EXHIBIT 10.01
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION
Among
PLATINUM FOX, LLC
And
EMERALD CHIMERA, LLC
And
IDAHO CONSOLIDATED METALS CORPORATION
Dated and Effective this 16th Day of July, 1999
THIS TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION (the "Agreement") by and
between, PLATINUM FOX, LLC, a State of Washington, United States of America,
limited liability company ("Fox"), AND, EMERALD CHIMERA, LLC, a State of
Washington, United States of America limited liability company ("EC"), AND,
IDAHO CONSOLIDATED METALS CORPORATION, a corporation duly incorporated and
validly subsisting pursuant to the laws of the Province of British Columbia,
Canada ("ICMC") is made effective this 16"' day of July, 1999.
RECITALS
WHEREAS Fox currently owns an undivided one hundred percent (100%)
right, title and interest in and to certain unpatented mining claims ("Clams")
known as the Chrome Mountain Property located in Sweet Grass County, Montana, a
complete list and description of which is attached as Schedule "A" (the
"Property");
AND WHEREAS pursuant to a lease agreement dated July 15 1999, between
Fox and EC (the "EC Lease"), a copy of the EC Lease is attached as Schedule "B"
hereto, Fox has leased the Claims to EC for the purpose of EC facilitating the
exploration of the Claims. EC does not have an option to purchase the Claims
under the EC Lease;
AND WHEREAS EC would like to sublease the Property to ICMC to further
the exploration and development of the Property and ICMC is a qualified firm to
further explore and develop the Property;
AND WHEREAS ICMC would like to sublease the Property from EC and
acquire an option to purchase the Property from Fox;
IN CONSIDERATION of the covenants and agreements hereinafter set forth and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by each of ▇▇▇, ▇▇ and ICMC, the above parties agree to the
following:
SECTION 1 - SUB-LEASE
l. l) EC hereby grants, leases and demises its interest in the Property
unto ICMC, its successors and assigns, for the term and for the
purposes hereinafter provided, including, but without being limited to
all Ore (as defined herein), minerals, and mineral rights, and all
water and water rights, in, upon and under the Property, and all right,
title and interest which may be acquired by or for Fox or EC, in or
pertaining to the Property or any part thereof, during the term of this
Agreement except those specific reservations contained herein in
Section 12 hereof.
1.2) Pursuant to Section 15 of the EC Lease, Fox hereby consents to the
grant of the sublease to ICMC.
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -2
SECTION 2 - TITLE TO CLAIMS
2.1) Fox represents, warrants and covenants to ICMC that it is the sole
recorded and beneficial owner and controller of the Property as set
forth in the attached Schedule "A"; the Property is free and clear of
all liens, charges and encumbrances, other than the EC Lease and it has
no knowledge of any adverse claim or encumbrance upon the Property
other than with respect to the EC Lease; and the Claims comprising the
Property are valid and subsisting mineral claims and are in good
standing under all applicable laws and regulation and all taxes,
assessments and filing required in this regard have been timely paid or
filed and Fox has provided ICMC with all of its title information and
related documents. Fox does not make title representation beyond those
specifically disclosed hereby.
2.2) Fox further represents, warrants and covenants that all of the
unpatented Claims have been located and acquired in compliance with the
laws of the State of Montana, and with all laws of the United States of
America governing location of the Claims.
2.3) Fox and EC shall cooperate and do everything in its power to put title
in a marketable state. with expense to be borne by ICMC.
SECTION 3 -PURPOSES AND RIGHTS
3.1) EC hereby grants, demises, leases, lets, transfers and otherwise
converts to ICMC, its successors and assigns, the free, exclusive,
unrestricted and uninterrupted right of access, ingress and egress to,
and to enter into and upon the Property, and each and every part
thereof (including all rights, if any, of EC with respect to placer
mining, timber rights, rights of access across adjoining lands under
Federal or State law and water rights), so long as this Agreement
remains in effect, and in particular to explore for, develop, mine (by
underground mining, surface mining, strip mining, placer mining, or any
other surfaces or substitute method), remove, ▇▇▇▇▇ in place, treat,
produce, market, ship and sell, for its own account, all merchantable
or non-merchantable Ore, metals and minerals which are or may be found
therein or thereon.
3.2) ICMC and its successors or assigns are also hereby granted the right to
make any use or uses of the Property and each and every part thereof
consistent with the foregoing purposes, including, but not limited to,
the full right, authority and privilege of placing and using therein
excavations, openings, shafts, ditches and drains, and of constructing,
erecting, maintaining, using, and at its election, removing, any and
all buildings, structures, plants, machinery, equipment, railroads,
roadways, pipelines, electrical power lines and facilities, stockpiles,
waste piles, tailings ponds and facilities, settling ponds, and all
other improvements, property and fixtures as may be necessary,
convenient, or suitable for mining, removing, beneficiating,
concentrating, smelting, extracting, leaching, refining and shipping of
Ore, minerals or products thereof, or for any activities incidental
thereto, or to any of the rights or privileges of ICMC hereunder.
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -3
3.3) ICMC and its successors or assigns are further granted the right,
insofar as Fox lawfully may grant the right, to divert streams, to
remove lateral and subjacent supports, to cave, subside or destroy the
surface or any part thereof, to deposit earth, rocks, waste, lean Ore
and materials on any parts of the Property where it will not interfere
with mining, to ▇▇▇▇▇ the same, and to commit waste the extent
necessary, usual or customary in carrying out any or all of the above
rights, privileges and purposes; IT IS PROVIDED, however, that if any
of the mining operations hereunder result in damage to any of Fox's or
EC's buildings or personal property existing on the Property on the
date this Agreement is executed, Fox and EC shall be reimbursed for the
reasonable value of the same.
3.4) ICMC and its successors or assigns shall explore, conduct geological
and geophysical investigations, drilling, or otherwise seek, in the
manner and to the extent that they, in their sole discretion, deem
advisable, to locate and develop Ore, minerals, and metals in
commercial quantities in and upon the Property.
3.5) ICMC from time to time at its discretion but in the name of Fox, and
subject to written approval from Fox and EC may:
(a) amend, restake, and refile any of the Property or any
documents associated therewith;
(b) stake unpatented federal mill sites;
(c) apply for patent to one, some, or all unpatented federal
claims;
(d) locate State mining claims, leasehold locations, or
prospecting sites on top of unpatented federal claims or unpatented
federal mill sites;
(e) if applicable, request that the State of Montana seek to
obtain tentative approval or patent to lands included within some or
all of the Property that have been selected by the State of Montana but
have not yet been tentatively approved or patented to the State of
Montana;
(f) if applicable, locate State mining claims or leasehold
locations within State prospecting sites or lands;
(g) exercise any other rights or options of Fox or EC with
respect to the Property or any portion thereof under any law or
regulation heretofore or hereafter enacted or promulgated, including
but not limited to any law or regulation (i) requiring conversion of
existing mining locations or other mining interests to one or more
types of mining locations or other mining interests, (ii) requiring
owners or holders of existing mining locations or other mining
interests to comply with some or all of the requirements of new or
amended mining laws or regulations, or (iii) requiring owners or
holders of existing mining locations or other mining interests to
commence patent or lease proceedings within a specified period of time.
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -4
3.6) When required in connection with any such amendment, relocation,
restaking, re-recording, refiling, replacement, top-filing, patenting,
leasing, or other action, Fox agrees to execute such certificates of
abandonment, certificates of location, or other documents, to
participate in any action or proceeding relating to such actions, to
allow any such action or proceeding to be taken or prosecuted in Fox's
name, or to take such other actions as ICMC reasonably requests in
connection therewith. All rights acquired by ICMC on behalf of Fox
pursuant hereto shall become part of the Property subject to this
Agreement. All expenses incurred by Fox at the request of ICMC in
connection with undertaking or prosecuting any such actions shall be
borne by ICMC.
3.7) If the United States, the State of Montana, or any third party attacks
the validity of any of the Claims or Additional Claims comprising the
Property, ICMC shall have no obligation to defend the validity thereof.
However, ICMC, at its sole discretion, may participate in any defense
of the Claims or Additional Claims.
SECTION 4- TERM AND CONSIDERATION
4.1) The term of this Agreement shall be for an aggregate period of five (5)
years, consisting of five successive individual one year terms
renewable as set forth below. The renewal of each one-year period shall
require an independent geological evaluation with a recommendation to
continue. All lease renewals will be subject to an independent
geological evaluation acceptable to the Vancouver Stock Exchange (the
"VSE") as well as the acceptance of the VSE.
4.2) The following consideration shall be payable by ICMC in connection with
the sublease granted by EC to ICMC hereunder:
(a) Upon the execution of this Agreement, ICMC will issue to EC
One Hundred Fifty Thousand (150,000) shares of its common stock and pay
to EC Nineteen Thousand Five Hundred United States Dollars ($19,500USD)
as consideration for the first year lease (the "Lease") granted
hereunder;
(b) If ICMC elects to renew the Lease for an additional one year
term beyond the first year, ICMC shall issue to EC Two Hundred Thousand
(200,000) shares of its common stock on or before the date which is one
(1) year from the date of this Agreement;
(c) If ICMC elects to renew the Lease for a third year it will
issue to EC an additional Two Hundred Thousand (200,000) shares of its
common stock on or before the date which is two (2) years from the date
of this Agreement;
(d) If ICMC elects to renew the Lease for a fourth year it shall
issue to EC Three Hundred Seventy Five Thousand (375,000) shares of its
common stock on or before the date which is three (3) years from the
date of this Agreement, provided that the independent geological
evaluation conducted with respect to the Property at the end of the
third year, but
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -5
before the start of the fourth year, must include the commission of a
feasibility study based on a drill indicated resource. In the event
that the exploration and development of the Property has not reached
that stage of development at that time, but the independent geological
evaluation recommends continued exploration, the Lease shall remain in
force and effect and no stock or consideration shall be payable until a
feasibility study has been initiated; and
(e) If ICMC elects to renew its lease for a fifth year it shall
pay EC Five Hundred Seventy Five Thousand (575,000) shares of its
common stock on or before the date which is four (4) years from the
date of this Agreement.
4.3) ICMC shall have the option to elect to extend the term of this
Agreement for an additional five (5) year period consisting of five (5)
successive individual one (1) year terms exercisable by payment of
Fifty Thousand United States Dollars ($50,000USD) to EC and the
incurrance of Two Hundred Fifty Thousand United States Dollars
($250,000USD) in Expenditures each year. The cash portion of the
consideration paid directly to EC may be converted to common shares of
ICMC ("Conversion Option"). The price of the common shares that EC can
purchase under this Conversion Option shall be Eighty Five Percent
(85%) of the average closing price of the common shares of ICMC on the
VSE for the ten (10) trading days prior to the date of delivery of the
cash consideration this Section 4.3 to EC. Renewal of each additional
one (1) year term shall be renewable by providing notice to EC and Fox
Thirty (30) Days prior to the then existing lease expiration.
SECTION 5 - EXPENDITURES
5.1) ICMC shall incur expenditures with respect to the Property in the
aggregate amount of Two Hundred Ten Thousand United States Dollars
($210,000USD) on or before June 10, 2002 in accordance with the
following schedule:
(a) Fifty Thousand United State Dollars ($50,000USD) on or
before June 10, 2000;
(b) Seventy Thousand United States Dollars ($70,000USD) on or
before June 10, 2001; and
(b) Ninety Thousand United States Dollars ($90,000USD) on or
before June 10, 2002
5.2) In the event that ICMC expends in excess of the required Expenditures
during any period, such excess Expenditures shall be credited against
the required Expenditures in any subsequent period, during the first
five (5) years of this Agreement.
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -6
SECTION 6 - OPTION TO PURCHASE
6.1) Fox hereby grants to ICMC the option ("Option") to buy Fox's right,
interest and title in Property for a purchase price of Five Million
United States Dollars ($5,000,OOOUSD). To exercise the Option, ICMC
must deliver to Fox a notice of exercise of Option in writing. On
delivery by ICMC to Fox of the notice of exercise of Option, Fox will
be contractually obliged to close the transactions contemplated by this
Section 6 (subject to Fox's rights under Section 6.7).
6.2) In consideration for the option granted by Fox hereunder, ICMC shall
pay to Fox Five Hundred United States Dollars ($500USD) upon execution
of this Agreement.
6.3) If ICMC exercises the Option, ICMC shall pay a one quarter of one
percent (0.25%) net smelter royalty returns (the "Purchase NSR") with
respect to the Property. The Purchase NSR will become payable upon
commencement of Commercial Production. The specific terms and
conditions of the Purchase NSR are set forth in Schedule "C" hereto.
6.4) If ICMC, its successors, or assigns should locate, discover or find Ore
or Product on other claims ("Apex Claims") that Fox would have an
interest in due to apex or lateral rights, Fox shall receive as
additional consideration for the purchase of its right title and
interest in the property a three percent (3.0%) net smelter royalty
return (the "Apex NSR") with respect to any Ore or Product from Apex
Claims. The Apex claims are further described and shown on the map
attached hereto as Schedule "F." The Apex NSR shall be applicable to
any Ore or Product discovered or located by ICMC, its successors or its
assigns, either before or after the Property is purchased by ICMC
pursuant to the exercise of the Option or the Second Option in Section
23.2 of this Agreement. The Apex NSR shall be subject to further terms
and conditions as set forth in Schedule C attached hereto.
6.5) If ICMC should exercise its Option to buy Fox's right, interest and
title in the Property as described in Section 6.1 above before the end
of five year Lease term pursuant to this Agreement, including all
unexercised Lease renewal option periods, EC agrees to execute a Lease
Termination Agreement for the EC Lease at the time of exercise and EC
agrees to waive its rights under Section 15.1 of the EC Lease. In
consideration for executing a Lease Termination Agreement, ICMC shall
issue to EC a non-transferable share purchase warrant for that number
of common shares of ICMC equal to One Hundred Ten Percent (110%) of the
number of shares subject to be, but not yet issued, with respect to all
unexercised Lease renewal option periods as contemplated above as at
the date of closing of the buyout. The share purchase price for the
purchase of these shares shall be equal to the average closing price of
the common shares of ICMC on the VSE for the ten (10) trading days
prior to the date of closing of the buyout. The term of the warrant
shall be no shorter than five (5) years.
6.6) If ICMC should place, or attempt to place, the Property or any other
claim that would be subject to a royalty under this Agreement, into
Commercial Production ICMC shall exercise its purchase option under
Section 6.1 or 23.2 of this Agreement.
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -7
6.7) If ICMC should exercise the Option, Fox shall have the right to elect
to forego being bought-out by ICMC and may participate in the
development of the Property further. Fox's participation shall not
exceed forty percent (40%). Fox shall have sixty (60) days from the
receipt of notification of ICMC's election to exercise the Option to
review data and determine if it would like to elect to forego being
bought out and participate in the development of the Property further.
Fox's election to forego being bought out by ICMC shall be contingent
upon the parties entering into a Joint Development Agreement for the
further development of the Property.
SECTION 7 - DEFINITIONS
7.1) The following defined terms, wherever used in this Agreement, shall
have the meaning set forth below:
(a) "Commercial Production" means the commercial operation of
the Property, or a portion thereof, but does not include milling or
other treatment for the purposes of testing or milling or leaching by a
pilot plant during the initial tune-up period of a plant. Commercial
Production will be deemed to have commenced:
(i) if a plant is located on the Property, or a
portion thereof, on the first day of the month following the
first period of thirty (30) consecutive days during which
mineral products or other concentrates from the Property, or a
portion thereof, have been processed through such plant for
not less than fifteen (15) days at an average rate of not less
than 66 2/3% of the initial rated capacity (calculated in tons
per day) of such plant; or
(ii) if no plant is located on the Property or a
portion thereof, on the first day of the month following the
first period of thirty (30) consecutive days during which ore
or other concentrates from the Property, or a portion thereof,
has been shipped from the Property, or a portion thereof, on a
reasonably regular basis for the purpose of acquiring revenue;
(b) "Expenditures" means all expenses paid for or incurred by
ICMC with respect to the exploration and development of the Property
including, without limiting the generality of the foregoing, expenses
paid for or incurred in connection with any program of surface or
underground prospecting, exploring, geological, geophysical and
geochemical surveying, diamond drilling and drifting, raising and other
underground work, assaying and metallurgical testing, conduction
feasibility studies, environmental studies, submissions to government
agencies with respect to production permits, plan and mine design
together with development and constructions thereof for the benefit of
furthering mining activities at and upon the Property and other
expenses ordinarily incurred in prospecting, exploring or developing
mining lands, salaries and travel expenses of ICMC's officers and
employees;
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -8
(c) "Ore" means mineral material from the Property, the
nature and composition of which, in the sole judgment of ICMC,
justifies either (1) mining or removing such material from place during
the term of this Agreement, and shipping and selling same, or
delivering same to a processing plant for physical or chemical
treatment, or (2) leaching in place during the term of this Agreement;
(d) "Waste" means earth, rock or material mined or removed
from place in the Property during the term of this Agreement, but which
is not Ore as defined above;
(e) "Product" means the following:
(i) all Ore mined or removed from place in the Property
during term hereof and shipped and sold by ICMC prior to
treatment; and
(ii) all concentrates, precipitates, and mill products
produced by or for ICMC from Ore mined or removed from place
in the Property, or from Ore leached in place in the Property,
during the term of this Agreement;
(f) "Property" means all Claims or Additional Claims made
subject to this Agreement pursuant to the terms hereof.
SECTION 8 - AREA OF INTEREST
8.1) During the term of this Agreement, either ICMC, Fox, or EC shall have
the right to stake unpatented mining claims or prospecting sites or any
other mineral interest ("Additional Claims") within one mile from the
exterior boundaries of the Property (the "Area of Interest") and,
subject to the provisions of this Section 8, any Additional Claims
acquired during the term of this Agreement by either ICMC, Fox or EC
within this Area of Interest shall be deemed to be included in the
Property and be subject to the terms of this Agreement. Any unpatented
mining claims or prospecting sites or other mineral interest ("Third
Party Claims") acquired by ICMC within the Area of Interest owned by
third parties, shall not be subject to the terms of this Agreement,
provided that such third parties were not introduced into the Area of
Interest by ICMC. If Additional Claims are located by Fox or EC within
the Area of Interest, Fox or EC shall provide written notice and
documentation regarding the Additional Claims to ICMC and ICMC shall
thereafter have sixty (60) days to provide written notice to Fox or EC
that it will accept or reject such Additional Claims for inclusion in
this Agreement. If ICMC does not accept the Additional Claims, those
Additional Claims shall not be included in this Agreement and Fox or EC
shall be free to hold and explore or develop those Additional Claims
independent of this Agreement.
8.2) Provided, however, that with respect to any Additional Claims (within
the Area of Interest) that become subject to the terms of this
Agreement, ICMC shall be required to convey its interest in the
Additional Claims to Fox as contemplated herein upon termination of
this Agreement. Should either party conduct activities contemplated by
the provisions of this Section 8 within the Area of Interest during the
term of this Agreement, they shall notify the other party in writing
within 30 days of the completion of each activity. For the purposes of
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -9
this Agreement, Additional Claims shall not act to increase the Area of
Interests Third Party Claims acquired by ICMC shall not require the
payment of any Purchase NSR payments to Fox or EC.
8.3) Any Additional Claims shall become subject to all terms and conditions
of this Agreement upon the giving by ICMC of the above-described notice
of acceptances ICMC shall have no obligations to ▇▇▇, ▇▇ or others
concerning any other Additional Claims within the Area of Interest,
except as set forth hereunder.
8.4) ICMC acknowledges that it has overstaked the Property. ICMC further
acknowledges that Fox has superior rights and title to the Property and
ICMC hereby agrees to convey and quit claim that portion of its SR
Claims that overlap the Property to at the request of Fox.
8.5) ICMC shall provide Fox and EC Thirty (30) Days advance written notice
of any plans to abandon any of the Additional Claims.
8.6) There is a certain interest in certain claims known as the Janets, that
are within the Area of Interest that is undecided at this times This
undecided interest and the Janets are specifically not included in this
Agreement or subject to the Area of Interest provisions of this
Agreements
8.7) If ICMC should sell, transfer or assign any claim or fraction thereof,
of the ▇-▇ Reef (as the ▇-▇ Reef is known, as asserted by Stillwater
Mining Company as of July 16, 1999), that is within the Area of
Interest of this Agreement, then ICMC shall pay to Fox a one percent
(1s0 %) Gross Royalty on the proceeds received by ICMC from such sale,
transfer or assignment.
SECTION 9 - REPRESENTATIONS, WARRANTIES, COVENANTS
AND ACKNOWLEDGEMENTS OF FOX AND EC
9.1) Fox and EC represents, warrants and covenants to and with ICMC while
this Agreement between the parties hereto is in effect that:
(a) it will not sell, transfer, encumber, suffer any lien
upon, dispose of or deal in the Property or title thereto;
(b) it will assist with ICMC in obtaining such permits and
approvals as ICMC may require or consider advisable to comply with all
regulatory or governmental requirements which affect the Property. In
the event ICMC desires to apply for patent to any of the unpatented
mining Claims or Additional Claims comprising the Property, Fox and EC
agree to assist and cooperate with ICMC in such application, which
applications shall be made in the name of Fox;
(c) it will notify ICMC of any knowledge, communication or
notice relating to the Property;
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -10
(d) it will keep all information and data concerning the
Property secret and confidential and will not release any such
information without prior written consent of ICMC;
(e) ICMC, so long as it performs all obligations and covenants
on its part to be performed, shall peaceably possess and enjoy the
Property without interruption or disturbance from Fox or any other
person, firm or corporation;
(f) it owns the outright right to mine the Property by actual
ownership free and clear of all liens and encumbrances except as
disclosed to ICMC;
(g) it has no knowledge of any adverse claim or encumbrance
upon the Property except as disclosed to ICMC;
(h) the Property is in good standing under all applicable laws
and regulations and all taxes, assessments and filings have been timely
paid or filed;
(i) it will indemnify and hold harmless ICMC from all
liabilities, loss of any and all kinds and responsibility for
environmental damages, charges, fines and penalties of every kind
resulting from activities of ▇▇▇, ▇▇ or any other past owner, operator,
lessor or lessee on the Property;
(j) it will not permit any part of the Property to be
converted or title lost as a result of Fox not remaining in good
corporate standing;
(k) it has the full right and authority to enter into this
Agreement;
(1) it has received from ICMC all documentation required
pursuant to United States securities laws, including a copy of any
documents filed under each of the Form 10Q, 10K, 8Q and 8K, as
applicable with the United States Securities and Exchange Commission
(m) it is not entering into this transaction as a result of
any material changes with respect to the affairs of ICMC known to it
(except for this transaction) which, to its knowledge, information and
belief, were not publicly disclosed as of the date hereof;
(n) in entering into this Agreement and leasing the Property
to ICMC in exchange for common shares of ICMC, it is acting as
principal and will be acquiring the shares as principal for its known
account and not on behalf of others and for the purpose of investment
and not with an intention to effecting a distribution, and no other
person, firm or other organization will have any beneficial interest
whatsoever in the shares;
(o) it is a resident of the State of Washington, USA, for the
purposes of all securities laws applicable to the transactions herein
contemplated;
(p) it is familiar with ICMC's business affairs as ICMC
disclosed in publicly available information, and acknowledges that ICMC
has made available to it all publicly
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -11
available documents and records of ICMC in its possession, and has
offered to EC an opportunity to discuss this investment with ICMC and
representatives of ICMC and to obtain any additional information
necessary to verify the accuracy of any information furnished, provided
that EC acknowledges that no information furnished by ICMC constitutes
investment, accounting, legal or tax advice, and that Fox is relying
solely upon itself and its professional advisors for such advice;
(q) it has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks
with respect to the shares, and is able to bear the economic risks with
respect to the shares, including the possibility that the shares may
become worthless;
9.2) For the purposes of this Section 9 of this Agreement, the knowledge,
information and belief of Fox means the knowledge, information and
belief of any director, senior officer, or shareholder of Fox after
reasonable inquiry made by or on behalf of such director, senior
officer or shareholders
9.3) Fox and EC acknowledges that the representations, warranties and
covenants contained in this Agreement are conditions upon which ICMC is
entering this Agreement and are continuing conditions of ICMC's
obligations hereunder and shall be expressed in any conveyance to ICMC
made pursuant to exercise of the Option to purchase granted by Section
6 of this Agreements Fox and EC shall indemnify and hold harmless ICMC
from and against any and all losses, damages, costs, actions or suits
arising out of or in connection with a breach of any representation,
warrants or covenants contained herein.
9.4) EC acknowledges that:
(a) any shares issued to EC hereunder will not be registered
under the United States Act of 1933 (the "1933 Act") as the transaction
in which they are being acquired is exempt under Section 4(2) of the
1933 Act as not involving any public offering, that the reliance of
ICMC and others on this exemption is predicated in part upon the
representations and warranties of EC that EC will be acquiring the
shares for its own account, with no present intention of selling or
otherwise distributing the same to the public, which representations
and warranties are hereby confirmed, and that the shares are therefore
subject to restrictions on transfer in the United States or to any US
person (as defined in Regulation S made pursuant to the 1933 Act),
unless subsequently registered under the 1933 Act for an exemption from
registration is available;
(b) EC, if it decides to offer, sell or otherwise transfer
any of the shares, it will not offer, sell or otherwise transfer any of
such shares, directly or indirectly unless:
(i) the sale is to ICMC, or;
(ii)the sale is made outside the United States in a
transaction meeting the requirements of Regulation S under the
1933 Act, or;
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -12
(iii) the sale is made pursuant to the exemption from
the registration requirements under the 1933 Act provided by
Rule 144 there under and in accordance with any applicable
state securities or "Blue Sky" laws; or
(iv) the shares are sold in a transaction that does
not require registration under the 1933 Act or any applicable
US state laws and regulations governing the offer and sale of
securities and Fox or EC has, prior to such sale, furnished to
ICMC an opinion to that effect of counsel of recognized
standing experienced in matters involving the Act and
reasonably satisfactory to ICMC, or;
(v) EC distributes said shares to its members or
shareholders, and members and shareholders thereof, ("Share
Distribution") who have executed a shareholders agreement, an
example of which is attached as Schedule "D" hereto, with ICMC
agreeing to the same restrictions of transfer of said shares
contained in this Section 9 of this Agreement. Any Share
Distributions under this Section 9.4(b)(v) shall be made in a
manner that is in compliance with all applicable securities
laws and regulations.
9.5) upon the issuance thereof, and until such time as the same is no longer
required under applicable requirements of the 1933 Act or applicable US
state laws and regulations, the certificates representing any of the
shares shall bear the following legend:
"The Securities represented hereby have not been
registered under the United States Securities Act of
1933, as amended (the "U.S. Securities Act") and may be
offered, sold or otherwise transferred only (a) to the
Company, or (b) outside the United States in accordance
with Regulation S under the U.S. Securities Act, or (c)
inside the United States in accordance with (1) Rule
144A under the U.S. Securities Act or (2) Rule 144
under the U.S. Securities Act, if applicable, or (3)
with the prior written consent of the Company, or (4)
under another exemption from registration under the
U.S. Securities Act. Delivery of this certificate may
not constitute "good delivery" in settlement of
transactions on stock exchanges in Canada."
9.6) There are restrictions on EC's ability to resell the shares and it is
the responsibility of EC to find out what those restrictions are and to
comply with them before selling the shares.
9.7) ICMC has advised Fox and EC that ICMC is relying on an exemption from
the requirements to provide Fox or EC with a prospectus and to sell
securities through a persons registered to sell securities under the
British Columbia Securities Act (the "Securities Act") and, as a
consequence of acquiring securities pursuant to this exemption, certain
protections, rights and remedies provided by the Securities Act,
including statutory rights of rescission will not be available to Fox
or EC.
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -13
9.8) All certificates representing shares issued in exchange therefore or in
substitution thereof will bear the same legend.
SECTION 10 - REPRESENTATIONS, WARRANTIES, ACKNOWLEDGEMENTS,
AND COVENANTS OF ICMC
10.1) ICMC represents, warrants and covenants to and with Fox and EC while
this Agreement between the parties hereto is in effect that:
(a) it will keep the Property in good standing by payment of all
taxes and assessments including payment of all state and federal
filings and other transfer fees necessary to maintain ownership of the
Property;
(b) it will provide to Fox and EC promptly copies of surveys,
assays, drill logs, and other similar documents obtained by or for ICMC
relating to the Property;
(c) it will provide to Fox and EC annually proposed programs of
exploration work and budgets therefore prior to their implementation;
(d) it will pay and discharge all accounts, expenses, and
charges incurred by it in respect to work on the Property as they
become due and to keep the title free of any lien;
(e) it will indemnify and hold harmless Fox and EC from all
liabilities, loss of any and all kinds and responsibility for
environmental damages, charges, fines and penalties of every kind
resulting from activities of ICMC on the Property;
(f) it will prepare, in a timely manner, for submission (with
contemporaneous copies to Fox and EC) all reports, affidavits,
estimates and other filings or documentation of any and all types
required to be submitted to local, State and federal government
agencies having jurisdiction over the Property during the term of this
agreement; and
(g) ICMC is a valid and subsisting corporation duly incorporated
and in good standing under the laws of the province of British Columbia
with respect to the filing of reports with the British Columbia
Registrar of Companies;
(h) ICMC is a "reporting issuer" in British Columbia as that
term is defined in the Securities Act;
(i) the common shares of ICMC are listed on the VSE;
(j) ICMC has good and sufficient right and authority to enter
into this Agreement and to complete its transactions contemplated under
this Agreement on the terms and conditions set forth herein;
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -14
(k) ICMC holds all material licenses and permits required for
carrying on its business in the manner in which such business has been
carried on and has the corporate power and capacity to own the assets
owned by it and, to the best of ICMC's knowledge, to carry on the
business carried on by it and is duly qualified to carry on business in
all jurisdictions in which it carries on business;
(1) to the best of ICMC's knowledge, the execution and
delivery of this Agreement, the performance of its obligations under
this Agreement and the completion of its transactions contemplated
under this Agreement will not conflict with, or result in the breach of
or the acceleration of any indebtedness under, or constitute default
under, the constating documents of ICMC or any indenture, mortgage,
agreement, lease, license or other instrument of any kind whatsoever to
which ICMC is a party or by which it is bound, or any judgment or order
of any kind whatsoever of any court or administrative body of any kind
whatsoever by which it is bound.
(m) ICMC has complied and will comply fully with the
requirements of all applicable corporate and securities laws and
administrative policies and directions, including, without limitation,
the Securities Act in relation to the issue and trading of its
securities and in all matters relating to the transactions contemplated
by this Agreement;
(n) to the best of ICMC's knowledge, there are no undisclosed,
beyond those contained in Schedule "E" to this Agreement, actions,
suits, judgments, investigations or proceedings of any kind whatsoever
outstanding, pending or threatened against or affecting ICMC at law or
in equity or before or by any Federal, State, Provincial, Municipal or
other governmental department, commission, board, bureau or agency of
any kind whatsoever and, to the best of its knowledge, there is no
basis therefor;
(o) no order ceasing, halting or suspending trading in
securities of ICMC nor prohibiting the sale of such securities has been
issued to and is outstanding against ICMC or its directors, officers or
promoters or against any other companies that have common directors,
officers or promoters and no investigations or proceedings for such
purposes are pending or threatened;
(p) ICMC will reserve or set aside sufficient shares in its
treasury to issue the Shares in accordance with this Agreement and upon
their issuance all such Shares will be duly and validly issued as fully
paid and non-assessable common shares of ICMC registered in the name of
EC free and clear of all voting restrictions, and, except as may be
created by EC, liens, charges or encumbrances of any kind whatsoever;
(q) during the term of this Agreement ICMC shall make all
filings and shall do all things required by British Columbia securities
laws to permit EC to resell any Shares issued to it free of any hold
periods or resale restrictions at the conclusion of a four month period
following the issuance of such Shares pursuant to Blanket Order and
Ruling #98/7, or any successor instrument, issued by the British
Columbia Securities Commission;
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -15
(r) in the event of a subdivision or consolidation or other
capital change affecting the common shares of ICMC, the Shares to be
issued following such event will be adjusted on the same basis as the
other common shares of ICMC; and
(s) upon execution of this Agreement, ICMC shall deliver to EC
such legal opinions of ICMC's legal counsel, addressed to EC and its
legal counsel and dated as of the date of this Agreement, in form and
content acceptable to EC acting reasonably relating to the trade and
distribution and resale of the common shares of ICMC to be issued to EC
pursuant to this Agreement (the "Shares") and to such other matters as
EC may reasonably require.
10.2) The above representations, warranties and covenants are continuing
conditions of Fox's and EC's obligations hereunder and shall be
expressed in any conveyance to ICMC made pursuant to exercise of the
Option to purchase granted by Section 6 of this Agreement.
10.3) ICMC acknowledges and will assist EC in distributing any shares that EC
receives from ICMC to its members and their members as allowed in
Section 9.4(b)(v) of this Agreement.
SECTION 11 - ANNUAL ASSESSMENT WORK
11.1) ICMC and its successors or assigns shall perform all annual assessment
work, and if required, pay maintenance fees and other costs required by
law to hold and maintain in good standing the Property for each
assessment year, as defined by statute, during the currency of this
Agreement and ending upon the date this Agreement expires. ICMC or its
successors or assigns shall then perform all annual assessment work for
any additional term or terms of this Agreement in accordance with State
and Federal regulations.
11.2) If this Agreement expires or is terminated after the first day of July
in any assessment year, ICMC shall perform the required assessment work
or pay the maintenance fees for the Property with respect to the
remainder of that assessment year, and shall have the right to enter
onto the Property at any time or times during the remainder of said
assessment year to perform or complete the above-required assessment
work for said assessment year, without payment or other obligation to
Fox or others.
11.3) ICMC shall pay any and all annual claim maintenance fees due any
governmental regulatory agency, including the United States Department
of the Interior, Bureau of Land Management no later than Fifteen (15)
Days before their due date.
11.4) ICMC shall provide documentation to Fox and EC of all payments,
filings, or other related claim maintenance documentation.
SECTION 12 - EXCLUSION OF A PORTION OR PORTIONS OF THE CLAIMS
12.1) At any time during the term of this Agreement, ICMC may exclude from
the provisions of this Agreement any Claim or Additional Claims covered
hereby by giving notice of the same in writing to Fox, but in such
event this Agreement shall be deemed to continue in full force
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -16
and effect as to any and all remaining Claims or Additional Claims.
Upon and after the giving of such notice:
(a) the terms "Property" or "Claims" as used herein shall not
include the Claims so dropped and excluded;
(b) ICMC shall surrender possession of such excluded Claims or
Additional Claims to Fox and shall execute and deliver to Fox such
instruments as may be reasonably necessary to evidence the
relinquishment by ICMC of any interest in such claims, and ICMC shall
have no further obligations with respect to such Claims or Additional
Claims except as otherwise provided in this Section 12s Relinquishment
or exclusion of any of the Claims or Additional Claims by ICMC shall
not reduce consideration to Fox required hereunder.
12.2) ICMC has agreed that Fox and EC shall have certain placer mining rights
as enumerated herein and ICMC shall not be entitled to the value of any
of Fox's or EC's work on production therefrom.
SECTION 13 - TAXES
13.1) ICMC shall pay promptly before delinquency all taxes, if any, and
assessments, general, special, ordinary and extraordinary, that may be
levied or assessed during the term of this Agreement upon the Property,
and upon all Ore and Product therefrom. All such taxes for the year in
which this Agreement is executed, and for the year in which this
Agreement terminates, shall be prorated between Fox and ICMC. ICMC
always shall have the right to contest in the courts or otherwise, in
its own name or in the name of Fox, the validity or amount of any such
taxes or assessments, if it deems the same unlawful, unjust, unequal or
excessive, or to take such other steps or proceedings as it may deem
necessary to secure a cancellation, reduction, readjustment or
equalization thereof, before it shall be required to pay the same. ICMC
shall not permit the Claims or any part thereof to be conveyed, or
title lost by Fox, as the result of nonpayment of such taxes or
assessments. ICMC shall, upon request, furnish to Fox duplicate
receipts for all such taxes and assessments when paid.
13.2) ICMC shall not be liable for any taxes levied on or measured by income,
or taxes applicable to Fox or EC, based upon payments under this
Agreement.
13.3) Nothing in the foregoing shall be construed to obligate ICMC to pay
such portion of any tax as is based upon the value of improvements,
structures, or personal property made, placed or used on any part or
parts of the Property by or for Fox and EC or by an owner of surface
rights other than ICMC. If Fox or EC receives tax bills or claims which
are the responsibility of ICMC hereunder, the same shall be promptly
forwarded to ICMC for appropriate actions
SECTION 14 - REPORTS AND INSPECTION
14.1) ICMC shall deliver to Fox and EC, each year during the term hereof, if
requested by Fox or EC upon Fox or EC requesting same, copies of such
maps, cross sections, and other
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -17
engineering data concerning the quality and location of Ore and
material mined from the Property as ICMC customarily prepares or
obtains for its own records, which information shall not require
preparation of special records or reports by ICMC. This information
shall be furnished, if requested, on or before the tenth day of June in
each year during the term hereof, and the data contained therein shall
be stated as it existed at the close of the preceding calendar year.
14.2) ICMC shall not be required to disclose its own current estimates and
calculations of the grade and tonnage of Ore reserves.
14.3) On or before the first day of each January, April, July and October
during the term hereof, ICMC shall deliver to Fox detailed statements
for the preceding calendar quarter, showing separately the respective
quantity and average analysis of Product produced from the Property
during such quarter.
14.4) 14.4) ICMC shall deliver to Fox the quarterly statements required under
Section 14.3, above, showing calculation of ICMC's payments, if any,
for calculation of payments to Fox.
14.5) Upon termination of this Agreement, ICMC shall deliver to Fox a report
of all exploration conducted by ICMC or its successors or assigns, on
or in that part of the Property as to which this Agreement is being
terminated. This report shall show the location of all such exploration
work, the results thereof, the character of any Ore encountered, and
ICMC's analysis of such Ore; it is provided, however, that in its above
reports upon termination, ICMC shall not be required to disclose
information concerning, or which might tend to reveal processes,
techniques or equipment developed by or for ICMC, or with which it may
be experimenting, or any processes, techniques or equipment which it is
under obligation to any other person or company not to reveal.
14.6) ▇▇▇, ▇▇ and its authorized agents, at Fox's and EC sole risk and
expense, at all reasonable times, may enter upon the Property to
inspect the same, and to measure the quantity and quality of Ore mined
therefrom or remaining therein, provided that Fox or EC shall not
unreasonably or unnecessarily hinder or interrupt ICMC's operations.
Fox or EC shall indemnify and save harmless ICMC, its successors and
assigns, from and against all liability, claims and causes of action
for injury to or death of persons, or damage to property, including,
without limitation, the person or property of ▇▇▇, ▇▇ and its agents,
and third parties, in any manner resulting, wholly or in part, from the
exercise of the foregoing rights by ▇▇▇, ▇▇ or its authorized agents.
14.7) ▇▇▇, ▇▇ or its authorized agents, shall have the right to audit and
inspect ICMC's accounts and records used in calculating payments to Fox
hereunder, which right may be exercised, as to each quarterly payment,
at any reasonable time during a period of one (1) year from and after
the date on which the quarterly payment was paid-by ICMC.
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -18
SECTION 15 - MANNER OF MINING
15.1) All of ICMC's operations hereunder shall be conducted in a careful and
workmanlike manner, in accordance with accepted practices of the
mineral industry, without committing any unusual permanent waste or
injury to any mine in the Property, or interference with the subsequent
operation thereof, if not reasonably necessary in ICMC's operations.
15.2) ICMC shall have no obligation, express or implied, to open or develop
any mine or mines in the Property. Whenever ICMC deems it necessary or
advisable, ICMC may discontinue or resume exploration, development,
mining and production operations from time to time during the term
hereof, so long as it meets its obligations hereunder to pay taxes and
advance royalty or production royalty.
15.3) Nothing herein shall require ICMC to develop a separate shaft or shafts
in the Property or prevent ICMC from exercising the cross-mining rights
herein after provided.
SECTION 16 - CROSS-MINING
16.1) For the purpose of enabling ICMC to conduct, with greater economy and
convenience, the mining and removing of Ore from the Property, ICMC is
hereby granted the right, if it so desires, to mine and remove Ore,
Product and materials from the Property through or by means of shafts,
openings or pits which may be made in or upon adjoining or nearby
property owned or controlled by ICMC or its successors and assigns.
16.2) ICMC or its successors or assigns, may, if they so desire, use the
Property and any shafts, openings and pits therein for the mining,
removal, treatment and transportation of Ore and materials from
adjoining or nearby property, or for any purpose connected therewith.
16.3) For the purpose of enabling ICMC to conduct, to the best advantage of
the parties hereto, and with greater economy and convenience, the
mining, removal, handling and disposition of Ore and Product from the
Property, and from other lands in which ICMC or its affiliated
companies may be conducting mining operations, the operations of ICMC,
and the said operations on other lands, may be conducted upon the
Property and upon any and all such other lands as a single mining
operation, to the same extent as if all such properties constituted a
single tract of land. Nothing herein shall relieve ICMC from its
obligations for payments or reports as set forth in this Agreement.
SECTION 17 - STOCKPILING AND WASTE
17.1) ICMC shall have the right, at any time during the term hereof, to
stockpile any Ore or Product mined or produced from the Property at
such place or places as ICMC may elect, either upon the Property or
upon any other lands owned or controlled by ICMC, its successors or
assigns. The rights and liens of Fox in and to any such Ore or Product
stockpiled on other lands shall not be divested by the removal thereof
from the Property, but shall be the same in all respects as though such
materials had been stockpiled on the
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -19
Property. If such other lands are now owned by ICMC, ICMC shall obtain
from the owners thereof a properly executed instrument under which the
owners of said other lands agree to recognize the interests and liens
of Fox on Ore and Product stockpiled on said other lands.
17.2) The stockpiling of Ore or Product from the Property on other lands
shall not be deemed a removal or shipment thereof requiring payment of
royalty thereon.
17.3) The tax covenants set forth in this Agreement shall apply to Ore and
Product from the Property stockpiled on other lands.
17.4) ICMC shall have the right, at any time during the term hereof, to
stockpile on the Property any Ore or materials mined or produced by
ICMC or its affiliated companies from other lands. Fox agrees to
recognize the rights and interests of others in such Ores and materials
stockpiled on the Property, and to permit the removal thereof by ICMC
at any time during the term of this Agreement, or by the owners thereof
for a reasonable time after termination of this Agreement, all without
liability or expense to Fox.
17.5) All stockpiles on the Property shall be so placed as not to interfere
with mining operations on the Property.
SECTION 18 - MIXING
18.1) After Ore and Product from the Property have been sampled, where
necessary, and weighed, or measured by volumetric survey, truck
factors, or other industry practices, in such manner as will permit the
computation of royalty to be paid hereunder, ICMC may mix the same with
Ore, materials or products from other lands. ICMC shall maintain
accurate tonnage and sampling records and shall furnish copies of such
records to Fox in the event that ICMC pays any NSR payments to Fox.
SECTION 19 - TREATMENT
19.1) ICMC shall have the right in its sole discretion and in any manner it
deems fit, but shall not be required, to beneficial, concentrate,
smelt, refine, ▇▇▇▇▇, and otherwise treat, in any manner, any Ore,
Product and materials mined or produced from the Property and from
other lands. Such treatment shall be conducted in a careful and
workmanlike manner. In exercising this right Ore or Product may be
removed to a plant or plants established or maintained either upon the
Property or elsewhere. It is provided, however, that any tailings or
residue remaining on the Property for a period of one (1) year after
the date on which this Agreement has expired, or has been terminated by
ICMC as to all of the Property, shall be deemed abandoned by ICMC and
thereupon shall become the Property of Fox.
19.2) ICMC shall reclaim the Property in accordance with local, state, and
federal laws relating to reclamation of mined land. In addition,
underground mining areas shall not be left in any condition so as to be
or become hazardous. Mine shafts, air courses, inclines, or horizontal
workings are to be permanently sealed and abandoned in accordance with
good mining practice. Prior to obtaining any necessary governmental
approval of a reclamation plan for
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -20
the Property, ICMC will submit such reclamation plan for review by Fox
and EC. The obligations set forth in this Section shall survive
termination of this Agreement.
SECTION 20 - ▇▇▇ ▇▇▇▇
20.1) Fox and EC shall at all times have, possess, and hold a lien upon all
Ore and Product mined from the Property and from Apex Claims and
shipped therefrom but not sold to a bona fide purchaser, and upon all
improvements placed upon the Property by ICMC, as security for any
unpaid balance of money due hereunder and as security for the
performance by ICMC of each and all of ICMC's covenants hereunder. This
lien may be enforced against any such property in like manner as liens
conferred by chattel mortgages, or as any other lien security may be
enforced under the laws of the State of Montana. Nothing herein
contained, however, is intended or shall be construed to prevent the
sale, shipment and removal of Ore or Product in the usual course of
business, nor to prevent the removal of tools, machinery, equipment or
other property at any time when ICMC is not in default. This lien shall
not apply to Ore or Product sold to unrelated third parties.
SECTION 21 - TITLE TO PROPERTY AND PROTECTING TITLE
21.1) ICMC accepts Fox's title to the Claims as represented and warranted
hereunder on the date of execution of this Agreement. ICMC or its
successors or assigns have the right to protect, perfect or otherwise
deal with title as deemed necessary by the current or future condition
of title. Nothing herein shall be construed to transfer title of the
Property to ICMC beyond the lease rights herein set forth.
SECTION 22 - INSURANCE AND INDEMNITY
22.1) ICMC shall protect and defend Fox and EC against any and all damages,
including, but not limited to, any and all environmental remediation
liabilities, arising out of ICMC's operations on the Property. ICMC and
shall indemnify Fox and EC against any liability resulting from ICMC's
operations on the Property; provided, however, that ▇▇▇, ▇▇ or any
agent acting on its behalf shall not have been a contributing cause to
the event giving rise to any such damages. ICMC shall carry liability
insurance protecting Fox and EC against damages arising out of ICMC's
operations on the Property. ICMC shall have Fox and EC named as
additional insured on all such insurance policies and shall provide
copies of said policies to both Fox and EC.
SECTION 23 - EXTRA TERMS UPON ELECTION TO EXTEND
23.1) Upon the exercise of the option to renew the Lease (the "Second Lease")
and to enter into a second five (5) year lease agreement, (the "Second
Lease Agreement"), ICMC will pay to EC the agreed upon amount of stock
and cash set forth in Section 4.3 hereof. All payments and other
consideration in connection with the Second Lease will be subject to
VSE approval.
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -21
23.2) If the lease term is extended pursuant to Section 4.3, ICMC shall
continue to have the option ( the "Section Option") to buy Fox's right,
interest and title in the Property from Fox for a purchase price of
Five Million United States Dollars ($5,000,OOOUSD) with the purchase
price to be adjusted by the change in the Consumer Price Index, All
Items published by the United States Department of Labor, Bureau of
Labor Statistics ("CPI"), for the period from thirty (30) days prior to
the closing of the purchase of the Property under the Second Option to
July, 1999. If the figure which the United States Department of Labor
uses as a base of 100, for purposes of the CPI is changed, the CPI will
continue to be used, but the value will be adjusted to account for this
change. In the event that the CPI is discontinued or otherwise becomes
unavailable, the parties shall undertake to agree upon a substitute
index or a substitute method of adjustment. As additional consideration
for the Second Option ICMC shall also pay Fox a one quarter of one
percent (0.25%) Purchase NSR on the Property payable upon commencement
of Commercial Production. The specific terms and conditions of the
Purchase NSR will be the same as those set out in Schedule "C" hereto.
If ICMC should purchase the Property under the Second Option ICMC shall
also pay to Fox as additional consideration a three percent (3.0%) Apex
NSR as contemplated in Section 6.2.
23.3) If ICMC should exercise the Second Option, Fox shall have the right to
elect to forego being bought-out by ICMC and may participate in the
development of the Property further. Fox's participation shall not
exceed forty percent (40%). Fox shall have sixty (60) days from the
receipt of notification of ICMC's election to exercise the Option to
review data and determine if it would like to elect to forego being
bought out and participate in the development of the Property further.
Fox's election to forego being bought out by ICMC shall be contingent
upon the parties entering into a Joint Development Agreement for the
further development of the Property.
SECTION 24 - TERMINATION AND REMOVAL OF PROPERTY
24.1) In the event of any default by ICMC in the performance of its
obligations hereunder, Fox and EC shall give to ICMC written notice
specifying the default. If the default is not cured within thirty (30)
days after ICMC has received the notice, or if ICMC has not within that
time begun action to cure the default and does not thereafter
diligently prosecute such action to completion, in no case to exceed
ninety (90) days, Fox and EC may terminate this Agreement by delivering
to ICMC written notice of such termination, subject to ICMC's right to
remove its property and equipment from the Property, as hereinafter
provided. Fox and EC shall have no right to terminate this Agreement
except as set forth in this paragraph and termination of this Agreement
shall be Fox's and EC sole remedy.
24.2) ICMC shall have the right to terminate this Agreement at any time upon
thirty (30) days written notice delivered to Fox and EC. Upon such
termination, all right, title and interest of ICMC under this Agreement
shall terminate, subject to Section 24.3 hereof, and ICMC shall not be
required to make further payments, or to perform any further
obligations hereunder, including work and Expenditure commitments
concerning the Property, except payments or obligations which have been
accrued hereunder pursuant to the express provisions of this Agreement,
and which have not been paid or performed.
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -22
24.3) Upon any termination of this Agreement, whether by expiration of the
term hereof or by act of either party, ICMC shall have a period of one
(1) year from and after the effective date of termination in which to
remove from the Property all of its machinery, buildings, structures,
facilities, equipment and other property of every nature and
description erected, placed or situated thereon, except supports placed
in shafts, drifts or openings in the Property. Any property of ICMC not
so removed at the end of said one (1) year period shall become the
property of EC. In the event of force majeure, as hereinafter set
forth, the terms and conditions of this paragraph shall be
appropriately extended.
24.4) Upon expiration of said removal period, ICMC shall place the Property
in a safe and orderly condition, with all shafts, caves and openings
fenced or protected as may be required by law or by regulation of any
duly constituted governmental authority having jurisdiction in the
Property.
24.5) Promptly following termination or expiration of this Agreement, each
party shall deliver to the others a fully executed release of this
Agreement in recordable form.
SECTION 25 - ASSIGNMENT
25.1) If, at any time during the term hereof, Fox intends to sell, assign,
transfer or convey the Property or any part thereof, Fox shall deliver
to ICMC at least thirty (30) days' prior written notice, describing all
of the terms of the proposed sale, assignment, transfer or conveyance.
ICMC shall have the exclusive right, during the above thirty (30) day
period, at its election, to purchase the Property described in said
notice, for a sum of money equal in value to the consideration which
would be received by Fox under the terms set forth in the written
notice. If ICMC elects to purchase the Property described in the
notice, ICMC shall so notify Fox within the thirty (30) day period. If
ICMC has not notified Fox of its above election within the thirty (30)
day period, Fox shall have the right for an additional thirty (30) day
period, after the expiration of the above notice, to sell, assign,
transfer or convey its interest in the Property as described in said
notice, upon the terms and conditions set forth in said notice, but all
subject, however, to this Agreement, and all rights of ICMC, its
successors and assigns, hereunder, and in and to the Property.
25.2) Upon prior written consent of Fox and EC, ICMC shall have the right at
any time to assign its rights hereunder, to contract with others to
mine and to treat Ore, Product and materials from the Property, and to
sublet the same for all purposes of this Agreement, with the same
rights and privileges as are granted herein to ICMC; provided, however,
that any such assignment, contract or sub-lease shall not operate as a
release or discharge of ICMC from the performance of its obligations
hereunder until and unless Fox and EC has consented thereto in writing.
The written consent of Fox and EC shall not be unreasonably withheld.
25.3) All covenants, conditions and provisions of this Agreement, including
the obligation to payments as required hereunder, shall run with the
land, and shall inure to the benefit of, and be binding upon, the
parties hereto, and their respective heirs, executors, administrators,
successors and assigns.
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -23
SECTION 26 - FORCE MAJEURE
26.1) ICMC shall not be liable for failure to perform any of its obligations
hereunder during periods in which performance is prevented by any cause
reasonably beyond ICMC's control, which causes hereinafter are called
"force majeure." For purposes of this Agreement, the term "force
majeure" shall include, but shall not be limited to, fires, floods,
windstorms, and other damage from the elements, strikes, riots, action
of government authority and acts of Gods The duration of this Agreement
and all deadlines hereunder shall be extended for a period equal to the
period for which performance is suspended by reason of force majeure.
All periods of force majeure shall be deemed to begin at the time ICMC
stops performance hereunder by reason of force majeure. ICMC shall
notify Fox and EC of the beginning and ending date of each such periods
SECTION 27 - DISPUTES NOT TO INTERRUPT OPERATIONS
27.1) Subject to the above right of Fox and EC to terminate this Agreement,
disputes or differences between the parties hereto shall not interrupt
performance of this Agreement or the continuation of operations
hereunder. In the event of any dispute or difference, operations may be
continued, and settlements and payments may be made hereunder, in the
same manner as prior to such dispute or difference, until the matters
in dispute have been finally determined between the parties, and
thereupon such payments or restitution shall be made as may be required
under the terms of the settlement or final determination of the
disputes
SECTION 28 - DISPUTE RESOLUTION
28.1) Any and all matters of dispute or difference that may arise between
ICMC, Fox or EC with respect to any act or thing done or to be done
pursuant to the provisions of this Agreement, excepting the payment of
royalty, taxes and assessments as aforesaid, shall be resolved by the
following procedure:
(a) Unaided Negotiations. Should there develop disagreement or
dispute among the parties hereto in connection with this Agreement, it
shall be settled by the procedures specified in this Section 28s If one
party believes any other party has breached this Agreement, notice
thereof shall be given to the other party in writings The receiving
party shall respond in writing to any such notice within seven (7)
business days after receipts If the dispute is not promptly resolved,
there shall follow within fourteen (14) days, or at such later time as
may be mutually agreed to by the parties to the disagreement or
dispute, a meeting of the parties to the disagreement or disputes The
purpose of the meeting shall be to discuss and negotiate in good faith
a resolution to any outstanding issues. The location of the meeting
shall be in Spokane, Washington, United States of Americas
(b) Mediation. Should the procedure outlined in paragraph 28s1
(a) fail to bring about a prompt resolution of the parties'
disagreement or dispute, then within thirty (30) days following the
meeting of the parties, such parties shall initiate a voluntary,
non-binding mediation
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -24
conducted by a mutually-agreed mediators Should such parties be unable
to agree upon a mediator, they shall request the Superior Court for
Spokane County, State of Washington, United States of America to
appoint a mediator for them. Each of the parties shall bear their own
costs and expenses (including attorney fees) and their proportionate
share of any other costs, fees or expenses associated with this
mediation and endeavor in good faith to resolve their differences. The
mediation shall be held in Spokane, Washington, United States of
Americas
(c) Arbitration. In the event that the parties are unable to
resolve any outstanding disagreement or dispute as provided above,
then, the parties agree that said outstanding disagreement or dispute
will be settled by binding arbitration. The arbitration will be
conducted in accordance with the State of Washington Arbitration Act,
RCW 7s04 et seq., in effect when the arbitration begins, as hereafter
modified or supplemented, and shall be conducted by a single arbitrator
experienced in the matters at issue selected by the parties. The
prevailing party in any such arbitration shall be entitled to their
reasonable attorneys' fees and costs, including fees for expert
witnesses associated with the arbitration. The judgment or the award
rendered by the arbitrator may be entered in any court having competent
jurisdictions The arbitration shall be held in Spokane, Washington,
United States of Americas The parties confirm that by agreeing to this
alternate dispute resolution process, they intend, with the exception
of emergency injunctive relief, to give up their right to have any
dispute decided in court by a judge or jury.
SECTION 29 - NOTICES
29.1) Any notice required or permitted to be given hereunder shall be deemed
properly given upon delivering the same to the party to be notified, or
upon mailing the notice, by registered or certified mail, return
receipt requested, to the party to be notified, at the address
hereinafter set forth, respectively, or such other address within the
United States of America as the party to be notified may have
designated prior thereto by written notice to the others
(a) If to Fox:
Platinum Fox, LLC.
▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇, Manager
▇▇▇ ▇▇▇▇▇ ▇▇▇"' ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
▇▇. ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, Esq.
Workland & Witherspoon, PLLC
714 Washington Mutual Financial Center
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -25
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 509-624-6441
(b) If to EC:
Emerald Chimera, LLC.
▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇, Manager
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Workland & Witherspoon, PLLC
714 Washington Mutual Financial Center
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: 509-624-6441
(c) If to ICMC:
Idaho Consolidated Metals Corporation
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
29.2) Routine or regular reports and statements hereunder may be sent by
regular mail addressed as above, without copies going to ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Esq. If, after proper mailing thereof, any of such reports are
not received when due, the addressee will notify ICMC in accordance
with the above provisions for notice, and ICMC shall have reasonable
time to secure the delivery of the statement or report, or a duplicate
thereof, without being in default hereunder.
SECTION 30 - RECORDING
30.1) The parties hereto shall execute a memorandum or short recording
counterpart of this Agreement, which counterpart shall be in form
sufficient to constitute notice of this Agreement to third parties
under the law of the State of Montana, but which counterpart shall not
contain the amounts or rates of royalty hereunder, or other terms of
this Agreement which the parties may elect not to disclose of record.
The execution and recording of the above recording counterpart shall
not limit, decrease, or increase, or in any manner affect any of the
terms of this Agreement, or any rights, interest or obligations of the
parties hereto.
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -26
SECTION 31 - CONSENT OF REGULATORY AUTHORITIES
31.1) This Agreement is specifically subject to the approval of the
regulatory authorities of the Province of British Columbia and of the
VSE.
31.2) The parties agree that Fox and EC shall be fully informed and allowed
to participate in obtaining approval of this Agreement from the
regulatory authorities of the Province of British Columbia and of the
VSE.
SECTION 32 - COUNTERPARTS
32.1) This Agreement maybe signed in as many counterparts as maybe
necessary and delivered by facsimile, each of which so signed shall
be deemed to be an original, and such counterparts together shall
constitute one and the same instrument and notwithstanding the date
of execution shall be deemed to bear the date as at the 10' day of
June, 1999.
SECTION 33 - FURTHER ASSURANCES
33.1) The parties hereto agree to do or cause to be done all acts or thing
necessary to implement and carry into effect this Agreement to the full
extent including, without limitation, to cause their respective
interests in the Property as it may appear from time to time to be
recorded with appropriate government offices and in this connection to
execute such documents as counsel for ICMC, EC or Fox may require.
SECTION 34 - MISCELLANEOUS
34.1) Binding Provisions. The terms and provisions of this Agreement shall be
binding upon and shall inure to the benefit of the heirs, successors
and Transferees of the respective Members.
34.2) Severability. In the event any sentence or paragraph of this Agreement
is declared by a court of competent jurisdiction to be void, such
sentence or paragraph shall be deemed severed from the remainder of the
Agreement and the balance of the Agreement shall remain in effect.
34.3) Headings. Section titles or captions contained in this Agreement are
inserted only as a matter of convenience and for reference. Such titles
and captions in no way define, limit, extend or describe the scope of
this Agreement nor the intent of any provision of this Agreement.
34.4) Meanings. Whenever required by the context, the singular shall include
the plural, and viceversa and the masculine gender shall include the
feminine and neuter genders, and viceversa.
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -27
34.5) Governing Law. All terms and provisions of this Agreement and the
rights and duties of all of the parties shall be construed under the
laws of the State of Washington, except for any legal interpretation
involving real property law in relation to the Property. Any legal
interpretation involving real property law shall be construed under the
applicable laws of the State of Montana and the United States of
America.
34.6) Waiver. The failure of any party at any time to require strict
performance of any provision of this Agreement shall not limit the
right of the party to enforce the provision, nor shall any waiver or
any breach of any provision be a waiver of any succeeding breach of
that provision or a waiver of that provision or any other provision.
Any waiver of any breach of any provision of this Agreement must be
evidenced in writing signed by all parties hereto.
34.7) Amendments. This Agreement or any tern hereof may be changed, waived,
discharged or terminated only in writing, signed by all parties hereto.
34.7) Geologic Consultations. On a semi-annual basis, ICMC, at its cost,
shall consult with ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇, Ph.D. to review ICMC's exploration
plans and results for the Property.
34.8) Securities Registration. if ICMC should register any class of equity
securities in the United States of America under either the Securities
Act of 1933 or under any state Blue Sky Laws, ICMC shall also register
those equity securities issued, and to be issued, under this agreement
that are held by either EC, its successor or any member of EC or member
thereof, who was a member at the date of this Agreement.
34.10) Entire Agreement. This Agreement, together with its exhibits and such
other agreements referred to in this Agreement, the terms of which are
incorporated into this Agreement by this reference, supersedes any and
all oral or written agreements previously made relating to the subject
matter of this Agreement and constitutes the entire agreement of the
parties relating to the subject matter of this Agreement.
34.11) Exhibits Incorporated by Reference. All exhibits attached to and/or
referenced in this Agreement are incorporated as additional terms of
this Agreement by this reference.
34.12) Payments. All payments to be made by ICMC to Fox or EC hereunder may be
made by check or bank draft mailed or delivered to Fox or EC at Fox's
or EC's address for notice purposes, or as set forth below, or for the
account of Fox or EC at such bank or banks, or elsewhere, in one of the
United States, as Fox or EC may designate from time to time by written
notice to ICMC. Such bank or banks shall be deemed the agent of Fox or
EC for the purpose of receiving, collecting and receipting for such
payments.
34.13) Announcements. No party to this Agreement shall make no public
announcement about this Agreement, the Property or the subject matter
hereof, without the prior approval of the parties, except as required
by the VSE and the regulatory authorities of the Province of British
Columbia. The parties to this Agreement shall not unreasonably withhold
their approval of public announcements.
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION -28
34.14 Agreement Execution. Even though the parties signed this Agreement as
of the date hand written below by the parties, this Agreement shall be
deemed dated and effective as of July 16, 1999.
IN WITNESS WHEREOF, the parties hereto have caused this TRI-PARTY LEASE
AGREEMENT WITH A PURCHASE OPTION to be properly executed, all as of this 16" day
of July, 1999.
PLATINUM FOX, LLC
/S/ ▇▇▇ ▇▇▇▇▇▇▇▇ 10/7/99
-------------------------------- ---------------
▇▇▇ ▇▇▇▇▇▇▇▇ Date
Its: Co-Manager
EMERALD CHIMERA, LLC
/S/ ▇▇▇ ▇▇▇▇▇▇▇▇ 10/7/99
-------------------------------- ---------------
▇▇▇ ▇▇▇▇▇▇▇▇ Date
Its: Manager
IDAHO CONSOLIDATED METALS
CORPORATION
/S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 10/7/99
--------------------------------- ---------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Date
Its: President
TRI-PARTY LEASE AGREEMENT WITH A PURCHASE OPTION - 29
SCHEDULE "A" TO THE LEASE AGREEMENT WITH OPTION TO PURCHASE
DATED THE 16th DAY OF JULY, 1999 AMONG
PLATINUM FOX, LLC, EMERALD CHIMERA, LLC, AND
IDAHO CONSOLIDATED METALS CORPORATION
PLATINUM FOX CLAIMS
United States Department of the Interior.
BUREAU OF LAND MANAGEMENT
Montana State ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇://▇▇▇.▇▇▇.▇▇▇.▇▇▇/
MC 18076 et al.
921.8
Date Received: August 17, 1999
Date Processed: August 19, 1999
Platinum Fox, LLC
▇/▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇-▇▇-▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Mutual Financial Center
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇--▇▇▇▇
Receipt of Document:
This acknowledges receipt of the Quit Claim Dead, executed July 15, 1999,
whereby Platinum Fox, Inc., conveyed their interest in the following mining
claims to Platinum Fox, LLC:
Serial Number Claim Name Serial Number Claim Name
------------- ---------- ------------- ----------
MMC 18077 Coors #57 MMC 38898 Chrome #8
MMC 28602 Iii No, 80 MMC 38916 Star
MMC 28617 Hi ▇▇. ▇▇ ▇▇▇ ▇▇▇▇▇ Star #1
MMC 28618 Hi ▇▇. ▇▇ ▇▇▇ ▇▇▇▇▇ Star #2
MMC 33623 Labatt #21 MMC 38919 Star #3
MMC 38859 ▇▇▇▇▇▇ MMC 38920 Star #4
MMC 38860 ▇▇▇▇▇▇ ▇▇. ▇ ▇▇▇ ▇▇▇▇▇ Star #5
MMC 38861 ▇▇▇▇▇▇ ▇▇. ▇ ▇▇▇ ▇▇▇▇▇ Star #6
MMC 38872 Apex F MMC 38923 Star # 7
MMC 38873 Atlas MMC 38924 Star #8
MMC 38874 Atlas No. 1 MMC 38949 Spruce
MMC 38875 Atlas No. 2 MMC 38950 Spruce #1
MMC 38876 Atlas No, 3 MMC 38951 Sunshine
MMC 38877 ▇▇▇▇▇ ▇▇. ▇ ▇▇▇ ▇▇▇▇▇ Forge #1
MMC 38878 Atlas No. 5 MMC 40278 Pine
MMC 38879 Atlas No. 6 MMC 68867 LAKESIDE
MMC 38880 Atlas No. 7 MMC 68868 LAKESIDE 1
MMC 38081 Atlas No. 8 MMC 68869 Spruce 2
MMC 38882 Atlas No. 9 MMC 110587 GOLDRIDGE 1
MMC 313883 Atlas No. 10 MMC 110588 GOLDRIDGE 2
MMC 38884 ▇▇▇▇▇▇▇ MMC 110589 GOLDRIDGE 3
MMC 38885 ▇▇▇▇▇▇▇ #1 MMC 110590 GOLDRIDGE 4
MMC 38893 Chrome #3 MMC 110591 GOLDRIDGE 5
MMC 38894 Chrome #4 MMC 110592 GOLDRIDGE 6
MMC 38895 Chrome #5 MMC 165879 CHROME
MMC 38896 Chrome #6 MMC 202994 CHROME ▇▇. ▇
▇▇▇ ▇▇▇▇▇ Chrome #7 MMC 202995 CHROME NO. 2
The quit claim deed has been processed, and our records now show that Platinum
Fox. LLC, is the owner of the Coors #57, Hi No. 80, Hi No. 96, Hi ▇▇. ▇▇, ▇▇▇▇▇▇
#▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇. ▇. ▇▇▇▇▇▇ ▇▇. ▇, ▇▇▇▇ ▇, ▇▇▇▇▇, ▇▇▇▇▇ ▇▇. ▇ through
▇▇▇▇▇ ▇▇. ▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ #l, chrome #3 through Chrome #8, star, Star #1
through Star #8, Spruce, Spruce #l, Sunshine, Pine, LAKESIDE, LAKESIDE 1, Spruce
2, GOLDRIDGE I THROUGH GOLDRIDGE 6, CHROME, CHROME NO. 1, and CHROME NO. 2
mining claims.
MMC 18076 cc al.
In addition, our record:, show that Platinum Fox, LLC, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, and ▇▇▇▇
▇▇▇▇▇▇▇▇ are the co-owners of the Forge #1 (MMC 38959) mining claim.
If you have any questions regarding your mining claims, please call me at (406)
▇▇▇-▇▇▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Land Law Examiner
SCHEDULE "B" TO THE LEASE AGREEMENT WITH OPTION TO PURCHASE
DATED THE 16"' DAY OF JULY, 1999 AMONG PLATINUM
FOX, LLC, EMERALD CHIMERA, LLC, AND
IDAHO CONSOLIDATED METALS
CORPORATION
EC LEASE
LEASE AGREEMENT
Among
PLATINUM FOX, LLC
And
EMERALD CHIMERA, LLC
Dated and Effective this 15th Day of July, 1999
LEASE AGREEMENT - 1
THIS LEASE AGREEMENT (this "Agreement") made effective this 15th day of July,
1999, by and between, PLATINUM FOX, LLC, a State of Washington, United States of
America, limited liability company ("Fox"), AND, EMERALD CHIMERA, LLC, a State
of Washington, United States of America limited liability company ("EC").
RECITALS
WHEREAS Fox currently owns an undivided one hundred percent (100%)
right, title and interest in and to certain unpatented mining claims (`Claims")
known as the Chrome Mountain Property located in Sweet Grass County, Montana, a
complete list and description of which is attached as Schedule "A" hereto and
referred to herein as the "Property";
AND WHEREAS EC seeks to lease the Claims from Fox, for the purpose of
EC facilitating the exploration of the Claims;
AND WHEREAS this Agreement will set forth all of the terms and
conditions under which Fox grants to EC a lease with respect to the Property,
for the purposes, and for the term, hereinafter provided;
IN CONSIDERATION of the covenants and agreements hereinafter set forth and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by both Fox and EC, the above parties agree to the following:
SECTION 1- EXCLUSIVE LEASE
l.1) Fox hereby grants, leases and demises the Property unto EC, its
successors and assigns, for the term and for the purposes hereinafter
provided, including, but without being limited to all Ore, minerals,
and mineral rights, and all water and water rights, in, upon and under
the Property, and all right, title and interest which may be acquired
by or for Fox, in or pertaining to the Property or any part thereof,
during the term of this Agreement.
SECTION 2 - TITLE TO CLAIMS
2.1) Fox represents, warrants and covenants to EC that Fox is the sole
recorded and beneficial owner and controller of the Property as set
forth in the attached Schedule "A"; the Property is free and clear of
all liens, charges and encumbrances, and it has no knowledge of any
adverse claim or encumbrance upon the Property; and the Claims
comprising the Property are valid and subsisting mineral claims and are
in good standing under all applicable laws and regulation and all
taxes, assessments and filing required in this regard have been timely
paid or filed and Fox has provided EC with all of Fox's title
information and related documents. Fox does not make title
representation beyond those specifically disclosed hereby.
LEASE AGREEMENT - 2
2.2) Fox further represents, warrants and covenants that all of the
unpatented Claims have been located and acquired in compliance with the
laws of the State of Montana, and with all laws of the United States of
America governing location of the Claims, and that Fox has the full
right and authority to enter into this Agreement.
2.3) Fox shall cooperate and do everything in its power to put title in a
marketable state. with expense to be borne by EC.
2.4) Fox acknowledges that the representations, warranties and covenants
contained in this Agreement are conditions upon which EC is entering
this Agreement and are continuing conditions of EC's obligations
hereunder and shall be expressed in any conveyance to EC hereunder. Fox
shall indemnify and hold harmless EC from and against any and all
losses, damages, costs, actions or suits arising out of or in
connection with a breach of any representation, warrants or covenants
contained herein.
SECTION 3- TERM AND CONSIDERATION
3.1) The term of this Agreement shall be from July 15, 1999, to July 15,
2010.
3.2) As consideration for this Agreement, EC agrees to pay and maintain all
local, state and federal annual assessments levied against the
Property.
SECTION 4 - ANNUAL ASSESSMENT WORK
4.1) EC and its successors or assigns shall perform all annual assessment
work, and if required, pay maintenance fees and other costs required by
law to hold and maintain in good standing the Property for each
assessment year, as defined by statute, during the currency of this
Agreement and ending upon the date this Agreement expires. EC or its
successors or assigns shall then perform all annual assessment work for
any additional term or terms of this Agreement in accordance with State
and Federal regulations.
4.2) If this Agreement expires or is terminated after the first day of July
in any assessment year, EC shall perform the required assessment work
or pay the maintenance fees for the Property with respect to the
remainder of that assessment year, and shall have the right to enter
onto the Property at any time or times during the remainder of said
assessment year to perform or complete the above-required assessment
work for said assessment year, without payment or other obligation to
Fox or others.
4.3) EC shall pay any and all annual claim maintenance fees due any
governmental regulatory agency, including the United States Department
of the Interior, Bureau of Land Management no later than Fifteen (15)
Days before their due date.
4.4) EC shall provide documentation to Fox of all payments, filings, or
other related claim maintenance documentation.
LEASE AGREEMENT - 3
SECTION 5 - TAXES
5.1) EC shall pay promptly before delinquency all taxes, if any, and
assessments, general, special, ordinary and extraordinary, that may be
levied or assessed during the term of this Agreement upon the Property,
and upon all Ore and Product therefrom. All such taxes for the year in
which this Agreement is executed, and for the year in which this
Agreement terminates, shall be prorated between Fox. EC always shall
have the right to contest in the courts or otherwise, in its own name
or in the name of Fox, the validity or amount of any such taxes or
assessments, if it deems the same unlawful, unjust, unequal or
excessive, or to take such other steps or proceedings as it may deem
necessary to secure a cancellation, reduction, readjustment or
equalization thereof, before it shall be required to pay the same. EC
shall not permit the Claims or any part thereof to be conveyed, or
title lost by Fox, as the result of nonpayment of such taxes or
assessments. EC shall, upon request, furnish to Fox duplicate receipts
for all such taxes and assessments when paid.
5.2) EC shall not be liable for any taxes levied on or measured by income,
or taxes applicable to Fox, based upon payments under this Agreement.
5.3) Nothing in the foregoing shall be construed to obligate EC to pay such
portion of any tax as is based upon the value of improvements,
structures, or personal property made, placed or used on any part or
parts of the Property by or for Fox or by an owner of surface rights
other than EC. If Fox receives tax bills or claims which are the
responsibility of EC hereunder, the same shall be promptly forwarded to
EC for appropriate action.
SECTION 6 - REPORTS AND INSPECTION
6.1) EC shall deliver to Fox, each year during the term hereof, if requested
by Fox, copies of such maps, cross sections, and other engineering data
concerning the quality and location of Ore and material mined from the
Property as EC customarily prepares or obtains for its own records,
which information shall not require preparation of special records or
reports by EC. This information shall be furnished, if requested, on or
before the tenth day of June in each year during the term hereof, and
the data contained therein shall be stated as it existed at the close
of the preceding calendar year.
6.2) EC shall not be required to disclose its own current estimates and
calculations of the grade and tonnage of Ore reserves.
6.3) On or before the first day of each January, April, July and October
during the term hereof, EC shall deliver to Fox detailed statements for
the preceding calendar quarter, showing separately the respective
quantity and average analysis of Product produced from the Property
during such quarter.
LEASE AGREEMENT - 4
6.4) EC shall deliver to Fox the quarterly statements required under Section
6.3, above, showing calculation of EC's payments, if any, for
calculation of payments to Fox.
6.5) Upon termination of this Agreement, EC shall deliver to Fox a report of
all exploration conducted by EC or its successors or assigns, on or in
that part of the Property as to which this Agreement is being
terminated. This report shall show the location of all such exploration
work, the results thereof, the character of any Ore encountered, and
EC's analysis of such Ore; it is provided, however, that in its above
reports upon termination, EC shall not be required to disclose
information concerning, or which might tend to reveal processes,
techniques or equipment developed by or for EC, or with which it may be
experimenting, or any processes, techniques or equipment which it is
under obligation to any other person or company not to reveal.
6.6) Fox, and its authorized agents, at Fox's sole risk and expense, at all
reasonable times, may enter upon the Property to inspect the same, and
to measure the quantity and quality of Ore mined therefrom or remaining
therein, provided that Fox shall not unreasonably or unnecessarily
hinder or interrupt EC's operations. Fox shall indemnify and save
harmless EC, its successors and assigns, from and against all
liability, claims and causes of action for injury to or death of
persons, or damage to property, including, without limitation, the
person or property of Fox, its agents, and third parties, in any manner
resulting, wholly or in part, from the exercise of the foregoing rights
by Fox, or its authorized agents.
6.7) Fox, or its authorized agents, shall have the right to audit and
inspect EC's accounts and records used in calculating payments to Fox
hereunder, which right may be exercised, as to each quarterly payment,
at any reasonable time during a period of one (1) year from and after
the date on which the quarterly payment was paid by EC.
SECTION 7 - MANNER OF MINING
7.1) All of EC's operations hereunder shall be conducted in a careful and
workmanlike manner, in accordance with accepted practices of the
mineral industry, without committing any unusual permanent waste or
injury to any mine in the Property, or interference with the subsequent
operation thereof, if not reasonably necessary in EC's operations.
7.2) EC shall have no obligation, express or implied, to open or develop any
mine or mines in the Property. Whenever ▇▇ ▇▇▇▇▇ it necessary or
advisable, EC may discontinue or resume exploration, development,
mining and production operations from time to time during the term
hereof, so long as it meets its obligations hereunder to pay taxes and
advance royalty or production royalty.
7.3) Nothing herein shall require EC to develop a separate shaft or shafts
in the Property or prevent EC from exercising the cross-mining rights
hereinafter provided.
LEASE AGREEMENT - 5
SECTION 8 - CROSS-MINING
8.1) For the purpose of enabling EC to conduct, with greater economy and
convenience, the mining and removing of Ore from the Property, EC is
hereby granted the right, if it so . desires, to mine and remove Ore,
Product and materials from the Property through or by means of shafts,
openings or pits which may be made in or upon adjoining or nearby
property owned or controlled by EC or its successors and assigns.
8.2) EC or its successors or assigns, may, if they so desire, use the
Property and any shafts, openings and pits therein for the mining,
removal, treatment and transportation of Ore and materials from
adjoining or nearby property, or for any purpose connected therewith.
8.3) For the purpose of enabling EC to.conduct, to the best advantage of the
parties hereto, and with greater economy and convenience, the mining,
removal, handling and disposition of Ore and Product from the Property,
and from other lands in which EC or its affiliated companies may be
conducting mining operations, the operations of EC, and the said
operations on other lands, may be conducted upon the Property and upon
any and all such other lands as a single mining operation, to the same
extent as if all such properties constituted a single tract of land.
Nothing herein shall relieve EC from its obligations for payments or
reports as set forth in this Agreement.
SECTION 9 - STOCKPILING AND WASTE
9.1) EC shall have the right, at any time during the term hereof, to
stockpile any Ore or Product mined or produced from the Property at
such place or places as EC may elect, either upon the Property or upon
any other lands owned or controlled by EC, its successors or assigns.
The rights and liens of Fox in and to-any such Ore or Product
stockpiled on other lands shall not be divested by the removal thereof
from the Property, but shall be the same in all respects as though such
materials had been stockpiled on the Property. If such other lands are
now owned by EC, EC shall obtain from the owners thereof a properly
executed instrument under which the owners of said other lands agree to
recognize the interests and liens of Fox on Ore and Product stockpiled
on said other lands.
9.2) The stockpiling of Ore or Product from the Property on other lands
shall not be deemed a removal or shipment thereof requiring payment of
royalty thereon.
9.3) The tax covenants set forth in this Agreement shall apply to Ore and
Product from the Property stockpiled on other lands.
9.4) EC shall have the right, at any time during the term hereof, to
stockpile on the Property any Ore or materials mined or produced by EC
or its affiliated companies from other lands. Fox agrees to recognize
the rights and interests of others in such Ores and materials
stockpiled on the Property, and to permit the removal thereof by EC at
any time
LEASE AGREEMENT - 6
during the term of this Agreement, or by the owners thereof for a
reasonable time after termination of this Agreement, all without
liability or expense to Fox.
9.5) All stockpiles on the Property shall be so placed as not to interfere
with mining operations on the Property.
SECTION 10 - MIXING
10.1) After Ore and Product from the Property have been sampled, where
necessary, and weighed, or measured by volumetric survey, truck
factors, or other industry practices, in such manner as will permit the
computation of royalty to be paid hereunder, EC may mix the same with
Ore, materials or products from other lands. EC shall maintain accurate
tonnage and sampling records and shall furnish copies of such records
to Fox in the event that EC pays any NSR payments to Fox.
SECTION 11 - TREATMENT
11.1) EC shall have the right in its sole discretion and in any manner it
deems fit, but shall not be required, to beneficial, concentrate,
smelt, refine, ▇▇▇▇▇, and otherwise treat, in any manner, any Ore,
Product and materials mined or produced from the Property and from
other lands. Such treatment shall be conducted in a careful and
workmanlike manners In exercising this right Ore or Product may be
removed to a plant or plants established or maintained either upon the
Property or elsewhere. It is provided, however, that any tailings or
residue remaining on the Property for a period of one (1) year after
the date on which this Agreement has expired, or has been terminated by
EC as to all of the Property, shall be deemed abandoned by EC and
thereupon shall become the Property of Fox.
11.2) EC shall reclaim the Property in accordance with local, state, and
federal laws relating to reclamation of mined lands In addition,
underground mining areas shall not be left in any condition so as to be
or become hazardous. Mine shafts, air courses, inclines, or horizontal
workings are to be permanently sealed and abandoned in accordance with
good mining practice. Prior to obtaining any necessary governmental
approval of a reclamation plan for the Property, EC will submit such
reclamation plan for review by Fox. The obligations set forth in this
Section shall survive termination of this Agreement.
SECTION 12 - ▇▇▇ ▇▇▇▇
12.1) Fox shall at all times have, possess, and hold a lien upon all Ore and
Product mined from the Property and from Apex Claims and shipped
therefrom but not sold to a bona fide purchaser, and upon all
improvements placed upon the Property by EC, as security for any unpaid
balance of money due hereunder and as security for the performance by
EC of each and all of EC's covenants hereunder. This lien may be
enforced against any such property in like manner as liens conferred by
chattel mortgages, or as any other lien
LEASE AGREEMENT - 7
security may be enforced under the laws of the State of Montana.
Nothing herein contained, however, is intended or shall be construed to
prevent the sale, shipment and removal of Ore or Product in the usual
course of business, nor to prevent the removal of tools, machinery,
equipment or other property at any time when EC is not in defaults This
lien shall not apply to Ore or Product sold to unrelated third parties.
SECTION 13 - TITLE TO PROPERTY AND PROTECTING TITLE
13.1) EC accepts Fox's title to the Claims as represented and warranted
hereunder on the date of execution of this Agreements EC or its
successors or assigns have the right to protect, perfect or otherwise
deal with title as deemed necessary by the current or future condition
of titles Nothing herein shall be construed to transfer title of the
Property to EC beyond the lease rights herein set forth. ;
SECTION 14 - INSURANCE AND INDEMNITY
14.1) EC shall protect Fox against any damages arising out of EC's operations
on the Property and shall indemnify Fox against liability resulting
from EC's operations on the Property; provided, however, that Fox or
any agent acting on its behalf shall not have been a contributing cause
to the event giving rise to any such damages.
SECTION 15 - ASSIGNMENT
15.1) If, at any time during the term hereof, Fox intends to sell, assign,
transfer or convey the Property or any part thereof, Fox shall deliver
to EC at least thirty (30) days' prior written notice, describing all
of the terms of the proposed sale, assignment, transfer or conveyance.
EC shall have the exclusive right, during the above thirty (30) day
period, at its election, to purchase the Property described in said
notice, for a sum of money equal in value to the consideration which
would be received by Fox under the terms set forth in the written
notices If EC elects to purchase the Property described in the notice,
EC shall so notify Fox within the thirty (30) day periods If EC has not
notified Fox of its above election within the thirty (30) day period,
Fox shall have the right for an additional thirty (30) day period,
after the expiration of the above notice, to sell, assign, transfer or
convey its interest in the Property as described in said notice, upon
the terms and conditions set forth in said notice, but all subject,
however, to this Agreement, and all rights of EC, its successors and
assigns, hereunder, and in and to the Property.
15.2) Upon prior written consent of Fox shall have the right at any time to
assign its rights hereunder, to contract with others to mine and to
treat Ore, Product and materials from the Property, and to sublet the
same for all purposes of this Agreement, with the same rights and
privileges as are granted herein to EC; provided, however, that any
such assignment, contract or sub-lease shall not operate as a release
or discharge of EC from
LEASE AGREEMENT - 8
the performance of its obligations hereunder until and unless Fox have
consented thereto in writing. The written consent of Fox shall not be
unreasonably withheld.
15.3) All covenants, conditions and provisions of this Agreement, including
the obligation to payments as required hereunder, shall run with the
land, and shall inure to the benefit of, " and be binding upon, the
parties hereto, and their respective heirs, executors, administrators,
successors and assigns.
SECTION 16 - DISPUTE RESOLUTION
16.1) Any and all matters of dispute or difference that may arise between Fox
and EC with respect to any act or thing done or to be done pursuant to
the provisions of this Agreement, excepting the payment of royalty,,
taxes and assessments as aforesaid, shall be resolved by the following
procedure:
(a) Unaided Negotiations. Should there develop disagreement or
dispute among the parties hereto in connection with this Agreement, it
shall be settled by the procedures specified in this Section 16. If one
party believes any other party has breached this Agreement, notice
thereof shall be given to the other party in writing. The receiving
party shall respond in writing to any such notice within seven (7)
business days after receipt. If the dispute is not promptly resolved,
there shall follow within fourteen (14) days, or at such later time as
may be mutually agreed to by the parties to the disagreement or
dispute, a meeting of the parties to the disagreement or dispute. The
purpose of the meeting shall be to discuss and negotiate in good faith
a resolution to any outstanding issues. The location of the meeting
shall be in Spokane, Washington, United States of America.
(b) Mediation. Should the procedure outlined in paragraph
16.1(a) fail to bring about a prompt resolution of the parties
disagreement or dispute, then within thirty (30) days following the
meeting of the parties, such parties shall initiate a voluntary,
non-binding mediation conducted by a mutually-agreed mediator. Should
such parties be unable to agree upon a mediator, they shall request the
Superior Court for Spokane County, State of Washington, United States
of America to appoint a mediator for them. Each of the parties shall
bear their own costs and expenses (including attorney fees) and their
proportionate share of any other costs, fees or expenses associated
with this mediation and endeavor in good faith to resolve their
differences. The mediation shall be held in Spokane, Washington, United
States of America.
(c) Arbitration. In the event that the parties are unable to
resolve any outstanding disagreement or dispute as provided above, then,
the parties agree that said outstanding disagreement or dispute will be
settled by binding arbitration. The arbitration will be conducted in
accordance with the State of Washington Arbitration Act, RCW 7.04 et
seq., in effect when the arbitration begins, as hereafter modified or
supplemented, and shall be conducted by a single arbitrator experienced
in the matters at issue selected by the parties. The prevailing party in
any such arbitration shall be entitled to their reasonable attorneys'
fees and costs, including fees for expert witnesses associated with the
arbitration. The
LEASE AGREEMENT - 9
judgment or the award rendered by the arbitrator may be entered in any
court having competent jurisdiction. The arbitration shall be held in
Spokane, Washington, United States of Americas The parties confirm that
by agreeing to this alternate dispute resolution process, they intend,
with the exception of emergency injunctive relief, to give up their
right to have any dispute decided in court by a judge or jury.
SECTION 17 - MISCELLANEOUS
17.1) Binding Provisions. The terms and provisions of this Agreement shall be
binding upon and shall inure to the benefit of the heirs, successors
and Transferees of the respective Members.
17.2) Severability. In the event any sentence or paragraph of this Agreement
is declared by a court of competent jurisdiction to be void, such
sentence or paragraph shall be deemed severed from the remainder of the
Agreement and the balance of the Agreement shall remain in effect.
17.3) Heading. Section titles or captions contained in this Agreement are
inserted only as a matter of convenience and for references Such titles
and captions in no way define, limit, extend or describe the scope of
this Agreement nor the intent of any provision of this Agreements
17.4) Meanings. Whenever required by the context, the singular shall include
the plural, and vice-versa and the masculine gender shall include the
feminine and neuter genders, and vice-versa.
17.5) Governing Law. All terms and provisions of this Agreement and the
rights and duties of all of the parties shall be construed under the
laws of the State of Washington, except for any legal interpretation
involving real property law in relation-to the Property. Any legal
interpretation involving real property law shall be construed under the
applicable laws of the State of Montana and the United States of
America.
17.6) Waiver. The failure of any party at any time to require strict
performance of any provision of this Agreement shall not limit the
right of the party to enforce the provision, nor shall any waiver or
any breach of any provision be a waiver of any succeeding breach of
that provision or a waiver of that provision or any other provisions
Any waiver of any breach of any provision of this Agreement must be
evidenced in writing signed by all parties hereto.
17.7) Amendments. This Agreement or any tern hereof may be changed, waived,
discharged or terminated only in writing, signed by all parties hereto.
17.8) Entire Agreement. This Agreement, together with its exhibits and such
other agreements referred to in this Agreement, the terms of which are
incorporated into this Agreement by this reference, supersedes any and
all oral or written agreements previously made relating
LEASE AGREEMENT - 10
to the subject matter of this Agreement and constitutes the entire
agreement of the parties relating to the subject matter of this
Agreement.
17.9) Exhibits Incorporated by Reference. All exhibits attached to and/or
referenced in this Agreement are incorporated as additional terms of
this Agreement by this reference.
IN WITNESS WHEREOF, the parties hereto have caused this LEASE AGREEMENT to be
properly executed, all as of the day and year first above written.
PLATINUM FOX, LLC.
/S/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Its: Co-Manager
EMERALD CHIMERA, LLC.
/S/ ▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇
Its: Manager
LEASE AGREEMENT - 11
"Schedule - A"
United States Department of the Interior.
BUREAU OF LAND MANAGEMENT
Montana State ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇://▇▇▇.▇▇▇.▇▇▇.▇▇▇/
MC 18076 et al.
921.8
Date Received: August 17, 1999
Date Processed: August 19, 1999
Platinum Fox, LLC
▇/▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇-▇▇-▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Mutual Financial Center
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇--▇▇▇▇
Receipt of Document:
This acknowledges receipt of the Quit Claim Dead, executed July 15, 1999,
whereby Platinum Fox, Inc., conveyed their interest in the following mining
claims to Platinum Fox, LLC:
Serial Number Claim Name Serial Number Claim Name
------------- ---------- ------------- ----------
MMC 18077 Coors #57 MMC 38898 Chrome #8
MMC 28602 Iii No, 80 MMC 38916 Star
MMC 28617 Hi ▇▇. ▇▇ ▇▇▇ ▇▇▇▇▇ Star #1
MMC 28618 Hi ▇▇. ▇▇ ▇▇▇ ▇▇▇▇▇ Star #2
MMC 33623 Labatt #21 MMC 38919 Star #3
MMC 38859 ▇▇▇▇▇▇ MMC 38920 Star #4
MMC 38860 ▇▇▇▇▇▇ ▇▇. ▇ ▇▇▇ ▇▇▇▇▇ Star #5
MMC 38861 ▇▇▇▇▇▇ ▇▇. ▇ ▇▇▇ ▇▇▇▇▇ Star #6
MMC 38872 Apex F MMC 38923 Star # 7
MMC 38873 Atlas MMC 38924 Star #8
MMC 38874 Atlas No. 1 MMC 38949 Spruce
MMC 38875 Atlas No. 2 MMC 38950 Spruce #1
MMC 38876 Atlas No, 3 MMC 38951 Sunshine
MMC 38877 ▇▇▇▇▇ ▇▇. ▇ ▇▇▇ ▇▇▇▇▇ Forge #1
MMC 38878 Atlas No. 5 MMC 40278 Pine
MMC 38879 Atlas No. 6 MMC 68867 LAKESIDE
MMC 38880 Atlas No. 7 MMC 68868 LAKESIDE 1
MMC 38081 Atlas No. 8 MMC 68869 Spruce 2
MMC 38882 Atlas No. 9 MMC 110587 GOLDRIDGE 1
MMC 313883 Atlas No. 10 MMC 110588 GOLDRIDGE 2
MMC 38884 ▇▇▇▇▇▇▇ MMC 110589 GOLDRIDGE 3
MMC 38885 ▇▇▇▇▇▇▇ #1 MMC 110590 GOLDRIDGE 4
MMC 38893 Chrome #3 MMC 110591 GOLDRIDGE 5
MMC 38894 Chrome #4 MMC 110592 GOLDRIDGE 6
MMC 38895 Chrome #5 MMC 165879 CHROME
MMC 38896 Chrome #6 MMC 202994 CHROME ▇▇. ▇
▇▇▇ ▇▇▇▇▇ Chrome #7 MMC 202995 CHROME NO. 2
The quit claim deed has been processed, and our records now show that Platinum
Fox. LLC, is the owner of the Coors #57, Hi No. 80, Hi No. 96, Hi ▇▇. ▇▇, ▇▇▇▇▇▇
#▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇. ▇. ▇▇▇▇▇▇ ▇▇. ▇, ▇▇▇▇ ▇, ▇▇▇▇▇, ▇▇▇▇▇ ▇▇. ▇ through
▇▇▇▇▇ ▇▇. ▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ #l, chrome #3 through Chrome #8, star, Star #1
through Star #8, Spruce, Spruce #l, Sunshine, Pine, LAKESIDE, LAKESIDE 1, Spruce
2, GOLDRIDGE I THROUGH GOLDRIDGE 6, CHROME, CHROME NO. 1, and CHROME NO. 2
mining claims.
MMC 18076 cc al.
In addition, our records, show that Platinum Fox, LLC, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, and ▇▇▇▇
▇▇▇▇▇▇▇▇ are the co-owners of the Forge #1 (MMC 38959) mining claims.
If you have any questions regarding your mining claims, please call me at (406)
▇▇▇-▇▇▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Land Law Examiner
SCHEDULE "C" TO THE LEASE AGREEMENT WITH OPTION TO PURCHASE
DATED THE 16th DAY OF JULY, 1999 AMONG PLATINUM
FOX, LLC, EMERALD CHIMERA, LLC. AND IDAHO
CONSOLIDATED METALS CORPORATION
Purchase NSR and Apex NSR Terms and Conditions
1. Purchase NSR and Apex NSR shall mean any and all amounts received, from time
to time, by the party obligated to pay the royalty (the "Owner") for product
extracted from ore mined from the Property or Apex Claims under Commercial
Production, deducting therefrom all expenses relating to the treatment of such
product at any smelter, refinery or mint, including all costs and charges for
the treatment, tolling, smelting, refining or minting of such product and all
costs and charges associated therewith, such as costs and charges in respect of
transportation, insurance, handling, weighing, sampling, assaying and marketing,
as well as penalties, representation charges, referee's fees and expenses,
import taxes and export taxes; that is to say, Purchase NSR and Apex NSR shall
mean the amount received by the Owner from a smelter, refinery or mint, as the
case may be, less all costs and charges associated with marketing, selling and
delivering the product to the smelter, refinery or mint, as the case may be.
2. If the product is treated at a smelter, refinery or mint owned, operated or
controlled by the Owner or an affiliate of it, all costs and charges referred to
in paragraph 1 hereof shall be equivalent to the prevailing competitive rates
charges by similar smelters, refineries or mints, as the case may be, in arm's
length transactions for the treatment of like quantities and quality of product.
3. Purchase NSR and Apex NSR shall be calculated by the Owner at the end of the
calendar quarter in which the ores or concentrates from the Property and Apex
Claims were sold or otherwise deemed disposed of and payment to the party
entitled to receive such payment (the "Royalty Holder") shall be made by the
Owner within forty-five (45) days after the end of each quarter.
4. The Owner shall provide the Royalty Holder with an annual statement of the
Purchase NSR and Apex NSR as of the end of each December 31 st on or before the
31 st day of March following such 31 st day of Decembers The Owner shall
maintain adequate records which shall be made available to the Royalty Holder
for a period of eight (8) months following the delivery of such annual statement
by the Owner so as to enable the Royalty Holder to verify the correctness of
their determination of NSR. The determination of whether an entry has been
properly categorised or calculated shall be finally made by an independent
auditor to be appointed by the Owner if the parties cannot agree between
themselves, provided, however, that after the eighth month following the
delivery of an annual statement, such annual statement shall be deemed to be
correct and the Royalty Holder shall waive all of their rights to challenge
same.
5. For the purposes of determining whether an amount received by the Owner is
properly received on account of "product extracted from ore mined from the
Property and Apex Claims", as defined in paragraph 1 hereof, the parties agree
that all amounts received by the Owner on account of future sales contracts,
hedging programs or other commodity arrangements which relate to product
extracted (or to be extracted) from ore mined (or to be mined) from the Property
and Apex Claims shall be deemed to be subject to the Purchase NSR or Apex NSR
and the Royalty Holder shall be entitled to receive payments in respect thereof.
SCHEDULE "D" TO THE LEASE AGREEMENT WITH OPTION TO PURCHASE
DATED THE 16th DAY OF JULY, 1999 AMONG PLATINUM
FOX, LLC, EMERALD CHIMERA, LLC. AND
IDAHO CONSOLIDATED METALS
CORPORATION
SHAREHOLDER'S AGREEMENT
SHAREHOLDER'S AGREEMENT
Among
{SHAREHOLDER}
And
IDAHO CONSOLIDATED METALS CORPORATION
Dated and effective this {DAY} day of {MONTH}, {YEAR}
THIS SHAREHOLDER'S AGREEMENT is entered into as of this {DAY) day of {MONTH},
{YEAR), by and among {SHAREHOLDER} and {SHAREHOLDER}, both individually and as a
marital community, and IDAHO CONSOLIDATED METALS CORPORATION, a Province of
British Columbia, Canadian corporations
RECITALS
WHEREAS, Shareholder is a Member of Emerald Chimera, LLC, which has entered into
that certain Tri-Party Lease Agreement With A Purchase Option dated July 16,
1999;
AND WHEREAS, EC has received certain Shares of ICMC from ICMC as consideration
for the Lease,
AND WHEREAS, the Lease contains certain restrictions of the transfer of Shares;
AND WHEREAS, EC, ICMC and Shareholder would like to transfer Shares to
Shareholder in accordance with the share transfer restrictions contained in the
Lease;
AND WHEREAS, in order to effect said share transfer Shareholder must enter into
a shareholders agreement with ICMC agreeing to the same share transfer
restrictions contained in the Leases
AGREEMENT
THEREFORE in consideration of good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by all parties, the foregoing, and
the mutual promises set forth herein, Shareholder and ICMC agree as follows:
Article 1- Definitions
1.1) "1933 Act" shall mean the United States Securities Act of 1933.
1.2) "Agreement" shall mean this Shareholder's Agreement.
1.3) "EC" shall mean Emerald Chimera, LLC.
1.4) "ICMC" shall mean Idaho Consolidated Metals Corporation.
1.5) "Lease" shall mean that certain Tri-Party Lease Agreement With A
Purchase Option dated July 16, 1999 among Platinum Fox, LLC, EC and
ICMC.
1.6) "Member" shall mean the holder of limited liability company units of a
limited liability company formed pursuant to Title 25.15 of the Revised
Code of Washington State.
1.7) "Securities Act" shall mean any and all applicable securities laws and
regulations of the Province of British Columbia, Canada.
1.8) "Share" shall mean the common stock of ICMC held by Shareholder that is
subject to this Agreement, as further defined in Article 2s3 of this
Agreement.
1.9) "Shares" shall mean the common stock of ICMC held by Shareholder that
is subject to this Agreement, as further defined in Article 2s3 of this
Agreement.
1.10) "Shareholder" shall mean {SHAREHOLDER).
1.11) "VSE" shall mean the Vancouver Stock Exchange.
Article 2 - Transfer of Shares
2.1) No transfer or attempted transfer of any Share or Shares subject to
this Agreement shall be effective unless such transfer is:
(a) made to ICMC, or;
(b) made outside the United States in a transaction meeting the
requirements of Regulation S under the 1933 Act, or;
(c) made pursuant to the exemption from the registration
requirements under the 1933 Act provided by Rule 144 there under and in
accordance with any applicable state securities or "Blue Sky" laws; or;
(d) made in a transaction that does not require registration
under the 1933 Act or any applicable US state laws and regulations
governing the offer and sale of securities and Shareholder has, prior
to such sale, furnished to ICMC an opinion to that effect of counsel of
recognized standing experienced in matters involving the 1933 Act and
reasonably satisfactory to ICMC;
(e) made to an organization exempt from United States federal
income tax under 501(c)(3) of the United States Internal Revenue Code
of 1986 as amended from time to time, to a family member of
Shareholder, or to a trust for the benefit of a family member of
Shareholder, through either a gift or inheritance and such organization
or family member has executed a similar shareholder's agreement with
ICMC agreeing to the restriction of transfer of Shares.
(f) made to a shareholder, Member or beneficiaries of the
Shareholder, who have executed a similar shareholders agreement with
ICMC agreeing to the same restrictions of transfer of Shares contained
in this Agreement.
2.2) Any transfer or attempted transfer made in violation of this Agreement
shall be void.
2.3) The Shares of ICMC held by the Shareholder that are subject to this
Agreement are only those shares of ICMC acquired by the Shareholder
from EC, that EC received from ICMC under the Lease.
Article 3 - Legend
3.1) Upon the transfer of Share or Shares from EC to Shareholder, and
until such time as the same is no longer required under applicable
requirements of this Agreement, the 1933 Act or applicable US state
laws and regulations, the certificates representing any of the Shares
subject to this Agreement shall bear the following legend:
"The Securities represented hereby have not been
registered under the United States Securities Act of
1933, as amended (the "U.S. Securities Act") and may be
offered, sold or otherwise transferred only (a) to the
Company, or (b) outside the United States in accordance
with Regulation S under the U.S. Securities Act, or (c)
inside the United States in accordance with (1) Rule
144A under the U.S. Securities Act or (2) Rule 144
under the U.S. Securities Act, if applicable, or (3)
with the prior written consent of the Company, or (4)
under another exemption from registration under the
U.S. Securities Acts The transfer of the shares of
common stock represented by this Certificate is
restricted under the terms of a Shareholders' Agreement
dated (DATE), as it may be amended from time to times A
copy of the Shareholders' Agreement, with all
amendments thereto, is on file at the principal office
of the Company. Delivery of this certificate may not
constitute "good delivery" in settlement of
transactions on stock exchanges in Canada."
Article 4 - Covenants And Representations of Shareholder
4.1) Shareholder represents, warrants and covenants to and with ICMC while
this Agreement is in effect that:
(a) ICMC has advised Shareholder that ICMC relied on an
exemption from the requirements to provide EC with a
prospectus and to sell securities through a persons registered
to sell securities under the Securities Act and, as a
consequence of EC acquiring securities pursuant to this
exemption Shareholder understands that, certain protections,
rights and remedies provided by the Securities Act, including
statutory rights of rescission will not be available to
Shareholder.
(b) it is not entering into this transaction as a result of
any material changes with respect to the affairs of ICMC known
to it (except for this transaction) which, to its knowledge,
information and belief, were not publicly disclosed as of the
date hereof;
(c) it is acting as principal and will be acquiring the shares
as principal for its known account and not on behalf of others
and for the purpose of investment and not with an intention to
effecting a distribution, and no other person, firm or other
organization will have any beneficial interest whatsoever in
the shares;
(d) it is a resident of the State of Washington, United States
of America, for the purposes of all securities laws applicable
to the transactions herein contemplated;
(e) it has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and
risks with respect to the shares, and is able to bear the
economic risks with respect to the shares, including the
possibility that the shares may become worthless;
(f) there are restrictions on Shareholder's ability to
transfer the Shares and it is the responsibility of
Shareholder to understand those restrictions and to comply
with them before transferring the Shares.
Article 5 - Term
5.1) This Agreement shall terminate upon the occurrence of any of the
following events:
(a) The registration of the Shares subject to this Agreement
under the 1933 Act of any State "Blue Sky" Laws, as required
by Article 6.9 of this Agreement,
(b) The valid transfer of the Shares under the terms and
conditions of this Agreement.
Article 6 - Miscellaneous
6.1) Binding Provisions. The terms and provisions of this Agreement shall be
binding upon and shall inure to the benefit of the heirs, successors
and assigns of the respective parties.
6.2) Severability. In the event any sentence or paragraph of this Agreement
is declared by a court of competent jurisdiction to be void, such
sentence or paragraph shall be deemed severed from the remainder of the
Agreement and the balance of the Agreement shall remain in effect.
6.3) Headings. Section titles or captions contained in this Agreement are
inserted only as a matter of convenience and for references Such titles
and captions in no way define, limit, extend or describe the scope of
this Agreement nor the intent of any provision of this Agreement.
6.4) Meanings. Whenever required by the context, the singular shall include
the plural, and viceversa and the masculine gender shall include the
feminine and neuter genders, and viceversa.
6.5) Governing Law. All terms and provisions of this Agreement and the
rights and duties of all of the parties shall be construed under the
laws of the State of Washington, United States of America, except for
any legal interpretation involving Canadian securities laws in relation
to this Agreements Any legal interpretation involving Canadian
securities laws shall be construed under the applicable laws of the
Province of British Columbia, Canada. The venue for any action under
this Agreement shall lie in ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇ of America.
6.6) Amendments. This Agreement or any tern hereof may be changed, waived,
discharged or terminated only in writing, signed by all parties hereto.
6.7) Entire Agreement. This Agreement, together with its exhibits and such
other agreements referred to in this Agreement, the terms of which are
incorporated into this Agreement by this reference, supersedes any and
all oral or written agreements previously made relating to the subject
matter of this Agreement and constitutes the entire agreement of the
parties relating to the subject matter of this Agreement.
6.8) Notice. Any notice required or permitted to be given hereunder shall be
deemed properly given upon delivering the same to the party to be
notified, or upon mailing the notice, by registered or certified mail,
return receipt requested, to the party to be notified, at the address
hereinafter set forth, respectively, or such other address within the
United States of America as the party to be notified may have
designated prior thereto by written notice to the other.
(a) If to Shareholder:
_____________________
United States of America
Phone:_______________
Facsimile:____________
(e) If to ICMC:
Idaho Consolidated Metals Corporation
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ of America Phone:
▇▇▇-▇▇▇-▇▇▇▇ Facsimile:
▇▇▇-▇▇▇-▇▇▇▇
6.9) Securities Registration. If ICMC should register any class of equity
securities in the United States of America under either the 1933 Act or
under any state "Blue Sky" laws, ICMC shall also register those equity
securities subject to this Agreement.
6.10) Specific Enforcement.Because of the unique relationship of the parties,
in addition to any other remedies which the parties may have upon
breach of this Agreement, the obligations and rights contained in
Articles 2, 3 and 5 of this Agreement shall be specifically enforced.
6.11) Dispute Resolution. In any action at law or in equity to enforce any of
the provisions or rights under this Agreement, the unsuccessful party
or parties of such litigation, as determined by the court in a final
judgement or decree, shall pay to the unsuccessful party or parties all
costs, expenses and reasonable attorneys' fees incurred by the
successful parties, including without limitation, such costs, expenses
and fees on any appeals. If the successful party or parties shall
recover judgement in any action or proceeding, its costs, expenses and
attorneys' fees shall be included in as part of such judgement.
6.12) Regulatory Consent. This Agreement is specifically subject to the
approval of the regulatory authorities of the Province of British
Columbia and of the VSE.
EXECUTED as of the date first above written.
Shareholder:
-------------------------------
ICMC:
Idaho Consolidated Metals Corporation
-------------------------------
Its: President
SCHEDULE "E" TO THE LEASE AGREEMENT WITH OPTION TO PURCHASE
DATED THE 16th DAY OF JULY, 1999 AMONG PLATINUM
FOX, LLC, EMERALD CHIMERA, LLC, AND
IDAHO CONSOLIDATED METALS
CORPORATION
SCHEDULE OF ICMC LITIGATION
SCHEDULE "E"
Case # 30534 Grumprecht and White v. ▇▇▇ ▇▇▇▇▇▇▇, Del ▇▇▇▇▇▇▇, ICMC, IMD and
Silver Crystal
Case # 31666 Shareholders v. Silver Crystal
SCHEDULE "F" TO THE LEASE AGREEMENT WITH OPTION TO PURCHASE
DATED THE 16" DAY OF JULY, 1999 AMONG PLATINUM
FOX, LLC, EMERALD CHIMERA, LLC, AND
IDAHO CONSOLIDATED METALS
CORPORATION
SCHEDULE F