EXHIBIT 10.1
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PROJECT ACQUISITION AGREEMENT
BETWEEN
GALAXY MINERALS INC.
AND
SEARCHLIGHT EXPLORATION, LLC.
AND
THE ▇▇▇▇▇▇▇▇ / ▇▇▇▇▇▇ NEW JERSEY TRUST
DATED AS OF OCTOBER 31ST, 2004
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PROJECT ACQUISITION AGREEMENT
This PROJECT ACQUISITION AGREEMENT (this "Agreement"), dated as of
September 20, 2004 is made by and between GALAXY MINERALS INC., a Florida
corporation, having offices at ▇▇▇ ▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇.▇.▇. ("Company") and SEARCHLIGHT EXPLORATION LLC, an Arizona limited liability
company with offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇., ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ U.S.A.
("Searchlight") and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and his successors in trust as trustee of
the ▇▇▇▇▇▇▇▇ / ▇▇▇▇▇▇ New Jersey Trust dated December 15, 2001 ("Trust") (Trust
and Searchlight are sometimes herein referred to collectively as "Claimholder").
1. GRANT OF LEASE, PURCHASE OPTION AND 75% NET PROFITS INTEREST. In
consideration for the sum of US$5,000 to be paid by Company to Claimholder on or
before December, 1st 2004 (the "Initial Payment"), the further payments of
$10,000 to be paid by Company to Claim holder quarterly during the Lease Term
("Quarterly Payments"), 250,000 shares of common stock of Company and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Claimholder hereby leases the unpatented placer and / or lode
mining claims known as the Treasure King, Copper Mountain and Monster Projects
and more particularly described in Exhibit A hereto and as the Oatman Project as
more particularly described in Exhibit B hereto (the "Property") to Company (the
"Lease") and grants to Company a 75% net profits interest and an exclusive
irrevocable option (the "Purchase Option") to purchase the Property, each on the
terms and conditions set forth below. Provided the Initial Payment has been
made, the term of the Lease shall commence on November 1, 2004 and, provided
that all Quarterly Payments are made, shall run to and including October 31,
2007 (the "initial term"), with the right of Company at its option to extend the
Lease for up to three (3) additional three year terms on the same terms and
conditions to and including October 31, 2016 (an "extended term") (the initial
and extended terms being hereinafter referred to as the "Lease Term"). Company
shall have the right to sooner terminate the Lease pursuant to Section 6 and,
subject to Section 15 below, to exercise the Purchase Option pursuant to Section
7 at any time during the Lease Term. The Purchase Option may be exercised by
Company only upon the delivery to Claimholder of each of (a) a "positive"
feasibility study for the Property, (b) corporate resolution of the Company (and
any parent company thereof) evidencing an affirmative production decision for
the Property and (c) evidence satisfactory to Claimholder that Company has
obtained the financing necessary to develop and operate the Property. Upon
transfer of title pursuant to exercise of the Purchase Option, the Lease shall
terminate. As to the patented claims included in the Property, the Lease and
Purchase Option are only in respect of the mineral rights to such patented
claims; Trust reserves all rights it may have to the surface of the patented
claims and development of same.
2. TITLE TO THE PROPERTY.
A. Claimholder hereby represents and warrants to Company as follows:
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(i) Claimholder owns or is able to convey a full and undivided interest in
and to each of the unpatented mining claims included in the Property as of the
date hereof and to the mineral rights to the patented mining claims included in
the Property;
(ii) To the best of the knowledge, information and belief of Claimholder,
all such claims have been validly located and maintained in accordance with all
applicable laws and regulations;
(iii) All such claims are free and clear of all liens, claims, and
encumbrances whatsoever, subject only to the paramount interest of the United
States of America and / or the State of Arizona; all taxes, if any, which may be
or which may become a lien upon the Property, as of the date hereof, have been
paid;
(iv) The Property is not in any manner encumbered as a result of any
conduct or activity of Claimholder;
(vi) Having secured the approval of its sole member to the terms and
conditions of this Agreement, Searchlight has full and complete authority to
execute this Agreement on behalf of Searchlight and to grant the rights herein
conferred by Searchlight on Company; ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ has full and complete
authority to execute this Agreement on behalf of Trust; and (vii) Claimholder
has no knowledge that any of the mining claims comprising the Property are
invalid, or that, except for patented ground owned by others lying within the
Project Area and certain unpatented claims of ▇.▇. ▇▇▇▇▇▇▇▇, there are other
senior mining claims in conflict with any of such claims.
3. LEASE PAYMENTS AND OTHER PAYMENTS.
A. During the Lease Term, Company shall make the following payments to
Claimholder, which shall constitute a portion of the purchase price for the
Property:
(i) The Initial Payment of $5,000, on or before December 1,
2004; and
(ii) The Quarterly Payments each in the amount of $10,000,
payable on March 1, June 1, September 1 and December 1 of each year during the
Lease Term, commencing with March 1, 2005.
B. Following Company's exercise of the Purchase Option under Section 7
and resulting termination of the Lease as provided in Section 1, Company shall
pay to Claimholder (i) the Claimholder's net profits interest (NPI) under
Section 8A and (ii) the Claimholder's net smelter return (NSR) royalty under
Section 8B. Company's obligation to make payment under Section 8A and Section 8B
shall cease to accrue on the first to occur of (i) completion by Company of
mining operations, residual leaching and reclamation in the Project Area or (ii)
other decision of Company to terminate operations in the Project Area and, if
Claimholder so desires, to reconvey the property to Claimholder once reclamation
and other environmental obligations have been satisfied, although this provision
shall not relieve Company from its obligation to make payments that accrued
prior to such occurrence.
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C. All payments shall be paid in US dollars in immediately available funds.
D. Company hereby represents and warrants to Claimholder that it has
adequate financial resources to make the payments required under this Section 3,
as well as the Work Expenditures required under Section 4.
E. Company shall also issue on or before December 1, 2004 to Searchlight
187,500 shares of Company's common stock and to Trust 62,500 shares of Company's
common stock. The shares shall be validly issued, fully paid and nonassessable.
The shares shall be restricted and eligible for resale pursuant to Rule 144 in
accordance with said rule. Company, following its initial public offering, shall
use its best efforts to comply with its reporting obligations under applicable
securities law so as to enable Searchlight and Trust to utilize Rule 144 for
resale of the shares following the applicable holding period.
4. WORK EXPENDITURES. During the Lease Term, until terminated by Company
under Section 6 or until the Purchase Option is exercised under Section 7,
Company shall make work expenditures ("Work Expenditures") on or for the benefit
of the Property in the following amounts:
A. The sum of $100,000 on or before October 31, 2005. This is a firm
commitment. If Company fails to perform the total amount of such
Work Expenditures; Company shall pay Claimholder the deficiency
in immediately available funds.
B. The sum of $100,000 on or before October 31, 2006.
C. The sum of $100,000 on or before October 31 of each year
thereafter.
Any excess of Work Expenditures in any year shall be carried forward to the
succeeding year. If Work Expenditures in any year after the period ended October
31, 2005 are deficient and Company desires to maintain the Lease and Purchase
Option in effect, Company shall pay Claimholder in immediately available funds a
sum equal to the deficiency in lieu of the Work Expenditure shortfall. For
purposes of this Agreement, "Work Expenditures" is defined as sums spent or
incurred by Company directly on the Property for exploration and development of
the Property, including drilling, geochemical sampling, geophysical or seismic
survey, assaying, and ore reserve calculation; metallurgical and engineering
analyses; environmental and permitting analyses and activities; feasibility
studies; and financing investigations; plus 5% of such direct costs in lieu of
headquarters overhead and general and administrative expenditures.
It is the parties' intention that work be done each year at the Oatman Project,
with some work to be done at one or more of the other projects. In the event
that, for two consecutive work years, Work Expenditures at any of the projects
are less than $2,500 (an "Inactive Project"), Claimholder may request
termination of the Lease with respect to the Inactive Project, whereupon Company
may either pay Claimholder $2,500 to keep the Inactive Project subject to the
Lease or Company may return the Inactive Project to Claimholder.
5. RIGHTS AND OBLIGATIONS DURING LEASE TERM. The parties shall have the
following rights and obligations during the Lease Term:
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A. ACCESS TO PROPERTY AND PROVISION OF DATA. Company shall have full
access to the Property to conduct such investigations and examinations as
Company may deem desirable and to all information and data in Claimholder's
possession and control pertaining to the Property necessary or desirable to
enable Company to fully evaluate the Property and its commercial feasibility.
Claimholder agrees to cooperate fully with Company in its investigation.
B. ACTIVITIES BY COMPANY. Company shall have exclusive possession of
the Property, subject to the paramount rights of the United States and / or the
State of Arizona with respect to unpatented mining claims included in the
Property, and shall have the exclusive right to conduct such exploration,
evaluation, and development activities on the Property (including bulk sampling)
as Company may desire. Claimholder shall provide at Company's expense all
reasonable assistance to Company for the obtaining of any permits, licenses, and
third party consents needed for such work. Company shall also have the right to
contact the pertinent federal, state, and local permitting agencies, and to
negotiate with such agencies.
C. MAINTENANCE OF PROPERTY. Company shall maintain in good standing
all unpatented mining claims that comprise the Property. Company shall, as
required by the Federal Government with respect to unpatented mining claims on
federal lands, perform required assessment work or timely pay all claim
maintenance or rental fees and all required property taxes, and shall timely
make all filings and recordings in the appropriate governmental offices required
in connection with such payments. In the event Claimholder makes any such
payment (although it shall have no obligation to do so), Company shall promptly
reimburse Claimholder for payment of such holding costs upon receipt by Company
of evidence of such payment. Company shall have the right to amend or relocate
in the name(s) of Claimholder any unpatented mining claims included in the
Property, to locate different types of claims on ground covered by existing
claims, and to locate any fractions.
D. SHARING OF DATA. During each year of the Lease Term, Company will
share with Claimholder all information (including interpretive and
non-interpretive data, subject to typical disclaimers regarding interpretive
data and statements that Claimholder may not rely upon the same) obtained from
the exploration, evaluation, and development activities pertaining to the
Property, including providing a copy of any geological and other principal
reports relating to the Property, and will report to Claimholder in writing at
least quarterly regarding the progress of the exploration and evaluation work
and Work Expenditures made during the period.
E. CLAIMHOLDER ACCESS TO PROPERTY. Claimholder may have access to the
Property at its sole risk on reasonable notice, and shall be entitled to conduct
tours of the Property for investor relations and financing activities.
Claimholder's exercise of its access rights shall not interfere in any way with
Company's operations on the Property, which shall take precedence in the event
of any conflict.
F. CONDUCT OF OPERATIONS BY COMPANY AT THE PROPERTY. All of the
exploration, development, mining, milling and related work and any other
activities which may be performed by Company or its agents or contractors
hereunder shall be performed in accordance with all of the terms and conditions
of this Agreement and good mining practices, but the timing, nature, manner and
extent of any exploration, development or any other operations or activities
hereunder shall be in the sole discretion of Company, and there shall be no
implied covenant to begin or continue any such operations or activities.
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G. INDEMNITY. Except for damages sustained by Claimholder while on the
Property pursuant to Section 5F., Company agrees to indemnify and hold
Claimholder and its affiliates, and their respective, officers, directors,
employees, agents, members, partners and agents harmless from and against any
loss, liability, cost, expense or damage (including reasonable attorney's fees)
that may be incurred for injury to or death of persons or damage to property, or
otherwise, as a result of Company or its agents or contractors conducting any
operations on or in connection with the Property.
H. INSURANCE. Company agrees to carry such insurance, covering all
persons working at or on the Property for Company, as will fully comply with the
requirements of the statutes of the State of Arizona pertaining to worker's
compensation and occupational disease and disabilities as are now in force or as
may be hereafter amended or enacted. In addition, Company agrees to carry
liability insurance with respect to its operations at the Property in reasonable
amounts in accordance with accepted industry practices. Company agrees that
Claimholder shall be named as an additional insured on all such policies, and
agrees to forward to Claimholder certificates of such insurance policies not
later than 10 days prior to the date that Company commences any such activities
on the Property. Company shall have no right to commence any such activities
until such certificates are delivered to Claimholder.
I. COMPLIANCE WITH LAWS. Company agrees to conduct and perform all of
its operations at the Property during the term of this Agreement in compliance
with all valid and applicable federal, state and local laws, rules and
regulations, including without limitation laws, rules and regulations pertaining
to environmental protection, human health and safety, social security,
unemployment compensation, wages and hours and conditions of labor, and Company
shall indemnify and hold Claimholder harmless from and against any loss,
liability, cost, expense or damage (including reasonable attorney's fees)
arising from or related to Company's failure to comply with said laws.
J. TAXES. During the term of this Agreement, Company shall be
responsible for payment of all taxes levied or assessed upon or against the
Property, as well as any facilities or improvements located thereon.
K. LIENS AND ENCUMBRANCES. Company shall keep title to the Property
free and clear of all liens and encumbrances resulting from its operations
hereunder; PROVIDED, HOWEVER, that Company may refuse to pay any claim asserted
against it which it disputes in good faith. At its sole cost and expense,
Company shall contest any suit, demand or action commenced to enforce such a
claim and, if the suit, demand or action is decided by a court or other
authority of ultimate and final jurisdiction against Company or the Property,
Company shall promptly pay the judgment and shall post any bond and take all
other action necessary to prevent any sale or loss of the Property or any part
thereof. Company shall permit Claimholder to post Notices of Non-Responsibility
at the collars of any shafts and in other locations required under Arizona law
in order to prevent certain liens from attaching to the Property, and Company
shall take all actions reasonably necessary to keep such notices posted in these
locations.
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L. RECLAMATION AND REMEDIATION. Company shall reclaim the Property, to
the extent disturbed by Company during the term of this Agreement, in accordance
with and as required by applicable federal, state and local laws, rules and
regulations.
6. RIGHT TO TERMINATE.
A. TERMINATION.
(1) BY THE COMPANY. Company may terminate this Agreement or the
Lease at any time at its sole option by giving Claimholder
30 days' prior written notice, upon which all rights and
obligations of the parties under this Agreement shall cease,
except for any limitation of liability, indemnification, and
confidentiality provisions set forth herein; PROVIDED,
HOWEVER, that (i) if Company terminates this Agreement after
April 1 of any year, Company agrees to pay governmental fees
and make all governmental filings necessary to maintain the
unpatented mining claims for the assessment year commencing
on September 1 next following such notice of termination and
(ii) if Company terminates this Agreement or the Lease on or
before June 30, 2005, Company shall remain obligated to
comply with Section 4A.
(2) BY CLAIMHOLDER. In the event that (i) Company shall fail to
pay any of its monetary obligations under this Agreement
when due and shall not pay same within 14 days following
notice thereof by Claimholder or (ii) Company shall fail to
perform any of its nonmonetary obligations under this
Agreement and shall not cure its failure within 30 days
following notice thereof by Claimholder (in each case an
"uncured default"), Claimholder may terminate this Agreement
upon three days written notice to Company. Termination
pursuant to this Section 6.A.(2) shall not excuse Company
from any of its obligations which accrued prior to the date
of termination, and Claimholder shall retain all of its
rights in law or in equity with respect thereto.
B. RETURN OF DATA. As soon as practicable upon the termination of this
Agreement, Company shall return to Claimholder copies of all title,
environmental, metallurgical, geological, geophysical, milling and other data
concerning the Property and furnished by Claimholder or previous owners of the
Property or their agents or consultants to Company. At such time, Company shall
also make available to Claimholder for examination and copying all survey maps,
drill hole logs, sample locations and assays developed by Company with respect
to the Property during the term of this Agreement and not previously made
available to Claimholder and shall transfer custody to Claimholder of all drill
cores.
C. RELEASE. Upon termination of this Agreement, Company will promptly
execute and deliver to Claimholder appropriate documents of conveyance releasing
and conveying its interest in the Property to Claimholder.
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D. SURRENDER OF POSSESSION AND REMOVAL OF EQUIPMENT. Upon termination
of this Agreement, Company shall surrender possession of the Property, subject
to the condition that Company shall have the right at any time within one year
(or such longer period as Company can demonstrate is reasonably necessary) after
such surrender or termination of this Agreement to (i) complete any reclamation
obligations required of Company under this Agreement or by governmental law or
regulation and (ii) remove all of its tools, equipment, machinery, supplies,
fixtures, buildings, structures and other property erected or placed on such
property by Company, excepting only timber, chutes and ladders in place for
underground entry and support. Title to such property not removed within the
time period set forth above shall, at the election of Claimholder, pass to
Claimholder. Alternatively, at the end of the time period set forth above,
Claimholder may remove any such property from the Property and dispose of same
in a commercially reasonable manner, all at the expense of Company.
7. EXERCISE OF PURCHASE OPTION. If Company decides to exercise the Purchase
Option, upon each of (a) the completion of a "positive" feasibility study for
the Property, (b) the making of an affirmative production decision for the
Property by Company's and any parent corporation's Boards of Directors and (c)
presentation to Claimholder of evidence satisfactory to Claimholder that Company
has obtained the financing necessary to develop and operate the Property,
Company shall give Claimholder notice thereof. Within 10 days after such notice,
Claimholder shall deliver to Company a special warranty deed in form
satisfactory to Company transferring title to a 100% interest in the Property,
and reserving to Claimholder the net profits interest ("NPI") in production from
the Property and the net smelter returns royalty ("NSR"), each as set forth in
Section 8 below, and Company shall deliver to Claimholder the sum of $10.00.
8. CLAIMHOLDER NPI AND NSR ROYALTY.
A. CLAIMHOLDER NPI. Upon completion of the payments under Section 3.A.,
Company shall have a 75% NPI in the Property and Claimholder shall have a 25%
NPI in the Property. Upon termination of this Lease (other than as a result of
Company's exercise of its Purchase Option, Company's NPI shall be reduced
permanently to zero (-0-%) and Claimholder's shall be increased permanently to
100%. For purposes of Claimholder's and Company's respective NPI, "Net Profits"
shall be calculated pursuant to generally accepted accounting principles in the
United States of America, PROVIDED, HOWEVER, that the calculation of net profits
shall not include any benefit or loss from price hedging and price protection
arrangements conducted by or on behalf of Company and, PROVIDED, FURTHER, that
Company shall be entitled to deduct from revenues only the following percentages
of total operating costs in lieu of headquarters overhead and headquarters
general and administrative expenses: 3% during the development/construction
stage of operations and 1% during the mining and processing stage of operations
and, PROVIDED, FURTHER, that no deduction shall be made for depletion or
depreciation. Claimholder's NPI shall be a fully carried interest, and
Claimholder shall not be required to fund any expenses relating to the Property
or its exploration , development, production or reclamation.
B. NET SMELTER RETURNS ROYALTY. In addition to Claimholder's NPI,
Claimholder hereby reserves a five (5%) percent net smelter returns royalty
("NSR Royalty") for all commodities produced. For purposes of this Agreement,
the "net smelter return" is defined as the amount of money which the smelter or
refinery, as the case may be, pays the Company for the commodity based on the
then current spot price of the commodity, with deductions for costs associated
with further processing but without deductions for taxes, calculated on an FOB
mine site basis.
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C. PAYABLE IN KIND; PAYABLE QUARTERLY. Claimholder may elect to
receive in kind its NPI or its NSR Royalty (as described below). Both royalties
shall be payable quarterly.
9. "PROJECT AREA" / AREA OF INTEREST. If either party or if any affiliate
of a party, or any officer, director, employee, partner, member or agent
thereof, now has or hereafter acquires any property interest within the
boundaries of Twp 11.5N Range 1E, ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇ ▇, ▇▇▇ 18N
Range 20W or Twp 19N Range 20W, GSRBM, Arizona, or within one mile of the
perimeter of such boundaries (the "Project Area"), such party shall give prompt
notice to the other party and such property interests shall, at the option of
the other party, exercised within 45 days after notice of such acquisition by
the acquiring party, become part of the Property and become subject to this
Agreement (the "Additional Property. If Company does not exercise the Purchase
Option and the Lease is terminated, Claimholder shall have the right to retain
any Additional Property acquired by Company at no cost to Claimholder.
10. CROSS - INDEMNITY. Each party ("Indemnifying Party") agrees to defend,
indemnify and hold harmless the other party, its successors, affiliates,
assigns, officers, directors and employees, members, partners and agents
("Indemnities") from and against any and all claims, actions suits, losses,
liabilities, damages, assessments, judgments, costs and expenses, including
reasonable attorney's fees, arising out of or pertaining to (i) any breach by
the indemnifying party of any representation, warranty or obligation under this
Agreement or (ii) any activities conducted by the Indemnifying Party or its
agents on the Property.
11. ASSIGNMENT. Neither party may assign its rights and obligations under
this Agreement without the prior written consent of the other party, which
consent shall not be unreasonably withheld, provided, however, that Claimholder
may assign its interest at any time after October 31, 2004 to a third party
without the consent of Company if such third party agrees to assume all of
Claimholder's obligations under this Agreement, and provided further that
Company may assign its interest to an affiliated company or a successor without
the consent of Claimholder, provided that the assignee agrees to assume all of
Company's obligations under this Agreement and has a tangible net worth no less
than that of Company prior to the assignment.
12. GOVERNING LAW. CONSENT TO JURISDICTION. This Agreement shall be
governed by the laws of the State of Arizona, excluding any conflicts of laws
principles. Each party consents to the exclusive jurisdiction and venue of the
federal and state courts sitting in Mohave County or Yavapai County, Arizona,
U.S.A. over any dispute, claim, lawsuit or proceeding arising from or pertaining
to this Agreement, and waives any argument that such courts are an "inconvenient
forum."
13. AFFILIATED COMPANIES. Each party shall take such actions as may be
necessary to cause its affiliates to comply with the obligations contemplated
herein. "Affiliate" of a party means any person, partnership, joint venture,
corporation, or other form of enterprise that directly or indirectly controls,
is controlled by, or is under common control with, the party.
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14. NOTICES. All notices required or permitted to be given hereunder shall
be in writing and shall be delivered to the parties by personal delivery,
registered or certified mail, facsimile transmission, or express delivery
service at the addresses set forth below, or to such other address as the
parties may later designate by like notice to each other:
Company:
Galaxy Minerals Inc.
▇▇▇ ▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇.▇.▇.
Phone: ▇▇▇.▇▇▇.▇▇▇▇
FAX: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Searchlight:
Searchlight Exploration LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ U.S.A.
Phone: 702.396-5292
FAX: 702.396-2347
Attn: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Trust:
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇
All notices required or permitted to be given hereunder shall be deemed to have
been given on the date of actual receipt.
15. RULE AGAINST PERPETUITIES. Anything in this Agreement to the contrary
notwithstanding, Company may not exercise its Purchase Option, which shall
thereupon become null and void, later than 21 years after the end of the life of
the last to survive of ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇, who are locators of claims owned or being explored by Searchlight.
16. DOLLARS. All dollar ($) amounts used in this Agreement or any Exhibit
or Schedule hereto are U.S. $ Dollars.
17. OTHER BUSINESS OPPORTUNITIES. This Agreement is, and the rights of the
parties are, strictly limited to the matters set forth herein. Subject to the
provisions of Section 9 relating to Additional Property in the Project Area, the
parties shall have the free and unrestricted right to independently engage in
and receive the full benefits of any and all business ventures of any sort
whatever, whether or not competitive with the matters contemplated hereby,
without consulting the other or inviting or allowing the other to participate
therein.
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18. CONFIDENTIALITY. Except as set forth in Section 20, the parties hereto
agree to treat all data, reports, records and other information developed under
this Agreement and applicable to the Property as confidential, and unless any
party is required by any law, rule, regulation or order to disclose any of such
information, it shall not be disclosed to any person other than consultants,
contractors or potential investors or assignees, without the written agreement
of both parties, which will not unreasonably be withheld.
19. MEMORANDUM FOR RECORDING. Simultaneous with the receipt by Claimholder
of the all payments pursuant to Section 3.A., the parties agree to execute for
recording purposes a written Short Form of Exploration and Development Lease /
Option Agreement, setting forth the basic terms and conditions of this Agreement
as necessitated or permitted by Arizona law.
20. PUBLIC ANNOUNCEMENTS. Disclosure of information relating to this
Agreement or the Property may be made by either party if such information is
required to be disclosed to any federal, state, provincial or local government
or appropriate agencies and departments thereof or if such information is
required by law, stock exchange rule or regulation to be publicly announced.
Otherwise, public announcements or reports by either party of information
relating to this Agreement or the Property shall be made only on the basis of
agreed texts upon the prior written consent of the other party, which consent
shall not unreasonably be withheld. Each of Claimholder and Company accordingly
agrees that it will, not less than forty-eight hours in advance of making public
any information referred to in the preceding sentence, give the other party
written notice of the text of the proposed report and provide the non-disclosing
party with the opportunity to object to the form and content thereof before the
same is issued. The non-disclosing party shall respond within forty-eight hours
of receipt of such notice, or its silence will constitute a waiver of objection
to the terms of the proposed text.
21. WAIVER; AMENDMENT. Any of the terms or conditions of this Agreement may
be waived at any time by the party which is entitled to the benefit thereof, but
such waiver must be in writing and signed by the party granting the waiver. No
such waiver shall affect or impair the right of the waiving party to require
observance, performance or satisfaction of any other term or condition thereof.
Any of the terms or provisions of this Agreement may be amended or modified at
any time, but only in a writing signed by each of the parties hereto.
22. SEVERABILITY. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument or agreement contemplated
hereby shall, for any reason, be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement or any such other instrument or agreement.
23. ATTORNEY'S FEES. In the event of any controversy, claim or dispute
between the parties hereto, arising out of or pertaining to this Agreement or
the breach thereof, the prevailing party shall be entitled to recover from the
losing party reasonable expenses, attorney's fees and costs.
11
24. FURTHER ASSURANCES. At the request of either party, the parties shall
execute and deliver any further instruments, agreements, documents or other
papers reasonably requested by either party to effect the purposes of this
Agreement and the transactions contemplated hereby.
25. COUNTERPARTS. This Agreement may be executed in multiple counterparts,
and all such counterparts taken together shall be deemed to constitute one and
the same instrument.
26. NO BROKERS OR FINDERS. Each party represents and warrants to the other
party that, except for ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, whose compensation shall be the sole
responsibility of the Company, all negotiations relative to this Agreement and
the transactions contemplated hereby have been carried on by it in such manner
as not to give rise to any valid claim against either party, or any third party,
for a brokerage commission, finder's fee or other fee or commission arising by
reason of the transactions contemplated by this Agreement.
IN WITNESS WHEREOF, the parties hereto, through their duly authorized
representative, have executed and delivered this Agreement as of the day and
year first above written.
SEARCHLIGHT EXPLORATION LLC, THE ▇▇▇▇▇▇▇▇ / ▇▇▇▇▇▇
an Arizona limited liability company New Jersey Trust dated December 15,
2001
By /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------- ------------------------------------
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, sole trustee
Manager and sole member
GALAXY MINERALS INC.
A Florida corporation
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: CEO / President
12
Exhibit A
Treasure King Property
Big Bug / Turkey Creek Mining Districts
Yavapai County, Arizona
Approx
Claim AMC# Recording Info Township / Range / Section Date Located Acreage
----- ---- -------------- -------------------------- ------------ -------
Treasure King AMC356410 Bk 3928 p281 T11.5N R1E Sec 24 5/8/2002 20
Lode Claim
TK#1 AMC356669 Bk 3957 p 462 T11.5N R1E Sec 24, 25 9/7/2002 160
TK#2 AMC356667 Bk 3957 p 463 T11.5N R1E Sec 25, 36 9/7/2002 160
TK#3 AMC356668 Bk 3957 p 464 T11.5N R1E Sec 36 9/7/2002 160
TK#4 AMC356930 Bk 3965 p 702 T11.5N R1E Sec 36 9/20/2002 160
Lode claims in process of location:
Treasure King #2
Treasure King #3
Treasure King #4
Treasure King #5
Treasure King #6
Copper Mountain Property
Agua Fria Mining District
Yavapai County, Arizona
AF#1 AMC360628 Bk 4113 p 108 T12N R2E Sec 6 1/19/2004 146.56
AV#1 AMC360759 Bk 4121 p 524 T12N R2E Sec 7 2/16/2004 150.95
AV#2 AMC360760 Bk ▇▇▇▇ ▇ ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ ▇ 2/16/2004 158.12
AV#3 AMC360761 Bk 4121 p 526 T12N R2E Sec 6, 7 2/16/2004 152.83
AV#4 AMC360862 Bk 4121 p 527 T12N R2E Sec 18 2/16/2004 142.35
AV#5 AMC360863 Bk 4121 p 528 T12N R2E Sec 17, 18, 19, 20 2/16/2004 159.79
AV#6 AMC360864 Bk 4121 p 529 T12N R2E Sec 19, 30 2/16/2004 159.28
AV#7 AMC360991 Bk 4121 p 530 T12N R2E Sec17, 20 2/16/2004 158.5
AV#8 AMC360992 Bk 4121 p 531 T12N R2E Sec 20 2/16/2004 159.61
AV#9 AMC360993 Bk 4121 p 532 T12N R2E Sec20 2/16/2004 160
AV#10 AMC360994 Bk 4121 p 533 T12N R2E Sec 20 2/16/2004 160
AV#11 AMC360995 Bk 4134 p 916 T12N R2E Sec 19 3/21/2004 160
AV#12 AMC360966 Bk 4134 p 917 T12N R2E Sec 25, 30 3/21/2004 160
AV#13 AMC360997 Bk 4134 p 918 T12N R2E Sec 30 3/21/2004 160
AV#14 ▇▇▇▇▇▇▇▇▇ Bk 4134 p 919 T12N R2E Sec 30 3/21/2004 158
Lode claims in process of location:
Big Bug
Old Minor
Copper Hill #1
Copper Hill #2
Copper Hill #3
Hack#1
Yaba Property
▇▇▇▇▇▇ Wash Mining District
Yavapai County, Arizona
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇ p 701 T13N R2E Sec 33 9/20/2002 160
Monstro Verde 2 AMC357865 Bk 4012 p 537 T12N R2E Sec 3 3/17/2003 160
Monstro Verde 3 AMC357866 Bk 4012 p 538 T12N R2E Sec 2 3/17/2003 160
T13N R2E Sec 34
Lode claims in process of location:
Yaba Gold Dot
Tri-Metals
Oatman Project
San Francisco Mining District
Mohave County, Arizona
Central Claim Block
Patented Claims:
The Lexington, Boston, ▇▇▇▇▇, Happy New Year, Only Chance and Big ▇▇▇▇▇▇▇ ▇▇▇▇
Mining Claims, in the San Francisco Mining District, being shown on Mineral
Survey No. 2775, on file in the Bureau of Land Management, as granted by Patent
recorded in Book 22 of Deeds, Page 332, records of Mohave County, Arizona.
The Bunker Hill Lode Mining Claim, in the San Francisco Mining District, being
shown on Mineral Survey No. 3190, on file in the Bureau of Land Management, as
granted by Patent recorded in Book 25 of Deeds, Page 557, records of Mohave
County, Arizona.
Unpatented Claims:
Big ▇▇▇▇ ▇▇▇▇ AMC357922 Bk4480 Pg821 T19N R20W Secs 22,23 3/15/2003 20
BJ#1 AMC357923 Bk4480 Pg823 T19N R20W Secs22,23,24 3/15/2003 156.6
BJ#2 AMC357924 Bk4480 Pg826 T19N R20W Sec26 3/15/2003 157.5
BJ#3 AMC357925 Bk4480 Pg829 T19N R20W Sec 26 3/15/2003 160
Big ▇▇▇▇ #4 AMC360061 Bk4813 Pg703 T19N R20W Sec 25 12/7/2003 ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Bk 4807 Pg 100 T19N R20W Sec 24 12/7/2003 20
Big ▇▇▇▇ #5 AMC360062 Bk 4813 Pg 706 T19N R20W Sec 24 12/7/2003 150
Big ▇▇▇▇ #6 ▇▇▇▇▇▇▇▇▇ Bk4813 Pg709 T19N R20W ▇▇▇ ▇▇ ▇▇/▇/▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Unpatented Claims:
Armil Lode ▇▇▇▇▇▇▇▇▇ Bk4836 Pg672 T18N R20W Secs4,9 1/4/2004 20
GQ#1 AMC357926 Bk4480 Pg832 T18N R20W Secs 9, 10 3/15/2003 140
GQ#2 AMC360429 Bk4826 Pg672 T18N R20W Secs4,9 12/25/2003 160
GQ#3 AMC360430 Bk4826 Pg158 T18N R20W Secs10,15 12/25/2003 155
GQ#4 AMC360431 Bk4836 Pg674 T18N R20W Secs 4,5 1/4/2004 160
GQ#5 AMC361420 Bk4926 Pg309 T18N R20W Sec 4 3/6/2004 155
T19N R20W Secs 32, 33
Q#6 AMC361421 Bk4926 Pg312 T18N R20W Sec 4 3/6/2004 160
T19N R20W Sec 33
GQ#7 AMC361422 Bk4926 Pg315 T18N R20W Secs3, 4 3/6/2004 160
T19N R20W Secs 33, 34
GQ#8 AMC361423 Bk4926 Pg318 T18N R20W Sec 3 3/6/2004 159.37
T19N R20W Sec 34
GQ#9 AMC361424 Bk4926 Pg321 T18N R20W ▇▇▇ ▇ ▇/▇/▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇
▇▇#▇▇ AMC361514 Bk4926 Pg 324 T18N R20W Sec 4 3/6/2004 160
GQ#11 AMC361515 Bk4926 Pg327 T18N R20W Sec 3, 4 3/6/2004 160
GQ#12 AMC361516 Bk4926 Pg330 T18N R20W Secs 2,3 3/6/2004 160
GQ#13 ▇▇▇▇▇▇▇▇▇ Bk4926 Pg333 T18N R20W Secs 2,3 3/6/2004 160
GQ#14 AMC361518 Bk4926 Pg336 T18N R20W Secs 3,4 3/6/2004 160
GQ#15 AMC361076 Bk4926 Pg339 T18N R20W Secs3,4,9,10 3/6/2004 159
GQ#16 AMC361077 Bk4926 Pg342 T18N R20W Sec 10 3/6/2004 160
Unpatented claims in process of location:
Lazy Boy
Peerless
Paragon
United Oatman
Oatman Southern
▇▇▇▇▇▇ May 1
▇▇▇▇▇▇ May 14
▇▇▇▇▇▇ May 20
▇▇▇▇▇▇ May 39
Arataba #1
Arataba #2
Arataba #3
14