Exhibit 10.15
LEASE AGREEMENT
PARCELA “71 ZAP/1”
“EJIDO LA PIMIENTA” STATE OF ZACATECAS
ENTERED INTO BY AND BETWEEN MR. MARTIN
BERNARDO SUTTI COURTADE AND THE
COMPANY NAMED STERLING MINING DE MEXICO,
S.A. DE C.V.
April 23rd, 2004.
Zacatecas City, Zacatecas
LEASE AGREEMENT ENTERED INTO BY AND BETWEEN MR. MARTIN BERNARDO SUTTI COURTADE HEREIN AFTER, (“THE LESSOR”), AND THE COMPANY “STERLING MINING DE MEXICO, S.A. DE C.V.”, REPRESENTED BY ITS LEGAL REPRESENTATIVE MR. RAYMOND KUMLER DE MOTTE, HEREIN AFTER (“THE LESSEE”); HAVING BOTH PARTIES TO OBSERVE THE FOLLOWING DECLARATIONS AND CLAUSES:
DECLARATIONS:
I.- The LESSOR declares that:
| I.1. | Personality He declares that his name is Martin Bernardo Sutti Courtade, who is citizen of the Mexican United States. That he is entitled to enter into this agreement, due to the fact that he has the legal capacity to do so, as well as the will to be undertaken in the terms here set forth. |
| I.2. | Real estate object of this Agreement He declares that is the legal owner of a track of land known as Parcela 71/ZAP1/1, located within the Ejido “La Pimienta” in the Municipality of Zacatecas, Zacatecas. |
The previous is credited through the public document 13,361, granted by Mr. Tarsicio Felix Serrano, Notary Public 7 of the Estate of Zacatecas, on January 31st, 2004, which contains the Sales Agreement of the track of land known as Parcela 71/ZAP1/1, entered into by and between Jose Manuel Venegas Rodriguez and Martha Rosales Pacheco, acting as the Sellers, and Mr. Martin Bernardo Sutti Courtade, acting as the buyer.
| I.3. | Registration The Sales Agreement of reference has been registered into the Zacatecas Public Registry of Property with number 30, pages 133 to 135 volume 938 first section. |
| I.4. | Recital He declares that it is his will to enter into this agreement, with the purpose of giving the temporary use and possession of the track of land known as Parcela 71/ZAP1/1, located within the Ejido “La Pimienta” in the Municipality of Zacatecas, Zacatecas. In this act, he also declares that is his intention to make a land reserve which be detailed below. |
The track of reference has a total area of 40-00-00 hectares and has the following perimeter and adjoining land:
| Adjoining Land of the Track of Land known as Parcela 71/Z4P1/1 | ||
| North: | Adjoins with Ejido Hacienda Nueva | |
| South: | Adjoins with land of common use Zone 1 de | |
| East: | Adjoins with Luis Zamora Mendez’ property and Zacatecas City | |
| West: | Adjoins with land of common use Zone 1 | |
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Perimeter of the Track of Land known as Parcela 71/Z4P1/1
| ||||
SIDES | DIRECTION | DISTANCES | ||
1-2 | N88°16’46”E | 408.400 MTS. | ||
2-3 | S07°33’39”W | 108.260 MTS. | ||
3-4 | S16°43’55”W | 117.900 MTS. | ||
4-5 | S20°04’55”W | 361.540 MTS. | ||
5-6 | S20°58’11”W | 185.350 MTS. | ||
6-7 | S08°49’09”W | 45.100 MTS. | ||
7-8 | S07°42’09”W | 70.870 MTS. | ||
8-9 | S82°25’31”W | 130.070 MTS. | ||
9-10 | S77°51’15”W | 49.290 MTS. | ||
10-11 | N87°33’20”W | 112.714 MTS. | ||
11-12 | S31°51’15”W | 75.210 MTS. | ||
12-13 | N58°07’29”W | 235.073 MTS. | ||
13-14 | N31°52’31”E | 108.327 MTS. | ||
14-1 | N23°00’26”E | 766.848 MTS. | ||
| I.5. | Land Reserves. TheLESSOR will reserve for his own purposes, a surface of land equivalent to 4-88.44 hectares. The location of the area of reference, as well as its sides, direction, distances and the adjoining lands are shown within the drawing attached to this agreement. |
| I.6. | Infrastructure. The track of land is integrated by four constructions of four lixiviation basins, with a total dimension of 24.00 meters long, 12.00 meters wide and 5.00 meters of depth. Those constructions are also integrated in this lease agreement. |
II.- The LESSEE declares that:
| II.1. | Personality it is an enterprise constituted according to Mexican Law. The previous is credited through the public document No. 31,286 dated February 27, 2004. Witnessed and recorded by Mr. Juan Antonio Castaneda Ruiz, Notary Public No. 10 in the State of Zacatecas; the referenced document is pending of inscription in the Public Registry of commerce. |
| II.2. | Representation It is legally represented by Mr. Raymond Kumler De Motte in the terms of the power of attorney contained in the public deed 31,286 dated February, 27, 2004. Witnessed and recorded by Mr. Juan Antonio Castaneda Ruiz, Notary Public No. 10 in Zacatecas; the referenced document is pending of inscription in the Public Registry of commerce., in said power sufficient faculties for the subscription of the present Agreement were granted, and the same faculties have not been revoked nor modified to the date of execution of same. |
| II.3. | Site Integration It is his will to celebrate the present Agreement as theLESSEE, regarding a track of land known as “La Pimienta”, within the Municipality of Zacatecas, Zacatecas, in order to obtain the temporary use and possession of said track of land in the terms and conditions here set forth. |
| II.4. | Site Use It accepts the terms established in the present Agreement, in the understanding that theLESSEE is aware of the sites conditions as well as the existence of, |
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approximately, 5 millions tons of tailings. The use and exploitation of the tailings of reference will be the subject matter of a different agreement (exploitation agreement). |
| II.5. | Consent with the Site’s Condition TheLESSEE knows the current condition and characteristics of the site, and hence, it receives it-to its entire satisfaction. |
| III. | The Legal Representative declares that his name is Raymond Kumler Demotte, who has sufficient legal capacity to act as Sterling Mining de Mexico, S.A. de C.V., representative. The previous is credited through the public deed 31,286 dated February, 27, 2004. Witnessed and recorded by Mr. Juan Antonio Castaneda Ruiz, Notary Public No. 10 in Zacatecas; the referenced document is pending inscription in the Public Registry of commerce. |
As the preceding is exposed, the parties enter into the present Agreement abiding to the following:
CLAUSES
| I. | OBJECT OF THE AGREEMENT |
TheLESSOR grants in leasing and theLESSEE takes legal and material temporary use and possession of the total area of the Site, consisting of 44-00-00 hectares; in the same way, theLESSEE also takes possession of the constructions attached to the track of land known as “Parcela 71 /Z4P1 /1”, which also are property of the LESSOR.
LESSEE will take possession of the site on the day in which this agreement has been signed.
| II. | TERM |
| II.1. | In accordance with this agreement, the parties have agreed that this agreement will become effective as of April 23, 2004. |
From this date, theLESSOR gives and theLESSEE accepts the temporary use and possession of the track of land, subject matter of this agreement. From this moment, both parties have all the rights and obligations concerning this agreement.
| II.2. | In accordance with article 1758 of the Zacatecas Civil Code, the term of the leasing might have been stipulated by the parties. However, the term of the leasing of the land can extend beyond 20 years. |
Both parties have convened in stipulating an obligatory term of 20 years. This agreement might terminate early if the specific conditions of termination arise, and/or by presence of causes of Force Major or Acts of God.
| II.3. | At the end of the term of this agreement; theLESSEE is entitled to renovate same or even, make valid the option set forth within Clause IV of this instrument. |
If theLESSEE takes the above mentioned option, a written notice containing said circumstance must be submitted to theLESSOR within a period of sixty working days, prior to the to the end of this Leasing Agreement.
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| III. | PRICE OF LEASE |
| III.1. | LESSEE will pay to theLESSOR an advance payment over a 20 years period. The payment of reference will be done in accordance to the following rule: |
Three payments will be done in three cash exhibitions as follows:
A First payment advance of$30,000 US Cy, out of$175,000 US Cy, has already been paid on March 17, 2004.
Upon the signing of this agreement a second payment of$145,000 US Cy (the remaining portion of the$175,000 setout above), will be- paid within the following 5 business days. Also upon signing of this agreement, an additional payment will be done within the United States of America with the issuance of five thousand shares of Sterling Mining Company, based on a value of$10 US Cy per share. The shares of reference will be restricted in accordance with the Securities and Exchange Commission Rule 144 or Regulation S as applicable. Martin Sutti will be required to execute a stock subscription agreement for said shares.
A third payment equivalent of$175,000 US Cy, will be paid 120 days after the signing of this agreement. An additional payment will be done within the United States of America with the issuance of five thousand shares of Sterling Mining Company, based on a value of$10 Us Cy per share.
The shares of reference will be restricted in accordance with the Securities and Exchange Commission Rule 144 or Regulation S as applicable. Martin Sutti will be required to execute a stock subscription agreement for said shares.
| IV. | FINAL OPTIONS |
| IV.1. | Once this agreement has expired, theLESSEE is entitled to decide whether to renew the contract or acquire the land from theLESSOR. In the case that theLESEE takes the option to renew the lease, theLESSEE is required to notify theLESSOR within 60 working days prior to the end of this Lease Agreement for each option renewal period described above. |
The lease option renewal set forth above consists of four terms of five years each. The consideration for these lease option renewal periods will consist in the payment of$15,000.00 US Cy, per year to be paid by theLESSEE.
| IV.2. | At the termination of this agreement, theLESSOR will have the right to decide whether or not to sell its property; if he decides to do so [selling the land], by mandatory of article 1809 of the Zacatecas State Civil Code, is bound to give theLESSEE the first right of refusal to buy the track of land. |
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| V. | SPECIFIC POSSESSION |
| V.1. | LESSEE is bound to use the land, within the terms set forth within this contract. Said property will not be used in contravention to the law, Norms and other applicable legal depositions, and only shall be used to the construction and operation of facilities related with the treatment, storage and disposal of mining products and/or byproducts. |
During the existence of this agreement, the LESSOR is forced to guarantee to theLESSEE that he would not be affected by other people acts, in relation with the leasehold property.
| VI. | REAL ESTATE TAX |
| V1.1. | The real estate tax of the land and the facilities attached to it, shall be paid by the owner of the land, in accordance with the applicable regulations within the state of Zacatecas. |
| VII. | LESSEE TAXES |
| VII.1. | LESSEE will be responsible to obtain permits, licenses and concessions, as well as to pay rights in order to condition the land, as well as to performed activities related with the social purpose. |
| VII.2. | Payments regarding municipal rights related with the land, Out different from the Real Estate Tax setout above, are the responsibility of theLESSEE. |
| VII.3. | By mandatory of law, if during the existence of the contract, new taxes appear in detriment of theLESSOR, he is bound to pay it until the end of the this agreement, as well in the case of theLESSEE’S exercise of the lease option renewal. |
| VIII. | IMPROVEMENTS |
| VIII.1. | TheLESSEE has the responsibility of constructing the improvements; as a consequence he will have the right to choose the persons that will perform said activities. In such case, theLESSEE has to obtain the approval of theLESSOR to perform. the improvements of reference. |
For the purposes set forth above, theLESSEE is bound to send a written notice to theLESSOR who, in a term of 2 working days, must give its consent.
| VIII.2. | At the agreement expiration, if the option to renew has not been executed, theLESSEE is bound to return the land to theLESSOR, in the same conditions that he received the land. This provision excludes the improvements made withLESSOR consent, as well as those constructions joined to the land with exemption to those that areLESSEE equipment. |
| VIII.3. | If disposition in contrary, parties of this agreement have established that they will protect, defend and indemnity to the other, its representatives and workers as a consequence of any responsibility or legal demand that may arise as a consequence of the construction and installation of improvements. |
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| IX. | OBLIGATIONS IN CHARGE OF THE LESSEE |
| IX.1. | Without prejudice to the applicable Civil Law in the State of Zacatecas, theLESSEE is obliged to: |
| a) | Use the land in accordance with what is established in the clauses of this contract; |
| b) | Use the land only for the agreed purposes; |
| c) | To restitute the land at the end of this agreement with exemption to the considerations set forth within ClauseVIII.2 of this agreement, as well as in the case that theLESSEE executes the option to renew set hereto. |
| X. | ENVIRONMENTAL CLAUSE |
| X.1. | With exception of the tailings, which are properties of theLESSOR (object of a different Exploitation Agreement). TheLESSOR manifests and obliges to have the property free of any kind of contamination and/or spills. In the same act, he also declares that the land has never been used as a confinement or final disposal site of hazardous wastes. |
In contrary, if hazardous wastes or any kind of contamination appears, theLESSOR will be responsible for the contamination generated within the property and shall respond before the Federal, Local or Municipal Authorities, as welt as for civil claims. The responsibility also includes: (i) the obligation to ..repair the damage, (ii) payment of penalties and, or other which are applicable.
| X.2. | With exception of the tailings, theLESSOR manifests in this act that within the property, an environmental accident has never occurred; therefore there is no existence of harmful materials or wastes that may. bring damage to the property. In the same way he is also declaring that at every moment he has been giving compliance to the General Law of Ecological Equilibrium and Protection of the Environment, their Regulations and the corresponding Mexican Official Norms. |
| X.3. | With exemption of the tailings, and if an environmental damage appears within the lease period, theLESSOR shall be responsible to keep theLESSEE safe and in peace of any claim and/or files suit against theLESSEE. On the other hand,LESSOR, during the existence of this agreement, shall be responsible for the environmental claims and accidents that may arise. |
| XI. | DAMAGES, DESTRUCTION AND FORCE MAJOR |
| XI.1. | Neither theLESSOR nor theLESSEE will be responsible in respect to each other for the damages or for those losses that they may occurred as a result of earthquakes, thunders, lightings, floods or any other natural disaster caused by force major or acts of god. In such case, theLESSOR will notify theLESSEE regarding the activities that need to be taken, in order to repair the damages. |
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| XII. | TERMINATION |
| XII.1. | TheLESSEE has ,the right [without the necessity of any judicial resolution and through a simple written notice] to terminate this agreement, ifLESSOR breaches any of the clauses set herein, or one of the applicable dispositions contemplated within Zacatecas’ Civil Code. |
| XII.2. | TheLESSOR has the obligation to mend the breaching causes within a term of 30 non working days, as to the date in which theLESSEE make the corresponding written notification, Within said communication, theLESSEE will have the obligation to determine the early termination cause. |
| XII.3. | Enunciatively but not limitedly, the following are also causes of early termination: |
| a. | If during the term of this contract, one of the parties could not guarantee the specific use and possession of the land. |
| b. | In the case that theLESSOR falls in suspension of payments and/or bankruptcy stipulated in the applicable Mexican laws. |
| XV. | ASSIGNABILITY |
| XV.1. | In the event that Sterling Mining de Mexico, S.A. C.V is acquired or merged; theLESSEE can assign this Lease Agreement to the surviving entity without theLESSOR’S Consent. |
| XVI. | GOOD FAITH |
| XVI.1. | This agreement is the result of the good faith that exist within the parties; therefore, neither theLESSOR, nor theLESSEE can invocate the existence of fraud, bad faith or any other deficit on the consent during the elaboration of this agreement. |
| XVII. | TOTAL AGREEMENT |
| XVII.1. | This contract is the result of the total agreement reached by the parties. This instrument is related to its own aim and will supersede any other previous agreements executed by the parties. |
| XVIII. | MODIFICATIONS TO AGREEMENT |
| XVIII.1. | To modify this agreement, it is necessary to have the written consent of both parties. If any modifications are performed in violation of these rules same [modifications] would hot be enforceable. |
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| XIX. | NOTICES |
| XIX.1 | Notices can be sent by ordinary mail, e-mail, facsimile or any other means. |
| XX. | GOVERNING LAW |
| XX.1 | The parties expressly agree to be subject to the competent Federal Tribunals of the City of Zacatecas, Zacatecas, and hereby waiver any present or future right to any other forum, derived from domicile, nationality or any other cause. |
| XXI. | AGREEMENT AND ATTACHMENTS |
| XXI.1 | Both, this agreement and its attachments reflect the aim of the parties which. is related to the purpose of this agreement. |
| XXII. | DOMICILES |
| XXII.1 | For the purpose of this agreement, the parties have set as his domiciles the following: |
LESSEE
STERLING MINING DE MEXICO, S.A. DE C.V.
Paseo de Bernardez 74b
Fraccionamiento Bemardez
98610, Guadalupe; Zacatecas
LESSOR
MARTIN BERNARDO SUTTI COURTADE
Paseo de Bernardez 74b
Fraccionamiento Bemardez
98610, Guadalupe, Zacatecas
Having both parties learned of the full content and legal effects of the Agreement hereunder, and having both parties stated that there is no willful deceit, misleading, error, nor has any party been forced in a violent manner, nor has consent been affected in any other way that may harm the validity of the Agreement hereunder, and once they have read the Agreement hereunder, they ratify and sign the present Agreement in duplicate in Zacatecas, Zacatecas, on April 23rd, 2004.
| THE LESSOR | THE LESSEE | |||
| MARTIN BERNARDO SUTTI | STERLING MINING DE MEXICO, S.A. | |||
| COURTADE | DE C.V. | |||
| WITNESSES | ||||
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