short Form of Option
Agreement and any other documents which may be necessary to reflect such
changed conditions.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------- --------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------- --------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
15
ST. ▇▇▇▇ MINERALS INC.
By: /s/ ILLEGIBLE
------------------------------
Executive Vice President
STATE OF )
) ss.
COUNTY OF )
On this 27 day of September, 1993 before me the undersigned, a notary
---- ---------- --
public, personally appeared ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ known to me (or proved to me
on the oath of _________________________________(to be the person whose name
is subscribed to the within instrument, and acknowledged that she executed
the same.
My Commission Expires:
[▇▇▇▇▇ ▇. ▇▇▇▇▇ SEAL] /s/▇▇▇▇▇ ▇▇▇▇▇
------------------------------ ------------------------------
Notary Public
STATE OF )
) ss.
COUNTY OF )
On this 27 day of September, 1993 before me the undersigned, a notary
---- ---------- --
public, personally appeared ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ known to me (or proved to me
on the oath of _________________________________(to be the person whose name
is subscribed to the within instrument, and acknowledged that he executed
the same.
My Commission Expires:
[▇▇▇▇▇ ▇. ▇▇▇▇▇ SEAL] /s/▇▇▇▇▇ ▇▇▇▇▇
------------------------------ ------------------------------
Notary Public
16
STATE OF )
) ss.
COUNTY OF )
On this 27 day of Sept. , 1993 before me the undersigned, a notary
---- ---------- --
public, personally appeared ▇▇▇ ▇. ▇▇▇▇▇▇▇ known to me (or proved to me
on the oath of _________________________________(to be the person whose name
is subscribed to the within instrument, and acknowledged that he executed
the same.
My Commission Expires:
[▇▇▇▇▇ ▇. ▇▇▇▇▇ SEAL] /s/▇▇▇▇▇ ▇▇▇▇▇
------------------------------ ------------------------------
Notary Public
STATE OF )
) ss.
COUNTY OF )
On this 27 day of Sept. , 1993 before me the undersigned, a notary
---- ---------- --
public, personally appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ known to me (or proved to me
on the oath of _________________________________(to be the person whose name
is subscribed to the within instrument, and acknowledged that she executed
the same.
My Commission Expires:
[▇▇▇▇▇ ▇. ▇▇▇▇▇ SEAL] /s/▇▇▇▇▇ ▇▇▇▇▇
------------------------------ ------------------------------
Notary Public
17
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this 22nd day of
----
September, 1993, by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, the Exec. Vice Pres. of St. ▇▇▇▇
--------- -- --------------- ----------------
Minerals Inc., a Colorado corporation, on behalf of the corporation.
My Commission Expires:
Feb. 14, 1997 /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------ --------------------------------
Notary Public ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
EXHIBIT A
OWNERS
NAME AND ADDRESS % INTEREST IN PROPERTY
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and Undivided 50% Interest
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ husband and wife
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇ and Undivided 50% Interest
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, husband and wife
▇▇▇▇ ▇▇. ▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
EXHIBIT B
PATENTED CLAIMS
An undivided two-thirds interest in and to the following patented mining
claims located in Montrose County, Colorado:
Cliff Dweller Lode, Mineral Survey No. 17486
Rainbow Lode, Mineral Survey No. 17487
UNPATENTED CLAIMS
100% interest in and to the unpatented mining claims located in Montrose
County, Colorado that are listed on Exhibit B-1 attached hereto and
incorporated herein.
EXHIBIT B-1
Claim Name Twn/Ran/Sec Book/Page Blm Ser. No.
---------- ----------- --------- ------------
Azurite #1 47N/19W/22 782/439 234431
Azurite #2 47N/19W/15 782/440 234432
Azurite #3 47N/19W/15 782/441 234433
Azurite #4 47N/19W/15 782/442 234434
Azurite #5 47N/19W/15 782/443 234435
Azurite #6 47N/19W/15 782/444 234436
Azurite #7 47N/19W/15 782/445 234437
Azurite #8 47N/19W/15 782/446 234438
Azurite.#9 47N/19W/15 782/447 234439
Azurite #10 47N/19W/15 782/448 234440
Azurite #11 47N/19W/15 782/449 234441
Azurite #12 47N/19W/22 782/450 234442
Azurite #13 47N/19W/15 782/451 234443
Azurite #14 47N/19W/15 782/452 234444
Azurite #15 47N/19W/15 782/453 234445
Azurite #16 47N/19W/15 782/454 234446
Azurite #17 47N/19W/15 782/455 234447
Azurite #18 47N/19W/22 782/456 234448
Azurite #19 47N/19W/22 782/457 234449
Azurite #20 47N/19W/15 782/491 236292
Azurite #21 47N/19W/22 782/492 236293
Azurite #22 47N/19W/22 782/493 236294
Azurite #23 47N/19W/22 782/494 236295
Azurite #24 47N/19W/22 782/495 236296
Azurite #25 47N/19W/22 782/496 236297
Azurite #26 47N/19W/22 782/497 236298
Azurite #27 47N/19W/22 782/498 236299
Azurite #28 47N/19W/22 782/499 236300
Azurite #29 47N/19W/22 782/500 236301
Azurite #30 47N/19W/22 782/501 236302
Azurite #31 47N/19W/27 782/502 236303
Azurite #32 47N/19W/14 782/503 236304
Azurite #33 47N/19W/14 782/504 236305
Azurite #34 47N/19W/22 782/505 236306
Azurite #35 47N/19W/22 782/506 236307
Azurite #36 47N/19W/22 782/507 236308
Azurite #37 47N/19W/22 782/508 236309
Azurite #38 47N/19W/22 782/509 236310
Azurite #39 47N/19W/22 782/510 236311
Azurite #40 47N/19W/22,23 782/511 236312
Azurite #41 47N/19W/22,23 782/512 236313
Azurite #42 47N/19W/22,23,26,27 782/513 236314
Azurite #43 47N/19W/26,27 782/514 236315
Azurite #44 47N/19W/23 782/515 236316
Azurite #45 47N/19W/23 782/516 236317
Azurite #46 47N/19W/23 782/517 236318
Azurite #47 47N/19W/23 782/518 236319
Azurite #48 47N/19W/23 782/519 236320
Azurite #49 47N/19W/23 782/520 236321
Claim Name Twn/Ran/Sec Book/Page Blm Ser. No.
---------- ----------- --------- ------------
Azurite #50 47N/19W/14 782/521 236322
Azurite #51 47N/19W/14 782/522 236323
Azurite #52 47N/19W/14,23 782/523 236324
Azurite #53 47N/19W/23 782/524 236325
▇▇▇▇▇▇ #1 47N/19W/22 782/430 234423
▇▇▇▇▇▇ #2 47N/19W/22 782/431 234424
▇▇▇▇▇▇ #3 47N/19W/22,28 782/432 234425
▇▇▇▇▇▇ #4 47N/19W/6,22,28 782/433 234426
▇▇▇▇▇▇ #5 47N/19W/22 782/434 234427
▇▇▇▇▇▇ #6 47N/19W/22 782/435 234428
▇▇▇▇▇▇ #7 47N/19W/22,28 782/436 234429
▇▇▇▇▇▇ #8 47N/19W/22,28 782/437 234430
▇▇▇▇▇▇ #9 47N/19W/27 782/526 236326
▇▇▇▇▇▇ #10 47N/19W/27 782/527 236327
▇▇▇▇▇▇ #11 47N/19W/27 782/528 236328
▇▇▇▇▇▇ #12 47N/19W/27 782/529 236329
▇▇▇▇▇▇ #13 47N/19W/22 782/574 237204
▇▇▇▇▇▇ #14 47N/19W/22 782/575 237205
Recorded at _____________________ O'clock ____________M ________________
Reception No. __________________ _____________________________Recorder
------------------------------------------------------------------------------
------------------------------------------------------------------------------
SPECIAL WARRANTY DEED
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
husband and wife
whose address is ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
xxxxxxxx
xxxxxxxxxxxxx , for the consideration
of Two Hundred Seventy-Five Thousand & 00/100 dollars,
($275,000.00)
in hand paid, hereby sell(s) and convey(s) to St. ▇▇▇▇ Minerals Inc., a
Colorado corporation
whose legal address is ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
City and County of Denver , and State of Colorado
the following real property in the County of Montrose
and State of Colorado, to wit:
An undivided fifty percent (50%) interest
in the property described in Exhibit A
attached hereto and incorporated herein
also known as street and number NA
and water rights
with all its appurtenances and warrant(s) the title against all persons
claiming under (me)(us).
Signed and delivered this day of 1993.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------- ------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
_____________________________ ______________________________
_____________________________ ______________________________
STATE OF COLORADO )
) ss.
County of )
The foregoing instrument was acknowledged before me this 27 day of Sept
1993, by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, husband and wife
My commission expires 6/3 , 1995. Witness my hand and official seal
[▇▇▇▇▇ ▇. ▇▇▇▇▇ SEAL]
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
If in Denver, insert "City and" -------------------------------
Notary Public
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Recorded at _____________________ O'clock ____________M ________________
Reception No. __________________ _____________________________Recorder
------------------------------------------------------------------------------
------------------------------------------------------------------------------
SPECIAL WARRANTY DEED
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇▇▇▇
husband and wife
whose address is 5889 So. 20 ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
xxxxxxxx
xxxxxxxxxxxxx , for the consideration
of Two Hundred Seventy-Five Thousand & 00/100 dollars,
($275,000.00)
in hand paid, hereby sell(s) and convey(s) to St. ▇▇▇▇ Minerals Inc., a
Colorado corporation
whose legal address is ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
City and County of Denver , and State of Colorado
the following real property in the County of Montrose
and State of Colorado, to wit:
An undivided fifty percent (50%) interest in
the property described in Exhibit A attached
hereto and incorporated herein
also known as street and number NA
and water rights
with all its appurtenances and warrant(s) the title against all persons
claiming under (me)(us).
Signed and delivered this day of 1993.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------- ------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇▇
_____________________________ ______________________________
_____________________________ ______________________________
STATE OF COLORADO )
) ss.
County of )
The foregoing instrument was acknowledged before me this 27 day of Sept
1993, by ▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, husband and wife.
My commission expires 6/3 , 1995. Witness my hand and official seal
[▇▇▇▇▇ ▇. ▇▇▇▇▇ SEAL]
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
If in Denver, insert "City and" -------------------------------
Notary Public
------------------------------------------------------------------------------
------------------------------------------------------------------------------
AMENDMENT #2 TO OPTION AGREEMENT
This Amendment #2 to Option Agreement is made and entered into as of
March __, 1996 by and between ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
husband and wife, and ▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, husband and wife
("Owners"), whose address is P. 0. ▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ and SUMMO USA
CORPORATION, a Colorado corporation and successor in interest to St. ▇▇▇▇
Minerals Inc. ("St. ▇▇▇▇"), whose address is ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, Owners and St. ▇▇▇▇ entered into an Option Agreement dated
September 27, 1993 pertaining to certain lands in Township 47 North, Range 19
West, in Montrose County, Colorado.
WHEREAS, Owners and Summo amended the Option Agreement effective
December 28, 1994 in order to revise the property description.
WHEREAS, Owners and Summo now desire to amend the Option Agreement and
to ratify and confirm the Option Agreement as so modified.
NOW, THEREFORE, in consideration of the following covenants, the Owners
and Summo agree as follows:
1. Subparagraph (b) of Article 6 is deleted in its entirety and replaced
with the following:
(b) Summo shall pay to Owners further option payments on the dates and
in the amounts as follows:
March 1, 1994 $ 20,000 (paid 2-7-94)
September 1, 1994 20,000 (paid 8-19-94)
September 1, 1995 50,000 (paid 8-15-95)
September 1, 1996 50,000
September 1, 1997 50,000
September 1, 1998 50,000
September 1, 1999 50,000
September 1, 2000 50,000
September 1, 2001 $200,000
--------
$540,000
THIS Amendment shall be effective as of March 29, 1996.
EXCEPT as herein amended, the Option Agreement is hereby ratified and
confirmed by Owners and Summo as executed and as being in full force and
effect.
THIS Amendment will inure to the benefit of and will be binding upon the
respective successors, representatives and assigns of the Owners and Summo.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------- ------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇ ▇.▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------- ------------------------------
▇▇▇ ▇.▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
SUMMO USA CORPORATION
By: /s/ [ILLEGIBLE]
---------------------------
STATE OF UTAH )
) ss.
COUNTY OF SALT LAKE )
On this 24 day of June, 1996 before me the undersigned, a notary public,
-- ----
personally appeared ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, owner of said claims.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Notary Public
My Commission Expires:
July 7, 1998
-----------------------------
[SEAL]
[NOTARY PUBLIC ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SEAL]
-2-
STATE OF UTAH )
) ss.
COUNTY OF SALT LAKE )
On this __ day of _____, 1996 before me the undersigned, a notary public,
personally appeared ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, owner of said claims.
______________________________
Notary Public
My Commission Expires:
_____________________________
[SEAL]
STATE OF UTAH )
) ss.
COUNTY OF SALT LAKE )
On this 21 day of June, 1996 before me the undersigned, a notary public,
-- ----
personally appeared ▇▇▇ ▇. ▇▇▇▇▇▇▇, owner of said claims.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------
Notary Public
My Commission Expires:
2/21/98
-----------------------------
[SEAL]
[NOTARY PUBLIC ▇▇▇▇▇▇ ▇. ▇▇▇▇ SEAL]
-3-
STATE OF UTAH )
) ss.
COUNTY OF SALT LAKE )
On this 21 day of June, 1996 before me the undersigned, a notary public,
-- ----
personally appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, owner of said claims.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------
Notary Public
My Commission Expires:
2/21/98
-----------------------------
[SEAL]
[NOTARY PUBLIC ▇▇▇▇▇▇ ▇. ▇▇▇▇ SEAL]
-4-
STATE OF COLORADO )
CITY AND ) ss.
COUNTY OF DENVER )
On this 27 day of March 1996 before me the undersigned, a notary public,
-- -----
personally appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, the President of Summo USA Corporation,
on behalf of the corporation.
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Notary Public
My Commission Expires:
3-18-99
-----------------------------
[SEAL]
-5-