Exhibit 10.1
MINERAL LEASE AGREEMENT
BETWEEN
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
AND
ZEBRA RESOURCES, INC.
THIS MINERAL LEASE AGREEMENT, dated this 16th day of April, 2010
("Agreement Date") is between ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
("▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇") and ZEBRA RESOURCES, INC, ("Zebra"). ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
and Zebra are each hereinafter sometimes referred to individually as Party and
collectively as Parties.
RECITALS:
▇. ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ own 189 unpatented mining claims, located in ▇▇▇
County, State of Nevada (referred to as the "Property" and more
particularly described in Article I).
▇. ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ are desirous of leasing the Property to Zebra, and
Zebra is desirous of leasing the Property from Hackwork and ▇▇▇▇▇▇, for
the purposes, and on the conditions, set forth herein.
NOW THEREFORE In consideration of the sums set forth in this Agreement to be
paid by Zebra to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, the receipt and sufficiency of which are
hereby acknowledged by the Parties, and in consideration of the mutual covenants
and agreements of the Parties herein contained, the Parties agree as follows:
CONDITION SUBSEQUENT
1.1 Condition. The respective obligations of the Parties under this
Agreement are binding obligations of the Parties unless this Agreement
is terminated pursuant to Section 1.3 as a result of Zebra failing to
waive the condition that it is satisfied, in its sole discretion, with
the viability, economic or otherwise, of proceeding to perform the
obligations contained in this Agreement. Such condition is for the sole
benefit of Zebra and may only be waived by Zebra.
1.2 Notice. If Zebra notifies ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ on or before the 45th day
following the Agreement Date that the condition in Section 1.1 has been
satisfied, then such condition shall be deemed to be satisfied
effective as of the date such notice is given to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
1.3 Non-Satisfaction of Condition: If the condition in Sections 1.1 is not
satisfied as set forth in Section 1.2, this Agreement will, unless the
parties otherwise mutually agree in writing, thereupon terminate and be
of no further force and effect and neither Party shall have any further
obligation hereunder; provided, however, that such termination shall
not relieve any Party from any liability for any breach of such party's
obligations hereunder prior to such termination.
1
ARTICLE I
DEFINITIONS
For purposes of this Agreement certain terms and provisions used herein are
defined as follows:
1.01 "Advance Royalty" means the payments provided for in Section 4.01.
1.02 "Affiliate" means, with respect to any Party, any person, partnership,
joint venture, corporation or other form of enterprise, which directly
or indirectly Controls, is controlled by, or is under common Control
with a Party.
1.03 "Agreement" means this Mineral Lease Agreement, as it may be amended,
together with Exhibit A, Exhibit B and Exhibit C attached hereto.
1.04 "Allowable Expenditures" means
(a) all costs, expenses, liabilities, charges and obligations of
whatsoever kind or nature incurred or funded in connection with
the Exploration or Development of the Property, including amounts
incurred or funded for or in connection with:
(A) geophysical, geochemical and geological surveys, drilling,
drifting and other underground work, assaying, metallurgical
testing, environmental studies and engineering;
(B) payments made to any governmental authorities to maintain
the Property or any part thereof in good standing;
(C) taxes and assessments other than taxes based on income; and
(D) fees, wages, salaries, expenses (including travel) and other
amounts paid to or in respect of persons directly engaged in
work with respect to the Property;
(b) all amounts included in Article XIII; and
(c) a charge for general overhead and administrative expenses of
Zebra equal to 10% of the amounts included pursuant to subclause
(a) and (b) of this Section 1.04.
1.05 "Alternative A" means the determination of the Applicable Percentage
set forth in Subsection 1.07(a).
1.06 "Alternative B" means the determination of the Applicable Percentage
set forth in Subsection 1.07(b).
1.07 "Applicable Percentage" means, in respect of a Quarter, the following:
2
(a) if Alternative A is elected, or deemed to be elected by Zebra,
then:
(i) if the Quarterly Average Gold Price for such Quarter is less
than $800.00, the Applicable Percentage is 1.00%;
(ii) if the Quarterly Average Gold Price for such Quarter is
equal to or greater than $800.00 and less than $1,200.00,
the Applicable Percentage is 2.00%;
(iii)if the Quarterly Average Gold Price for such Quarter is
equal to or greater than $1,200.00, the Applicable
Percentage is 3.00%; and
(b) if Alternative B is elected, or deemed to be elected by Zebra,
the Applicable Percentage is 3.00%, subject to reduction pursuant
to the following conditions:
(i) Zebra shall have the right, from, and on, the first day
payments are received by Zebra for the sale of Products from
the Property (the "First Production Day") until, and on, the
365th day following the First Production Day, to pay
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ the amount of $1,000,000.00 (the
"Reduction Payment"), following which such percentage shall
be reduced to 2.00% effective (a) on and after the First
Production Date if the Reduction Payment is made on or
before the First Production date; or (b) on and after the
first day of the Quarter in which the Reduction Payment is
made if the Reduction Payment is made after the First
Production Date; and
(ii) Zebra shall have an additional right, from, and on, First
Production Day until, and on, the 730th day following the
First Production Day, to pay ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ the amount
of $3,000,000.00 (the "Additional Reduction Payment")
following which such percentage shall be reduced to 1.00%
effective (a) on and after the First Production Date if the
Additional Reduction Payment is made on or before the First
Production date; or (b) on and after the first day of the
Quarter in which the Reduction Payment is made if the
Reduction Payment is made after the First Production Date.
1.08 "Area of Interest" has the meaning ascribed thereto in Exhibit B.
1.09 "Control" means possession, directly or indirectly, of the power to
direct or cause direction of management and policies through ownership
of voting securities, contracts, voting trusts, or otherwise.
Grammatical variations of Control have a like meaning.
1.10 "Development" means all preparation for the removal of Ores and
Minerals for the commercial recovery of Products from such Ores and
Minerals, including surveying, development drilling and geological,
geochemical and engineering analysis thereof, sampling, pre-stripping
and stripping, the construction or installation of a mill or any other
improvements to be used for the Mining, handling, milling, processing
or other beneficiation of Products. The active pursuit of obtaining any
federal, state or local authorization or permit related to any of the
3
foregoing activities included in this definition shall also be
considered to be an act of Development and grammatical variations of
Development have a like meaning.
1.11 "Effective Date" means the first day of the first month following the
date on which notice is provided pursuant to Section 1.2.
1.12 "Exploration" means all activities directed toward ascertaining the
existence, location, quantity or quality of a commercial deposit of
valuable Ores and Minerals on, in or under the Property, which
activities are conducted prior to the commencement of Development of
such deposit. Such activities include, but are not limited to,
investigating, prospecting, surveying, sampling and drilling. The
active pursuit of obtaining any federal, state or local authorization
or permit related to any of the foregoing activities included in this
definition shall also be considered to be an act of Exploration and
grammatical variations of Exploration have a like meaning.
1.13 "Mining" means the extraction of Ores and Minerals from the Property
and grammatical variations of Mining have a like meaning.
1.14 "Ores and Minerals" means any and all metallic and non-metallic
minerals of every kind, grade and type (excluding only oil, gas, casing
head gas and associated liquid and gaseous hydrocarbon substances),
including, without limitation, deposits, dores, ores, concentrates and
solutions containing such minerals in all forms in which such minerals
may be found, extracted or produced, any by-products thereof having
commercial value.
1.15 "Production Royalty" means the payments provided for in Section 4.02.
1.16 "Products" means all metals and commercial minerals produced from the
Ores and Minerals which are Mined from the Property.
1.17 "Property" means:
(a) the unpatented mining claims situate in the State of Nevada
described in Exhibit A, and all claims, mineral titles, mineral
leases, mineral exploration permits and other mining and mineral
interests and rights derived therefrom (including any renewal
thereof or other form of successor or substitute title relating
thereto), and for clarity, any unpatented mining claims resulting
from any amendment or relocation of such unpatented claims or
patents obtained with respect to any unpatented claims included
in the foregoing shall be deemed to be included in the Property;
(b) all unpatented or patented mining claims, mineral titles, mineral
leases, mineral exploration permits and other mining and mineral
interests and rights included in the Property pursuant to the
provisions of this Agreement from time to time; and
(c) such other rights and interests as may be included in the
Property from time to time pursuant to Article XIII.
4
1.18 "Quarter" means a calendar quarter;
1.19 "Quarterly Average Gold Price" means the sum of the monthly average
gold price per ounce as quoted by the London Bullion Market Association
(or, in the event that the London Bullion Market Association ceases to
publish such information, then by a similar publication) of each month
in an applicable Quarter, divided by three;
1.20 "Zebra" includes any subsidiary, successor, parent company, subsidiary
of parent company, division or Affiliate of Zebra.
ARTICLE II
GRANT OF AGREEMENT
2.01 Demise of the Property. Subject to the terms and conditions contained
in this Agreement, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ hereby grant to Zebra an
exclusive lease of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇'▇ interest in the Property,
including, all of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇'▇ rights and privileges, whether
now owned or hereafter acquired, that are within the Area of Interest.
The Property is leased to Zebra for the purposes of Exploring,
Developing, Mining, Producing, processing, consuming, transporting and
marketing Ores and Minerals, by any method or methods deemed desirable
by Zebra, whether the same be now or hereafter known to Zebra.
2.02 Mining Rights. The rights leased exclusively unto Zebra in Section 2.01
expressly include, without limitation, the following:
(a) the right to Mine Ores and Minerals by open pit, underground,
auger, borehole, drilling, combustion, in-situ solution methods,
or any other method now known or hereafter developed;
(b) the right to store, save, and stockpile Ores and Minerals and
Products;
(c) the right to mill, concentrate, refine and otherwise beneficiate
Ores and Minerals;
(d) the right to transport and market Ores and Minerals and Products;
(e) the right to construct, use, maintain, repair, replace and
relocate any and all facilities and structures on and under as
may be necessary, useful or convenient in connection with Zebra's
operations on the Property and/or operations on other lands owned
(in whole or in part), controlled, leased or operated by Zebra,
including, but not limited to: buildings, roads, railroads,
shafts, inclines, tunnels, drifts, pits, tailings ponds, ▇▇▇▇▇
pads, piles of waste, earth, waste dumps, ditches, drains,
pumping stations, boreholes, drill holes, tanks, dams, ▇▇▇▇▇,
reservoirs, ponds or other alterations, mineral stockpiles,
pipelines, telephone lines, utility lines, power lines,
processing facilities, and plants, shops, and transportation
facilities and other utilities, and the maintenance thereof;
5
(f) all rights-of-way, easements and servitudes as may be necessary,
useful or convenient for the purposes set forth in (a) through
(e) above, and the right of ingress and egress therefore;
(g) the right to use or consume so much of the subsurface of the
Property as may be found necessary, useful, convenient or
incidental to carrying out the purposes of this Agreement, in
accordance with the methods adopted by Zebra, such right to be
carried out in Zebra's sole discretion without any requirement to
leave or provide subjacent or lateral support for the overlying
strata or surface or anything thereon, therein or there under;
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ hereby waiving and releasing all damages
arising from all operations in and the removal of Ores and
Minerals from the Property by Zebra, its successors or assigns,
or arising from any and all physical conditions now present or
which may hereafter develop in or about the Property;
(h) the right to possess and use all or any part of the Property and
any or all structures, facilities, tunnels shafts, pits, opening,
ditches, roads, haulage ways and other improvements or
appurtenances existing thereon or there under to Explore,
Develop, Mine, produce, stockpile, store, market and transport
Ores and Minerals, Products, rock, wasted, water or materials
form all or any portion of the Property and/or from other
properties, whether contiguous or not, owned (in whole or in
part), controlled, leased or operated by Zebra, and for all other
purposes, including, but not limited to, all rights-of-way,
easements and servitudes as may be necessary, useful or
convenient therefore and rights of ingress to and egress from
such other properties which Zebra, in its sole discretion,
determines to be necessary, useful or convenient for Exploration,
Development, Mining or production operations on such other
properties;
(i) the right to use and consume, in compliance with the laws of the
State of Nevada, all water rights relating to water within, upon
or under the Property and all water rights, the point of
diversion or place of use of which is on the Property;
(j) the right to commingle (for all purposes including, but not
limited to, Mining, storing, transporting, marketing, or selling)
any Ores and Minerals or Products produced from the Property with
any material or minerals from properties other than the Property
provided such commingling is first weighed, measured, sampled and
analyzed in accordance with sound mining and metallurgical
practices; and
(k) the right to mortgage, pledge, charge, assign or transfer by way
of security, or otherwise encumber the whole or any part of all
of Zebra's rights under this Agreement for any financing
purposes, but only on the condition that the holder of such
encumbrance shall have first entered into a written agreement
with ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ to the effect that in enforcing its
encumbrance, the holder shall honor the terms of this Agreement,
including the priority ranking of ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇'▇ Advance
Royalty and Royalty Payments to any such encumbrance.
6
2.03 Information and Data. Upon execution of this Agreement, Zebra may
obtain from ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, all records, data and information in
their possession or reasonably available to them relating to ownership
in the Property, and all maps, surveys, technical reports, drill logs,
mine, mill and smelter records, and all metallurgical, geological,
geophysical, geochemical, and other technical data pertaining to the
Property in their possession or reasonably available to them.
2.04 Title to After-Acquired and Additional Interests. This Agreement, and
the rights granted to Zebra hereunder, will cover and extend to any
further or additional right, title, interest or estate heretofore or
hereafter acquired by ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ in or to the Property, the
Area of Interest or any part thereof.
ARTICLE III
TERM
3.01 Term. The primary term of this Agreement shall be 30 years from the
Effective Date (the "Primary Term"), unless sooner terminated provided
herein. This Agreement shall remain in effect after the expiration of
the Primary Term for so long thereafter as the Advance Royalty payments
and/or the Production Royalty payments are paid in accordance with the
terms of this Agreement, up to a maximum of 90 years.
3.02 Waiver of Obligations. Zebra shall have no obligation hereunder to
begin or prosecute prospecting, Exploration, Development, Mining,
processing, transporting or other operations on the Property, or to
Mine and/or remove any Ores and Minerals thereon, therein or
thereunder, nor is there any implied covenant to do so. ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ further acknowledge and agree that no Mining of Ores and
Minerals from the Property, or otherwise, are required which would
require Zebra to pay any Production Royalty to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ further acknowledge and agree that Zebra may waste,
consume, spoil and destroy any and all Ores and Minerals from the
Property, or otherwise, in Zebra's sole discretion, and Zebra shall not
be required to pay any Production Royalty on any such Ores and Minerals
which may be so wasted, consumed, spoiled or destroyed. ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ further acknowledge and agree that the consideration provided
herein, for the rights granted to Zebra hereunder, including, but not
limited to the Advance Royalty, constitute the sole consideration for
all rights granted to Zebra hereunder and that the same constitutes
full, reasonable, fair and adequate consideration for the rights
granted to Zebra hereunder. If Zebra shall conduct Exploration,
Development, Mining, processing, transporting, and other operations or
activities hereunder, such operations and activities shall be performed
only to the extent, at such times and locations, and by or with such
methods as Zebra, in Zebra's sole discretion, shall deem desirable.
Zebra shall not be required to Mine, or protect in its Mining
operations, any Ores and Minerals which cannot be Mined, processed,
shipped, and marketed at a reasonable profit to Zebra at the time
encountered as determined in the sole discretion of Zebra.
ARTICLE IV
ADVANCE AND PRODUCTION ROYALTIES, SHARES AND WORK COMMITMENTS
4.01 Advance Royalty.
7
(a) In consideration for the rights granted to Zebra hereunder, Zebra
shall make the following payments to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇:
Amount Payable On or Before
------ --------------------
$ 25,000.00 execution of this Agreement
$100,000.00 the 15th day following the Effective Date
$125,000.00 the first day of Year 2 and continuing on the
first day of each year through Year 5
$150,000.00 first day of Year 6 and continuing on the first
day of each year through Year 12
$200,000.00 the first day of Year 13 and continuing on the
first day of each year through Year 20
$300,000.00 the first day of each year beginning on Year 21
and continuing through Year 30
(b) For purposes of this Article IV, the term Year shall be defined
as a calendar year which commences on the same day, in each
calendar year of the term of this Agreement, as the Effective
date of this Agreement (for clarity, if the Effective Date is
April 1, 2010, the first day of year 2 is April 1, 2011).
(c) The payments under this Section 4.01 for each year of the term of
this Agreement beyond the Primary Term will be paid on or before
the first day of each year subsequent to Year 30 and shall be
based on the payment made under this Section 4.01 during the
prior Year multiplied by the U.S. Consumer Price Index for such
prior Year as published in the Wall Street Journal or other
comparable publication in the United States of America (the
"CPI"), and that factor added to the prior Year's payment (for
clarity, if the CPI in Year 30 was 2.34%, the payment on or
before the first day of Year 31 would be $307,020.00 based on the
following calculation: ($300,000 x 2.34%) + $300,000 = $307,020);
and if the CPI in Year 31 was 1.50% the payment on or before the
first day of Year 32 would be $311,625.30 based on the following
calculation: ($307,020 x 1.50%) + $307020 = $311,625.30).
(d) The payments by Zebra to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ under this Section
4.01 hereunder shall constitute prepayment of the Production
Royalty payments and Zebra may, during the term of this
Agreement, recover all payments under this Section 4.01, by
crediting such payments against, and in reduction of, all
Production Royalty payments which may become payable by Zebra to
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ under this Agreement. All payments under this
Section 4.01 not recovered by Zebra during a given Year may be
8
recovered by Zebra in subsequent years and no Production Royalty
payments shall be due and owing to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ until all
payments under this Section 4.01 have been fully recovered by
Zebra.
4.02 Production Royalty.
(a) In further consideration for the rights granted to Zebra
hereunder, Zebra shall pay to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ a royalty as set
forth in Exhibit C; and
(b) no payments under this Section 4.02 shall be due with respect to
samples of Ores and Minerals which Zebra deems necessary to test
or evaluate the technical or economic feasibility of extraction,
milling or processing methods which may be used to enjoy the
benefits and rights granted to Zebra hereunder.
4.03 Manner of Payment. All payments of Advance Royalties or Production
Royalties due or payableunder this Article IV may be made by check or
draft mailed or delivered on or before the due date to ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ in the name of the person designated and at the address provided
in Section 14.08 below.
4.04 Work Commitments. Unless this Agreement is terminated as provided
herein, the following Allowable Expenditures will be incurred or funded
by Zebra on or before the end of the following respective Years:
Year Allowable Expenditures
---- ----------------------
Year 1 $150,000
Year 2 $200,000
Year 3 $250,000
Year 4 $300,000
Year 5 $350,000
ARTICLE V
MINING OPERATION
5.01 Right of Entry During Lease Period. During the term of this Agreement,
Zebra and its authorized representatives shall have, subject to Section
5.06, the sole and exclusive right in respect of the Property to enter
thereon and to have exclusive and quiet possession thereof.
5.02 Standard. Zebra shall perform or cause to be performed its Exploration,
Development and Mining and other operations upon the Property and under
this Agreement in a good and workmanlike manner and in accordance with
sound mining and engineering practices.
9
5.03 Compliance with Law. All work performed or caused to be performed by
Zebra upon the Property shall be in compliance with all applicable
federal, state and local laws, rules and regulations, expressly
including, but not limited to, any and all applicable laws, rules and
regulations pertaining to the reclamation of the Property.
5.04 Books. Zebra shall keep accurate books and records on the accrual basis
in accordance with generally accepted accounting principles. ▇▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇'▇ sole inspection and audit rights as to Zebra's books and
records are set forth in Exhibit C.
5.05 Reports. Zebra shall furnish to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, on or before 90
days following the end of each Year, copies of all geophysical,
geochemical, and geological surveys, drilling logs, assaying,
metallurgical testing, environmental studies and engineering and
geologic data and studies produced by Zebra with no warranty, express
or implied, as to the completeness or accuracy of any information or
data made available to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ hereunder or to the fitness
or suitability of such information or data for any purpose, together
with a report on Allowable Expenditures incurred on the Property during
such Year.
5.06 Inspections. Zebra shall permit ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ and, in reasonable
numbers, their authorized representatives, at their own risk and
expense, and subject to section 14.19, access to the Property at all
reasonable times for inspection purposes, provided that:
(i) ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ provides Zebra with 10 days written notice of
any intended visit to the Property; and
(ii) If Zebra is conducting operations on the Property, ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇, or their authorized representatives, shall be accompanied
by a Zebra representative while visiting the Property.
5.07 Indemnity. ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ hereby agree to indemnify Zebra, and to
save Zebra harmless, from all costs, liabilities, damages and expenses,
of any kind whatsoever, including attorney fees, which Zebra may incur
or suffer as a result of (i) any injury, including injury causing
death, to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, or their authorized representatives; or
(b) any activities by ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, or their authorized
representatives, on the Property.
ARTICLE VI
OWNERSHIP
6.01 Ownership. ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ hereby represents and warrants as
follows:
(a) ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ are Nevada residents.
(b) there are no actions, suits, claims, proceedings, litigation or
investigations pending or, to the best of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇'▇
knowledge after due investigation, threatened, or judgments
outstanding and unsatisfied against or affecting any part of, or
10
all of the Property, or this Agreement, at law or in equity, or
in arbitration, mediation, or instrumentality. ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
are not aware of any facts or circumstances upon which any such
action, suit, claim, proceeding, litigation or investigation
could be based. ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ know of no requirements of
federal, state or local law, which could materially and adversely
affect Zebra's ability to Explore, Develop and Mine the Property
as contemplated by this Agreement;
(c) with regard to the Property:
(i) it is not subject to any royalty, overriding royalty or
payment on the production of Ores and Minerals or Products,
except a set forth in this Agreement;
(ii) it is not subject to any prior agreements including, without
limitation, any royalty obligations, lease, mortgage, deed
of trust, restriction, contract for sale or option to
purchase and ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ have not committed to the
sale or right of first refusal, preemptive right, lease or
any other form of disposition of the Property; and
(iii)it is free and clear of all charges, claims defects,
objects, liens and encumbrances, except taxes not yet
assessed;
(d) there has been no act or omission by ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ which
could result by notice or lapse of time, or both, in the breach,
termination, abandonment, forfeiture, relinquishment or other
premature termination of the rights of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ in and
to the Property;
(e) ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ have not incurred any expenditures and have
made no commitments to make expenditures in connection with the
Property which are, or will be become, due and payable after the
Effective Date of this Agreement;
(f) ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ have made no agreements or arrangements for
the sale of any Ores and Minerals or Products located on or under
the Property or produced form the Property; and
(g) ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ are not aware of any material facts of
circumstances not disclosed in writing to Zebra, the disclosure
of which is necessary to prevent the representations and
warranties of this Article VI from being materially misleading.
6.02 Survival. The representations and warranties contained in Section 6.01
survive the execution and delivery of this Agreement.
6.03 Discharging Liens. Zebra, at its option, may discharge any tax,
mortgage, deed of trust or other lien upon the Property, and in the
event Zebra does so it shall be subrogated to such lien with the right
to enforce the same and apply all Advance Royalties, Production
Royalties, or other payments or shares, accruing to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
hereunder, toward satisfying same.
11
6.04 Proportionate Reduction. Without impairment of Zebra's rights under the
above warranties of ownership, if ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ own an interest in
the Property, which is less than a 100% interest in the Property, then
the Advance Royalties and Production Royalties provided for herein
shall be paid to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ only in the proportion that
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇'▇ interest in the Property actually owned bears to
the ownership interest warranted in this Agreement.
6.05 Ownership Defects. Without impairment of Zebra's rights under the above
warranties of ownership, if ownership to the Property or any part
thereof, is, in the opinion of Zebra's counsel, defective, Zebra shall
so notify ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, at any time during the term of this
Agreement, of the specific defect and provide sufficient information so
that ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ shall, at their expense, undertake to promptly
cure such defect or defects with reasonable promptness after ▇▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇'▇ receipt of notice thereof, failing which, Zebra may, at its
option, cure such defect or defects and deduct the cost thereof from
any subsequent payments due to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ under this Agreement
or may elect to terminate this Agreement in whole or in part, without
prejudice to any claims Zebra may have against ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ as a
result of such defect or defects. ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ agree to execute
all documents and do any and all things that may be necessary or
desirable to assist Zebra in eliminating any such defect or defects.
6.06 Contested Title. If at any time or times during the term of this
Agreement the right to the use of the Property or any part thereof is
or may be contested by any party, including a governmental agency,
Zebra shall have the right, but not the obligation, to defend or quiet
the title thereto before any court or administrative body. If Zebra
elects to defend or quiet title, Zebra shall have the right to deduct,
from any and all payments due to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ under this
Agreement, all reasonable costs and expenses of such actions,
including, but not limited to, attorney fees, deposition costs and
investigative expenses, unless such actions result from Zebra's failure
to perform any of its obligations set forth in this Agreement. Zebra,
at any time may withdraw from or discontinue any title litigation, or
any steps it may have undertaken to defend or quiet title, after
written notice of such withdrawal is delivered to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇.
6.07 Escrow Deposit. In the event of dispute or litigation as to title of
the Property or as to Advance Royalties, Production Royalties, or any
other amounts payable under this Agreement, any such Advance Royalties,
Production Royalties or other payments may be deposited in escrow with
a depository bank selected by Zebra to be held until such dispute or
litigation is finally resolved or terminated. Any sums so deposited in
escrow by Zebra hereunder shall be deemed payment of Advance Royalties,
Production Royalties or other sums due hereunder for purposes of
compliance by Zebra with its obligations under this Agreement. Should
the dispute or litigation be settled in favor of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ shall be entitled to any earned interest on the
deposited funds for the period such funds are held in escrow.
6.08 Amendment and Relocation of Mining Claims. Zebra shall have the right
to amend or relocate in the name of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, the unpatented
claims, which are subject to this Agreement, which Zebra, in its sole
12
discretion, deems advisable to amend or relocate. Zebra shall not be
liable to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ for any act, or failure to act, by it or
any of its agents in connection with the amendment or relocation of
such claims as long as such act, or omission, does not arise from gross
negligence or is not made in bad faith. ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ hereby grant
Zebra a special power of attorney to file amendments to the memorandum
of this Agreement to reflect any changes in the legal description of
the Property occasioned by any amendment or relocation.
6.09 Patent and Mineral Lease Proceedings. Upon the request of Zebra at any
time or times during the term of this Agreement, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
agree to undertake to obtain patent to any or all of the unpatented
mining claims which are subject to this Agreement. Zebra shall prepare
all documents and compile all data and comply in all respects with the
applicable law, all at the expense of Zebra. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ shall
execute any and all documents required for this purpose and shall
cooperate fully with Zebra in the patent or lease application
proceedings subsequent thereto. If ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ begin such
proceedings and Zebra thereafter requests ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ to
discontinue such proceedings, or if this Agreement is terminated while
such proceedings are pending, Zebra shall have no further obligation
with respect thereto except to pay any unpaid expenses accrued in such
proceedings prior to its request to discontinue or prior to
termination, whichever occurs first.
6.10 Change of Law. If the laws of the United States concerning acquisition
of mineral rights on federally managed lands are repealed, amended, or
new legislation is enacted, Zebra shall have the right to take whatever
action it deems appropriate to preserve a right to Explore, Develop
and/or Mine the Property. If Zebra elects to take any action under the
terms of this Section 6.10, it shall first notify ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ in
writing setting forth the nature of the proposed action and an
explanation thereof. ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ agree to cooperate with Zebra
and execute whatever documents are deemed necessary by Zebra to
accomplish such action. Nothing in this Section 6.10 shall impose any
obligation upon Zebra to take any action, and nothing in this Section
6.10 diminishes the right of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ to take any action it
deems appropriate; provided, however, that if ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ choose
to take any action, it will first inform Zebra of the nature of such
contemplated action.
6.11 General. Nothing herein contained, and no notice or action which may be
taken under this Article VI, shall limit or detract from Zebra's right
to terminate this Agreement in the manner provided in this Agreement.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
7.01 Representations and Warranties. Each Party represents and warrants to
the other as follows:
(a) that, with regard to Zebra, it is incorporated under the laws of
Nevada and in good standing under such laws.
13
(b) that they have the capacity, power and authority to enter into
and perform this Agreement and all transactions contemplated
herein and that all other actions required to authorize them to
enter into and perform this Agreement have been properly taken;
(c) that they will not breach any other agreement or arrangement by
entering into or performing this Agreement;
(d) that this Agreement has been duly executed and delivered by them
and constitutes the legal, valid and binding obligations of Zebra
and ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ enforceable in accordance with its terms;
(e) that to the best of their respective knowledge, after due
investigation, neither the execution and delivery of this
Agreement, nor compliance by either Party with any of the
provisions of this Agreement conflict or will conflict with or
result or will result, with or without notice or lapse of time,
or both, in a breach of, or default, or result in any lien,
charge, encumbrance or adverse claim against or on the Property,
under any of the terms, conditions or provisions of a Party's
articles or by-laws or any directors or shareholders resolutions
of a Party or any agreement or instrument to which either Zebra
or ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ is a party, or judgment, order, law or
governmental or administrative regulation or restriction
applicable to it; and
(f) that they have not made any assignment for the benefit of
creditors, filed any petition in bankruptcy, been adjudicated
insolvent or bankrupt, petitioned or applied to any tribunal for
any receiver, conservator or trustee of them under any
reorganization arrangement, readjustment of debt, conservation,
dissolution or liquidation law or statute of any jurisdiction,
and no such action or proceeding has been commenced against them
by any creditor, claimant, governmental agency or other person
and the they have no present plans or intentions to undertake any
of the foregoing.
7.02 Disclosure. The Parties are not aware of any material facts or
circumstances not disclosed in writing to the other Party, the
disclosure of which is necessary to prevent the covenants and
warranties in this Article VII from being materially misleading.
7.03 Survival. The covenants and warranties contained in this Article VII
survive the execution and delivery of this Agreement.
ARTICLE VIII
TAXES
8.01 Taxes. Zebra agrees to pay, to the extent applicable, the following:
(a) all taxes levied and assessed on improvements placed upon the
Property by Zebra during the term of this Agreement; and
14
(b) any increase in tax levied upon the interest of ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ in the Property during the term of this Agreement to the
extent that such increase is attributable to Zebra's operations
or activities upon the Property.
Zebra's obligation to pay the aforesaid taxes shall commence with
taxes payable for the year of execution of this Agreement prorated as
of the Effective Date. Zebra agrees to make payment thereof, as
required by federal, state and local statutes, rules and regulations,
so that no default in taxes upon the interest of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
shall occur; provided however, that Zebra shall have the right to
contest by judicial proceeding or otherwise the validity of any
assessment or levy of any of the aforesaid taxes and to take such
action as Zebra deems necessary or desirable to secure cancellation,
reduction, adjustment or equalization thereof before Zebra shall be
required to pay and discharge the same. ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ shall
cooperate and assist Zebra as necessary in any judicial or other
proceeding contesting the validity of any assessment or levy of any of
the aforesaid taxes.
Zebra may require that taxes be assessed to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ in care
of Zebra in order that it may assure itself that the taxes are timely
paid. Zebra shall deliver duplicates of any tax receipts for payments
made if requested to do so by ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇. It is agreed that
should ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ receive tax bills or claims that are the
responsibility of Zebra hereunder, the same shall be promptly
forwarded to Zebra for appropriate action and if not so forwarded,
Zebra shall not be responsible for any delinquent payment charges or
interest charges resulting from the late payment of such taxes.
If Zebra should, upon surrender or other termination of its rights
under this Agreement, be in possession of the Property for only a
portion of a year, the taxes for the year shall be prorated between
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ and Zebra on the basis of taxes paid for the last
preceding calendar year.
Zebra shall not be obligated to pay any tax imposed upon any payment
it makes to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ under this Agreement, nor shall Zebra
be compelled to discharge any liens upon the Property not arising by
reasons of its activities under this Agreement.
8.02 Tax Payments by ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇. During the term of this Agreement,
except as otherwise specifically set forth in Section 8.01, ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ shall pay, to the extent applicable, when due all general ad
valorem taxes and assessments assessed against the Property, and all
other lawful public taxes and assessments, whether general, specific or
otherwise, assessed and levied upon or against the Property.
ARTICLE IX
LIABILITY AND INSURANCE
9.01 Liens. Zebra shall promptly pay all wages due its workmen and employees
and pay for all materials and supplies furnished for its operations
hereunder and shall defend and protect ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ from and
against all claims, liens and liabilities which may arise as a result
of Zebra's failure so to do. In the event that any mechanic's, material
15
men's or laborer's liens may arise and are filed against the Property
as a result of Zebra's operations hereunder, Zebra shall take all steps
to obtain the discharge thereof.
9.02 Insurance. Zebra shall maintain at all times during the term of this
Agreement insurance of the type and in an amount adequate to satisfy
employer's liability and worker's compensation obligations under
applicable federal and state laws.
9.03 Liability. Zebra will, at its sole expense, save, protect and hold
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ harmless against any and all claims, demands or
judgments whatsoever for loss or damage to personal property and death
or injury to persons arising out of Zebra's activities or operations on
the Property, except those claims of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, its assigns,
assigns representatives, contractors, employees, successors or agents
which are barred by the provisions of Section 5.06. Zebra's
responsibilities under this Section 9.03 shall terminate upon
termination of this Agreement, except for causes of action accruing on
or before the date of termination.
ARTICLE X
TERMINATION
10.01 Termination of Lease Agreement.
(a) This Agreement may be terminated:
(i) in the manner provided for in Section 1.3;
(ii) by Zebra, at any time, upon Zebra delivering to ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ written notice that it has terminated this Agreement;
(iii)by ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, if Zebra has not paid the Advance
Royalty payments as set forth in Section 4.01 and has failed
to cure such defect within 30 days of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
delivering written notice to Zebra of such defect, upon
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ delivering to Zebra written notice that
it has terminated this Agreement;
(iv) by ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, if Zebra has not incurred or funded
the Allowable Expenditures as set forth in Section 4.04, and
has failed to cure such defect, or paid ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
the amount of such defect (which payment will be deemed to
satisfy such Allowable Expenditure requirements for the
applicable Year) within 30 days of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
delivering written notice to Zebra of such defect, upon
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ delivering to Zebra written notice that
it has terminated this Agreement;
(b) If this Agreement is terminated in the circumstances contemplated
by sub-clause (a)(i) or (a)(ii) above within 90 days prior to
payment of the annual government fees, due to maintain the mining
claims described in Exhibit A in good standing for another year,
16
Zebra will be obligated to pay such fees, and if this Agreement
is terminated in the circumstances contemplated by sub-clause (i)
or (ii) above within 30 days prior to the payment of the annual
government fees, due to maintain in good standing the mining
claims which become part of the Property pursuant to Article XIII
for another year, Zebra will be obligated to pay such fees.
10.02 Rights and Obligations After Termination. In the event of termination
of this Agreement pursuant to Section 10.01, Zebra shall have the
right, for a period of 12 months following termination, to remove its
buildings, structures, machinery, casings, tools, equipment and other
personal property, permanent improvements and fixtures erected or
placed upon the Property by Zebra, or its assigns, after the date
hereof. Zebra shall leave on the Property any track, pipe, timber,
shaft guides, sheave wheels, air gates, ventilation ducts, chutes,
ladders and other protective devises in place on the Property for the
purpose of safety and underground support and entry. All such
buildings, structures, machinery, casings, tools, equipment or other
personal property, permanent improvements or fixtures not removed prior
to the expiration of such 12 month period, shall, at the election of
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, be deemed affixed to the Property and shall become
and remain the sole property of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇.
10.03 Obligations and Liability for Default. Upon termination of this
Agreement as provided for in this Article X, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ shall
be entitled to retain all payments that were paid to it prior to such
termination, and, except for (i) any unfulfilled obligations of Zebra
under paragraph 10.01(b) above; (ii) any reclamation or other similar
requirements mandated by state or federal law or regulation in regards
to Zebra's activities on the Property; and (iii) the return by Zebra of
drill cores and chip trays from the Property, obtained by Zebra from
▇▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ or from Zebra's Property drill programs or
otherwise, to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, P. O. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇, or such other location as ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
may advise Zebra, Zebra shall have no further obligation to ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ under this Agreement and shall have no liability to ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ by way of damages of any kind whatsoever.
ARTICLE XI
TRANSFER RIGHTS AND RESTRICTIONS
11.01 Transfers, Charges, Restrictions. ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ shall not sell,
transfer, convey, assign, pledge, mortgage, charges or otherwise
dispose of or encumber all or any part of its right, title and interest
in and to the Property or this Agreement (collectively, the "Interest")
except as permitted by this Article XI.
11.02 Right of First Refusal.
(a) if ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ receive a bona fide offer from a person
or entity, with whom ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ deal at arm's length, to
purchase all, or any part of, its Interest, which offer ▇▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇ is willing to accept, or if ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ intend to
make an offer to a person or entity, with whom ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
deal at arm's length to sell all, or any part of, its Interest
(both instances of which are hereinafter referred to as the
17
"Offer"), then ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ will deliver to Zebra, promptly
after receipt of, or the making of, an Offer, as the case may be,
written notice (the "Offer Notice") of the Offer, accompanied by
a copy of the Offer and all information in the possession of
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ regarding the person or entity (the "Offeror")
from whom, or to whom, the Offer is received or made, as the case
may be. The Offer Notice will constitute an offer by ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ to Zebra to sell ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇'▇ Interest, or part
thereof included in the Offer, (the "Offered Interest") to Zebra
at the same price and on the same terms and conditions as
specified in the Offer and Zebra may accept the offer constituted
by the Offer Notice by delivering to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, within
60 days after the delivery of the Offer Notice to Zebra, written
notice (the "Acceptance Notice") of Zebra's acceptance of such
offer;
(b) if the Offer is for a price payable in whole, or in part, by way
of securities, royalties, or other real or personal property, the
Offer Notice shall be accompanied by an opinion of an investment
dealer (or such other qualified advisor as is appropriate) in the
United States of America of the cash equivalent value of the
securities, royalties or other real or personal property and
Zebra shall have the option to pay for the Offered Interest in an
amount of cash equal to such cash equivalent value or to pay for
the Offered Interest on the same terms and conditions as set out
in the Offer and Zebra's choice of this option shall be stated in
the Acceptance Notice;
(c) the delivery by Zebra to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ of an Acceptance
Notice will constitute a binding agreement between Zebra and
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ for the purchase and sale of the Offered
Interest at the price and on the terms and conditions specified
in Acceptance Notice, which price and terms and conditions may be
modified by agreement between the Parties or by arbitration
pursuant to Section 13.02;
(d) for clarity, if Zebra purchases the Offered Interest, Zebra will
have acquired any and all of rights included in the Offered
Interest including, including, but not limited, all remaining
Advance Royalties or Production Royalties payable by Zebra herein
and any and all other rights such purchase includes;
11.03 Permitted Sales. If an Acceptance Notice is not delivered by Zebra
within the time provided for in Section 11.02, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ may,
for a period of 60 days thereafter, transfer the Offered Interest to
the Offeror at a price, and on terms and conditions, no less favourable
to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ than as set out in the Offer; provided, however
that upon closing of such transaction, the Offeror agrees to be bound
by the terms and conditions of this Agreement. If such transaction has
not completed within the said 60 day time period, then the provisions
of Section 11.02 shall again become applicable to any sale or transfer
of the Offered Interest.
11.04 Transfer to Affiliates, Heirs, Family Members, Trusts. Notwithstanding
any other provision of this Article XI, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ may transfer
the Interest, or part thereof, to any Affiliate, any of ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇'▇ heirs, immediate family members (which includes a husband,
wife, son or daughter), or a trust established for ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇'▇
heirs or immediate family members; provided, however as follows:
18
(a) that upon closing of such transaction, the transferee agrees to
be bound by the terms and conditions of this Agreement; and
(b) the said Affiliate will remain an Affiliate of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
for so long as the Affiliate owns all, or any part of, the
Interest of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇.
11.05 No Release. ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ shall be liable under this Agreement,
for, or with respect to, any breach or non-observance of any covenant,
condition or term hereof, by any transferee under this Article XI,
except to the extent expressly otherwise agreed to in writing by Zebra.
11.06 Closings. Any agreement for the purchase and sale of all, or any part
of, the Interest pursuant to Section 11.02, shall be completed no later
than 10 days after a binding agreement for the purchase and sale of the
Interest has come into effect, or, if any determination of value is
required by agreement or arbitration, no later than 10 days after such
determination. Unless otherwise agree to in writing by the Parties,
completion of the purchase and sale of the Interest, shall take place
at the offices of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, P.C., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇,
▇▇▇▇▇▇. At the time scheduled for completion, the Party who is the
purchaser (the "Purchaser") shall deliver to the Party who is the
vendor (the "Vendor") payment of the purchase price (which, if the
whole or part of the purchase price is in cash, then by certified check
or bank draft) for the Interest, or portion thereof, being purchased by
the Purchaser, and the Vendor shall deliver to the Purchaser executed
transfers of the Interest, or portion thereof, being purchased by the,
Purchaser in form and substance satisfactory to the Purchaser. The
Interest, or portion thereof, being purchased by the Purchaser shall be
transferred by the Vendor to the Purchaser free and clear of all liens,
claims, charges and encumbrance of others, and if by reason of any
lien, claim, charge or encumbrance on the Interest, or portion thereof,
being purchased by the Purchaser, the Vendor is unable to do so, the
Purchaser may make payment to the holder of the lien, claim, charge or
encumbrance, to discharge the same, which payment shall be deemed to be
payment to the Vendor and shall be applied in reduction of the unpaid
balance of the purchase price for the Interest, or portion thereof,
being purchased by the Purchaser.
11.07 Equitable Remedies. ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ acknowledges that a breach by it
of this Article XI would result in loss to Zebra for which Zebra could
not be adequately compensated in damages by a monetary award.
Accordingly, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ agree that in the event of any breach
by it of this Article XI, Zebra shall, in addition to all remedies
available to Zebra at law or in equity, be entitled as a matter of
right to apply to a court of competent and equitable jurisdiction for
such relief by way of specific performance, restraining order,
injunction (including an interim injunction), decree or otherwise, as
may be appropriated to ensure compliance with the provisions of this
Article XI.
11.08 Zebra Transfers. Zebra, may at any time during the term of this
Agreement sell, transfer, assign or otherwise dispose of all or any
portion of its interest in all or any part of the Property or this
Agreement, provided that that upon closing of such transaction, the
transferee agrees to be bound by the terms and conditions of this
19
Agreement. Zebra shall be released of all of its obligations under this
Agreement following the closing of any transaction under this Section
11.08.
11.09 Sale of Property by Zebra for Non-Mining Purposes. If Zebra sells the
Property to a non-government party for purposes other than Exploration,
Development and Mining or the processing of Ores and Minerals from the
Property, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ are entitled to receive 25% of the sales
price, after deduction of Zebra's direct costs relating to such sale,
and to retain the Production Royalties payable under this Agreement
(such rights to be included in the sale agreement). If Zebra sells the
Property to a government party, including such Production Royalty
rights from production from the Property retained by ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
at the time of such sale shall be included in such sale of the Property
to the government Party. In this circumstance ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ are
entitled to receive 15% of the sales price, after deduction of Zebra's
direct costs relating to such sale. ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ shall be
entitled to be present at the negotiations regarding the sale of the
Property to a government party and Zebra shall, by notice to ▇▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇, facilitate such presence.
ARTICLE XII
FORCE MAJEURE
12.01 Force Majeure. All obligations of Zebra under this Agreement, and all
conditions under this Agreement to the continuation of this Agreement,
including but not limited to any payment obligations by Zebra
hereunder, shall be suspended, and Zebra shall not be deemed in default
or liable for damages or other legal or equitable remedies while, but
only as long as, Zebra is prevented from complying with such
obligations or conditions in whole, or in part, by actions of
environmental lobbyists, strikes, lockouts, labour slowdowns or
disturbances, acts of God, explosion, flood, epidemics, unavoidable
accidents, uncontrollable delays in transportation, inability to obtain
necessary materials or services in the open market, unusually severe
weather, inadequate facilities for the transportation of materials, any
local, state or federal law, regulation or order, or any other matters
beyond the reasonable control of Zebra, whether similar to the matters
herein specifically enumerated or not ("Force Majeure"). The time, or
times, specified herein for compliance by Zebra with any obligations
and conditions under this Agreement, including but not limited to any
payment obligations by Zebra hereunder, shall be extended for a period,
or periods, equal to the duration of the Force Majeure; provided,
however, that performance by Zebra shall be resumed within a reasonable
time after that Force Majeure has ceased to exist; and provided,
further, that Zebra shall not be required, against Zebra's will, to
compromise or settle any labour disputes or to question the validity,
or to refrain from, judicially testing the validity of any local, state
or federal order, regulation or law. Without limitation of the above
general provision, if Zebra is, or becomes, subject, at any time, to
environmental regulations or governmental restrictions (environmental
regulations or governmental restrictions shall include any law, rule,
regulation, order, judgment, policy, proposal, action or inaction or
restriction relating to air pollution, water pollution, surface or
subsurface Exploration or Mining and surface or subsurface effects of
Mining or land use) which prohibit or materially affect any operations
hereunder or planned to be carried out hereunder, Zebra shall have the
right to declare the existence of a condition of Force Majeure during
the period in which Zebra is in good faith seeking a feasible method to
comply with, be exempted from, modify, obtain necessary permits or
20
licenses under or prevent the enactment, promulgation or enforcement of
such environmental regulations or governmental restrictions. ▇▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇ agree to cooperate with Zebra in prosecuting any such actions.
ARTICLE XIII
ACQUISITIONS AND ABANDONMENTS
13.01 Acquisitions: Property and Area of Interest. If either ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇, or Zebra, or any of their respective Affiliates, acquires any
interest, or the right to acquire any interest, in:
(a) any mining claim, mineral title, mineral lease, mineral
exploration permit, license, concession or other mineral property
interest within, or partially within, or contiguous to, any
portion of the Area of Interest;
(b) any water rights or easements, licenses, rights of way, surface
lands, titles, leases or other surface rights that are within the
area of the Property; or
(c) any water rights or easements, licenses, rights of way, surface
lands, titles, leases or other surface rights that are outside
the Area of Interest and the area of the Property but which are
necessary for, or appurtenant to, any Exploration, Development or
Mining purposes;
whether through acquisition, option, staking or map staking or
otherwise (such acquired interest or right is referred to as the
"Acquired Interest" and for greater certainty, where only a portion of
the interest or right is within the Area of Interest, this Section
14.01 is applicable to the whole of the interest, including any portion
of the interest which is outside of, but contiguous to, the portion of
the interest within the Area of Interest), then the following
provisions shall apply:
(1) if the acquiring Party is Zebra, the out-of-pocket
acquisition costs incurred by Zebra, or any of its
Affiliates, in acquiring the Acquired Interest, shall be
included in Allowable Expenditures and the Acquired Interest
shall be deemed to be part of the Property; and
(2) if the acquiring Party is ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, or their
Affiliates, the Acquired Interest must be offered to Zebra
and Zebra shall have the option, for a 30 day period
following notice being delivered to Zebra by ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ setting forth the particulars of the Acquired
Interest, including the out-of-pocket costs incurred by
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ to acquire the Acquired Interest, to
acquire the Acquired Interest for 100% of the out-of-pocket
costs incurred by ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, or their Affiliates,
in acquiring the Acquired Interest and, if such option is
exercised, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ shall deliver to Zebra all
instruments necessary to transfer the Acquired Interest to
Zebra, such payments by Zebra to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ shall be
included in Allowable Expenditures, and the Acquired
Interest shall be deemed to be part of the Property.
21
13.02 Abandonment, Surrender. If at any time during the term of this
Agreement, Zebra elects to abandon or surrender any of the Acquired
Interest which becomes part of the Property pursuant to Section 13.01,
or if, after Year 5 of this Agreement, Zebra elects to abandon or
surrender any of the mining claims or mineral interests comprised in
the Property described in Exhibit A (such Acquired Interest and/or
mining claims and mineral interests hereinafter referred to as the
Abandoned Claims"), Zebra shall deliver notice of such intention to
Hackwork & ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ shall have 30 days thereafter
to notify Zebra that it wishes to have all, or a portion of the
Acquired Interest or the Abandoned Claims, transferred to ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ and upon delivery of such notice by ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Zebra
shall deliver to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ all instruments necessary to
transfer the Abandoned Claims to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇. If Zebra gives
such notice less that 30 days prior to the due date for payment of
governmental fees required to maintain Acquired Interest or Abandoned
Claims, in good standing for another year Zebra shall be obligated to
pay such fees with respect to any such mining claims ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
elects to have transferred to it. If ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ fail to request
the transfer of the Acquired Interest or the Abandoned Claims within
such 30 day period, Zebra may abandon or surrender the Acquired
Interest or the Abandoned Claims without further notice to ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇. Upon any such transfer, abandonment or surrender, the Acquired
Interest or the Abandoned Claims, including but not limited to, all
mining claims or mineral interests so transferred, abandoned or
surrendered shall cease to form part of the Property or part of the
subject matter of the Production Royalty and Zebra shall have no
further obligation hereunder with respect thereto.
ARTICLE XIV
GENERAL PROVISIONS
14.01 Competition. This Agreement is, and the rights and obligations of the
Parties are, strictly limited to the Property and the Parties shall
have the free and unrestricted right to engage in and receive
independently the full benefits of any and all business ventures of any
sort whatsoever, whether or not competitive with the activities
undertaken pursuant hereto, without consulting the other or inviting or
allowing the other to participate therein. Neither of the Parties shall
be under any fiduciary or other duty to the other which will prevent it
from engaging in or enjoying the full benefits of any competing venture
or ventures within the general scope of the activities contemplated by
this Agreement. Without limiting the generality of the, foregoing,
neither Party shall be under any duty to disclose to the other Party
information and data relating to the Property which the first Party
obtains outside the scope of its activities under this Agreement.
14.02 Arbitration. In the event of any dispute between the Parties arising in
connection with the interpretation of this Agreement, or any associated
agreement entered into pursuant to this Agreement, or the determination
of values hereunder or thereunder (a "Dispute"), and with respect to
any matter that may be referred to arbitration pursuant to any
provision of this Agreement, or such other agreement, the Parties shall
use all reasonable endeavours to resolve the Dispute on an amicable
basis, failing which the Dispute shall be submitted to, and finally
resolved by, binding arbitration. The arbitration shall be conducted
before a single arbitrator selected by mutual agreement of the Parties.
If the Parties have not selected an arbitrator within 20 days of
written demand, by one Party to the other, for arbitration, the
22
American Arbitration Association, pursuant to their then current rules,
shall select the arbitrator. The arbitrator shall have authority to
fashion such just, equitable and legal relief as the arbitrator, in the
arbitrator's sole discretion, may determine, including, but not limited
to, the extension of any deadlines or timeframes set forth in this
Agreement. Each Party shall bear all its own expenses of arbitration
save and except the costs of the arbitrator which shall be paid
one-half by Zebra and one-half by ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇. All arbitration
proceedings shall be conducted in the City of Reno, State of Nevada.
The duty to arbitrate shall survive the cancellation or termination of
this Agreement.
Subject to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇'▇ right to terminate this Agreement
Article X, Disputes between the Parties shall not interrupt performance
of or the continuation of operations under this Agreement. In the event
of any Dispute, operations may be continued and settlements and
payments may be made in the same manner as prior to such dispute or
difference, until the Dispute have been finally determined between the
Parties. Upon final determination of the Dispute, such payments or
restitutions shall be made as may be required under the terms of the
settlement or final determination of the Dispute.
14.03 Pre-Arbitration Recourse. Each Party shall have the right to seek and
obtain from any Nevada court of competent jurisdiction any equitable or
provisional relief or remedy enforcing any right or interest it may
have in connection with this Agreement, including a temporary
restraining order, preliminary injunction, writ of attachment or order
compelling an audit. No judicial actions permitted by this Section
14.03 shall waive or limit the claiming Party's rights to adjudicate
the merits of the dispute by arbitration.
14.04 Memorandum for Recording. This Agreement shall not be recorded unless
otherwise agreed to in writing between ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ and Zebra or
is required by any regulatory authority. ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ and Zebra
agree to execute a notice or memorandum of this Agreement, which shall
be in a form suitable for recording under the state and local laws of
Nevada, specifying the interests of Zebra and ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ in the
Property are subject to the terms and conditions of this Agreement.
14.05 Governing Law. This Agreement shall be governed and construed according
to the laws of Nevada and subject to the jurisdiction of the courts of
such state. In addition, this Agreement shall be subject to all
applicable laws, rules and regulations of public bodies having
jurisdiction over the development or operation of the Property.
14.06 Not a Partnership. It is not the purpose or intention of this Agreement
to create a partnership, mining partnership, commercial partnership or
any other partnership relationship between the Parties hereto. Each of
the Parties shall be responsible only for its respective obligations
and liabilities as set forth in this Agreement and neither Party shall
have any authority to act for or to assume any obligations or
responsibility on behalf of the other Party. Nothing contained in this
Agreement shall be deemed to constitute any Party the partner of the
other or the agent or legal representative of the other or to create
any fiduciary relationship between them. Each Party agrees to indemnify
and old harmless the other Party, its directors, officers, employees
and agents form and against an and all losses, claims, damages and
liabilities arising out of any act taken by or on behalf of such
23
first-mentioned Party, its directors, officers, employees or agents
under or in relation to this Agreement, except pursuant to authority
expressly granted herein or otherwise agreed to between the Parties.
Zebra shall indemnify, defend and hold ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ harmless for
all costs of reclamation required by law by reason of Zebra's
operations prior to termination of this Agreement pursuant to Article
X.
14.07 Laws and Regulations. In the conduct of its operations on the Property,
Zebra shall be responsible for compliance with applicable laws and
regulations, including laws and regulations related to Exploration,
Mining, Development and reclamation thereof. Notwithstanding, and in
furtherance, of any other provision of this Agreement, Zebra shall not
be released from any responsibility or liability upon a termination of
this Agreement in connection with any reclamation work required by any
governmental entity as a result of any activities conducted by Zebra
upon the Property prior to the effective date of termination of this
Agreement.
14.08 Payments and Notices. Any payment, notice, election, proposal,
objection or other document, including any public announcement, press
release or other disclosure, required or permitted to be given
hereunder ("Notice") shall be in writing addressed to the Parties as
follows:
If to Zebra:
Zebra Resources, Inc.
c/o ▇.▇. ▇▇▇▇▇▇▇▇▇ Law Corporation
▇▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇:
▇/▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
All Notices shall be given by personal delivery to the other Party, by
courier service (UPS, Fed-Ex, DHL, etc) or by telecopier communication
and shall be deemed delivered
(a) if by personal delivery, on the date of delivery if delivered
during normal business hours, and, if not delivered during normal
business hours, on the next business day following delivery;
(b) if by courier, on the date of delivery; or
(c) if by telecopier communication, on the day of transmission is
delivered during normal business hours, and, if not delivered
during normal business hours, on the next business day following
delivery.
24
A Party may at any time change its address for future Notices hereunder
by Notice in accordance with this Section 14.08 (provided that at all
times each Party shall only designate one address and such address must
be located at a reasonable location).
14.09 Currency. All amounts of money expressed or payable hereunder are
expressed and shall be paid in dollars of the United States of America.
14.10 Representations and Warranties. ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ have not made, shall
not make, and shall not be deemed to have made, any representation or
warranty, express or implied, as to the completeness or accuracy of any
information delivered or made available to Zebra under or in relation
to this Agreement or as to the fitness or suitability of such
information for any particular purpose, whether or not such purpose has
been or is communicated to Zebra.
14.11 Further Assurances. Each of the Parties hereby covenants and agrees to
execute any further and other documents and instruments and to take any
further and other actions that may be necessary to implement and carry
out the intent of this Agreement.
14.12 Binding Effect. This Agreement, once executed by all Parties, shall
enure to the benefit of and be binding upon the Parties hereto and
their respective, heirs, successors and permitted assigns.
14.13 Headings. The articles, sections, titles and other headings of this
Agreement (other than the definitions) are inserted only for
convenience and shall not control or affect the meaning, construction
or interpretation of the Agreement or affect its terms and provisions.
14.14 Severability. In the event any provision of this Agreement is, or the
operations contemplated hereby are, found to be inconsistent with or
contrary to any such law, rule or regulation, the latter shall be
deemed to control and this Agreement shall be regarded as modified
accordingly and shall continue in full force and effect as so modified.
14.15 Perpetuities. The parties to this Agreement do not intend that there
shall be any violation of the rule against perpetuities or any related
rule pertaining to restraints upon alienation. If any such violation
should inadvertently exist, it is the intent and desire of the Parties
hereto that the appropriate court shall reform such provision or
provisions in such a way as to approximate most closely the intent of
the Parties hereto within the limits permissible under such rule or
related rule.
14.16 Waiver, Modification or Amendment. No failure or delay on the part of
any Party in exercising any of their respective rights hereunder, or
upon acting in connection with any failure by the other Party to
perform or observe any conditions, covenant or provision herein
contained, shall operate as waiver thereof, nor shall any single or
partial exercise of any of such rights preclude any other right
hereunder. Neither this Agreement nor any provision hereof may be
supplemented, changed, waived, discharged orally by any course of
dealing or trade usage, except by an instrument in writing signed by
the Party against whom the enforcement of the supplement, change,
waiver, or discharge is sought.
25
14.17 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
14.18 Entire Agreement. This Agreement shall constitute the complete
understanding and agreement of the Parties with respect to the Property
and the subject matter hereof and all previous agreements with respect
thereto are expressly rescinded and replaced hereby. No modification or
alteration of this Agreement shall be effective unless in writing and
executed by the Parties subsequent to the date hereof.
14.19 Confidential Information. In the event this Agreement is terminated in
accordance with Clause 10.01(a)(i), Zebra, for a period of two years
thereafter, shall keep confidential all books, records, files and other
information supplied to it by ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ in connection with
this Agreement. Notwithstanding the foregoing, the restrictions in this
Section 14.19 shall not apply to disclosure of information or any part
thereof by Zebra to the extent that:
(a) prior to its receipt by Zebra, or its employees, agents,
representatives or advisors, such information was already in the
possession of Zebra or its employees, agents, representatives or
advisors;
(b) such information is required to be publicly disclosed by Zebra
(as determined by Zebra in good faith) pursuant to applicable
securities or corporate laws, or pursuant to the requirements of
any stock exchange on which the shares of Zebra are listed,
quoted or traded;
(c) such information is otherwise required to be disclosed by Zebra
by law or regulation; and
(e) such information is or becomes generally disclosed to the public,
other than as a consequence of a breach hereof by Zebra.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------- ---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Zebra Resources, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
President
26
Exhibit A
to
MINERAL LEASE AGREEMENT
between
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and
ZEBRA RESOURCES, INC.
THE PROPERTY
See attached.
27
EXHIBIT A
Claim ▇▇▇ County Owner of BLM
Name Serial No Record Serial No.
---- --------- ------ ----------
CAP 1 269182 Production Exploration Resources, Inc. NMC 449933
CAP 2 269182 Production Exploration Resources. Inc. NMC 449934
CAP 3 269182 Production Exploration Resources. Inc NMC 449935
CAP 4 269182 Production Exploration Resources, Inc. NMC 449936
CAP 5 269182 Production Exploration Resources, Inc NMC 449937
CAP 6 269182 Production Exploration Resources, Inc NMC 449938
CAP 7 269182 Production Exploration Resources, Inc NMC 449939
CAP 8 269182 Production Exploration Resources, Inc NMC 449940
CAP 9 269182 Production Exploration Resources. Inc NMC 449941
CAP 10 269182 Production Exploration Resources. Inc. NMC 449942
CAP 11 269182 Production Exploration Resources, Inc. NMC 449943
CAP 12 269182 Production Exploration Resources, Inc. NMC 449944
CAP 13 269182 Production Exploration Resources, Inc. NMC 449945
CAP 14 269182 Production Exploration Resources, Inc. NMC 449946
KAP 36 271069 Production Exploration Resources, Inc. NMC 608636
KAP 38 271071 Production Exploration Resources, Inc. NMC 608638
EXHIBIT A
Claim ▇▇▇ County Owner of BLM
Name Serial No Record Serial No.
---- --------- ------ ----------
CAPX 1 ▇▇▇▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
CAPX 2 576646 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854759
CAPX 3 576647 ▇▇▇▇▇ ▇ ▇▇▇▇▇▇ NMC 854760
CAPX 4 ▇▇▇▇▇▇"▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
CAPX 5 576649 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854762
CAPX 6 576650 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854763
CAPX 7 576651 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854764
CAPX 8 576652 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854765
CAPX 9 576653 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854766
CAPX 10 576654 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854767
CAPX 11 576655 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854768
CAPX 12 576656 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854769
CAPX 13 576657 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854770
CAPX 14 576658 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854771
CAPX 15 576659 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854772
CAPX 16 576660 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854773
CAPX 17 576661 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854774
CAPX 18 576662 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854775
CAPX 19 576663 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854776
CAPX 20 576664 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854777
CAPX 21 576665 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854778
CAPX 22 576666 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854779
CAPX 23 576667 ▇▇▇▇▇ ▇ ▇▇▇▇▇▇ NMC 854780
CAPX 24 576668 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854781
CAPX 25 576669 ▇▇▇▇▇ ▇ ▇▇▇▇▇▇ NMC 854782
CAPX 26 576670 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854783
CAPX 27 576671 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854784
CAPX 28 576672 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854785
CAPX 29 576673 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854786
CAPX 30 576674 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854787
CAPX 31 576675 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854788
CAPX 32 576676 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854789
CAPX 33 576677 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854790
CAPX 34 576678 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854791
CAPX 35 576679 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854792
CAPX 36 576680 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854793
CAPX 37 576681 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854794
CAPX 38 576682 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854795
CAPX 39 576683 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854796
CAPX 40 576684 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854797
CAPX 41 576685 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854798
1
CAPX 42 576686 Betva ▇. ▇▇▇▇▇▇ NMC 854799
CAPX 43 576687 Betva ▇. ▇▇▇▇▇▇ NMC 854800
CAPX 44 576688 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854801
CAPX 45 576689 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854802
CAPX 46 576690 Betva ▇. ▇▇▇▇▇▇ NMC 854803
CAPX 47 576691 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854804
CAPX 48 576692 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854805
CAPX 49 576693 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854806
CAPX 50 576694 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854807
CAPX 51 576695 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854808
CAPX 52 576696 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854809
CAPX 53 576697 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854810
CAPX 54 576698 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854811
CAPX 55 576699 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854812
CAPX 56 576700 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854813
CAPX 57 576701 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854814
CAPX 58 576702 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854815
CAPX 59 576703 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854816
CAPX 60 576704 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854817
CAPX 61 576705 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854818
CAPX 62 576706 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854819
CAPX 63 576707 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854820
CAPX 64 576708 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854821
CAPX 65 576709 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854822
CAPX 66 576710 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854823
CAPX 67 576711 ▇▇▇▇▇ L, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
CAPX 68 576712 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854825
CAPX 69 576713 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854826
CAPX 70 576714 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854827
CAPX 71 576715 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854828
CAPX 72 576716 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854829
CAPX 73 576717 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854830
CAPX 74 576718 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854831
CAPX 75 576719 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854832
CAPX 76 576720 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854833
CAPX 77 576721 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854834
CAPX 78 576722 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854835
CAPX 79 576723 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854836
CAPX 80 576724 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854837
CAPX 81 576725 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854838
CAPX 82 576726 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854839
CAPX 83 576727 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854840
CAPX 84 576728 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854841
CAPX 85 576729 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854842
CAPX 86 576730 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854843
CAPX 87 576731 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854844
CAPX 88 576732 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854845
2
CAPX 89 576733 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854846
CAPX 90 576734 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854847
CAPX 91 576735 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854848
CAPX 92 576736 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854849
CAPX 93 576737 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854850
CAPX 94 576738 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854851
CAPX 95 576739 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854852
CAPX 96 576740 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854853
CAPX 97 576741 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854854
CAPX 98 576742 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854855
CAPX 99 576743 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854856
CAPX 100 576744 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854857
CAPX 101 576745 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854858
CAPX 102 576746 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854859
CAPX 103 576747 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854860
CAPX 104 576748 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854861
CAPX 105 576749 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854862
CAPX 106 576750 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854863
CAPX 107 576751 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854864
CAPX 108 576752 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854865
CAPX 109 576753 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854866
CAPX 110 576754 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854867
CAPX 111 576755 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854868
CAPX 112 576756 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854869
CAPX 113 576757 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854870
CAPX 114 576758 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854871
CAPX 115 576759 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854872
CAPX 116 576760 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854873
CAPX 117 576761 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854874
CAPX 118 576762 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854875
CAPX 119 576763 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854876
CAPX 120 576764 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854877
CAPX 121 576765 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854878
CAPX 122 576766 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854879
CAPX 123 576767 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854880
CAPX 124 576768 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854881
CAPX 125 576769 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854882
CAPX 126 576770 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854883
CAPX 127 576771 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854884
CAPX 128 576772 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854885
CAPX 129 576773 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854886
CAPX 130 576774 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854887
CAPX 131 576775 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854888
CAPX 132 576776 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854889
CAPX 133 576777 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854890
CAPX 134 576778 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854891
CAPX 135 576779 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854892
3
CAPX 136 576780 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854893
CAPX 137 576781 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854894
CAPX 138 576782 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854695
CAPX 139 576783 ▇▇▇/▇ ▇. ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
CAPX 140 576784 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854897
CAPX 141 576785 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854898
CAPX 142 576786 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854899
CAPX 143 576787 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854900
CAPX 144 576788 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854901
CAPX 145 576789 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 654902
CAPX 146 576790 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854903
CAPX 147 576791 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854904
CAPX 148 576792 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854905
CAPX 149 576793 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854906
CAPX 150 576794 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854907
CAPX 151 576795 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854908
CAPX 152 576796 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854909
CAPX 153 576797 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854910
CAPX 154 576798 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854911
CAPX 155 576799 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854912
CAPX 156 576800 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854913
CAPX 157 576801 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854914
CAPX 158 576802 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854915
CAPX 159 576803 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854916
CAPX 160 576804 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854917
CAPX 161 576805 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854918
CAPX 162 576806 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854919
CAPX 163 576807 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854920
CAPX 164 576808 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854921
CAPX 165 576809 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854922
CAPX 166 576810 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854923
CAPX 167 576811 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854924
CAPX 168 576812 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854925
CAPX 169 576813 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854926
CAPX 170 576814 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854927
CAPX 171 576815 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854928
CAPX 172 576816 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854929
CAPX 173 576817 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ NMC 854930
4
EXHIBIT B
to
MINERAL LEASE AGREEMENT
between
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and
ZEBRA RESOURCES, INC.
AREA OF INTEREST
"Area of Interest" means the collective area in Nevada described below, but
excluding any mining claims that form part of the Property:
▇▇▇ COUNTY, NEVADA
T1S R51E Sections 13,14,15,16 & 17 all (unsurveyed)
T1S R51E Sections 20, 21, 22, 23 & 24 all (unsurveyed)
T1S R51E Sections 28, 29, 32 & 33 all (unsurveyed)
T1S R51E Section 25 all (unsurveyed)
T1S R51E Section 26 all (unsurveyed)
T1S R51E Section 27 all (unsurveyed)
T1S R51E Section 34 all (unsurveyed)
T1S R51E Section 35 all (unsurveyed)
T1S R51E Section 36 all (unsurveyed)
T1S ▇▇▇ ▇/▇▇ Sections 17, 18, 19, 20, 29, 30, 31 & 32 all (unsurveyed)
T2S ▇▇▇ ▇/▇▇ Sections 5, 6, 7 & 8 all (unsurveyed)
28
EXHIBIT C
to
MINERAL LEASE AGREEMENT
between
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and
ZEBRA RESOURCES, INC.
PRODUCTION ROYALTY
1. Production Royalty
The Production Royalty provided for in Section 4.03 and payable to
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ shall be based upon: (a) the value of dore produced
from Ores and Minerals mined from the Property, determined at the
Property or at such other facility producing such dore, sold or deemed
sold, determined by reference to published prices for refined gold and
silver and other Precious Metals; and (b) the value of all Other
Products produced from Ores and Minerals mined from the Property,
determined at the Property or at such other facility producing such
Other Products, sold or deemed sold, determined by reference to
published prices for such Other Products, all as hereinafter provided.
2. Definitions. For the purposes of this Exhibit C the following
definitions have the following meaning:
"Precious Metals" means gold, silver, platinum, and palladium.
"Other Products" means all metallic and non-metallic minerals that are
not Precious Metals.
3. Election of Applicable Percentage. Zebra will have a one-time right to
elect whether the Applicable Percentage is determined in accordance
with "Alternative A" or "Alternative B" by giving written notice of
such election to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ prior to the payment of any
Production Royalty as required by this Agreement. If, prior to the time
that any Production Royalty is due and payable, Zebra has not made such
election, Zebra shall be deemed to have elected Alternative A and the
Applicable Percentage shall be determined in accordance with
Alternative A. The Applicable Percentage for a calendar Quarter (which,
if Alternative A is elected, may vary from time to time) shall apply to
the Production Royalty that accrues during such calendar Quarter as
determined pursuant to Section 11 of this Exhibit C.
4. Production Royalty to Run with Land. The Production Royalty shall run
with the land described as the Property. The Production Royalty shall
specifically apply to unpatented lode mining claims that are a part of
the Property and to any relocation or amendment thereof, to any patent
issued covering such land and to any other right, title or interest
acquired by, for, or on behalf of Zebra or an Affiliate of Zebra with
respect to such land.
29
5. Net Value Definition
As used in this Exhibit C, Net Value means the Gross Value (as defined
below) of Precious Metals or Other Products mined from the Property,
less all costs, charges and expenses paid or incurred by Zebra after
production of dore, or, in the case of Other Products, after production
of concentrates, (including any Precious Metals contained within a
concentrate or otherwise upgraded Precious Metals or Other Products)
whether at the Property or elsewhere with respect to the
transportation, processing, treatment or upgrading of the dore or
concentrates including, without limitation:
(a) charges for treatment in the smelting and refining processes
(including handling, processing, interest and provisional
settlement fees, sampling, assaying and representation costs,
penalties and other processor deductions);
(b) actual costs of transportation (including freight, insurance,
security, transaction taxes, handling, port, demurrage, delay,
and forwarding expenses incurred by reason of or in the course of
such transportation) of dore or concentrates from the Property or
other facility producing dore or concentrates to the place of
additional treatment and to the place of sale;
(c) actual sales and brokerage costs of Precious Metals or Other
Products for which the Production Royalty is based on proceeds
received by Zebra as hereinafter provided in Section 6(d) below,
and an allowance for reasonable sales and brokerage costs for
refined Precious Metals subject to the Production Royalty
hereinafter provided in Sections 6(a), (b) and (c) below;
(d) sales, use, severance, net proceeds of mine, ad valorem taxes
applicable under state, federal or local law and any other tax or
governmental levy or fee relating to production of Precious
Metals or Other Products from the Property, the Property, or the
value thereof (other than taxes based upon income);
(e) the costs of any applicable governmental or underlying private
royalties; and
(f) all Advance Royalty payments.
6. Gross Value Definition
Gross Value means:
(a) if Zebra causes refined gold which meets or exceeds generally
accepted commercial standards for the sale of refined gold (it
being understood that the specifications for refined gold
published by the London Bullion Market Association presently meet
such standards) to be produced from ores mined from the Property
(and if Section 3(d) shall not be applicable) for purposes of
determining the Production Royalty the refined gold shall be
30
deemed to have been sold at the Monthly Average Gold Price for
the month in which it was refined, and the Gross Value shall be
determined by multiplying Gold Production during the calendar
month by the Monthly Average Gold Price. As used in this
Agreement, Gold Production means the quantity of refined gold out
turned to Zebra's pool account (or to a third-party account for
the benefit of Zebra) by an independent third-party refinery from
Ores and Minerals mined from the Property on either a provisional
or final settlement basis each calendar month. As used herein,
Monthly Average Gold Price means the average London Bullion
Market Association P.M. Gold Fix, calculated by dividing the sum
of all such prices reported for the month by the number of days
for which such prices were reported.
In the event that the London Bullion Market Association P.M. Gold
Fix ceases to be published, all such references shall be replaced
with references to prices of gold for immediate delivery in the
most nearly comparable established market selected by Zebra as
such prices are published in Metals Week or a similar
publication.
(b) if Zebra causes refined silver which meets or exceeds generally
accepted commercial standards for the sale of refined silver (it
being understood that the specifications for refined silver
published by Handy & ▇▇▇▇▇▇ presently meet such standards) to be
produced from ore mined from the Property (and if Section 3(d)
shall not be applicable) for purposes of determining the
Production Royalty, the refined silver shall be deemed to have
been sold at the Monthly Average Silver Price for the month in
which it was refined, and the Gross Value shall be determined by
multiplying Silver Production during the calendar month by the
Monthly Average Silver Price. As used herein, Silver Production
means the quantity of silver out turned to Zebra's pool account
(or to a third-party account for the benefit of Zebra) by an
independent third-party refinery from Ores and Minerals mined
from the Property on either a provisional or final settlement
basis each calendar month. As used herein, Monthly Average Silver
Price means the average New York Silver Price as published daily
by Handy & ▇▇▇▇▇▇, calculated by dividing the sum of all such
prices reported for the calendar month by the number of days for
which such prices were reported.
In the event that the Handy & ▇▇▇▇▇▇ quotation ceases to be
published, all such references shall be replaced with references
to prices of silver for immediate delivery in the most nearly
comparable established market selected by Zebra as published in
Metals Week or a similar publication.
(c) If Zebra causes refined or processed Precious Metals, other than
gold and refined silver, which meets or exceeds commercial
standards for the sale of such Precious Metals, or refined or
processed Other Products, to be produced from Ores and Minerals
mined from the Property (and if Section 3(d) shall not be
applicable) the Gross Value shall be equal to the Monthly Average
Price for such metal or non-metallic mineral for the month in
which it was refined as determined by multiplying the Production
of such metal or non-metallic mineral during the calendar month
by the Monthly Average Price for such metal or non-metallic
mineral. As used herein, Production means the quantity of a metal
31
or non-metallic mineral out turned to Zebra's pool account (or to
a third-party account for the benefit of Zebra) by an independent
third-party refinery from Ores and Minerals mined from the
Property on either a provisional or final settlement basis each
calendar month. As used herein, Monthly Average Metal Price means
the price of such metal for immediate delivery in an established
market selected by Zebra as published in Metals Week or a similar
publication.
(d) in the event Zebra sells raw ores of Precious Metals or Other
Products or concentrates or dore produced from such Ores and
Minerals mined from the Property, then the Gross Value shall be
calculated as set forth in Section 3(a), (b) and (c), except that
Gold Production, Silver Production or other metal or non-metal
Production shall, in each case, be equal to the gold, silver,
other Precious Metals and Other Products contained in such raw
ores, concentrates or dore sold in the specified month multiplied
by (i) the recovery rate contractually determined between Zebra
and a third party processor or (ii) if there is not a
specifically contracted recovery rate, then by the actual
recovery rate for such metal or non-metallic mineral for the
calendar quarter in which ores of such metal or non-metallic
mineral from the Property were beneficiated by or for Zebra.
(e) where out turn of Precious Metals or Other Products is made by an
independent third-party on a provisional basis, the Gross Value
shall be based upon the amount of such provisional settlement,
but shall be adjusted in subsequent statements to account for the
amount of refined Precious Metals or Other Products established
by final settlement by such third-party.
7. Forward Sales
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ acknowledges that Zebra shall have the right to
market and sell or refrain from selling Precious Metals and Other
Products produced from Ores and Minerals mined from the Property in any
manner it may elect. Accordingly, Gross Value shall be determined as
provided in Section 6 above irrespective of any actual selling
arrangements entered into by Zebra, specifically including, but not
limited to, forward sales, futures trading or commodity options
trading, and any other price hedging, price protection and speculative
arrangements which may involve the possible delivery of Precious Metals
or Other Products produced from Ores and Minerals mined from the
Property.
8. Processing by Zebra
Zebra may, but is not obligated to, beneficiate, mill, sort,
concentrate, refine, smelt or otherwise process or upgrade the Precious
Metals ores and concentrates or Other Products ores and concentrates
produced from Ores and Minerals mined from the Property prior to sale,
transfer or conveyance to a purchaser, user, or consumer other than
Zebra. Zebra shall not be liable for mineral values lost in such
processing except for losses resulting from the bad faith or gross
negligence of Zebra.
32
9. Sales to Affiliated Party
Zebra shall be permitted to sell Ores and Minerals from the Property in
the form of raw ore, dore, or concentrates to an affiliated party,
provided that such sales shall be considered, solely for the purpose of
computing Net Value, to have been sold at prices and on terms no less
favorable than those which would be extended to a non-affiliated third
party under similar circumstances.
10. Measurement of Products
All Precious Metals or Other Products ore for which a Production
Royalty is payable shall be weighed or measured, sampled and analyzed
in accordance with sound Mining and metallurgical practices, after
which Zebra may mix or commingle or allow the mixing and commingling of
such Precious Metals or Other Products ores with ores from properties
other than the Property.
11. Calculation of Net Value
Net Value shall be determined on a calendar month basis. Production
Royalties shall be paid:
(a) with respect to refined gold and refined silver, Quarterly on the
last day of the sixth month following the last day of the Quarter
in which the same accrued; and
(b) with respect to Precious Metals and Other Products other than
refined gold and refined silver, Quarterly on the last day of the
sixth month following the last day of the Quarter in which Zebra
receives payment for such Precious Metals and Other Products.
Calendar quarters end on March 31, June 30, September 30 and December
31 of each calendar year. At the time of payment of Production
Royalties, Zebra shall deliver to ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ a statement
showing, in reasonable detail, the quantities and grades of the refined
Precious Metals, dore, concentrates, Other Products or Ores and
Minerals produced and sold or deemed to be sold by Zebra in the
preceding quarter; the Average Monthly Price determined, as herein
provided, for refined Precious Metals and Other Products on which a
Production Royalty is due; costs and other deductions; and other
pertinent information, in reasonable detail, to explain the calculation
of the Production Royalty payment with respect to each month in such
quarter. The obligation to prepare and deliver quarterly statements
will be terminated upon the shutdown of the operation of the Property
as a mine and the final outturn to Zebra's pool account or other
disposition of all Products produced prior to such shutdown. Payment to
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ shall be made in cash or by check, or upon 48 hours
prior written notice from ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, by wire transfer to the
account specified by ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ in such notice. In the event a
Production Royalty is not due for any quarter, Zebra shall nonetheless
provide ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ with a quarterly statement showing, in
reasonable detail, the quantities of Precious Metals and Other Products
produced from the Property.
Such quarterly statement shall also list the quantity and quality of
any Precious Metals dore in inventory for more than ninety (90) days.
33
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ shall have ten (10) business days after receipt of
the statement to either (a) elect that the dore be deemed sold as
provided in Sections 3(a), (b) and (c) above as of such tenth day
utilizing the mine weights and assays for such dore and utilizing a
reasonable recovery rate for refined metal and reasonable deemed
charges for all deductions specified in Sections 1 and 2 above or (b)
elect to wait until the time that Production Royalties would otherwise
become payable pursuant to Section 3 hereof. The failure of ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ to respond within such time shall be deemed to be an election to
use the method set forth in (b) above. No Production Royalty shall be
due with respect to stockpiles of ores or concentrates unless and until
such ores or concentrates are actually sold.
12. Sales
All Production Royalty payments shall be considered final and in full
satisfaction of all obligations of Zebra with respect thereto, unless
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ gives Zebra written notice describing and setting
forth a specific objection to the calculation thereof within ninety
(90) days after receipt by ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ of the quarterly
statement herein provided for. If ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ objects to a
particular quarterly statement as herein provided, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇,
for a period of thirty (30) days after Zebra's receipt of notice of
such objection, shall have the right, upon reasonable notice and at
reasonable times, to have Zebra's accounts and records relating to the
calculation of the Production Royalty payment with respect to the
quarter in question audited by an independent certified public
accountant acceptable to Zebra. If such audit determines that there has
been a deficiency or an excess in the payment made to ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇, such deficiency or excess shall be resolved by adjusting the
next quarterly Production Royalty payment due hereunder. All books and
records used by Zebra to calculate Production Royalties due hereunder
shall be kept in accordance with generally accepted accounting
principles, and shall be available for inspection by ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
upon reasonable notice.
13. Zebra's Duty to Inform
Zebra shall provide ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ with any ore reserve
calculations (including, but not limited to, any information that would
be required to be included in documents filed with the Securities and
Exchange Commission regarding ore reserve calculations), mine plans,
forecasts or other information relating to its operations.
14. No Duty to Mine
Zebra shall have the sole and exclusive right to determine the timing
and the manner of any production from the Property and all related
Exploration, Development and Mining activities. Nothing in this Exhibit
or the Agreement shall require Zebra to explore, develop, mine or
continue operations on the Property or to process Ores and Minerals
from the Property. In particular, the Mining of ores from any
properties not subject to the Production Royalty to the exclusion of
Ores and Minerals that are subject to the Production Royalty shall not
violate any provision of this Exhibit C or the Agreement or any express
or implied covenant or duty of Zebra or any of its Affiliates.
34