AGREEMENT TO ASSIGN LEASES AND QUITCLAIM OF INTERESTS
THIS AGREEMENT TO ASSIGN LEASES AND QUITCLAIM OF INTERESTS
(the "Agreement") is made this 20th day of April, 1995 by and
between KENNECOTT EXPLORATION COMPANY, a Delaware corporation, with
an office at 10 East South Temple, Salt Lake City, Utah 84133
("Kennecott") and FISCHER-WATT GOLD COMPANY, INC., a Nevada
corporation, with an office at 340 Freeport Boulevard, Suite 3,
Sparks, Nevada 89431 ("Fischer-Watt").
RECITALS
A. Pursuant to that certain Assignment of Leases dated July
15, 1994, and the related Agreement to Assign Leases dated July 7,
1994, Fischer-Watt assigned to Kennecott certain leases located in
Imperial County, California, it being the intent of the parties
that all of the real property interests relating to that project of
Fischer-Watt would be transferred to Kennecott.
B. The parties have discovered that certain property
interests were inadvertently omitted in such assignments and now
desire to cause an assignment and transfer of those interests,
which property interests are more particularly described in Exhibit
"A" to this Agreement (the "Property").
B. Fischer-Watt desires to sell, assign and transfer all of
its right, title and interest in the Property and Kennecott desires
to purchase all of Fischer-Watt's right, title and interest in the
Property on the terms and conditions set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained in this Agreement, Kennecott and Fischer-Watt
agree as follows:
1. Assignment of the Property.
1.1 Upon the terms and conditions set forth in this
Agreement, Fischer-Watt hereby sells, transfers, conveys, assigns,
and delivers to Kennecott, all of Fischer-Watt's right, title and
interest in the Property by an Assignment of Leases in the form
attached to this Agreement as Exhibit "B" and by the Quitclaim Deed
attached to this Agreement as Exhibit "C", reserving only to
Fischer-Watt a 2.5% Net Smelter Return royalty which shall be
calculated and paid as provided in Exhibit "D" to this Agreement.
1.2 In consideration of the sale, transfer, conveyance,
assignment and delivery of Fischer-Watt's right, title and interest
in the Property as provided in Section 1.1, Kennecott agrees:
(a) to pay a 2.5% Net Smelter Return royalty to Fischer-Watt
on all minerals produced and sold from the Property as
provided in Exhibit "D" to this Agreement.
(b) to reimburse Fischer-Watt for any and all land holding
and related costs under the leases related to such Property,
and any taxes or other costs incurred by Fischer-Watt, from
and after July 15, 1994 to the date hereof.
(c) to offer to reassign the Property to Fischer-Watt, if
Kennecott at any time on or before the fourth anniversary of
the date hereof determines to relinquish the interest in the
Property acquired under this Agreement. Fischer-Watt shall
accept Kennecott's offer in writing within 20 days after
Kennecott notifies Fischer-Watt of the offer. Fischer-Watt's
failure to provide written notice of its acceptance of the
offer within such 20 day period shall be deemed to be an
election to decline the offer and Kennecott may thereafter
relinquish the Property. Kennecott's obligation to make the
payments as provided in Section 1.2(a) shall terminate upon
the date that Kennecott gives notice of the offer to Fischer-Watt under
this Section 1.2(c). This Section 1.2(c) shall apply only if Kennecott
intends to relinquish the Property and shall not apply to any assignment
by Kennecott of the Property subject to the terms of this Agreement.
1.3 The consideration described above is the sole and
complete consideration given by Kennecott to Fischer-Watt for the
assignment of the Property by Fischer-Watt to Kennecott.
2. Fischer-Watt' Representations and Warranties.
Fischer-Watt represents and warrants to Kennecott as follows:
2.1 Fischer-Watt is a corporation, duly incorporated, validly
existing, and in good standing under the laws of the jurisdiction
of its incorporation and Fischer-Watt has the corporate power and
authority to enter into this Agreement.
2.2 The execution, delivery and performance of this Agreement
by Fischer-Watt have been authorized by all necessary corporate
action, create binding obligations on Fischer-Watt, and do not and
will not:
(a) require any consent or approval of Fischer-Watt's
stockholders;
(b) contravene Fischer-Watt's charter or bylaws;
(c) violate any provision of law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award
presently in effect having applicability to Fischer-Watt; or
(d) result in a breach of or constitute a default under any
agreement to which Fischer-Watt is a party.
2.3 No consent, approval, permit, license, or authorization
of any governmental body is required in connection with the
execution, delivery, or performance of this Agreement by Fischer-Watt.
2.4 As of the date hereof, Fischer-Watt is lawfully seized of
a defeasible estate in the Property as set forth in Exhibit "A,"
and has the right and power to assign and quitclaim the Property as
provided in this Agreement.
2.5 Fischer-Watt has provided to Kennecott true and complete
copies of all instruments affecting title to the Property.
2.6 As of the date hereof, and to the best of its knowledge,
the Leases relating to the Property are in good standing, Fischer-Watt has
not taken any action or failed to take any required action that with the
passage of time would result in a default under the Leases, and Fischer-Watt
has not received any notice or threat of default under the Leases.
2.7 As of the date hereof, and except as otherwise provided
in Section 2.10, the Property is free from all liens or
encumbrances created by Fischer-Watt, or any person claiming by,
through, or under Fischer-Watt. Fischer-Watt will defend its title
to the Property against all persons who may claim the same by,
through, or under Fischer-Watt, but not otherwise.
2.8 Fischer-Watt has not committed, nor will Fischer-Watt in
the future commit, any act or acts which will encumber or cause a
lien to be placed against the Property.
2.9 Fischer-Watt has not deposited any petroleum, hazardous
waste, hazardous substances, pollutants, contaminants, or toxic
materials (as those terms are defined by any applicable local,
state or federal law presently in effect) on the Property, nor
conducted any activities that have caused an adverse environmental
condition on the Property.
2.10 Fischer-Watt has no material contractual commitments or
obligations which relate to or affect the Property.
3. Representations and Warranties of Kennecott.
Kennecott represents and warrants to Fischer-Watt as follows:
3.1 Kennecott is a corporation, duly incorporated, validly
existing, and in good standing under the laws of the jurisdiction
of its incorporation and Kennecott has the corporate power and
authority to enter into this Agreement.
3.2 The execution, delivery and performance of this Agreement
by Kennecott have been authorized by all necessary corporate
action, create binding obligations on Kennecott, and do not and
will not:
(a) require any consent or approval of Kennecott's
stockholders;
(b) contravene Kennecott's charter or bylaws;
(c) violate any provision of law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award
presently in effect having applicability to Kennecott; or
(d) result in a breach of or constitute a default under any
agreement to which Kennecott is a party.
3.3 No consent, approval, permit, license, or authorization
of any governmental body is required in connection with the
execution, delivery, or performance of this Agreement by Kennecott.
4. Confidentiality.
4.1 The terms of this Agreement shall be the exclusive
property of the Parties and, except as provided in Section 4.2,
shall not be disclosed to any third party or the public without the
prior written consent of the other Party, which consent shall not
be unreasonably withheld.
4.2 The consent required by Section 4.1 shall not apply to a
disclosure:
(a) By a Party to a potential successor by sale of all or
substantially all of its interest in the Property, or to a
potential successor by consolidation or merger, or to a
proposed joint venturer or partner in a joint venture or
partnership in which such Party may become a participating
partner or venturer.
(b) To an affiliate, consultant, contractor or subcontractor
that has a bona fide need to be informed.
(c) To a bank or other potential source of financing.
(d) To a court, governmental agency or to the public if the
disclosing Party believes in good faith that disclosure is
required by pertinent law, regulation, rule, order or the
rules of any stock exchange.
4.3 In any case to which Section 4.2 is applicable, the
disclosing Party shall give notice to the other Party concurrently
with the making of such disclosure. As to a disclosure pursuant to
Section 4.2(a) or (b), only such confidential information as such
third party shall have a legitimate business need to know shall be
disclosed and such third party shall first agree in writing to
protect the confidential information from further disclosure to the
same extent as the Parties are obligated under this Section 4.
5. General Provisions.
5.1 This Agreement may be assigned by either Party; however,
any such assignment shall be subject to the rights and interests
granted by this Agreement to the other Party and shall not relieve
the assigning Party from any obligation to the other Party that
arose prior to the assignment.
5.2 The failure of a Party to insist on the strict
performance of any provision of this Agreement or to exercise any
right, power or remedy upon a breach hereof shall not constitute a
waiver of any provision of this Agreement or limit the Party's
right thereafter to enforce any provision or exercise any right.
5.3 This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Utah, except for its rules
pertaining to conflicts of laws. In the event that any condition
or other provision of this Agreement is held to be invalid or void
by any court of competent jurisdiction, the same shall be deemed
severable from the remainder of this Agreement and shall in no way
affect any other covenant or condition. If such condition,
covenant or other provision shall be deemed invalid due to its
scope or breadth, such provision shall be deemed valid to the
extent of the scope or breadth permitted by law.
5.4 There are no implied covenants given by either Party or
otherwise contained in this Agreement.
5.5 Each of the Parties agrees that it shall take from time
to time such actions and execute such additional instruments as may
be reasonably necessary or convenient to implement and carry out
the intent and purpose of this Agreement.
5.6 This Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of the Parties.
In the event of any conflict between this Agreement and any Exhibit
attached hereto, the terms of this Agreement shall be controlling.
5.7 No modification of this Agreement shall be valid unless
made in writing and duly executed by the Parties.
5.8 This Agreement may be executed in counterparts, each of
which when so executed shall be deemed an original, and such
counterparts shall together constitute but one and the same
instrument.
5.9 The section headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
5.10 All representations, warranties, covenants, and
agreements of the Parties shall survive the delivery of the
Assignment of Leases and Quitclaim Deed and shall not merge with or
be extinguished by delivery of any document of transfer
contemplated by this Agreement.
5.11 Nothing expressed or implied in this Agreement is
intended by the Parties or shall be construed to confer upon or to
give to any person or entity other than the Parties to this
Agreement or their successors or assigns any rights or remedies
under or by reason of this Agreement.
5.12 All notices, requests, demands, and other communications
pertaining to or contemplated by this Agreement shall be addressed
to the Party to whom such communication is to be directed as
follows:
if to Kennecott Exploration Company:
10 East South Temple
Salt Lake City, Utah 84133
Telecopier: (801) 322-8303
with a copy to:
Kennecott Corporation
10 East South Temple
Salt Lake City, Utah 84133
Attention: Legal Department
Telecopier: (801) 322-8081
if to Fischer-Watt Gold Company, Inc.:
340 Freeport Boulevard, Suite 3
Sparks, Nevada 89431
Telecopier: (702) 358-4026
with a copy to:
George Beattie
1410 Cherrywood Drive
Coeur d'Alene, Idaho 83814
Telecopier: ((208) 765-9461
and to:
Cliff Pearl
Jones and Keller
1625 Broadway, Suite 1600
Denver, Colorado 80202
Telecopier: (303) 893-6506
All Notices shall be given (I) by personal delivery to the Party,
or (ii) by electronic communication, with a confirmation sent by
commercial courier, registered or certified mail return receipt
requested, or (iii) by registered or certified mail return receipt
requested or by commercial courier. All Notices shall be effective
and shall be deemed delivered (I) if by personal delivery, on the
date of delivery if delivered during normal business hours, and, if
not delivered during normal business hours, on the next business
day following delivery, (ii) if by electronic communication, on the
next business day following receipt of the electronic
communication, and (iii) if solely by mail or by commercial
carrier, on the next business day after actual receipt. A Party
may change its address by Notice to the other Party.
5.13 This Agreement contains the entire understanding of the
Parties and supersedes all prior agreements, communications and
understandings between the Parties relating to the subject matter
of this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement as of the date first above written.
FISCHER-WATT GOLD COMPANY, INC.
By George Beattie
(Signature)
Its President
KENNECOTT EXPLORATION COMPANY
By Thomas C. Patton
(Signature)
Its President
EXHIBIT "A"
Property
The Property consists of the following real property situated as
follows:
Fee Interests:
All that real property situated in Section 19, Township 19 South,
Range 9 East, of Imperial County, California:
1. An undivided 12.5 percent ownership interest in the mineral
estate in and to the: SE1/4 SW1/4 NE1/4;
NE1/4 SE1/4 NE1/4;
NE1/4 SE1/4 SE1/4;
SE1/4 NE1/4 SW1/4; and
S/2 NW1/4 SW1/4.
Being the same property quitclaimed to Fischer-Watt by that
certain Quitclaim, Assignment and Agreement between Homestake
Mining Company of California and Fischer-Watt Gold Company, Inc.,
dated effective as of December 26, 1990.
Assignment of Leases:
Mining Lease dated April 1, 1990 between Wes and Mary
Martin, Owner, and Homestake Mining Company of California, as
Lessee; a short form of which is recorded in Book 1658, Page
1269, Official Records, Imperial County, California;
Mining Lease dated April 1, 1990 between Emily Martin,
Owner, and Homestake Mining Company of California, as Lessee; a
short form of which is recorded in Book 1658, Page 1273, Official
Records, Imperial County, California.
EXHIBIT "B"
ASSIGNMENT OF LEASES
THIS ASSIGNMENT OF LEASES effective as of April 20, 1995, is
between FISCHER-WATT GOLD COMPANY, INC., a Nevada corporation
("Assignor"), with an office at 340 Freeport Boulevard, Suite 3,
Sparks, Nevada 89431, and KENNECOTT EXPLORATION COMPANY, a
Delaware corporation ("Assignee") with an office at 10 East South
Temple, Salt Lake City, Utah 84133.
IN CONSIDERATION OF good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged,
Assignor conveys, transfers and assigns to Assignee all of
Assignor's interest in certain real property situated in Imperial
County, California which property is more particularly described
as follows:
That certain Mining Lease dated April 1, 1990 between Wes
and Mary Martin, Owner, and Homestake Mining Company of
California, as Lessee; a short form of which is recorded in
Book 1658, Page 1269, Official Records, Imperial County,
California;
That certain Mining Lease dated April 1, 1990 between Emily
Martin, Owner, and Homestake Mining Company of California,
as Lessee; a short form of which is recorded in Book 1658,
Page 1273, Official Records, Imperial County, California.
Assignor's warranty of title to Assignee shall be limited to
claims asserted by any person claiming by, through or under
Assignor.
DATED this 20 day of April, 1995.
FISCHER-WATT GOLD COMPANY, INC.
By George Beattie
(Signature)
Its President
COUNTY OF Kootenai )
) ss.
STATE OF Idaho )
On this 20 day of April, 1995, before me, Robert A. Sampson,
a notary public, personally appeared George Beattie, personally
known to me or proved to me on the basis of satisfactory evidence
to be the person whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in
his authorized capacity and that by his signature on the
instrument the entity on behalf of which he acted, executed the
instrument.
IN WITNESS WHEREOF, I hereunto set my hand and seal.
My commission expires 3-30-2001
Robert A. Sampson (SEAL)
(Signature)
Notary Public
EXHIBIT "C"
QUITCLAIM DEED
FOR $10 AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT
AND SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, FISCHER-WATT
GOLD COMPANY, INC., a Nevada corporation ("Fischer-Watt"), with
an office at 340 Freeport Boulevard, Suite 3, Sparks, Nevada
89431, hereby sells, assigns, transfers and quitclaims to
KENNECOTT EXPLORATION COMPANY, a Delaware corporation with an
office at 10 East South Temple, Salt Lake City, Utah 84133, all
of Fischer-Watt's rights, titles and interests in and to the real
property described below:
All that real property situated in Section 19, Township 19 South,
Range 9 East, of Imperial County, California consisting of an
undivided 12.5 percent ownership interest in the mineral estate
in and to:
SE1/4 SW1/4 NE1/4;
NE1/4 SE1/4 NE1/4;
NE1/4 SE1/4 SE1/4;
SE1/4 NE1/4 SW1/4; and
S/2 NW1/4 SW1/4.
Being the same property quitclaimed to Fischer-Watt by that
certain Quitclaim, Assignment and Agreement between Homestake
Mining Company of California and Fischer-Watt Gold Company, Inc.,
dated effective as of December 26, 1990.
Dated this 20 day of April, 1995.
FISCHER-WATT GOLD COMPANY, INC.
By George Beattie
(Signature)
Its President
COUNTY OF Kootenai )
) ss.
STATE OF Idaho )
On this 20 day of April, 1995, before me, Robert A. Sampson,
a notary public, personally appeared George Beattie, personally
known to me or proved to me on the basis of satisfactory evidence
to be the person whose name is subscribed to the within
instrument and acknowledged to me that he executed the same in
his authorized capacity and that by his signature on the
instrument the entity on behalf of which he acted, executed the
instrument.
IN WITNESS WHEREOF, I hereunto set my hand and seal.
My commission expires 3-30-2001
Robert A. Sampson (SEAL)
(Signature)
Notary Public
EXHIBIT "D"
NET SMELTER RETURN CALCULATION
Pursuant to the terms of the Agreement to Assign Leases and
Quitclaim of Interests between Kennecott Exploration Company and
Fischer-Watt Gold Company, Inc. dated January ___, 1995,Kennecott
Exploration Company (the "Payor") grants to Fischer-Watt Gold Company, Inc.
(the "Royalty Holder") a 2.5% Net Smelter Return royalty to Fischer-Watt
on all minerals produced and sold from the Property as provided herein.
A. Net Smelter Return Definition.
1. Except as provided in paragraph 2 below, in the event
that the Payor sells ores, concentrates, precipitates, cathodes,
leach solutions or any other primary, intermediate or final
product or any other mineral substances (other than fine gold
and/or silver bullion or dore bullion) produced from the
Property, Net Smelter Return for the calendar quarter shall mean
the amount of Revenues (as defined below) actually received by
the Payor from the sale of such mineral substances, less to the
extent paid or incurred by the Payor, (a) the cost of transporta-
tion between the Payor's mill and the buyer, (b) the cost of
assaying, sampling, custom-smelting and refining such products,
including any independent representative and umpire charges, and
(c) taxes (other than income taxes) imposed upon or in connection
with producing, transporting and selling such products.
2. If the Payor produces as a final product or has pro-
duced as a final product through a tolling/refining contract or
any other transaction that results in the Payor owning title to
fine gold and/or silver bullion or dore bullion produced from the
Property, Net Smelter Return for a calendar quarter shall mean
the amount of fine gold and/or silver bullion produced or the
amount of payable gold and/or silver contained in dore bullion
produced from the Property during the quarter multiplied by (I)
for gold, the average London Bullion Brokers P.M. Gold Fixing for
the calendar quarter of production and (ii) for silver, the
average London Bullion Market Association daily Silver Fixing for
the calendar quarter of production, less the following costs
attributed to that production, to the extent paid or incurred by
the Payor prior to the date payment is due to the Royalty Holder
as prescribed in Section C.1(b) of this Exhibit, (a) the costs of
transportation from the Payor's mill to the smelter/refiner, (b)
the cost of assaying, sampling, custom-smelting and refining said
bullion, including tolling costs, independent representative and
umpire charges, and including any penalties assessed by the
purchaser of said fine gold and/or silver bullion, (c) taxes
(other than income taxes) imposed upon or in connection with
producing, transporting and selling said fine gold and/or silver
bullion and (d) costs of sale, if any, actually paid or incurred
by the Payor prior to the date payment is due the Royalty Holder
as described above.
For purposes of this Section A.2., the average gold and
silver prices for the production quarter shall be determined by
dividing the sum of all daily prices posted during the calendar
quarter by the number of days that prices were posted. The
posted prices shall be obtained from The Wall Street Journal,
Reuters, or another reliable source. If either the London
Bullion Brokers P.M. Gold Fixing or the London Bullion Market
Association daily Silver Fixing ceases to be published, the Payor
and the Royalty Holder shall agree upon a similar alternative
method for determining the average spot market price for gold
and/or silver, as the case may be, which shall be used in calcu-
lating Net Smelter Return.
The Payor and the Royalty Holder acknowledge that the
purpose of this Section A.2. is to assure that Net Smelter Return
is determined in a timely manner for fine gold and/or silver
bullion produced or dore bullion produced during a calendar
quarter regardless of whether an actual sale of gold and/or
silver to a third party is made by the Payor. The parties
further acknowledge that the Payor shall have the right to market
and sell to third parties the gold and silver produced from the
Property in any manner it chooses, including the forward sale of
gold and silver on the commodity markets. The Royalty Holder
shall have absolutely no right to participate whatsoever in any
sales of mineral substances by the Payor on the commodity market
or otherwise share in any profits or losses received by the Payor
as a result of the Payor's marketing activities.
3. In no event shall the Payor deduct the cost of mining,
milling, leaching or any other processing costs incurred by the
Payor in the determination of Net Smelter Return.
4. In the event smelting or refining are carried out in
facilities owned or controlled, in whole or in part, by the
Payor, then charges, costs and penalties for such smelting or
refining shall mean the amount the Payor would have incurred if
such smelting or refining were carried out at facilities not
owned or controlled by the Payor then offering comparable ser-
vices for comparable products on prevailing terms, but in no
event greater than actual costs incurred by the Payor with
respect to such smelting and refining.
B. Other Definitions.
1. "Payor" shall mean the person or entity obligated to
pay a Net Smelter Return royalty to the Royalty Holder pursuant
to the terms of the Agreement to Assign Leases.
2. "Royalty Holder" shall mean the person or entity
entitled to receive a Net Smelter Return royalty pursuant to the
terms of the Agreement to Assign Leases.
3. "Revenues" shall mean the total amounts received by the
Payor from the sale of mineral substances produced from the
Property at the point of sale, less all selling costs, provided
such sales are arm's length transactions, and provided further
that sales to affiliates of the Payor are valued at the fair
market value of the products sold. For the purposes of this
Exhibit, mineral substances may be in a primary, intermediate or
final form.
C. Payments of Net Smelter Return Royalty.
1. The amount of Net Smelter Return royalty due the
Royalty Holder shall be payable in the following alternative
manners depending on the Payor's method of selling mineral
substances produced from the Property:
(a) If the Payor produces and sells ores, concen-
trates, precipitates, cathodes, leach solutions or
any other primary, intermediate product or mineral
substances other than fine gold and/or silver
bullion or dore bullion, the Net Smelter Return
royalty paid to the Royalty Holder shall be
calculated by multiplying the amount of Net
Smelter Return determined in Section A.1 by 2.5 %.
Payment shall be made within 30 days after the
Payor's receipt of Revenues from such sales during
a calendar quarter.
(b) If the Payor produces fine gold and/or silver
bullion or dore bullion, the Net Smelter Return
royalty paid to the Royalty Holder shall be
calculated by multiplying the amount of Net
Smelter Return determined in Section A.2 by 2.5 %.
Payment shall be made within 30 days after the end
of a calendar quarter.
2. The Payor shall provide copies of all data relating to
the Net Smelter Return royalty calculation (including, but not
limited to, settlement sheets used in calculating the Royalty
Holder's Net Smelter Return royalty) to the Royalty Holder at the
same time that the Royalty Holder's Net Smelter Return royalty
payments are paid.
D. Audits and Disputes.
1. The Royalty Holder, upon written notice, shall have the
right to have an independent firm of certified public accountants
audit the records that relate to the calculation of the Net
Smelter Return interest within 24 months after receipt of a
payment described in Section C. of this Exhibit for a calendar
quarter.
2. The Royalty Holder shall be deemed to have waived any
right it may have had to object to a payment made for any calen-
dar quarter, unless it provides notice in writing of such objec-
tion within 24 months after receipt of final payment for the
calendar quarter. If the parties are unable to resolve the
dispute within 60 days after the receipt of such notice, the
dispute shall be resolved by arbitration in Salt Lake City, Utah,
pursuant to the commercial arbitration rules of the American
Arbitration Association. The resolution pursuant to such arbi-
tration shall be binding on the parties. Alternatively, the
parties may elect to submit the dispute to a mutually acceptable
certified public accountant, or firm of certified public accoun-
tants, for a binding resolution thereof. Unless the parties
agree to share the costs of arbitration, the arbitrator shall
determine what part of the costs and expenses incurred in any
such proceeding shall be borne by each party participating in the
arbitration.
E. General.
1. Unless otherwise specified, capitalized terms used
herein shall have the same meaning as given to them in the
Agreement to Assign Leases to which this Exhibit C is attached.
2. The Payor shall keep true and accurate books and
records for the purposes of this Exhibit. Such books and records
shall be kept on the accrual basis in accordance with generally
accepted accounting principles and practices consistently
applied.
3. The Royalty Holder or its authorized representative on
not less than 2 days' notice to the Payor, may enter upon all
surface and subsurface portions of the Property for the purpose
of inspecting the Property, all improvements thereto and
operations thereon, and may inspect and copy all records and data
pertaining to the calculation of its interest, including without
limitation such records and data which are maintained electroni-
cally. The Royalty Holder or its authorized representative shall
enter the Property at the Royalty Holder's own risk and may not
unreasonably hinder operations on or pertaining to the Property.
The Royalty Holder shall indemnify and hold harmless the Payor
and its Affiliates (including without limitation direct and
indirect parent companies), and its or their respective direc-
tors, officers, shareholders, employees, agents and attorneys,
from and against any Liabilities which may be imposed upon,
asserted against or incurred by any of them by reason of injury
to the Royalty Holder or any of its agents or representatives
caused by the Royalty Holder's exercise of its rights herein.
4. All notices or communications hereunder shall be made
and effective in accordance with the provisions of the Agreement
to Assign Leases.
5. The Net Smelter Return interest shall attach to any
amendments, relocations or conversions of any mining claims or
leases comprising the Property, or to any renewals or extensions
of leases, and to any mineral rights acquired by the Payor and
any Affiliates in lands embraced within any mining claims or
leases comprising the Property within one year after the loss or
relinquishment of any mining claim or lease comprising the
Property. The Net Smelter Return interest shall be a real
property interest that runs with the Property and shall be
applicable to any person who produces and sells Products from the
Property.
6. All information and data provided to Royalty Holder
shall be subject to the confidentiality provisions of the
Agreement to Assign Leases.
7. Notwithstanding anything to the contrary herein, the
Payor shall have the right to mine and market amounts of precious
metals or other minerals reasonably necessary for non-bulk
sampling, assaying, metallurgical testing and evaluation of the
minerals potential of the Property without initiating the
obligation to make production royalty payments hereunder.
8. The Payor shall have the right to commingle ore and
minerals from the Property with ore from other lands and
properties; provided, however, that the Payor shall calculate
from representative samples the average grade of the ore and
shall weigh (or calculate by volume) the ore before commingling.
If concentrates are produced from the commingled ores by the
Payor, the Payor shall also calculate from representative samples
the average recovery percentage for all concentrates produced
during the calendar quarter. In obtaining representative sam-
ples, calculating the average grade of the ore and average
recovery percentages, the Payor may use any procedures accepted
in the mining and metallurgical industry which it believes
suitable for the type of mining and processing activity being
conducted and, in the absence of fraud, its choice of such
procedures shall be final and binding on the Royalty Holder. In
addition, comparable procedures may be used by the Payor to
apportion among the commingled ores penalty charges, if any,
imposed by the purchaser of such ore or concentrates.
9. The Royalty Holder may assign its interest in the Net
Smelter Return royalty, in whole or in part, provided however,
that the Payor shall not be obligated to make Net Smelter Return
royalty payments to any such assignee until the Payor has been
provided with a certified or authenticated copy of a properly
executed and recorded instrument conveying all or a portion of
the Net Smelter Return royalty to the assignee.
ASSIGNMENT OF LEASES
THIS ASSIGNMENT OF LEASES effective as of January __, 1995,
is between FISCHER-WATT GOLD COMPANY, INC., a Nevada corporation
("Assignor"), with an office at 340 Freeport Boulevard, Suite 3,
Sparks, Nevada 89431, and KENNECOTT EXPLORATION COMPANY, a
Delaware corporation ("Assignee") with an office at 10 East South
Temple, Salt Lake City, Utah 84133.
IN CONSIDERATION OF good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged,
Assignor conveys, transfers and assigns to Assignee all of
Assignor's interest in certain real property situated in Imperial
County, California which property is more particularly described
as follows:
That certain Mining Lease dated April 1, 1990 between Wes
and Mary Martin, Owner, and Homestake Mining Company of
California, as Lessee; a short form of which is recorded in
Book 1658, Page 1269, Official Records, Imperial County,
California;
That certain Mining Lease dated April 1, 1990 between Emily
Martin, Owner, and Homestake Mining Company of California,
as Lessee; a short form of which is recorded in Book 1658,
Page 1273, Official Records, Imperial County, California.
Assignor's warranty of title to Assignee shall be limited to
claims asserted by any person claiming by, through or under
Assignor.
DATED this ____ day of January, 1995.
FISCHER-WATT GOLD COMPANY, INC.
By
Its
COUNTY OF ____________ )
) ss.
STATE OF _______________ )
On this _____ day of January, 1995, before me,
_______________________, a notary public, personally appeared
________________________, personally known to me or proved to me
on the basis of satisfactory evidence to be the person whose name
is subscribed to the within instrument and acknowledged to me
that he executed the same in his authorized capacity and that by
his signature on the instrument the entity on behalf of which he
acted, executed the instrument.
IN WITNESS WHEREOF, I hereunto set my hand and seal.
My commission expires __________________.
Notary Public
QUITCLAIM DEED
FOR $10 AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT
AND SUFFICIENCY OF WHICH IS HEREBY ACKNOWLEDGED, FISCHER-WATT
GOLD COMPANY, INC., a Nevada corporation ("Fischer-Watt"), with
an office at 340 Freeport Boulevard, Suite 3, Sparks, Nevada
89431, hereby sells, assigns, transfers and quitclaims to
KENNECOTT EXPLORATION COMPANY, a Delaware corporation with an
office at 10 East South Temple, Salt Lake City, Utah 84133, all
of Fischer-Watt's rights, titles and interests in and to the real
property described below:
All that real property situated in Section 19, Township 19 South,
Range 9 East, of Imperial County, California consisting of an
undivided 12.5 percent ownership interest in the mineral estate
in and to:
SE1/4 SW1/4 NE1/4;
NE1/4 SE1/4 NE1/4;
NE1/4 SE1/4 SE1/4;
SE1/4 NE1/4 SW1/4; and
S/2 NW1/4 SW1/4.
Being the same property quitclaimed to Fischer-Watt by that
certain Quitclaim, Assignment and Agreement between Homestake
Mining Company of California and Fischer-Watt Gold Company, Inc.,
dated effective as of December 26, 1990.
Dated this ____ day of January, 1995.
FISCHER-WATT GOLD COMPANY, INC.
By
Its
COUNTY OF ____________ )
) ss.
STATE OF _______________ )
On this _____ day of January, 1995, before me,
_______________________, a notary public, personally appeared
________________________, personally known to me or proved to me
on the basis of satisfactory evidence to be the person whose name
is subscribed to the within instrument and acknowledged to me
that he executed the same in his authorized capacity and that by
his signature on the instrument the entity on behalf of which he
acted, executed the instrument.
IN WITNESS WHEREOF, I hereunto set my hand and seal.
My commission expires __________________.
Notary Public