EXHIBIT 10.48
DESERT MINERALS, INC./▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
Table of Contents
1. Description of Property/Grant of Exploration Rights................ 1
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2. Term.............................................................. 1
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3. Consideration..................................................... 1
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4. Conduct of Operations............................................. 2
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5. Notice............................................................ 2
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6. Termination....................................................... 3
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7. Insurance......................................................... 3
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8. Indemnity......................................................... 3
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9. Compliance With Laws.............................................. 3
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10. Option to Lease................................................... 4
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11. Removal of Property............................................... 4
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12. Information....................................................... 4
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13. Default and Termination........................................... 5
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13.1 Default.................................................. 5
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13.1.1 Breach of Covenants............................. 5
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13.1.2 Assignments..................................... 5
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13.1.3 Bankruptcy...................................... 5
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13.1.4 Receivership.................................... 6
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13.1.5 Attachment...................................... 6
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13.2 Remedies................................................. 6
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14. Inurement......................................................... 6
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15. Force Majeure..................................................... 6
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16. Title............................................................. 7
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17. Counterparts...................................................... 7
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18. Complete Agreement................................................. 7
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19. Recordation........................................................ 8
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DESERT MINERALS, INC./▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
This Agreement is made and effective as of the ___ day of
_______________, 19__, by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇, SR., ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇▇ (hereinafter referred to as "LICENSOR") and DESERT MINERALS, INC., a
Delaware corporation, (hereinafter referred to as "LICENSEE"), agree as follows:
20. Description of Property/Grant of Exploration Rights.
LICENSOR is the owner of all or part of the unpatented placer mining
claims described in EXHIBIT "A" attached hereto. LICENSOR grants to LICENSEE the
exclusive right to explore LICENSOR's ownership interest in the property set
forth in EXHIBIT "A" (LICENSOR's interest is hereinafter referred to as the
"PREMISES").
21. Term.
The term of this Agreement shall be five (5) years, unless terminated
earlier or extended. LICENSEE shall have the right to extend for two additional
five (5) year terms upon the payment of Five Hundred Dollars ($500.00) for each
such extension.
22. Consideration.
In consideration for the granting of the exploration rights set forth
herein, LICENSEE agrees to pay to LICENSOR each year in which this Agreement is
in effect on or before the anniversary date, the sum of Five Hundred Dollars
($500.00). Upon execution of this Agreement, LICENSEE shall pay the sum of One
Thousand Dollars ($1,000.00) which shall be full consideration for the
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DESERT MINERALS, INC./▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
first and second year's payments. LICENSORS authorize ▇▇▇▇ ▇▇▇▇▇▇▇ to receive
such payments for them, for their benefit, as follows:
▇▇▇▇ ▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
23. Conduct of Operations.
During the term of this Agreement, LICENSEE shall have possession of,
and free and unrestricted access to, the PREMISES and shall have the right to
explore, investigate, measure, sample (including bulk sample), examine, test,
work, use, manage, control and develop the PREMISES. LICENSOR shall receive an
accounting and production royalty, pursuant to the terms of the Mining Lease
attached hereto as EXHIBIT "B", for all ores, minerals and concentrates removed
and sold from the PREMISES. LICENSEE may trench or drill any part of the
PREMISES, may rehabilitate existing mine workings, construct new workings, and
may erect, construct, use, and maintain on the PREMISES such roads, building
structures, equipment and machinery as in its sole discretion it may deem
necessary to its operations.
24. Notice.
Any notices required or permitted to be given to LICENSOR or LICENSEE
hereunder shall be given in the manner provided herein and be considered as
delivered and received when the same are delivered in person or received by the
addressee following deposit in the United States mail by registered mail, return
receipt requested, with postage prepaid. All notices given hereunder shall be
addressed to the persons and addresses given below or such other persons or
addresses as the parties may designate from time to time. Any change in the
names and/or addresses of the persons
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DESERT MINERALS, INC./▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
listed below shall be effective thirty (30) days from the giving of the notice
to the other party as provided herein.
LICENSEE: Desert Minerals, Inc.
c/o LS Capital Corporation
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
LICENSOR: ▇▇▇▇ ▇▇▇▇▇▇▇
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▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
25. Termination.
Upon termination or surrender under the terms of this License, all
rights of LICENSEE under this Agreement, except as provided in Paragraph 11.,
shall terminate and all payments heretofore made under this Agreement shall be
retained by LICENSOR as full compensation, as rental, for the use and occupancy
of said PREMISES and as consideration for which this Agreement is given.
26. Insurance.
LICENSEE shall, at its sole expense, cause to be issued and maintained
during the term of this Agreement, or any extension thereof, workmen's
compensation insurance coverage in accordance with the provisions of California
law.
27. Indemnity.
LICENSEE shall protect and indemnify and hold LICENSOR harmless from
and against any and all claims, actions or causes of action, including, without
limitation, employees of LICENSEE, contractors and employees of contractors of
LICENSEE, for injury to or death of persons or damage to property arising out of
or in connection with LICENSEE's exploration activities.
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DESERT MINERALS, INC./▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
28. Compliance With Laws.
LICENSEE shall conduct all exploration activities in full compliance
with the applicable laws and regulations of the State of California and the
United States of America including, but not limited to, the provisions of the
Federal Land Management and Policy Act of 1976 and the regulations promulgated
pursuant thereto.
29. Option to Lease.
During the term of this Agreement, or during the term of any extension
hereof, LICENSEE may exercise an option to lease the PREMISES pursuant to the
terms and conditions set forth in the Mining Lease attached hereto as EXHIBIT
"B" and made a part hereof as though set forth in its entirety. The option to
lease shall be deemed exercised when LICENSOR has received a certified check in
the amount of Five Thousand Dollars ($5,000.00), together with two (2) copies of
EXHIBIT "B" that have been executed by LICENSEE. LICENSOR shall sign one copy
and return it promptly to LICENSEE. If LICENSOR is the owner at the date of
exercise of this option of less than one hundred percent (100%) of the title to
the PREMISES, LICENSOR shall receive an amount equal to LICENSOR's percentage
ownership multiplied by Five Thousand Dollars ($5,000.00) pursuant to this
paragraph.
30. Removal of Property.
LICENSEE shall have, and it is hereby given and granted, ninety (90)
days after a valid forfeiture, surrender, or other termination of this
Agreement, to remove from the PREMISES all machinery, equipment, personal
property and improvements erected or placed in or upon the said property by
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DESERT MINERALS, INC./▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
it. If not so removed by LICENSEE within said ninety (90) day period, titles to
unremoved property will then vest in LICENSOR.
31. Information.
31.1 If the Option to Lease contained in Paragraph 10 is not
exercised and this Agreement is terminated, LICENSOR may, within ninety (90)
days, request, and if requested, LICENSEE shall supply LICENSOR copies of all
Information as defined below. As used in this Agreement, "Information" shall
mean all geological, geophysical and geochemical data, maps and reports, whether
acquired, generated or compiled by or for LICENSEE. LICENSEE warrants that all
information supplied to LICENSOR pursuant to the terms of this provision shall
be true and accurate copies of the Information acquired, generated or compiled
by or for LICENSEE; provided, however, that LICENSEE does not warrant that the
data contained therein is an accurate interpretation of the geology described
therein.
31.2 Any and all data, information, reports and samples
provided by LICENSEE to LICENSOR under the terms of this Agreement shall be
treated and held confidential for the term of this Agreement, and for the term
of the Mining Lease attached as EXHIBIT "B", if LICENSEE should exercise its
Option to Lease.
32. Default and Termination.
32.1 Default.
The occurrence of any of the following events shall constitute
an event of default on the part of LICENSEE:
32.1.1 Breach of Covenants.
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DESERT MINERALS, INC./▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
Failure (i) to perform any of LICENSEE's covenants hereunder, including, but not
limited to the failure to make a payment under Paragraph 3 herein, and (ii) to
remedy such failure within ninety (90) days after written demand is made
therefor. 32.1.2 Assignments. The making of a general assignment by LICENSEE for
the benefit of creditors. 32.1.3 Bankruptcy. The filing of any form of voluntary
petition in bankruptcy by LICENSEE, or the filing of an involuntary petition by
LICENSEE's creditors, if such petition remains undischarged for a period of
thirty (30) days. 32.1.4 Receivership. The appointment of a receiver to take
possession of substantially all of LICENSEE's assets or of the interest held by
LICENSEE under this Agreement, if such receivership remains undissolved for a
period of thirty (30) days. 32.1.5 Attachment. The attachment or other judicial
seizure of substantially all of LICENSEE's assets or of the interest held under
this Agreement, if such attachment or other seizure remains un dismissed or
undischarged for a period of thirty (30) days after the levy thereof. 32.2
Remedies. In the event of the occurrence of any event of default mentioned in
Paragraph 13.1 hereof, LICENSOR shall have the right, so long as default
continues, to immediately terminate this Agreement by giving LICENSEE written
notice of such termination.
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DESERT MINERALS, INC./▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
33. Inurement.
All covenants, conditions, limitations and provisions herein contained
apply and are binding upon the parties hereto and their heirs, devisees,
successors and assigns.
34. Force Majeure.
If, because of force majeure, LICENSEE is unable to carry out any of
its obligations under this Agreement, the obligation of LICENSEE shall be
excused to the extent made necessary by such force majeure and this Agreement
shall be extended by a length of time equal to its continuance not to exceed
maximum term permitted by law. The term "force majeure" as used herein shall
include, but not be limited to, acts of God, acts of civil or military
authority, acts of war or the public enemy, legislation, acts or orders of any
court, acts or failure to act of regulatory agencies or administrative bodies
having jurisdiction with respect to the performance of this Agreement,
insurrections, riots, strikes, boycotts or other labor disturbances, fire,
flood, windstorm, explosion and other causes not within the reasonable control
of the parties directly affected and claiming suspension of its obligation
whether or not like or similar to the causes or occurrences specifically
enumerated above.
35. Title.
Each LICENSOR covenants that said LICENSOR now owns and is in actual
possession of an undivided one-eighth interest in the PREMISES free and clear
from all former grants, sales, liens, or encumbrances of any kind, and that
there are no delinquent taxes; and agrees to furnish LICENSEE upon request such
abstracts, deeds, or other evidence of title as may be in LICENSOR's possession
and control. LICENSEE may elect to correct any defects it determines
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DESERT MINERALS, INC./▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
exist in title to the PREMISES, including, but not limited to, amendment,
relinquishment, relocation of existing claims and location of additional claims
over fractions within the PREMISES.
36. Counterparts.
This Agreement may be signed in counterparts and shall be deemed
effective when all parties have executed this Agreement or any counterpart
thereof.
37. Complete Agreement.
This Agreement and all the terms and covenants contained herein are
deemed to be the complete and unequivocal written agreement of the parties and
no other agreements, either written or oral, are contemplated with respect to
said PREMISES.
38. Recordation.
This Agreement shall not be recorded, however, the Memorandum of
Exploration Agreement with Option to Lease attached hereto as EXHIBIT "C" shall
be executed and recorded promptly following the execution of this Agreement.
LICENSOR:
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▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇, SR.
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▇▇▇▇▇ ▇▇▇▇▇▇▇
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DESERT MINERALS, INC./▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, et al.
EXPLORATION AGREEMENT AND OPTION TO LEASE
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LICENSEE:
DESERT MINERALS, INC.
By ____________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇
Its Vice-President
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EXHIBIT "A"
UNPATENTED PLACER MINING CLAIMS
Located in Inyo County, California
Inyo County
Township/Range Date of Document
Claim Name Section SBB&M Location Number CAMC
OBOE #66 10 21 N./7 E. 4-30-95 ▇▇-▇▇▇▇ ▇▇▇▇▇▇
Amended 97-1702
OBOE #67 10 21 N./7 E. 4-30-95 ▇▇-▇▇▇▇ ▇▇▇▇▇▇
Amended 97-1703
OBOE #68 10 21 N./7 E. 4-30-95 ▇▇-▇▇▇▇ ▇▇▇▇▇▇
Amended 97-1704
OBOE #69 10 21 N./7 E. 4-30-95 ▇▇-▇▇▇▇ ▇▇▇▇▇▇
Amended 97-1705
OBOE #70 15 21 N./7 E. 4-30-95 ▇▇-▇▇▇▇ ▇▇▇▇▇▇
Amended 97-1706
OBOE #71 15 21 N./7 E. 4-30-95 ▇▇-▇▇▇▇ ▇▇▇▇▇▇
Amended 97-1707
OBOE #72 15 21 N./7 E. 4-30-95 ▇▇-▇▇▇▇ ▇▇▇▇▇▇
Amended 97-1708
OBOE #73 15 21 N./7 E. 4-30-95 ▇▇-▇▇▇▇ ▇▇▇▇▇▇
Amended 97-1709
OBOE #74 22 21 N./7 E. 4-30-95 ▇▇-▇▇▇▇ ▇▇▇▇▇▇
Amended 97-1710
OBOE #75 22 21 N./7 E. 4-30-95 ▇▇-▇▇▇▇ ▇▇▇▇▇▇
Amended 97-1711
OBOE #76 22 21 N./7 E. 4-30-95 ▇▇-▇▇▇▇ ▇▇▇▇▇▇
Amended 97-1712
OBOE #77 22 21 N./7 E. 4-30-95 ▇▇-▇▇▇▇ ▇▇▇▇▇▇
Amended 97-1713
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OBOE #82 16 21 N./7 E. 2-26-96 ▇▇-▇▇▇▇ ▇▇▇▇▇▇
Amended 96-3080
OBOE #83 21 21 N./7 E. 2-26-96 ▇▇-▇▇▇▇ ▇▇▇▇▇▇
Amended 96-3081
OBOE #84 24 21 N./6 E. 2-26-96 ▇▇-▇▇▇▇ ▇▇▇▇▇▇
Amended 96-3082
Amended 97-1714
OBOE #85 24 21 N./6 E. 2-26-96 ▇▇-▇▇▇▇ ▇▇▇▇▇▇
Amended 96-3083
Amended 97-1715
EXHIBIT "B"
MINING LEASE
This Agreement is made and effective as of the ___ day of _______________,
19__, by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, SR., ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇ (hereafter
referred to as "LESSOR"), and DESERT MINERALS, INC., a Delaware corporation,
(hereafter "LESSEE").
1. DESCRIPTION OF PROPERTY.
LESSOR is the owner of all or part of the unpatented placer mining claims
described on EXHIBIT "A" attached hereto.
2. GRANT OF LEASE.
2.1 LESSOR hereby leases exclusively to LESSEE,
subject to the terms and conditions hereinafter expressed,
LESSOR's interest in the property set forth in EXHIBIT "A" attached hereto
(LESSOR's interest is hereafter referred to as "LEASED PROPERTY").
2.2 This lease is granted for the purpose of the
exploration, development, and mining of the LEASED PROPERTY
for minerals as may be found therein (hereinafter referred to as the "Leased
Minerals"). LESSEE is hereby
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granted the exclusive right to enter into possession of the LEASED PROPERTY, and
during the term of this lease, to remain in possession thereof, and to develop,
mine, operate and use the property and any surface or underground rights,
including but not limited to access, and water or water rights, and to mine,
extract and remove from the LEASED PROPERTY the Leased Minerals and to treat,
mill, ship, sell or otherwise dispose of the same and receive the full proceeds
thereof (subject to the obligation of royalty payment as specified below); and
to construct, use and operate thereon and therein structures, excavations,
roads, equipment and other im provements or facilities which LESSEE shall deem
reasonably required for, or in connection with, the full enjoyment of the rights
and interests granted to LESSEE by this lease.
3. TERM OF LEASE.
The term of this Mining Lease shall be for twenty (20) years from and
after the date of this lease and for so long thereafter as LESSEE is in
production on properties located within a five (5) mile radius of the nearest
LEASED PROPERTY. For purposes of this paragraph, production shall be defined as
the processing of ore. LESSEE may terminate this lease at any time by delivery
to LESSOR of a quitclaim deed to the LEASED PROPERTY, provided that LESSEE is
not then in default under the terms of this lease.
4. ROYALTIES AND CONSIDERATION.
4.1 Advance Minimum Royalty.
LESSEE shall pay to LESSOR advance minimum royalties as follows:
a) Upon execution of this agreement $1,000.00
b) On or before the anniversary date
and each anniversary date thereafter $1,000.00
4.2 Production Royalties.
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4.2.1A production royalty for all minerals mined, removed, and sold from the
property set forth in EXHIBIT "A" equal to 2.5 percent (2.5%) of the Smelter
Returns shall be calculated. LESSOR, as defined in this Agreement, shall receive
a percentage of the production royalty calculated equal to LESSOR's actual
ownership interest of the property described in EXHIBIT "A". 4.2.2The term
"Smelter Returns" shall be defined to be the gross amount received from the sale
of valuable minerals after recovery of all exploration, development, and capital
costs and less all taxes levied, incurred or imposed on the sale, severance or
production of such minerals and less costs of extraction, mining, milling,
treating, transportation to the smelter and/or refinery, smelting and refining
charges and costs of sale. 4.3 Manner of Payment. 4.3.1All minerals mined,
removed and extracted from the LEASED PROPERTY shall be sold under the name of
LESSEE and a royalty settlement sheet accounting for such transactions shall be
furnished to LESSOR on or before the twenty-fifth (25th) day of the next
succeeding calendar month for all sales made and received during the preceding
calendar quarter. All production royalty payments, accompanied by a settlement
sheet required by this lease, shall be made to LESSOR at the address set forth
in Paragraph 12.1 below, or such other person or address as LESSOR shall
designate by written notice pursuant to the provisions of Paragraph 8 by mail or
personal delivery. LESSEE shall receive a cumulative credit against production
royalties for all minimum royalties paid pursuant to this lease agreement
regardless of the year in which said minimum royalties are paid and production
royalties shall not be payable until the production royalty set forth in
Paragraph 4.2 exceeds the cumulative sums paid by LESSEE pursuant to Paragraph
4.1. If the Leased Minerals are sold to, or processed by, a smelter or refinery
owned, operated, affiliated with or controlled by LESSEE, in no event shall the
royalties computed herein be less than would have been paid had the ore been
sold to or processed by a major smelter or refinery not owned, operated,
affiliated with, or controlled by LESSEE. Page 13 of 8
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5. CONDUCT OF MINING OPERATIONS.
5.1 General.
LESSEE shall conduct, and cause all mining activities
to be conducted in a prudent,
workmanlike, miner-like manner in accordance with established mining practices.
5.2 Commingling of Ore.
LESSEE may commingle ore from the LEASED PROPERTY with ore from other
properties, either before or after concentration or beneficiation, provided that
the method and procedures LESSEE uses to commingle the ore and to determine the
weight and grade of the ore removed from the LEASED PROPERTY and of the ore with
which it is commingled shall be a method recognized by the mining industry and
conducted in accordance with generally accepted accounting principles. LESSEE
shall use that method to determine weight and grade and to allocate net returns
from the commingled ore between the LEASED PROPERTY and the other properties
from which the other commingled ore was removed and to assure that the share of
production received by LESSOR is representative of the ore that was produced
from the LEASED PROPERTY. All such weight, grade and allocation calculations by
LESSEE shall be done in accordance with generally accepted accounting principles
and in a manner recognized by the mining industry as practical and sufficient at
that time. If it is impractical to determine which portions of any of the costs
and expenses described in Paragraph 4.2.2 above are directly attributable to ore
removed from the LEASED PROPERTY, such costs and expenses shall be allocated on
a straight-line, per-ton basis among all ores that give rise to those expenses,
in accordance with acceptable accounting standards.
5.3 Cross-Mining Rights.
LESSEE is hereby granted the right, if it so desires, to mine or remove
from the LEASED PROPERTY any ores, waste, water and other materials existing
therein or thereon or in any part thereof, through or by means of shafts,
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openings or pits which may be sunk or made upon other property owned,
controlled, or operated by or for LESSEE (hereinafter "Other Property"). LESSEE
also may stockpile any ores, waste, or other materials and/or concentrated
products of ores or materials (collectively "Products") from the LEASED
PROPERTY, or any part thereof, upon stockpile grounds situated upon such Other
Property. In the event LESSEE stockpiles Products from the LEASED PROPERTY on
Other Properties, LESSEE shall execute or cause to be executed such instruments
as LESSOR may reasonably request in writing to evidence LESSOR's royalty
interest in the Products so stockpiled. Any such instrument executed by LESSEE,
however, expressly shall acknowledge LESSEE's right to sell the stockpiled
Products. LESSEE also, if it so desires, may use the LEASED PROPERTY and any
shafts, openings, pits and stockpile grounds sunk or made for the mining,
removal and/or stockpiling of any Products from the LEASED PROPERTY and/or from
the Other Property, or for any purpose or purposes connected therewith,
provided, however, that such use of the LEASED PROPERTY does not prevent or
interfere with the mining or removal of ore from the LEASED PROPERTY.
6. RECORDS AND BOOKS OF ACCOUNT.
6.1 Books of Account.
LESSEE shall keep complete, true and proper books and records of account
showing all minerals mined and removed from the LEASED PROPERTY and recording
all sales, transfers, conveyances or other dispositions of ores, minerals or
other materials taken from the LEASED PROPERTY in accordance with generally
accepted accounting principles. Said books and records shall be open to
examination by LESSOR or its duly authorized representative during regular
business hours and shall include any and all documents necessary to establish a
gross selling price of the ores, minerals or other materials taken from the
Leased Premises. LESSOR is hereby granted the right at LESSOR's expense to
examine and make a copy or copies of said books or records or any portion
thereof.
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6.2 Inspection.
LESSOR or its duly authorized agents shall have, following advanced notice, the
right at reasonable times under reasonable circumstances to enter upon the
LEASED PROPERTY for the purpose of inspecting operations and work being
performed by LESSEE pursuant to this lease. Such entry shall be at LESSOR's risk
and LESSEE shall not be liable for injury to LESSOR unless such injury is caused
by the willful or grossly negligent conduct of LESSEE. 7. PROTECTING FROM LIENS
AND TAXES. 7.1 LESSEE shall keep the subject premises and every part thereof
free and clear of any and all liens and encumbrances for work performed upon the
subject premises, or for materials furnished to it while this agreement remains
in force and effect. 7.2 LESSEE shall pay not later than ten (10) days before
due, one hundred percent (100%) of all taxes and assessments that may be levied
or assessed against the premises, including all taxes that may be levied or
assessed as a direct or indirect result of LESSEE's mining activities, and
including, but not limited to, taxes on the mineral estate, real property
improvements and personal property and possessory interest taxes. LESSOR shall
forward to LESSEE, upon receipt, all notices of taxes and assessments due.
LESSOR shall be responsible for payment of all taxes or assessments due as a
result of its activities. 8. NOTICE. Any notices required or permitted to be
given to LESSOR or LESSEE hereunder shall be considered as delivered when
received by the parties to whom they shall be directed. Notice shall be given by
personal delivery or by registered mail, postage prepaid and return receipt
requested, addressed to the persons and addresses given below or to such other
person or address as the parties may designate by written notice from time to
time.
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LICENSEE: Desert Minerals, Inc.
c/o LS Capital Corporation
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
LICENSOR: ▇▇▇▇ ▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Changes in the above names and addresses shall be effected by sending
notice as set forth herein and said change shall be effective fifteen (15) days
from receipt thereof.
9. WASTE AND REFUSE.
LESSEE agrees to dispose of refuse from all mining activities conducted
pursuant to this lease in accordance with good mining practice and in accordance
with the provisions of applicable ordinances, laws and regulations.
10. INSURANCE.
LESSEE shall, at its sole cost and expense, cause to be issued and
maintained during the term of this lease or any extension thereof workers'
compensation insurance coverage in accordance with the provisions of California
law.
11. COMPLIANCE WITH LAWS.
LESSEE shall conduct and cause to be conducted all mining activities in
full compliance with the applicable laws of the State of California and the
United States of America.
12. TITLE.
12.1Each LESSOR warrants that said LESSOR is the owner
of an undivided 1/8th interest in the LEASED
PROPERTY and that there are no defects in LESSOR's title which would affect
LESSEE's right to possession and use pursuant to the terms of this lease.
LESSORS authorize ▇▇▇▇ ▇▇▇▇▇▇▇ to receive all payments for them, for their
benefit, as follows:
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17
▇▇▇▇ ▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
12.2 In the event that any defect in LESSOR's title is
determined to exist, LESSOR shall, at its sole cost and expense,
take such steps as may be required, including, but not limited to, the
commencement of litigation, the location of additional claims, relinquishment,
amendment or relocation of existing claims held by LESSOR. In the event LESSOR
fails or refuses to take or complete appropriate steps to correct any defect in
LESSOR's title, LESSEE may elect to correct such defect and deduct the cost of
such correction, including attorneys fees, from the payment obligations
contained in this lease. LESSEE also may make such deductions for costs or
corrections to title to the LEASED PROPERTY incurred by LESSEE prior to the date
of this Lease.
12.3In the event it is determined that LESSOR owns less
than one hundred percent (100%) of the LEASED
PROPERTY, then LESSOR's rights under this Agreement shall be adjusted so as to
reflect the actual interest owned. It is the intention of the parties that the
full ownership of LESSOR be included in this Mining Lease.
13. DEFAULT AND TERMINATION.
13.1 Default.
The occurrence of any of the following events shall constitute an event of
default on the part of LESSEE:
13.1.Breach of Covenants. Failure (i) to perform any of LESSEE's covenants
hereunder, and (ii) to remedy such failure within ninety (90) days after written
demand is made therefore. 13.1.2 Assignments. The making of a general assignment
by LESSEE for the benefit of creditors. 13.1.3 Bankruptcy.
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18
The filing of any form of voluntary petition in bankruptcy by LESSEE, or the
filing of an involuntary petition by LESSEE's creditors, if such petition
remains undischarged for a period of thirty (30) days. 13.1.4 Receivership. The
appointment of a receiver to take possession of substantially all of LESSEE's
assets or of the interest held by LESSEE under this lease, if such receivership
remains undissolved for a period of thirty (30) days. 13.1.5 Attachment. The
attachment or other judicial seizure of substantially all of LESSEE's assets or
of the interest held under this lease, if such attachment or other seizure
remains undismissed or undischarged for a period of thirty (30) days after the
levy thereof. 13.2 Remedies. 13.2.1 Termination. In the event of the occurrence
of any event of default mentioned in Paragraph 13.1 hereof, LESSOR, shall have
the right, so long as default continues, to immediately terminate this lease by
giving LESSEE written notice of such termination. 13.2.2 Eviction. In the event
of any such termination of this lease, LESSOR may then or at any time
thereafter, re-enter the LEASED PROPERTY, or any part thereof, and expel or
remove therefrom LESSEE and any other person occupying the same, using such
force as may be necessary so to do, and again repossess and enjoy the LEASED
PROPERTY, without prejudice to any other remedies that LESSOR may have under
this lease, or at law or equity, by reason of LESSEE's default or of such
termination.
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19
13.2.3 Damages. In the event of any such termination of this lease, LESSOR shall
have all of the rights and remedies of a landlord provided by Section 1951.2 of
the Civil Code of the State of California. 13.2.4 Remedies of LESSOR. In the
event LESSEE breaches this lease and abandons the LEASED PROPERTY, LESSOR shall
have all of the remedies of a landlord provided by the Civil Code of the State
of California. 13.2.5 Default by Landlord. In the event of default by LESSOR,
LESSEE shall have all of the remedies of a tenant provided by the laws of the
State of California. 13.3 Termination by LESSEE. This agreement may be
terminated by LESSEE at any time by the giving of three (3) months written
notice. 13.4 Information.
Upon termination of this Agreement LESSEE shall (upon the
request of LESSOR made within 60 days of termination) provide LESSOR with copies
of all Information as defined below. As used in this Agreement, "Information"
shall mean all geological, geophysical and geochemical data, all laboratory
testing results, maps and reports, whether acquired, generated or compiled by or
for LESSEE. LESSEE warrants that all Information supplied to LESSOR pursuant to
the terms of this provision shall be true and accurate copies of the Information
acquired, generated or compiled by or for LESSEE; provided, however, that LESSEE
does not warrant that the data contained therein is an accurate interpretation
of the geology described therein.
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20
13.4.1 Upon execution of this Agreement, LESSOR shall provide LESSEE access to
all geologic, geophysical and geochemical data concerning the LEASED PROPERTY
which has been acquired, generated, or compiled by LESSOR. 13.4.2 Any and all
data, information, reports and samples provided by LESSEE to LESSOR under the
terms of this Agreement shall be treated and held confidential for the term of
this Agreement.
14. FORCE MAJEURE.
The failure to perform or comply with any of the covenants or
conditions hereof on the part of LESSEE
(including, but not limited to, production requirements set forth in Paragraph 3
above) will not be grounds for cancellation, penalty, termination or forfeiture
hereof, during such time as failure to perform is caused or compliance is
prevented by severe weather, explosion, unusual mining casualty, mill shutdowns,
damage to or destruction of mill or mill plant facility, fire, flood, civil or
military authority, insurrection, strikes, riots, inability after diligent
effort to obtain competent workmen or material or necessary permits, fuel
shortages, inadequate or shortages of transportation facilities not due to the
negligence or lack of diligence by LESSEE, governmental actions or policies
which substantially restrict the legality or profitability of extracting and
selling any of the valuable minerals produced under the Mining Lease, acts of
God, or any circumstances or conditions beyond the control of LESSEE, and in
such an event, LESSEE shall be excused from, and not held liable for, such
failure to perform or comply.
15. INUREMENT.
This lease shall inure to the benefit of and be binding upon their
respective heirs, trustees, conservators, successors and assigns of the parties.
16. RECORDATION.
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21
This agreement is not to be recorded. LESSEE may, however, prepare and
submit to LESSOR for signature, a memorandum of this agreement for recordation.
17. ASSIGNMENT.
17.1 Assignment by LESSOR.
LESSOR agrees that it shall give notice to LESSEE of its
intention to sell or otherwise assign the Lease or LEASED PROPERTY. Upon receipt
of a bona fide offer to purchase the Lease or LEASED PROPERTY, the LESSOR shall
forthwith give notice, to be accompanied by a true copy of such offer to
purchase attached thereto, to LESSEE, and LESSEE shall have ninety (90) days in
which to present to LESSOR a written counter offer, such counter offer to be for
greater consideration than the offer, expressed in cash or marketable
securities. Upon receipt of such counter offer, LESSOR will have thirty (30)
days to sell to LESSEE or to give notice to LESSEE of receipt of a further
counter offer for greater consideration than LESSEE's counter offer. In the
event of a further counter offer being presented, LESSEE will have fifteen (15)
days from receipt of notice to raise its offer, and the offers and counter
offers shall thereafter be limited to a response time of fifteen (15) days from
receipt of notice.
17.2 Assignment by LESSEE.
LESSEE may assign this Lease without the prior written consent
of LESSOR provided LESSEE guarantees the obligations of the assignee; otherwise,
this Lease shall not be assigned by LESSEE without the prior written consent of
LESSOR which consent shall not be unreasonably withheld.
18. REMOVAL OF EQUIPMENT.
At the termination of this lease, LESSEE may remove any and all
equipment it placed on the property during the term of this lease, or any
extension thereof, provided said removal is completed within one (1) year of the
termination date.
Page 22 of 8
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19. COUNTERPARTS.
This agreement may be signed in counterparts and shall be deemed
effective when all parties have executed this agreement or any counterpart
thereof.
20. COMPLETE AGREEMENT.
This writing and all terms and covenants contained herein are deemed to
be the complete and unequivocal written agreement of the parties, and no other
agreements, either written or oral, are contemplated with respect to said
property.
21. CALIFORNIA LAW.
This lease shall be governed by and construed and interpreted under the
internal laws of the State of California.
22. SEVERABILITY.
If any term, covenant, condition or provision of this agreement is held
by a court of competent jurisdiction to be invalid, void, or unenforceable, the
remainder of the provisions hereof shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
23. TITLE HEADINGS.
The headings of the respective paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to be a part of this
Agreement and considered in construing this Agreement.
LESSEE:
DESERT MINERALS, INC.
By ____________________________________
Its______________________________
By ____________________________________
Its______________________________
Page 23 of 8
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LESSOR:
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇, SR.
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
-----------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
Page 24 of 8
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DESERT MINERALS, INC./▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, et al.
MINING LEASE
Table of Contents
1. DESCRIPTION OF PROPERTY............................................ 1
-----------------------
2. GRANT OF LEASE..................................................... 1
--------------
3. TERM OF LEASE...................................................... 2
-------------
4. ROYALTIES AND CONSIDERATION........................................ 2
---------------------------
4.1 Advance Minimum Royalty................................... 2
-----------------------
4.2 Production Royalties...................................... 2
--------------------
4.3 Manner of Payment......................................... 3
-----------------
5. CONDUCT OF MINING OPERATIONS....................................... 4
----------------------------
5.1 General................................................... 4
-------
5.2 Commingling of Ore........................................ 4
------------------
5.3 Cross-Mining Rights....................................... 5
-------------------
6. RECORDS AND BOOKS OF ACCOUNT....................................... 5
----------------------------
6.1 Books of Account.......................................... 5
----------------
6.2 Inspection................................................ 6
----------
7. PROTECTING FROM LIENS AND TAXES.................................... 6
-------------------------------
8. NOTICE............................................................. 7
------
9. WASTE AND REFUSE................................................... 7
----------------
10. INSURANCE.......................................................... 8
---------
11. COMPLIANCE WITH LAWS.................../........................... 8
--------------------
12. TITLE.............................................................. 8
-----
13. DEFAULT AND TERMINATION............................................ 9
-----------------------
13.1 Default................................................... 9
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25
DESERT MINERALS, INC./▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, et al.
13.1.1 Breach of Covenants............................. 9
-------------------
13.1.2 Assignments..................................... 9
-----------
13.1.3 Bankruptcy...................................... 9
----------
13.1.4 Receivership..................................... 10
------------
13.1.5 Attachment....................................... 10
----------
13.2 Remedies.................................................. 10
--------
13.2.1 Termination...................................... 10
-----------
13.2.2 Eviction......................................... 10
--------
13.2.3 Damages.......................................... 11
-------
13.2.4 Remedies of LESSOR............................... 11
------------------
13.2.5 Default by Landlord.............................. 11
-------------------
13.3 Termination by LESSEE..................................... 11
---------------------
13.4 Information............................................... 11
-----------
14. FORCE MAJEURE...................................................... 12
-------------
15. INUREMENT.......................................................... 13
---------
16. RECORDATION........................................................ 13
-----------
17. ASSIGNMENT......................................................... 13
----------
17.1 Assignment by LESSOR...................................... 13
--------------------
17.2 Assignment by LESSEE...................................... 14
--------------------
18. REMOVAL OF EQUIPMENT............................................... 14
--------------------
19. COUNTERPARTS....................................................... 14
------------
20. COMPLETE AGREEMENT................................................. 14
------------------
21. CALIFORNIA LAW..................................................... 14
--------------
22. SEVERABILITY....................................................... 14
------------
23. TITLE HEADINGS.................................................. 15
--------------