AMENDMENT AGREEMENT
THIS AMENDMENT AGREEMENT made and entered into this 9th day of
November, 1992, to the EXPLORATION FOR MINING AND MINERAL DEVELEPMENT LEASE,
WITH OPTION TO PURCHASE PLACER AND LODE MINING CLAIMS, dated July I4, 1989, and
the AMENDMENT AGREEMENT, dated January 20, 1992, by and between DON W. FULLMER,
whose address is 800 NORTH MAIN, FILMORE, UTAH 84631, herein referred to as
"Lessor" or "Owner" and DANIEL H. ENGH, DENNIS S. ENGH whose address is 2340
EAST GERMANIA CIRCLE, SANDY, UTAH 84093-1174, hereinafter referred to as
"Lessee"
WITNESSETH:
WHEREAS, Lessee wishes to change the above mentioned agreements,
and Owner wishes to change the same agreements, here by agree to amend the above
mentioned agreements,
WHEREAS, the owner is the sole owner, or the agent for the
association which is the sole owner of the unpatented mining claims listed in
Exhibit "A" of this agreement, hereinafter referred to as the "Leased Property",
and
WHEREAS, Lessee desires to lease the Leased Property, Owner and
Lessee hereby agree to the following (hereinafter referred to as the
"Agreement"):
WHEREAS, Lessor is owner of certain properties and property rights
situated in Beaver County, State of Utah, and more particularly described in the
attached Exhibit "A", incorporated by reference, and hereinafter referred to as
the "Leased Premises"; and
AMENDMENT AGREEMENT
November 09, 1992
Page 2 o f 20
WHEREAS, Lessee desires to lease certain rights in and to the Leased
Premises which Lessor is willing to grant to Lessee;
NOW THEREFORE, in consideration of $100.00 paid by Lessee to
Lessors receipt of which is hereby acknowledged and the payments, covenants and
agreements hereinafter set forth the parties agree as follows:
1. The Leased Premises.
-------------------
The "Leased Premises" shall mean all of the property described in
Exhibit "A" attached hereto and made a part hereof, together with all of the
ores, minerals and materials thereon and thereunder, and all right, title and
all water, water rights, easements and rights of way now and hereafter owned or
held by Owner in, upon or under the said property, or in any way pertaining
thereto.
2. Warranties and Representations.
------------------------------
Owner represents to Lessee: (1) that subject to the matters
specifically set forth in Exhibit "A," and subject to the matters set forth
below with respect to unpatented mining claims, Owner has the exclusive
possession of the mining claims and (2) that the Owner has the full right, power
and capacity to enter into this Lease upon the terms set forth herein. Since the
Leased Premises, as described in Exhibit "A" includes unpatented mining claims,
Owner represents and warrants to Lessee: (1) that Owner's title is subject to
paramount title of the United States of America and to the rights, if any, of
surface patentees; (2) that the acts of location performed by Owner on the
unpatented mining claims described in Exhibit "A" have been completed in
compliance with the
AMENDMENT AGREEMENT
November 09 , 1992
Page 3 of 20
laws of the State of Utah and of the United States of America; and (3) that the
Notice Of Intent To Hold has been completed and filed with the Beaver County
Recorder and the BLM in Salt Lake City, Utah. (4) Lessee represents to owner:
(A) that Lessee has made a preliminary search of the Bureau of Land Management
records with regard to the leased premises and (B) That Lessee is aware of some
conflicting claims within the boundaries of the leased premises and (C) That
Lessee intends to do additional title research and to take such actions as are
necessary to perfect title in the Lessors favor, insofar as possible and (D)
That Lessee will refrain from or abandon all attempts to obtain title to the
Leased Premises except as provided by this by this lease, without first
obtaining owners written consent.
I. GRANT
1.1 Lessor hereby grants and leases to Lessee for and in
consideration of, and subject to all of the terms provisions and conditions
hereinafter set forth, the exclusive right and privilege to mine, extract~
remove and dispose of the all locarable Minerals in, upon or under the Leased
Premises, together with the right to use and occupy so much of the surface of
the Leased Premises as may be required for all purposes reasonably incident to
the mining, extracting, removal and disposal of the locatable Minerals according
to the provisions of this Lease.
II. LEASED MINERALS
2.1 "Leased Minerals" Or "Locatable Minerals" as used shall mean all
locatable minerals acquired by virtue of the placer or lode mining claims owned
by owner.
AMENDMENT AGREEMENT
November 09, 1992
Page 4 of 20
2.2 Lessee understands and acknowledges hereby that there are current
Federal Potassium Leases on some of the same area as the Leased Premises. That
the Lessor can only convey the rights that it possesses in relation to placer
and 1ode mining claims being staked over the Federal Potassium Leases, as
allowed by the Multiple Minerals Development Act, 30 U.S.C. s 521 (1970), and
other State and Federal law.
III. TERM
3.1 The primary term of this Lease shall be for a period of five (5)
years from the date hereof and for so long thereafter as Leased Minerals are
produced in commercial quantities at more than 500 tons/month from the lands
described in Exhibit A by the Lessee, their partners, successors or assigns, for
at least ten months of each year after the first year term has expired, subject
to extension or termination as hereinafter provided.
3.2 This Lease and the terms and conditions of this Lease agreement
issued by the Lessor are made with the Lessee herein on condition that Lessee
and any lawful successor in interest to Lessee shall perform all covenants and
terms and conditions herein set forth to be performed by Lessee or its lawful
assigns including payment of royalties as herein provided. Lessor may issue
written notice of termination and cancellation of this Lease, and forfeiture,
subject to paragraph 9.1: declaring that the Leased Premises and each and every
part thereof have thereby reverted to the Lessor, including any and all fixtures
and improvements required to be left with the property upon expiration,
AMENDMENT AGREEMENT
November 09, 1992
Page 5 of 20
termination, or cancellation of this Lease.
3.3 Lessee may terminate this Lease at any time by giving Lessors at
least ninety (90) days prior written notice, together with a check in full
settlement of any royalties that are due and unpaid; upon giving such notice of
termination, Lessee shall be released of all its obligations except those
obligations which have theretofore accrued. Within Thirty (30) days after date
of termination, Lessee shall execute and record a release and quitclaim deed
releasing all of Lessee's right, title and interest in and to the Leased
Premises.
3.4 Upon the effective date of termination by Lessee, Lessor shall be
entitled to retain all funds paid to it by Lessee pursuant to this Lease.
3.5 Within sixty (60) days after termination from this Lease, Lessee
or its successor or assign will provide Lessor with a copy of all data prepared,
collected, and interpreted by or for it (including maps, drill data, assays,
analyses, geological surveys, topographic surveys, and other data pertaining to
the Leased Premises and the Leased Minerals. Lessee will provide readable copies
of all new factual geologic data and reports by February 15th of each year.
IV. CONSIDERATION
4.1 The Lessee in consideration of the granting of the rights and
privileges granted herein hereby covenants and agrees as follows:
AMENDMENT AGREEMENT
November 09, 1992
Page 6 of 20
(1) $5,000.00 due June 15, i993 and $5,000.00 annual minimum
royalty beginning on the first anniversary of This lease and thereafter minimum
$5,000.00 each anniversary until Lessee terminates its rights. The minimum
royalty of $5,000.00, will be adjusted by the Consumer Prices Index for All
Urban Consumers for U.S. City Average as published by the U.S. Department of
Labor Statistics who is created pursuant to Sec. 5(a) of Public Law 304, 79th
Congress. The average at the end of December 1992 will be the base year and any
cahange in the Consumer Prices Index for All Urban Consumers for U.S. City
Average for the following year ended December will determine the percent change
in the $5,000.00 for the following year. Each year becomes the new base year to
measure change from.
(2) Production Royalty: A production royalty on Leased Minerals
which shall be Two Dollars and 50 Cents per ton ($2.50/ton) of ore removed from
or mined and processed upon the Leased Property.
(3) The production royalty of $2.50/ton stated in IV (2), will be
adjusted by the Comsumer Prices Index for All Urban Consumers for U.S. City
Average as published by the U.S. Department of Labor Bureau of Labor Statistics
The average at the end of December 1992 will be the base year and any change in
the Consumer Prices Index for All Urban Consumers for U.S. City Average for
the following year ended will determine the percent change in the $2.50/ton for
the following year. Each year becomes the new base year to measure change from.
A). Annual Labor:
------------
(1) To perform upon the Leased Premises the annual
AMENDMENT AGREEMENT
November 09, 1992
Page 7 of 20
assessment work as set forth under the laws of the United States and the State
of Utah, and to prepare timely proof of the performance of such labor and to
record and file the same as required by law, and to furnish Lessor with a copy
thereof. Should this Lease be terminated as herein provided and the effective
date of such termination shall be ninety (90) days, or less, prior to the end
of the then current assessment year, Lessee shall nevertheless be required to
perform upon of the Leased Premises the annual labor for such assessment year
and shall prepare timely proof thereof, record the same, and furnish Lessor with
a copy of such proof as hereinafter provided. In the performance of annual labor
upon or for the benefit of the Leased Premises, Lessee shall be entitled to
perform such work upon any of the claims or upon any of the groups of claims
comprising the Leased Premises so long as such work shall qualify for the
purpose of the development of the Leased Premises as a contiguous group pursuant
to the requirements of law relating to group work on mining claims except as
herein provided.
(2) Assessment work will be completed by July 15 of each
year starting with the 1993 Assessment Year, or Lessor may do the work and
charge reasonable costs time and expenses to Lessee. Lessee will furnish to
Lessor a copy of the proof-of-labor with the County, no later than September
15th of each year.
B). PRODUCTION ROYALTY PAYMENTS:
---------------------------
(1) Production royalty shall be paid within thirty (30)
days after receipt of payment for each shipmen or when otherwise due, and each
payment shall be accompanied by a statement showing the date(s) of shipment(s),
AMENDMENT AGREEMENT
November 09, 1992
Page 8 of 20
quantity and value of each shipment, to whom sold and the gross value received,
and any cost deductions.
(2) Method of Production royalty payments shall be in U.S.
dollars payable by cash or valid check drawn on available funds, and shall
be deemed made when deposited at Lessor's single depository at:
Paradise Management Co.
PO Box 368
Filmore, Utah 84631
Phone (801) 743-5848
Lessor may change its single depository at any time by giving written notice to
Lessee.
V. PERIODIC REPORTS
5.1 Lessee agrees to make semi-annual written reports to lessor (on
or before January 1 and July 1 each year) detailing the exploration, development
and mining work done upon the leased premises, quantity of ores, minerals or
products shipped from the Leased Premises, the identity of the buyer(s) thereof
or the place where such ores, minerals or products are stockpiled, the plans for
the Leased Premises during the next six (6) month period, and other activities
conducted or planned for the Leased Premises.
5.2 Lessee shall audit all operations upon the Leased Premises at
least annually, and furnish to Lessor a copy of such audit within thirty (30)
days after completion.
AMENDMENT AGREEMENT
November 09, 1992
Page 9 of 20
VI. RIGHTS AND OBLIGATIONS OF LESSEE
6.1 The Lessee will forthwith have and is hereby granted by Lessor
the right and privilege from the date hereofand so long thereafter as this Lease
remains in force and effect of entering into and upon the Leased Premises and
the right to drill and excavate thereon and therein holes, Pits, tunnels,
shafts, and other such excavations and to conduct therein and elsewhere such
surveys, exploration, investigations, sampling, milling, screening and other
work similar as well as dissimilar as Lessee in its sole judgment and discretion
may wish to know relating to any and all facts relative to the geology of the
Leased Premises, including but not limited to the geology of the Leased Minerals
and the mining, milling, beneficiating, and marketing thereof, together with the
right to drain water and materials and to pile overburden at places most
convenient to Lessee, and the right to dig or bore wells and use any water in or
upon said lands and the right to construct and place upon said lands any and all
buildings, dams, drains, machinery, roads, railroads, pipe and power lines and
other improvements that may be convenient for said purposes, all of which
improvements will become the full and complete property of the Lessor upon
termination or assignment of Lease back to Lessor, and Lessee will be under no
further obligation or liability with respect thereto except for reclamation and
except as provided in 6.7 paragraph below. Lessee will have the paramount
possession and control of the Leased Premises with regard to the Leased Mineral
rights obtained herein during and throughout the life of this Lease and shall be
entitled to conduct therein and thereon all mining, milling and beneficiation
uses and purposes reasonably incident thereto as it shall deem satisfactory
and advantageous so far as Lessee tries not to interfere with the rights of the
Federal potassium leases. All work shall be conducted by Lessee as Lessee in its
sole judgment and discretion deems best and in a good and
AMENDMENT AGREEMENT
November 09, 1992
Page 10 of 20
minerlike fashion. Stockpiles and tailings covered by Lease, remain the property
of the Lessor upon surrender of Lease. Mining timbers in place shall remain
affixed as part of the Leased Premises unless released in writing to Lessee.
6.2 Lessor or his agents duly authorized in writing will have at all
reasonable times and at his own risk access to all parts of Leased Premises and
associated premises for the purposes of reasonable inspection of operations,
record keeping, and accounts to the end that Lessor might verify that the
specified royalty payments are being made properly and that operations are being
conducted in a minerlike fashion. Lessee will keep records in a businesslike
manner.
6.3 Any and all future leases, transfers, encumbrances or
conveyances of interests in the Leased Premises not covered by this Lease shall
be subordinate to and subject to the rights of Lessee, his successors, assigns
of sublessees, so long as this Lease is in force and effect.
6.4 Lessee shall pay all expenses incurred by it and shall permit no
liens to attach to Leased Premises on account of any debt for materials or
services furnished for the benefit of the Leased Premises while this Lease is in
effect.
6.5 Lessee will indemnify and forever hold harmless and defend
Lessor from any demand, claim, suit, judgment or liability resulting from the
exploratory or development activities of Lessee conducted pursuant to this
agreement. Upon request of Lessor, Lessee will furnish evidence of sufficient
workmen's compensation, liability and other insurance to cover anticipated
risks, or evidence that it is adequately self-insured for such contingencies.
AMENDMENT AGREEMENT
November 09 , 1992
Page i1 of 20
6.6 Lessee agrees that Leased minerals from the Leased Premises shall
not be mixed or co-mingled with minerals, ore, subsLances or materials from
other properties or lands except as agreed by Lessor.
6.7 In the event of the termination of this Lease by lapse of time
or otherwise, Lessee shall grade and slope and otherwise reclaim that portion of
the land being leased pursuant hereto, which was the site of actual mining
operations, in accordance with the requirements of the State and Federal
regulations then in effect and Owner may elect to assume the burden of
reclaiming the land, by notifying Lessee in writing of his intent to assume said
burden, in which event, Lessee will obtain not more than three (3) bids for
performance of the reclamation work required by this paragraph, and will pay
over to owner a sum equal to ninety-five percent (95%) of the lowest of said
bids. Thereafter, Lessee shall be relieved from all duties, expenses or
responsibility with respect to such reclamation and Owner, simultaneously with
or prior to the receipt of said payment, shall obtain from the
appropriate-Government agencies and deliver to Lessee all documents necessary to
release Lessee from all further responsibility for the performance of such
reclamation work.
VII. PATENT OF CLAIMS
7.1 Upon request of Lessee at any time during the term of this
Lease, the Lessor agrees to undertake to obtain patent to any of the mining
claims designated by Lessee. Lessee, at its own expense, shall prepare all
documents, compile all data and comply in all respects with all applicable laws
in this endeavor, and
AMENDMENT AGREEMENT
November 09 , 1992
Page 12 of 20
Lessor shall execute all documents required for this purpose and shall cooperate
fully with Lessee in the patent application and proceedings.
7.2 The rights of Lessor and Lessee under this Lease will extend to
any and all amended, relocated, or patented claims referred to in Exhibit A.
Lessor and Lessee agree that all amendments, relocations, or staking new cla~ims
in the claimed area, of the claims referred to in Exhibit A, will be made in the
name of Lessor. Some claims need amending and it is known hereby to the Lessee.
Any valid mining claims staked by Lessor, or his agents, within the Leased
Premises shall fall under and be a part of this Lease.
VIII. DEFAULT AND FORCE MAJEURE
8.1 If Lessee will be in default in performing any obligations
(except the timely payment of royalt(pound)es), Lessee shall lose no rights
unless, within sixty (60) days following written notice from Lessor, given at
the address herein specified, specifying such failure or breach, Lessee shall
fail to make such payment or undertake to cure such default by commencement and
follow through of appropriate performance, within a reasonable amount of time.
Upon such failure, Lessor may terminate this Lease.
8.2 If Lessee shall be prevented or delayed from performing its
obligations or performing any work which it desires to perform or is performing
by reason of act of nature, strike or threat of strike, fire, flood, war, mob
violence, court order, unavoidable casualties, or any other enumeration, beyond
AMENDMENT AGREEMENT
November 09, 1992
Page 13 of 20
the control of Lessee which cannot be overcome by the means normally
employed in performance and at comparable and reasonable expense, then the
duration of this Lease shall be extended for a period equal to the period of
Force Majeure and any failure to perform obligations shall not be deemed a
breach of this Lease. Lessee agrees to use reasonable diligence to remove such
causes of disability as may occur from time to time. This paragraph shall not
excuse payment or delay payment of royalties.
IX. LEASE PREMISES.
9.1 The parties hereto agree that during the term of this Lease, in
the event title to any of the Leased Premises is contested by any person or
persons, corporation or corporations, or governmental agencies, Lessee will, at
its own election and expense, defend the title to any of the Leased Premises
before any court of competent jurisdiction or any administrative body. Lessee
will defend any actions for damages relating to exploration, development,
or mining activities by Lessee on Leased Premises.
9.2 Lessor, upon execution of this Lease, shall furnish Lessee with
copies of all property maps possessed by Lessor on the Leased Premises and
adjacent lands.
X. TAXES AND DUTIES.
10.1 Lessee agrees to pay (i) all taxes hereafter levied and assessed
upon all machinery and improvements placed by Lessee upon the Leased Premises,
(ii) taxes hereafter levied upon the Leased Premises, including taxes assessed
by reason of net annual proceeds, and (iii) occupation or severance taxes
imposed upon the mining or production of Leased Minerals from the Leased
AMENDMENT AGREEMENT
November 09, 1992
Page 14 of 20
Premises or any other taxes, assessments or charges resulting from Lessee
activities on Leased Premises.
10.2 Lessor agrees to promptly transmit to Lessee any notices
pertaining to taxes, assessments and charges which Lessor may receive.
10.3 Lessee, in all operations under this Lease, will comply with all
applicable State and Federal laws, including the social laws relative to
employment, safety, workmen's compensation insurance, social security,
unemployment tax and tax withholding. Lessee shall hold Lessor harmless from
claims of damage to persons or property arising from Lessee's operations under
this Lease. Lessee will comply with hazardous waste, air and water quality
requirements.
10.4 Lessee will do all reclamation work required by the Bureau of
Land Management, the State of Utah or Beaver County in a timely manner.
XI. ASSIGNMENT AND TRANSFER
11.1 Lessee can convey, assign or transfer its interest in this lease
or any part of this Lease without the prior notification and consent in writing
of the Lessor. The assignee party will, as a condition of consent to the
transfer, agree to be bound by and subject to the terms of this Lease. Any
assignee party will provided a photocopy of the executed copy of assignment and
is delivered to the other party. Overriding royalty assignments will 'not become
effective, even if otherwise valid without the consent in writing of the Lessor.
Lessee, its successor and assigns, may not assign or convey royalty, overriding
royalty, production payment or like interest in the Leased Premises
AMENDMENT AGREEMENT
November 09, 1992
Page 15 of 20
without Lessor's prior written consent.
XII. MISCELLANEOUS
12.1 This agreement shall be governed by the laws of the State of
Utah.
12.2 Title headings are for convenience only and shall not be deemed
a part of this Lease.
12.3 This Lease and Its Exhibit contain the entire agreement between
the parties and supersedes entirely any prior understandings whether oral or
written.
12.4 If any provisions of this Lease is or becomes void or
unenforceable by Force of Law, the other provisions shall remain valid and
enforceable.
12.5 Lessor's and Lessee's proper address shall be the following, which
either may change by giving written notice to the other.
Don W. Fullmer
P.O. Box 268
800 North Main
Filmore, Utah 84631
Daniel H. Engh, Dennis S. Engh
2340 East Germania Circle
Sandy, Utah 84093-1174
12.6 The failure to enforce at any time any provisions of this Lease,
shall in no way be construed to be a waiver of such provisions, or to affect
validity of the Lease.
12.7 This Lease shall be binding upon and inure to the
AMENDMENT AGREEMENT
November 09, 1992
Page 16 of 20
benefit of the successors and permitted assigns of the parties.
12.8 A Memorandum of this Lease may be filed by either party.
12.9 Lessee will diligently explore and conduct operations on or near
Leased Premises throughout the term of this Lease in a manner reasonably
calculated to advance the production of minerals from Leased Premises.
IN WITNESS WHEREOF, this Lease has been executed and delivered by
Lessor to Lessee as of the day and year first above written.
/s/Don W. Fuller
- --------------------------------------
Don W. Fullmer
LESSOR
/s/Daniel H. Engh /s/Dennis S. Engh
- -------------------------------------- -----------------------------------
Daniel H. Engh Dennis S. engh
LESSEE LESSEE
AMENDMENT AGREEMENT
November 09, 1992
Page 17 of 20
ACKNOWLEDGMENT
STATE OF UTAH
SS.
COUNTY OF MILLARD
On this 9th day of November, 1992, before me personally appeared DON W.
FULLMER to me known to be the person described in and who executed the foregoing
instrument and acknowledged that he executed the same as a free act and deed
Given under my hand and seal this 9th day of November, 1992.
My Commission Expires 4-15-95
---------------------------
/s/Lisa M. Morey
---------------------------
ACKNOWLEDGMENT
STATE OF UTAH
SS.
COUNTY OF SALT LAKE
On this 9th day of November, 1992, before me personally appeared DANIEL
H. ENGH to me known to be the person described in and who executed the foregoing
instrument and acknowledged that he executed the same as a free act and deed.
Given under my hand and seal this 9th day of November, 1992.
My Commission Expires 4-15-95
-----------------------
/s/Lisa M. Morey
-----------------------
AMENDMENT AGREEMENT
November 09, 1992
Page 18 of 20
ACKNOWLEDGMENT
STATE OF UTAH
SS.
COUNTY OF SALT LAKE
On this 9th day of November, 1992, before me personally appeared DENNIS
S. ENGH to me known to be the person described in and who executed the foregoing
instrument and acknowledged that he executed the same as a free act and deed.
Given under my hand and seal this 9th day of November, 1992.
My Commission Expires 4-15-95
-------------------------
Lisa M. Morey
-------------------------
AMENDMENT AGREEMENT
November 09, 1992
Page 19 of 20
EXHIBIT A
To the Mining Lease Agreement
Between Don W. Fullmer, and Daniel H. Enqh, Dennis S. Enqh.
Dated the ~--~ day of November, 1992.
The Property consists of Lode Claims and Placer claims Plus, all other
claims located in Townships 29 South Range 13 West and Township 29 South 14 West
Salt Lake Medrian, Beaver County, Utah which Owner has claim to in this area.
CLAIM NAME
DESCRIPTION
UMC NUMB~
CLAIM NAME DESCRIPTION UMC NUMBER
- --------------- ----------------------------------------- ----------
Julie White #l NW 1/4 SEC. 9. TWNS. 29 SO. R-13. (PLACER) 303016
Julie White #2 SW 1/4 SEC. 9, TWNS. 29 SO. R-13. (PLACER) 303017
Julie White #3 NE 1/4 SEC. 8, TWNS. 29 SO. R-13. (PLACER) 303018
Julie White #4 SE 1/4 SEC. 8, TWNS. 29 SO. R-13. (PLACER) 303019
Julie White #5 NW 1/4 SEC. 8, TWNS. 29 SO. R-13. (PLACER) 303020
Julie White #6 NE 1/4 SEC. 7, TWNS. 29 SO. R-13. (PLACER) 303021
Julie White #7 NW 1/4 SEC. 7, TWNS. 29 SO. R-13. (PLACER) 303022
Julie White #8 NE 1/4 SEC. 12,TWNS. 29 SO. R-14. (PLACER) 303023
Julie White #9 SE 1/4 SEC. 1, TWNS. 29 SO. R-14. (PLACER) 303024
(LODES CLAIMS)
--------------
Julie White #ll NE 1/4 SEC. 7 & NW 1/4 SEC. 8,TWNS. 29 SO. R-13 W. 302980
Julie White #12 NE 1/4 SEC. 7 & NW 1/4 SEC. 8,TWNS. 29 SO. R-13 W. 302981
Julie White #13 NW 1/4 SEC. 8, TWNS. 29 SO. R-13 W. 302982
Julie White #14 NW 1/4 & NE 1/4 Sec. 8, TWNS. 29 SO. R-13 W. 302983
Julie White #15 NW 1/4 SEC. 8. TWNS, 29 SO. R-13 W. 302984
Julie White #16 NW 1/4 & NE 1/4 Sec. 8, TWNS. 29 SO. R-13 W. 302985
Julie White #l7 NE 1/4 SEC. 8, TWNS. 29 SO. R-13 W. 302986
Julie White #18 NE 1/4 SEC. 8, TWNS. 29 SO. R-13 W. 302987
Julie White #19 NE 1/4 SEC. 8, TWNS. 29 SO. R-13 W. 302988
Julie White #20 NE & NW 1/4 SEC. 8, TWNS. 29 SO. R-13 W. 302989
Julie White #21 NE 1/4 SEC. 8, TWNS. 29 SO. R-13 W. 302990
Julie White #22 NE & SE 1/4 SEC. 8, TWNS. 29 SO. R-13 W. 302991
Situated in Township 29 South, Range 13 West, Township 29 South, Range 14,
Salt Lake Meridian, Beaver County, Utah.
AMENDMENT AGREEMENT
November 09, 1992
Page 20 of 20
CLAIM NAME UMC NUMBER
Julie White #23 326947
Julie White #24 326948
Julie White #25 326949
Julie White #26 326950
Julie White #27 326951
Julie White #28 326952
Julie White #29 326953
Julie White #30 326954
Julie White #31 326955
Julie White #32 326956
Julie White #33 326957
Julie White #34 326958
Julie White #35 326959
Julie White #36 326960
Julie White #37 326961
Julie White #38 326962
Situated in Township 29 South, Range 13 West, Salt Lake Meridian, Beaver
County, Utah.
MINING LEASE
BETWEEN
DANIEL H. ENGH, CONNIE L. ENGH, DENNIS S. ENGH,
JUDY A. ENGH, DARIN ENGH, HOLLY ENGH (a.k.a. HOLLY KINGDON)
AND
UTAH CLAY TECHNOLOGY 1NC.
(A UTAH CORPORATION)
MARCH 1, 1994
TABLE OF CONTENT
----------------
ARTICLE Page No.
- ------- --------
I - DEFINITIONS............................................................1
1.1 "Agreement"..............................................1
1.2 "Area of Interest".......................................2
l.3 "Assets".................................................2
1.4 "Leased Minerals"........................................2
1.5 "Development"............................................2
1.6 "Dollars" or "$".........................................2
1.7 "Exploration" ' .........................................2
1.8 "Effmtxve Date...........................................2
1.9 "Exploration Period".....................................2
1.10 "Exploration Rights .....................................2
1.11 "Mining" ................................................2
1.12 "Operations".............................................3
1.13 "Prime Rate".............................................3
1.14 "Products"...............................................3
1.15 "Program"................................................3
1.16 "Propertion".............................................3
1.17 "Transfer"...............................................3
1.18 "Work Expenditures"......................................3
II - REPRESENTATIONS AND WARRANTIES; COVENANTS;
TITLE TO ASSETS
2.1 Capaeity of Participants.................................3
2.2 Representations and Warranties...........................4
2.3 Disclosures..............................................6
2.4 Covenants................................................6
2.5 Record Title Jmd Lessor's Interest ......................6
2.6 Federal Potassium Leases.................................6
III - NAME, PURPOSES AND TERM...............................................7
3.1 General..................................................7
3.2 Name ....................................................7
3.3 Purposes.................................................7
3.4 Limitation...............................................7
3.5 Term.....................................................7
3.6 Terms and Conditions.....................................8
3.7 Termination..............................................8
3.8 Funds Paid...............................................8
3.9 Copy of all Data.........................................8
i
ARTICLE Page No.
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IV - CONSIDERATION.........................................................8
4.1 Consideration............................................8
4.1(A) Annual Labor ............................................8
4.1(B) Reserved Royalty.........................................8
V - APPOINTMENT OF AGENT BY LESSOR.......................................10
5.1 Appointment of Agent....................................10
VI - PERIODIC REPORTS ....................................................10
6.1 Semi-annual Wirtten Reports.............................10
6.2 Audit all Operations....................................10
VII - RIGHTS AND OBLIGATIONS OF LESSEE ....................................10
7.1 Entering Leased Premises ...............................10
7.2 Inspection of Operations, records ......................11
7.3 Transfers, Encumbrances or Conveyances .................11
7.4 Expenses and Liens......................................11
7.5 Indemnification.........................................11
7.6 Mixed or Co-mingle minerals.............................12
VIII - PATENT OF CLAIMS.....................................................12
8.1 Obtaill Patent to Mining Claims.........................12
8.2 Rights extend to Amendments.............................12
IX - DEFAULT AND FORCE MAJEURE ...........................................12
9.1 Default Performaing Obligations.........................12
9.2 Prevented or Delayed from Obligations...................12
X - LEASE PREMISES.......................................................13
10.1 Defend Title............................................13
10.2 Copies Map..............................................13
XI - TAXES AND DUTIES.....................................................13
11.1 Lessee Agrees to Pay Taxes..............................13
11.2 Notices to Lessee.......................................13
11.3 Comply with all State and Federal Laws..................13
11.4 Reclamation Work....................................... 13
XII - ASSIGNMENT AND TRANSFER
12.1 Assign or Transfer......................................14
XIII - MISCELLANEOUS........................................................14
13.1 Governed by Utah Laws...................................14
13.2 Title for Convenience...................................14
13.3 Contain Entire Agreement................................14
13.4 Force of Law............................................14
13.5 Proper Address's........................................14
13.6 Affect Validity of thc Lease............................14
13.7 Benefit of the Successors...............................15
ii
ARTICLE Page No.
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13.8 Memorandum of Lease.....................................15
13.9 Diligently Explore......................................15
XIV - EXPLORATION REQUIREMENTS .............................................15
14.1 Operator of Exploration, Mining.........................15
EXHIBITS
- --------
EXHIBIT A - PROPERTIES .............................................1
PART I. - Proporties and Title Exceptions..........................1
PART 2. - Area of Interest.........................................4
iii
MINING LEASE
THIS MINING LEASE, herein referred to as "Lease", made and entered into
this 1st day of March, 1994, by and between DANIEL H. ENGH, CONNIE L. ENGH, at
2340 East Germania Circle, Sandy, Utah 84093-1174, DENNIs S. ENGH, JUDY A. ENGH,
at 4532 Briarcreek Drive, Salt Lake City, Utah 84124, DARIN ENGH, at 437 Elise
Street, Sandy, Utah 84070, HOLLY ENGH (a.k.a. HOLLY KINGDON) at 9064 Cheyenne
Way, Park City, Utah 84060 hereinafter referred to as "Owner or Lessor", and
UTAH CLAY TECHNOLOGY INC., a Utah corporation, having an address at 3985 South
2000 East, Salt Lake City, Utah 84124 (hereinafter designated as "Lessee"):
WITNESSETH:
WHEREAS, Lessor is owner of certain properties and property fights
situated in Beaver County, State of Utah, and more particularly described in the
attached Exhibit "A", incorporated by reference, and hereinafter referred to as
the "Leased Premises"; and
WHEREAS, Lessee desires to lease certain fights in and to the Leased
Premises which Lessor is willing to grant to Lessee;
NOW THEREFORE, in Consideration of $10.00 paid by Lessee to Owner
receipt of which is hereby acknowledged and the payments, covenants and
agreements hereinafter set forth the parties agree as follows:
GRANT, Lessor hereby grants and leases to Lessee for and in consideration
of, and subject to all of the terms provisions and conditions hereinaftg set
forth, the exclusive right and privilege to mine, extract, remove and dispose of
the all locatable Minerals in, upon or under the Leased Premises, together with
the right to use and occupy so much of the surface of the Leased Premises as may
be required for all purposes reasonably incident to the mining, extracting,
removal and disposal of the locatable Minerals according to the provisions of
this Lease.
ARTICLE I
---------
DEFINITIONS
-----------
1.1 "Agreement" means this Mining Lease, including all amendments and
modifications thereof, and all schedules and exhibits, which are incorporated
herein by this reference.
-1-
1.2 "Area of Interest" means the area described in Part 2 of Exhibit A.
1.3 "Assets" means the Properties, Products and all other real and
personal property, tangible and intangible, held for the benefit of the Lessor
hereunder.
1.4 "Leased Minerals" or "Locatable Minerals" as used herein shall mean
all locatable minerals acquired by virtue of the placer or lode mining claims
owned by owner.
1.5 "Development" means all preparation for the removal and recovery of
Products, including the construction or installation of a mill or any other
improvements to be used for the mining, handling milling, processing or other
beneficiation of Products.
1.6 "Dollars" or "$" means dollars in the currency of the United
States.
1.7 "Exploration" means all activities directed toward ascertaining the
existence, location, quantity, quality or commercial value of deposits of
Products.
1.8 "Effective Date" means the date first written above.
1.9 "Exploration Period" means the period of time during which Lessee
is conducting Exploration Operations pursuant to Article VII. The Exploration
Period shall begin on the Effective Date and, unless this Agreement sooner
terminates, shall end on the date a processing mill is placed into production
with Leased Minerals.
1.10 "Exploration Rights" mean collectively the following:
(a) the sole and exclusive right of Lessee and its agents,
employees, contractors, subcontractors and workers, to enter upon and occupy the
Properties for Exploration purposes during the Exploration Period and to conduct
thereon such prospecting, trenching, drilling, sampling, examination, testing
development, engineering and feasib'dity studies for kaolin and other or
associated clays or metals and all other ores and minerals whatever kind or
character as desired by Lessee; and
(b) the right to do such other things as Lessee, in its sole
discretion, deems advisable or necessary to maintain and to fully evaluate the
mineral potential of the Properties to determine the feasibility of Development
of the Properties, including the right to remove bom the Properties such limited
volumes of minerals and materials as are necessary for test and assaying;
provided, however, that Lessee shall not have the right during the Exploration
Period to mine and remove such minerals and materials for sale.
1.11 "Mining" means the mining, extracting, producing, handling, milling
or other processing of Products.
-2-
1.12 "Operations" means the activities carried out under this Agreement.
1.13 "Prime Rate" means the interest rate published as the Prime Rate in
the "Money Rates" column of The Wall Street Journal, as said rate may change
-----------------------
from day to day, or if said column sets forth a range of rates on a single day,
the arithmetic mean thereof.
1.14 "Products" means all ores, minerals and mineral resources produced
from the Properties under this Agreement.
1.15 "Program" means a description in reasonable detail of Operations to
be conducted and objectives to be accomplished by the Lessee for a specified
period.
1.16 "Properties" means those interests in real property described in
Part 1 of Exhibit A and all other interests in real property within the Area of
Interest which are acquired and held subject to this Agreement.
1.17 "Transfer" means sell, grant, assign, ea~nnher, pledge or otherwise
commit or dispose of.
1.18 "Work Expenditures" means the 'minimum work obligations described
in Sections 3.5 and 4.1 below and shall include, for purposes of this Agreement,
the value of all time, money or equipment contn]~uted to or used on or in
connection with the Properties or the Area of Interest by Lessee in good faith,
including but not limited to all consultants' time, all costs of testing and
assaying and all other expenses reasonably necessary to evaluate the Properties
or the Area of Interest. Work Expenditures shall include (a) geological
evaluation, geophysical study, geochemical analysis, rock and soil sampling,
geological mapping and similar activities affecting the Properties or the Area
of Interest; (b) drilling, trenching, road construction and pad construction
(plus associated stand-by time) and other physical work on the Properties or the
Area of Interest; (c) environmental, permitting and reclamation ~ (d) title
examination and title curative, remonumentation of unpatented mining claims,
survey (or re-survey), claim filing fees, taxes, and all other reasonable
project maintenance or associated costs on or for the benefit of the Properties
or the Area of Interest, including without limitation the maintenance activities
described in Sections 3.2 and 4.1 acquisition of property within the Area of
interest.
ARTICLE II
----------
REPRESENTATIONS AND WARRANTIES; COVENANTS; TITLE TO ASSETS
----------------------------------------------------------
2.1 Capacity of Participants. Lessee and Lessor, each for itself
--------------------------
represent and warrant as follows:
-3-
(a) That it is a corporation and individuals respectively duly
incorporated and in good standing in its state of incorporation and that
it is qualified to do business and is in good standing in those states
where necessary in order to carry out the purposes of this Agreement;
(b) That it has the capacity to enter into and perform this
Agreement and all transactions contemplated herein and that all
corporate and other actions required to authorize it to enter into
and perform this Agreement have been properly taken;
(c) That it will not breach any other agreement or arrangement by
entering into or performing this Agreement; and
(d) That this Agreement has been duly executed and delivered by it
and is valid and binding upon it in accordance with its terms.
2.2 Representations and Warranties. Lessor make the following
--------------------------------
representations and warranties effective on the Effective Date:
The Leased Premises. The "Leased Premises" shall mean all of the
---------------------
Property described in Exhibit "A" attached hereto and made a part hereof,
together with all of the ores, minerals and materials thereon and thereunder,
and all right, title and all water, water rights, easements and rights of way
now and hereafter owned or held by Lessor in, upon or under the said property,
or in any way pertaining thereto.
(a) With respect to those Properties Lessor claimed through the
Bureau Of Land Management and those Properties Lessor has enter into a
mineral leases with the State of Utah, if any, Lessor are in exclusive
possession mining rights of such Properties free and clear of all
defects, royalties, liens and encumbrances except those specifically
identified in Part I of Exhibit A.
(b) With respect to those Properties in which Lessor hold an
interest under leases or other contracts: (i) Lessor are in exclusive
possession of such Properties; (ii) neither Lessor has received any
notice of default of any of the terms or provisions of such contracts;
(iii) Lessor have the authority under such contracts to perform
fully their obligations under this ~ (iv) such contracts are valid and
are in good standing; and (v) the properties covered thereby are free
and clear of all defects, royalties, liens and encumbrances except for
those specifically identified in Part I of Exhibit A or in such
contracts.
(c) With respect to unpatented mining claims that are included
within the Properties, except as provided in Part 1 of Exhibit A and
subject to the paramount title of the United States, the claims are
free and clear of defects, royalties, liens and encumbrances except for
those specifically identified in Part 1 of Exhibit A and to the best of
Lessor's knowledge and belief, (i) the unpatented mining claims were
properly laid out and monumented; (ii) all required location and
validation work was properly performed; and (iii)
-4-
all assessment work required to hold the unpatented mining claims has
been performed in a manner consistent with that required of the
Lessee pursuant to Section 4. l(A) of this Agreement through the
assessment year ending September I, 1994. With respect to such
unpatented mining claims located by or on behalf of Lessor or one of
their Affiliates, except as provided in Part 1 of Exhibit A and
subject to the paramount title of the United States, all location
notices and certificates and all affidavits of assessmem work and other
filings required to maintain the claims in good standing have been
properly and timely recorded and filed with appropriate governmental
agencies, with respect to such unpatented mining claims that were not
located by or on behalf of Lessor or one of their Affiliates, Lessor
make the representation and warranty contained in the foregoing sentence
to the best of their knowledge and belief. Additionally, Lessor have no
knowledge of any claims conflicting with the claims described in Part 1
of Exhibit A. Nothing in this Section 2.2(c), however, shall be deemed
to be a representation or a warranty that any of the unpatented mining
claims described in Part 1 of Exhibit A contains a discovery of
minerals.
Lessor represents to Lessee: (1) that subject to the matters
specifically set forth in Exhibit "A," and subject to the matters set
forth below with respect to unpatented mining claims, Lessor has the
exclusive possession of the Leased Premises and (2) that the Lessor has
the full right, power and capacity to enter into this Lease upon the
terms set forth herein. Since the Leased Premises, as described in
Exhibit "A" includes unpatented mining claims, Owner represents and
warrants to Lessee: (1) that Lessor's title is subject to paramount
title of the United States of America and to the rights, if any, of
surface patentees; (2) that the acts of location performed by Lessor on
the unpatented mining claims described in Exhibit "A" have been
completed in compliance with the laws of the State of Utah and of the
United States of America; and (3) that the Notice Of Intent To Hold has
been completed and filed with the Beaver County Recorder and the BLM in
Salt Lake City, Utah.
(d) Lessor have delivered to Lessee all information concerning
title to the Properties in Lessor's possession or control, including but
not limited to, true and correct copies of all leases or other contracts
relating to the Properties of which Lessor has knowledge.
(e) Except as disclosed in Exhibit A, there are no pending or
threatened actions, suits, claims or proceedings with respect to the
Properties.
(f) Except as disclosed in Exhibit A, Lessor is aware of any
adverse environmental condition on or affecting the Properties.
(g) Except as disclosed in Exhibit A, Lessor has any material
contractual commitments obligations which relate to or affect the
Properties.
Notwithstanding any other provision of this Section 2.2, Lessor makes the
representations and warranties contained in this Section to the best of its
knowledge and belief, except that with respect
-5-
to claims arising by, through or under Lessor or any its Affiliates, such
representations and warranties (except those contained in Section 2.2(c)
identified as being made on knowledge and belief) shall be absolute. The
representations and warranties set forth above shall survive the execution
and delivery of any documents of Transfer provided under this Agreement.
2.3 Disclosures. Each of the Participants represents and warrants that
-----------
it is unaware of any material facts or circumstances which have not been
disclosed in this Agreement, which should be disclosed to the other Participant
in order to prevent the representations in this Article II from being materially
misleading.
2.4 Covenants. Lessee covenant and agree as follows:
---------
(a) At any time, they will give prompt notice Lessor (during the
Exploration Period) of any notice of default, lawsuit, proceeding, action or
damage of which either Lessee becomes aware and which might affect the
Properties either Participant's title to the Properties.
(b) Notwithstanding any other provision of this Agreement, during
the Exploration Period neither of them will Transfer any interest in any
property located in the Area of Interest, except as between themselves and then
only upon 14-day prior notice to Lessee, nor will either of them conduct,
without Lessor's prior written consent, any property acquisition, exploration,
claim staking or mining operations within the Area of Interest.
(c) At any time, they will use their best efforts to assist
Lessor (during the Exploration Period) in obtaining necessary permits or
approvals, access to the Properties and water rights to the extent required by
or for operations hereunder, and to assist Lessee in informing Lessor of legal,
title and mining problems which may affect the Properties.
(d) They will make available to Lessor, its employees and agents,
any and all data, maps, other documents or information which either of them may
have or may acquire pertaining to the Properties.
2.5 Record Title and Lessor's Interest
----------------------------------
(a) Title to the mining claims shall be held by Lessor.
(b) Lessee will at all times maintain Utah Clay Technology, Inc.,
in good standing and qualified to own Property under the laws of the State of
Utah.
2.6 Lessee understands and acknowledges hereby that there are current
Federal Potassium Leases on some of the same area as the Leased Premises. That
the Lessor can only convey the rights that it possesses in relation to placer
and lode mining claims being staked over the Federal Potassium Leases, as
allowed by the Multiple Minerals Development Act, 30 U.S.C. s 521 (1970), and
other State and Federal law.
-6-
Since law hasn't clearly defined exact cutoffs between the two mineral
domains (Federal leases and later mining claim locations) and their rights, it
behooves both the Lessor and Lessee, or their successors, to make agreements
with the Potassium lessee as necessary to prevent entanglements, both as to
mineral and other rights.
ARTICLE III
-----------
NAME, PURPOSES AND TERM
-----------------------
3.1 General. Lessor and Lessee hereby enter into this Agreement for the
-------
purposes hereinafter stated and agree that all of their rights and all of the
Operations on or in connection with the Properties or the Area of Interest shall
be subject to and governed by this Agreement.
3.2 Name. The name of this mine shall be The Blawn Wash Clay. Lessee
----
during the Exploration Period and, thereai~er, shall accomplish any registration
required by applicable assumed or fictitious name statutes and similar statutes.
3.3 Purposes. This Agreement is entered into for the following purposes
--------
and for no others, and shall serve as the exclusive means by which the
Participants, or either of them, accomplish such purposes:
(a) to conduct Exploration within the Area Interest,
(b) to acquire additional Properties within the Area of Interest,
(c) to evaluate the possible Development of the Properties,
(d) to engage in Development and Mining Operations on the
Properties,
(e) to engage in marketing Products, and
(f) to perform any other activity necessary appropriate, or
incidental to any of the foregoing.
3.4 Limitation. Unless the Participants otherwise agree in writing,
----------
the development and operations shall be limited to the purposes described in
Section 3.3, and nothing in this Agreement shall be construed to enlarge such
purposes.
3.5 Term. The primary term of this Lease shall be for a period of three
----
(3) years from the date hereof and for so long thereai~er as Leased Minerals are
produced in commercial
-7-
quantities at more than 500 tons/month from the lands described in Exhibit A by
the Lessee, their partners, successors or assigns, for at least ten months of
each year after the initial three (3) year term has expired, subject to
extension or termination as hereinafter provided.
3.6 This Lease and the terms and conditions of this Lease agreement
issued by the Lessor are made with the Lessee herein on condition that Lessee
and any lawful successor in interest to Lessee shall perform all covenants and
terms and conditions herein set forth to be performed by Lessee or its lawful
assigns including payment of royalties as herein provided. Lessor may issue
written notice of termination and cancellation of this Lease, and forfeiture,
subject to paragraph 9.1: declaring that the Leased Premises and each and every
part thereof have thereby reverted to the Lessor, including any and all fixtures
and improvements required to be left with the property upon expiration,
termination, or cancellation of this Lease.
3.7 Lessee may terminate this Lease at any time by giving Lessors at
least ninety (90) days prior written notice, together with a check in fidl
settlement of any royalties that are due and unpaid; upon giving such notice of
termination, Lessee shall be released of all its obligations except those
obligations which have theretofore accrued. Within Thirty (30) days after date
of termination, Lessee shall execute and record a release and quitclaim deed
releasing all of Lessee's right, title and interest in and to the Leased
Premises.
3.8 Upon the effective date of termination by Lessee, Lessor shall be
entitled to retain all funds paid to it by Lessee pursuant to this Lease.
3.9 Within sixty (60) days after termination from this Lease, Lessee or
its successor or assign will provide Lessor with a copy of all data prepared,
collected, and interpreted by or for it (including maps, drill data, assays,
analyses, geological surveys, topographic surveys, market studies, flow sheets,
processing studies, and all other data) pertaining to the Leased Premises and
the Leased Minerals. Lessee will provide readable copies of all new factual
geologic data and reports by February 15th of each year.
ARTICLE IV
----------
CONSIDERATION
-------------
4.1 The Lessee in consideration of the granting of the rights and
privileges granted herein hereby covenants and agrees as follows:
A). Annual Labor:
------------
(1) To perform upon or for the benefit of the Leased Premises the
annual assessment work as set forth under the laws of the United States and the
State of Utah, and to prepare timely proof of the performance of such labor and
to record and file the same as required by law,
-8-
and to furnish Lessor with a copy thereof Should this Lease be terminated as
herein provided and the effective date of such termination shall be ninety (90)
days, or less, prior to the end of the then current assessment year, Lessee
shall nevertheless be required to perform upon or for the benefit of the Leased
Premises the annual labor for such assessment year and shall prepare timely
proof thereof, record the same, and furnish Lessor with a copy of such proof as
hereinafter provided. In the performance of annual labor upon or for the benefit
of the Leased Premises, Lessee shall be entitled to perform such work upon any
of the claims or upon any of the groups of claims comprising the Leased Premises
or upon other claims lying outside the Leased Premises so long as such work
shall qualify for the purpose of the development of the Leased Premises as a
contiguous group pursuant to the requirements of law relating to group work on
mining claims except as herein provided.
(2) Assessment work will be completed by July 15 of each year starting
with the 1994 Assessment Year, or Lessor may do the work and charge reasonable
costs time and expenses to Lessee. Lessee will furnish to Lessor a copy of the
proof-of-labor with the County and the BLM time-stamp on it, no later than
September 15th of each year.
B). RESERVED ROYALTY:
(1) To pay lessor a three percent (3%) royalty on all ores, minerals or
products (herein called "Production") mined and removed from the Leased
Premises. Said royalty shall be calculated based upon the gross value of the
Production. In the event Production is removed from the Leased Premises and
stockpiled, royalty shall be payable six(6) months after removal and the gross
value shall be deemed the highest value received for comparable material sold
from the Leased Premises or from the nearest mine or property to the Leased
Premises.
(2) Production royalty shall be paid within thirty (30) days after
receipt of payment for each shipment or when otherwise due, and each payment
shall be accompanied by a statement showing the date(s) of shipment(s), quantity
and value of each shipmer~, to whom sold and the gross value received, and any
cost deductions. Production royalty payments not made when due shall bear
interest at the rate of I 1/2% per calendar month or fraction thereof until paid
in full.
(3) Method of Production royalty payments shall be in U.S. dollars
payable by cash or valid check drawn on available funds, and shall be deemed
made when deposited at Lessor's single depository at:
FIRST UTAH BANK
3826 South 2300 East
Salt Lake City, Utah 84109
phone (801) 272-9454
-9-
Lessor may change its single depository at any time by giving written notice to
Lessee.
ARTICLE V
---------
APPOINTMENT OF AGENT BY LESSOR
------------------------------
5.1 Lessor hereby appoints Daniel H. Engh as their agent and attorney-
in-fact for the purpose of representing the claim owners as a group, and
authorize him to take all necessary or desirable actions on behalf of Lessor.
This appointment shall be without limitation and remain in force until said
agent resigns or is replaced by a newly appointed agent for the entire group of
owners.
ARTICLE VI
----------
PERIODIC REPORTS
----------------
6.1 Lessee agrees to make semi-annual written reports to lessor (on or
before January 1 and July 1 each year) detailing the exploration, development
and mining work done upon the leased premises, the dates, quantity and value of
ores, minerals or products shipped from the Leased Premises, the identity of the
buyer(s) thereof or the place where such ores, minerals or products are
stockpiled, the plans for the Leased Premises during the next six (6) month
period, and other activities conducted or planned for the Leased Premises, also,
Lessee will provide Lessor with a copy of all data prepared, collected, and
interpreted by or for it (including maps, drill data, assays, analyses,
geological surveys, topographic surveys, market studies, flow sheets, processing
studies, and all other data) pertaining to the Leased Premises and the Leased
Minerals. Lessee will provide readable copies of aH new factual geologic data
and reports by January I and July 1 of each year.
6.2 Lessee shall audit all operations upon the Leased Premises at least
annually, and furnish to Lessor a copy of such audit within thirty (30) days
after completion.
ARTICLE VII
-----------
RIGHTS AND OBLIGATIONS OF LESSEE
--------------------------------
7.1 The Lessee will forthwith have and is hereby granted by Lessor the
right and privilege from the date hereof and so long thereafter as this Lease
remains in force and effect of
- 10 -
entering into and upon the Leased Premises and the right to drill and excavate
thereon and therein holes, pits, tunnels, shafts, and other such excavations and
to conduct therein and elsewhere such surveys, exploration, investigations,
sampling, milling, screening and other work similar as well as dissimilar as
Lessee in its sole judgment and discretion may wish to know relating to any and
all facts relative to the geology of the Leased Premises, including but not
limited to the geology of the Leased Minerals and the mining, milling,
beneficiating, and marketing thereof, together with the right to drain water and
materials and to pile overburden at places most convenient to Lessee, and the
right to dig or bore wells and use any water in or upon said lands and the right
to construct and place Upon said lands any and ali buildings, dams, drains,
machinery, roads, railroads, pipe and power lines and other improvements that
may be convenient for said purposes, all of which improvements will become the
full and complete property of the Lessor upon termination or assignment of Lease
back to Lessor, and Lessee will be under no further obligation or liability with
respect thereto except for reclamation and except as provided in paragraph 7.5
below. Lessee will have the paramount possession and control of the Leased
Premises with regard to the Leased Mineral rights obtained herein during and
throughout the life of this Lease and shall be entitled to conduct therein and
thereon all mining, milling and beneficiation uses and purposes reasonably
incident thereto as it shall deem satisfactory and advantageous so far as Lessee
tries not to interfere with the rights of the Federal potassium leases. All work
shall be conducted by Lessee as Lessee in its sole judgment and discretion deems
best and in a good and minerlike fashion. Stockpiles and tailings covered by
Lease, remain the property of the Lessor upon surrender of Lease. Mining timbers
in place shall remain affixed as part of the Leased Premises unless released in
writing to Lessee.
7.2 Lessor or his agents duly authorized in writing will have at ail
reasonable times and at his own risk access to all parts of Leased Premises and
associated premises for the purposes of reasonable inspection of operations,
record keeping, and accounts to the end that Lessor might verify that the
specified royalty payments are being made properly and that operations are being
conducted in a minerlike fashion. Lessee will keep records in a businesslike
manner.
7.3 Any and all future leases, transfers, encumbrances or conveyances
of interests in the Leased Premises not covered by this Lease shall be
subordinate to and subject to the fights of Lessee, his successors, assigns of
sublessees, so long as this Lease is in force and effect.
7.4 Lessee shall pay all expenses incurred by it and shall permit
no liens to attach to Leased Premises on account of any debt for materials or
services furnished for the benefit of the Leased Premises while this Lease is in
effect.
7.5 Lessee will indemnify and forever hold harmless and defend Lessor
from any demand, claim, suit, judgment or liability resulting fi.om the
exploratory or development activities of Lessee conducted pursuant to this
agreement. Upon request of Lessor, Lessee will furnish evidence of sufficient
workmen's compensation, liability and other insurance to cover anticipated
risks, or evidence that it is adequately self-insured for such contingencies.
-11-
7.6 Lessee agrees that Leased Minerals from the Leased Premises shall
not be mixed or co-mingled with minerals, ore, substances or materials from
other properties or lands except as agreed by Lessor.
ARTICLE VIII
------------
PATENT OF CLAIMS
----------------
8.1 Upon request of Lessee at any time during the term of this Lease,
the Lessor agrees to undertake to obtain patent to any of the mining claims
designated by Lessee. Lessee, at its own expense, shall prepare all documents,
compile all data and comply in all respects with all applicable laws in this
endeavor, and Lessor shall execute all documents required for this purpose and
shall cooperate fully with Lessee in the patent application and proceedings.
8.2 The rights of Lessor and Lessee under this Lease will extend to any
and ali amended, relocated, or patented claims referred to in Exhibit A. Lessor
and Lessee agree that all amendments, relocations, or staking new claims in the
claimed area, of the claims referred to in Exhibit A, will be made in the name
of Lessor. Some claims need amending and it is known hereby to the Lessee. Any
valid mining claims staked by Lessor, or his agents, within the Leased Premises
shall fail under and be a part of this Lease.
ARTICLE IX
----------
DEFAULT AND FORCE MAJEURE
-------------------------
9.1 If Lessee will be in default in performing any obligations (except
the timely payment of royalties), Lessee shall lose no rights unless, within
sixty (60) days following written notice from Lessor, given at the address
herein specified, specifying such failure or breach, Lessee shall fail to make
such payment or undertake to cure such default by commencement and follow
through of appropriate performance, within a reasonable amount of time. Upon
such failure, Lessor may terminate this Lease.
9.2 If Lessee shall be prevented or delayed from performing its
obligations (degree)r performing any work which it desires to perform or is
performing by reason of act of nature, strike or threat of strike, fire, flood,
war, mob violence, court order, unavoidable casualties, or any other
enumeration, beyond the control of Lessee which cannot be overcome by the means
normally employed in performance and at comparable and reasonable expense, then
the duration of this Lease shall be extended for a period equal to the period of
Force Majeure and any failure to perform obligations shall not be deemed a
breach of this Lease. Lessee agrees to use reasonable
-12-
diligence to remove such causes of disability as may occur from time to time.
This paragraph shall not excuse payment or delay payment of royalties.
ARTICLE X
---------
LEASE PREMISES
--------------
10.1 The parties hereto agree that during the term of this Lease, in the
event title to any of the Leased Premises is contested by any person or persons,
corporation or corporations, or governmental agencies, Lessee will, at its own
election and expense, defend the title to any of the Leased Premises before any
court of competent jurisdiction or any administrative body. Lessee will defend
any actions for damages relating to exploration, development, or mining
activities by Lessee on Leased Premises.
10.2 Lessor, upon execution of this Lease, shall furnish Lessee with
copies of all property maps possessed by Lessor on the Leased Premises and
adjacent lands.
ARTICLE XI
----------
TAXES AND DUTIES
----------------
11.1 Lessee agrees to pay (i) all taxes hereat~er levied and assessed
upon all machinery and improvements placed by Lessee upon the LeaSed Premises,
(ii) taxes herea~er levied upon the Leased Premises, including taxes assessed by
reason of net annual proceeds, and (iii) occupation or severance taxes imposed
upon the mining or production of Leased Minerals from the Leased Premises or any
other taxes, assessments or charges resulting from Lessee activities on Leased
Premises.
11.2 Lessor agrees to promptly transmit to Lessee any notices pertaining
to taxes, assessments and charges which Lessor may receive.
11.3 Lessee, in all operations under this Lease, will comply with all
applicable State and Federal laws, including the social laws relative to
employment, safety, workmen's compensation insurance, social security,
unemployment tax and tax withholding. Lessee shall hold Lessor harmless from
chims of damage to persons or property arising from Lessee's operations under
this Lease. Lessee will comply with hazardous waste, air and water quality
requirements.
11.4 Lessee will do all reclamation work required by the Bureau of Land
Management, the State of Utah or Beaver County in a timely manner.
-13-
ARTICLE XII
-----------
ASSIGNMENT AND TRANSFER
-----------------------
12.1 Lessee will not convey, assign or transfer its interest in this
lease or any part of this Lease without the prior notification and consent in
writing of the Lessor. The assignee party will, as a condition of consent to the
transfer, agree to be bound by and subject to the terms of this Lease. Any
assignee party will provided a photocopy of the executed copy of assignment and
is delivered to the other party. Overriding royalty assignments will not become
effective, even if otherwise valid without the consent in writing of the Lessor.
Lessee, its successor and assigns, may not assign or convey royalty, overriding
royalty, production payment or like interest in the Leased Premises without
Lessor's prior written consent.
ARTICLE XIII
------------
MISCELLANEOUS
-------------
13.1 This agreement shall be governed by the laws of the State of Utah.
13.2 Title headings are for convenience only and shall not be deemed a
part of this Lease.
13.3 This Lease and Its Exhibit contain the entire agreement between the
parties and supersedes entirely any prior understandings whether oral or
written.
13.4 If any provisions of this Lease is or becomes void or unenforceable
by Force of Law, the other provisions shall remain valid and enforceable.
13.5 Lessor's and Lessee's proper address shall be the following, which
either may change by giving written notice to the other.
Daniel H. Engh
2340 East Germania Circle
Sandy, Utah 84093
Utah Clay Technology, Inc. 3985 South 2000 East
Salt Lake City, Utah 8124
13.6 The failure to enforce at any time any provisions of this Lease,
shall in no way be construed to be a waiver of such provisions, or to affect
validity of the Lease.
-14-
13.7 This Lease shall be binding upon and inure to the benefit of the
successors and permitted assigns of the parties.
13.8 A Memorandum of this Lease may be filed by either party.
13.9 Lessee will diligently explore and conduct operations on or near
Leased Premises throughout the term of this Lease in a manner reasonably
calculated to advance the production of minerals from Leased Premises.
ARTICLE XIV
-----------
EXPLORATION REQUIREMENTS
------------------------
14.1 Lessor agrees to Utah Clay Technology, Inc. as the party that will
be the operator's of the exploration, and mining of the lode and placer claims
referred to in Exhibit A. Lessee agrees that it can not transfer or assign ail
or part of being the operator of the exploration, and mining to any other party.
IN WITNESS WHEREOF, this Lease has been executed and delivered by
Lessor to Lessee as of the day and year first above written.
/s/Daniel H. Engh
- -------------------------------
Daniel H. Engh
Lessor
/s/Connie L. Engh
- -------------------------------
Connie L. Engh
Lessor
/s/Dennis S. Engh
- -------------------------------
Dennis S. Engh
Lessor
-15-
/s/Judy A. Engh
- -------------------------------
Judy A. Engh
Lessor
/s/Darin Engh
- -------------------------------
Darin Engh
Lessor
/s/Holly Engh Kingdon
- -------------------------------
Holly Engh (a.k.a. Holly Kingdon
Lessor
UTAH CLAY TECHNOLOGY, INC.
BY:/s/Dennis S. Engh
----------------------------
President
Lessee
State of Utah
S.S.
County of Salt Lake
On this 22nd day of October, 1996, personally appeared before me.
Daniel H. Engh, Connie L. Engh, Dennis S. Engh, Judy A. Engh, Darin Engh, Holly
- --------------------------------------------------------------------------------
Engh (a.k.a. Holly Kingdon). Dennis S. Engh, having authority to sign as
- ----------------------------
President of Utah Clay Technology, Inc. and by authority of the board of
Directors, who acknowledged to me that they executed the foregoing document.
- ------------------------------ RESIDING AT:
-----------------------
-----------------------------------
-----------------------------------
-----------------------------------
-16-
EXHIBIT A
---------
To Mining Lease Agreement dated as of March 1st,
1994, by and among Daniel H. Engh, Connie L. Engh,
Dennis S. Engh, Judy A. Engh, Darin Engh, Holly Engh
(a.k.a. Holly Kingdon) and Utah Clay Technology, Inc.
PART 1
- ------
With respect to the Properties, Daniel H. Engh and Dennis S. Engh are in
control and ownership of Engh Family placer claims described below:
The Following Property consists of Placer Claims plus, all other claims
located in Townships 29 South Range 13 & 14 West Salt Lake Medrian, Beaver
County, Utah which Owner has claim to in this area.
NAME TYPE OF
OF CLAIM CLAIM FILING DATE BOOK & PAGE UMC NUMBER
-------- ------- ----------- ----------- ----------
BLUE #201 (PLACER) 07/22/88 238 374 313316
BLUE #202 (PLACER) 07/22/88 238 375 313317
BLUE F203 (PLACER) 07/22/88 238 376 313318
BLUE F204 (PLACER) 07/22/88 238 377 313319
BLUE #205 (PLACER) 07/22/88 238 378 313320
BLUE #206 (PLACER) 07/22/88 238 379 313321
BLUE F207 (PLACER) 07/22/88 238 380 313322
BLUE F208 (PLACER) 07/22/88 238 381 313323
BLUE #209 (PLACER) 07/22/88 238 382 313324
BLUE #210 (PLACER) 07/22/88 238 383 313325
BLUE//211 (PLACER) 07/22/88 238 384 313326
BLUE #212 (PLACER) 07/22/88 238 385 313327
BLUE//213 (PLACER) 07/22/88 238 386 313328
BLUE F214 (PLACER) 07/22/88 238 387 313329
BLUE #215 (PLACER) 07/22/88 238 388 313330
1
BLUE #216 (PLACER) 07/22/88 238 389 313331
BLUE #217 (PLACER) 07/22/88 238 390 313332
BLUE #218 (PLACER) 07/22/88 238 391 313333
BLUE//219 (PLACER) 07/22/88 238 392 313334
BLUE #220 (PLACER) 07/22/88 238 393 313335
The above claims are Located and Recorded in Beaver County, Utah.
This mininG lease contains a Reserved Royalty of 3% on all ores, minerals or
Products (called "Production") mined and removed from the leased Premises. Said
Royalty shall be calculated based upon the gross value of the production.
Additionally, the below Julie White lode or placer claims have a minimum royalty
of $5,000.00 and or a production royalty of $2.50/ton which is adjusted by the
Consumer Prices Index for all Urban Consumers for U.S. City average as published
by the U.S. Department of Labor Bureau of Labor Statistics.
With respect to the Properties, Daniel H. Engh and Dennis S. Engh have a mining
lease Dated November 9th 1992 by and between Don W. Fullmer (Lessor) and Daniel
H. Engh, Dennis S. Engh (Lessee). All terms and conditions of the November 9,
1992 mining lease will be a part of this minin~ lease. Said claims of this
mining lease are described below:
The Property consists of Lode Claims and Placer claims Plus, all other
claims located in Townships 29 South Range 13 West and Township 29 South 14 West
Salt Lake Medrian, Beaver County, Utah which Owner has claim to in this area.
CLAIM NAME DESCRIPTION UMC NUMBER
- -------------- ----------------------------------- ----------
Julie White #1 NW 1/4 SEC. 9, TWNS. 29 SO. R-13. (PLACER) 303016
Julie White #2 SW 1/4 SEC. 9, TWNS. 29 SO. R-13. (PLACER) 303017
Julie White #3 NE 1/4 SEC. 8, TWIGS. 29 SO. R-13. (PLACER) 303018
Julie White #4 SE 1/4 SEC. 8, TWIGS. 29 SO. R-13. (PLACER) 303019
Julie White #5 NW 1/4 SEC. 8, TWNS. 29 SO. R-13. (PLACER) 303020
Julie White #6 NE 1/4 SEC. 7, TWNS. 29 SO. R-13. (PLACER) 303021
Julie White #7 NW 1/4 SEC. 7, TWNS. 29 SO. R-13. (PLACER) 303022
Julie White #8 NE 1/4 SEC. 12,TWNS. 29 SO. R-14. (PLACER) 303023
Julie White #9 SE 1/4 SEC. 1, TWNS. 29 SO. R-14. (PLACER) 303024
2
(LODES CLAIMS)
------------------
Julie White #11 NE 1/4 SEC. 7 & NW ~ SEC. 8,TWNS. 29 SO. R-13 W 302980
Julie White #12 NE 1/4 SEC. 7 & NW ~ SEC. 8,TWNS. 29 SO. R-13 W 302981
Jutie White #13 NW 1/4 SEC. 8, TWNS. 29 SO R-13 W. 302982
Julie White #14 NW 1/4 & NE 1/4 SEC. 8, TWNS 29 SO. R-13 W. 302983
Julie White #15 NW 1/4 SEC. 8. TWNS. 29 SO R-13 W. 302984
Julie White #16 NW 1/4 & NE 1/4 SEC. 8, TWNS 29 SO. R-13 W. 302985
Julie White #17 NE 1/4 SEC. 8, TWNS. 29 SO R-13 W. 302986
Julie White #18 NE 1/4 SEC. 8, TWNS. 29 SO R-13 W. 302987
Julie White #19 NE 1/4 SEC. 8, TWNS. 29 SO R-13 W. 302988
Julie White #20 NE & NW 1/4 SEC. 8, TWNS. 29 SO. R-13 W. 302989
Julie White #21 NE 1/4 SEC. 8, TWNS. 29 SO. R-13 W. 302990
Julie White #22 NE & SE 1/4 SEC. 8, TWNS. 29 SO. R-13 W. 302991
Situated in Township 29 South, Range 13 West, Township 29 South, Range
14, Salt Lake Meridian, Beaver County, Utah.
Dated March 1st, 1994
PART 2
- ------
Area of Interest
ALl lands within the following described Areas of Interest including:
T29S, R13W Sections 2-6, 7-11, 14-18
T29S, R14W Sections 1-2, 11-14
T28S, R12W Section 31
T28S, R13W Sections 35, 36
T29S, R12W Sections 5-7, 18
T29S, R13W Sections 1-13
T29S, R14W Sections 1, 12, 13
and any lands in Township 29 South 13 West, Township 29 South 14 West to
define the boundary of Area of interest.
4
AMENDMENT AGREEMENT
THIS AMENDMENT AGREEMENT made and entered into this 9th, day of
November, 1992, to the EXPLORATION FOR MINING AND MINERAL DEVELOPMENT LEASE,
-------------------------------------------------------
WITH OPTION TO PURCHASE PLACER AND LODE MINING CLAIMS, dated July 14, 1989, and
- -----------------------------------------------------
the AMENDMENT AGREEMENT, dated January 20, 1992, by and between DON W. FULLMER,
-------------------
whose address is 800 NORTH MAIN, FILMORE, UTAH 84631, herein referred to as
"Lessor" or "Owner" and DANIEL H. ENGH, DENNIS S. ENGH whose address is 2340
EAST GERMANIA CIRCLE, SANDY, UTAH 84093-1174, hereinafter referred to as
"Lessee"
WITNESSETH:
WHEREAS, Lessee wishes to change the above mentioned agreements, and
Owner wishes to change the same agreements, here by agree to amend the above
mentioned agreements,
WHEREAS, the owner is the sole owner, or the agent for the
association which is the sole owner of the unpatented mining claims listed in
Exhibit "A" of this agreement, hereinafter referred to as the "Leased Property",
and
WHEREAS, Lessee desires to lease the Leased Property, Owner and
Lessee hereby agree to the following (hereinafter referred to as the
"Agreement"):
WHEREAS, Lessor is owner of certain properties and property rights
situated in Beaver County, State of Utah, and more particularly described in the
attached Exhibit "A", incorporated by reference, and hereinafter referred to as
the "Leased Premises"; and
AMENDMENT AGREEMENT
- -------------------
November 09 , 1992
Page 2 of 20
WHEREAS, Lessee desires to lease certain rights in and to the Leased
Premises which Lessor is willing to grant to Lessee;
NOW THEREFORE, in consideration of $100.00 paid by Lessee to Lessors
receipt of which is hereby acknowledged and the payments, covenants and
agreements hereinafter set forth the parties agree as follows:
1. The Leased Premises.
-------------------
The "Leased Premises" shall mean all of the property described in
Exhibit "A" attached hereto and made a part hereof, together with all of the
ores, minerals and materials thereon and thereunder, and all right, title and
all water, water rights, easements and rights of way now and hereafter owned or
held by Owner in, upon or under the said property, or in any way pertaining
thereto.
2. Warranties and Representations
------------------------------
Owner represents to Lessee: (1) that subject to the matters
specifically set forth in Exhibit "A," and subject to the matters set forth
below with respect to unpatented mining claims, Owner has the exclusive
possession of the mining claims and (2) that the Owner has the full right, power
and capacity to enter into this Lease upon the terms set forth herein. Since the
Leased Premises, as described in Exhibit "A" includes unpatented mining claims,
Owner represents and warrants to Lessee: (1) that Owner's title is subject to
paramount title of the United States of America and to the rights, if any, of
surface patentees; (2) that the acts of location performed by Owner on the
unpatented mining claims described in Exhibit "A" have been completed in
compliance with the
AMENDMENT AGREEMENT
- -------------------
November 09 , 1992
Page 3 of 20
laws of the State of Utah and of the United States of America; and (3) that the
Notice Of Intent To Hold has been completed and filed with the Beaver County
Recorder and the BLM in Salt Lake City, Utah. (4) Lessee represents to owner:
(A) that Lessee has made a preliminary search of the Bureau of Land Management
records with regard to the leased premises and (B) That Lessee is aware of some
conflicting claims within the boundaries of the leased premises and (C) That
Lessee intends to do additional title research and to take such actions as are
necessary to perfect title in the Lessors favor, insofar as possible and (D)
That Lessee will refrain from or abandon all attempts to obtain title to the
Leased Premises except as provided by this by this lease, without first
obtaining owners written consent.
I. GRANT
1.1 Lessor hereby grants and leases to Lessee for and in
consideration of, and subject to all of the terms provisions and conditions
hereinafter set forth, the exclusive right and privilege to mine, extract,
remove and dispose of the all locatable Minerals in, upon or under the Leased
Premises, together with the right to use and occupy so much of the surface of
the Leased Premises as may be required for all purposes reasonably incident to
the mining, extracting, removal and disposal of the locatable Minerals according
to the provisions of this Lease.
II. LEASED MINERALS
2.1 "Leased Minerals" or "Locatable Minerals" as used herein shall
mean all locatable minerals acquired by virtue of
AMENDMENT AGREEMENT
- -------------------
November 09 , 1992
Page 4 of 20
the placer or lode mining claims owned by owner.
2.2 Lessee understands and acknowledges hereby that there are current
Federal Potassium Leases on some of the same area as the Leased Premises. That
the Lessor can only convey the rights that it possesses in relation to
placer and 1ode mining claims being staked over the Federal Potassium Leases, as
allowed by the Multiple Minerals Development Act, 30 U.S.C. s 521 (1970),
and other State and Federal law.
III. TERM
3.1 The primary term of this Lease shall be for a period of five (5)
years from the date hereof and for so long thereafter as Leased Minerals are
produced in commercial quantities at more than 500 tons/month from the lands
described in Exhibit A by the Lessee, their partners, successors or assigns, for
at least ten months of each year' after the first year term has expired, subject
to extension or termination as hereinafter provided.
3.2 This Lease and the terms and conditions of this Lease agreement
issued by the Lessor are made with the Lessee herein on condition that Lessee
and any lawful successor in interest to Lessee shall perform all covenants
and terms and conditions herein set forth to be performed by Lessee or its
lawful assigns including payment of royalties as herein provided. Lessor may
issue written notice of termination and cancellation of this Lease, and
forfeiture, subject to paragraph 9.1: declaring that the Leased Premises and
each and every part thereof have thereby reverted to the Lessor, including any
and all fixtures and improvements required to be left with the property upon
expiration,
AMENDMENT AGREEMENT
- -------------------
November 09 , 1992
Page 5 of 20
termination, or cancellation of this Lease.
3.3 Lessee may terminate this Lease at any time by giving Lessors
at least ninety (90) days prior written notice, together with a check in full
settlement of any royalties that are due and unpaid; upon giving such notice of
termination, Lessee shall be released of all its obligations except those
obligations which have theretofore accrued. Within Thirty (30) days after date
of termination, Lessee shall execute and record a release and quitclaim deed
releasing all of Lessee's right, title and interest in and to the Leased
Premises.
3.4 Upon the effective date of termination by Lessee, Lessor shall be
entitled to retain all funds paid to it by Lessee pursuant to this Lease.
3.5 Within sixty (60) days after termination from this Lease, Lessee
or its successor or assign will provide Lessor with a copy of all data prepared,
collected, and interpreted by or for it (including maps, drill data, assays,
analyses, geological surveys, topographic surveys, and other data pertaining to
the Leased Premises and the Leased Minerals. Lessee will provide readable copies
of all new factual geologic data and reports by February 15th of each year.
IV. CONSIDERATION
4.1 The Lessee in consideration of the granting of the rights and
privileges granted herein hereby covenants and agrees as follows:
AMENDMENT AGREEMENT
- -------------------
November 09 , 1992
Page 6 of 20
(1) $5,000.00 due June 15, 1993 and $5,000.00 annual minimum royalty
beginning on the first anniversary of this lease and thereafter minimum
$5,000.00 each anniversary until Lessee terminates its rights. The minimum
royalty of $5,000 00, will be adjusted by the Consumer Prices Index for All
Urban Consumers for U.S. City Average as published by the U.S. Department of
Labor, Bureau of Labor Statistics who is created pursuants toSec. 5(a) of Public
Law 304, 79th Congress. The average at the end of December 1992 will be the
base year and any changes in the Consumer Prices Index for All Urban Consumers
U.S. City Average for the following year ended December will determine the
percent change in the $5,000.00 for the following year. Each year becomes the
new base year to measure change from.
(2) Production Royalty: A production royalty on Leased Minerals
which shall be Two Dollars and 50 Cents per ton ($2.50/ton) of ore removed from
or mined and processed upon the Leased Property.
(3) The production royalty of $2.50/ton stated in IV (2), will be
adjusted by the Consumer Prices Index for All Urban Consumers for U.S. City
Average as published by the U.S. Department of Labor, Bureau of Labor Statistics
who is created pursuant to Sec. 5(a) of Public Law 304, 79th Congress. The
average at the end of December 1992 will be the base year and any change in the
Consumer Prices Index for All Urban Consumers for U.S. City Average for the
following year ended December will determine the percent change in the $2.50/ton
for the following year. Each year becomes the new base year to measure change
from.
A). Annual Labor:
------------
(l) To perform upon the Leased Premises the annual
AMENDMENT AGREEMENT
- -------------------
November 09 , 1992
Page 7 of 20
assessment work as set forth under the laws of the United States and the State
of Utah, and to prepare timely proof of the performance of such labor and to
record and file the same as required by law, and to furnish Lessor with a copy
thereof. Should this Lease be terminated as herein provided and the effective
date of such termination shall be ninety (90) days, or less, prior to the end
of the then current assessment year, Lessee shall nevertheless be required to
perform upon of the Leased Premises the annual labor for such assessment year
and shall prepare timely proof thereof, record the same, and furnish Lessor
with a copy of such proof as hereinafter provided. In the performance of annual
labor upon or for the benefit of the Leased Premises, Lessee shall be
entitled to perform such work upon any of the claims or upon any of the groups
of claims comprising the Leased Premises so long as such work shall qualify for
the purpose of the development of the Leased Premises as a contiguous group
pursuant to the requirements of law relating to group work on mining claims
except as herein provided.
(2) Assessment work will be completed by July 15 of each
year starting with the 1993 Assessment Year, or Lessor may do the work and
charge reasonable costs time and expenses to Lessee. Lessee will furnish to
Lessor a copy of the proof-of-labor with the County, no later than September
15th of each year.
B). PRODUCTION ROYALTY PAYMENTS:
---------------------------
(1) Production royalty shall be paid within thirty (30) days
after receipt of payment for each shipment or when otherwise due, and each
payment shall be accompanied by a statement
AMENDMENT AGREEMENT
- -------------------
November 09 , 1992
Page 8 of 20
showing the date(s) of shipment(s), quantity and value of each shipment, to whom
sold and the gross value received, and any cost deductions.
(2) Method of Production royalty payments shall be in U.S.
dollars payable by cash or valid check drawn on available funds, and shall be
deemed made when deposited at LeSsor's single depository at:
Paradise Management Co.
P.O. Box 368
Filmore, Utah 84631
Phone (801) 743-5848
Lessor may change its single depository at any time by giving written notice to
Lessee.
V. PERIODIC REPORTS
5.1 Lessee agrees to make semi-annual written reports to lessor (on
or before January 1 and July 1 each year) detailing th exploration, development
and mining work done upon the leased premises, quantity of ores, minerals or
products shipped from the Leased Premises, the identity of the buyer(s) thereof
or the place where such ores, minerals or products are stockpiled, the plans for
the Leased Premises during the next six (6) month period, and other activities
conducted or planned for the Leased Premises.
5.2 Lessee shall audit all operations upon the Leased Premises at
least annually, and furnish to Lessor a copy of such audit within thirty (30)
days after completion.
AMENDMENT AGREEMENT
- -------------------
November 09 , 1992
Page 9 of 20
VI. RIGHTS AND OBLIGATIONS OF LESSEE
6.1 The Lessee will forthwith have and is hereby granted by Lessor
the right and privilege from the date hereof and so long thereafter as this
Lease remains in force and effect of entering into and upon the Leased Premises
and the right to drill and excavate thereon and therein holes, pits, tunnels,
shafts, and other such excavations and to conduct therein and elsewhere such
surveys, exploration, investigations, sampling, milling, screenifig and other
work similar as well as dissimilar as Lessee in its sole judgment and discretion
may wish to know relating to any and all facts relative to the geology of the
Leased Premises, including but not limited to the geology of the Leased Minerals
and the mining, milling, beneficiating, and marketing thereof, together with the
right to drain water and materials and to pile overburden at places most
convenient to Lessee, and the right to dig or bore wells and use any water in or
upon said lands and the right to construct and~ place upon said lands any
and all buildings, dams, drains, machinery, roads, railroads, pipe and power
lines and other improvements that may be convenient for said purposes, all of
which improvements will become the full and complete property of the Lessor
upon termination or assignment of Lease back to Lessor, and Lessee will be under
no further obligation or liability with respect thereto except for reclamation
and except as provided in paragraph 6.7 below. Lessee will have the paramount
possession and control of the Leased Premises with regard to the Leased Mineral
rights obtained herein during and throughout the life of this Lease and shall be
entitled to conduct therein and thereon all mining, milling and beneficiation
uses and purposes reasonably incident thereto as it shall deem satisfactory
and advantageous so far as Lessee tries not to interfere with the rights of the
Federal potassium leases. All work shall be conducted by Lessee as Lessee in its
sole judgment and discretion deems best and in a good and
AMENDMENT AGREEMENT
- -------------------
November 09 , 1992
Page 10 of 20
minerlike fashion. Stockpiles and tailings covered by Lease, remain the property
of the Lessor upon surrender of Lease. Mining timbers in place shall remain
affixed as part of the Leased Premises unless released in writing to Lessee.
6.2 Lessor or his agents duly authorized in writing will have at all
reasonable times and at his own risk access to all parts of Leased Premises and
associated premises for the purposes of reasonable inspection of operations,
record keeping, and accounts to the end that Lessor might verify that the
specified royalty payments are being made properly and that operations are being
conducted in a minerlike fashion. Lessee will keep records in a businesslike
manner.
6.3 Any and all future leases, transfers, encumbrances or conveyances
of interests in the Leased Premises not covered by this Lease shall be
subordinate to and subject to the rights of Lessee, his successors, assigns
of sublessees, so long as this Lease is in force and effect.
6.4 Lessee shall pay all expenses incurred by it and shall permit no
liens to attach to Leased Premises on account of any debt for materials or
services furnished for the benefit of the Leased Premises while this Lease is in
effect.
6.5 Lessee will indemnify and forever hold harmless and defend Lessor
from any demand, claim, suit, judgment or liability resulting from the
exploratory or development activities of Lessee conducted pursuant to this
agreement. Upon request of Lessor, Lessee will furnish evidence of sufficient
workmen's compensation, liability and other insurance to cover anticipated
risks, or evidence that it is adequately self-insured for such contingencies.
AMENDMENT AGREEMENT
- -------------------
November 09, 1992
Page 11 of 20
6.6 Lessee agrees that Leased Minerals from the Leased Premises
shall not be mixed or co-mingled with minerals, ore, substances or materials
from other properties or lands except as agreed by Lessor.
6.7 In the event of the termination of this Lease by lapse of time or
otherwise, Lessee shall grade and slope and otherwise reclaim that portion of
the land being leased pursuant hereto, which was the site of actual mining
operations, in accordance with the requirements of the State and Federal
regulations then in effect and Owner may elect to assume the burden of
reclaiming the land, by notifying Lessee in writing of his intent to assume said
burden, in which event, Lessee will obtain not more than three (3) bids for
Performance of the reclamation work required by this paragraph, and will pay
over to owner a sum equal to ninety-five percent (95%) of the lowest of said
bids. Thereafter, Lessee shall be relieved from all duties, expenses or
responsibility with respect to such reclamation and Owner, simultaneously with
or prior to the receipt of said payment, shall obtain from the
appropriate-Government agencies and deliver to Lessee all documents necessary to
release Lessee from all further responsibility for the performance of such
reclamation work.
VII. PATENT OF CLAIMS
7.1 Upon request of Lessee at any time during the term of this
Lease, the Lessor agrees to undertake to obtain patent to any of the mining
claims designated by Lessee. Lessee, at its own expense, shall prepare all
documents, compile all data and comply in all respects with all applicable laws
in this endeavor, and
AMENDMENT AGREEMENT
- -------------------
November 09, 1992
Page 12 of 20
Lessor shall execute all documents required for this purpose and shall cooperate
fully with Lessee in the patent application and proceedings.
7.2 The rights of Lessor and Lessee under this Lease will extend to
any and all amended, relocated, or patented claims referred to in Exhibit A.
Lessor and Lessee agree that all amendments, relocations, or staking new cl&ims
in the claimed area, of the claims referred to in Exhibit A, will be made in the
name of Lessor. Some claims need amending and it is known hereby to the Lessee.
Any valid mining claims staked by Lessor, or his agents, within the Leased
Premises shall fall under and be a part of this Lease.
VIII. DEFAULT AND FORCE MAJEURE
8.1 If Lessee will be in default in performing any obligations
(except the timely payment of royalties), Lessee shall lose no rights unless,
within sixty (60) days following written notice from Lessor, given at the
address herein specified, specifying such failure or breach, Lessee shall fail
to make such payment or undertake to cure such default by commencement and
follow through of appropriate performance, within a reasonable amount of time.
Upon such failure, Lessormay terminate this Lease.
8.2 If Lessee shall be prevented or delayed from performing its
obligations or performing any work which it desires to perform or is performing
by reason of act of nature, strike or threat of strike, fire, flood, war, mob
violence, court order, unavoidable casualties, or any other enumeration, beyond
the
AMENDMENT AGREEMENT
- -------------------
November 09, 1992
Page 13 of 20
control of Lessee which cannot be overcome by the means normally employed in
performance and at comparable and reasonable expense, then the duration of this
Lease shall be extended for a period equal tothe period of Force Majeure and any
failure to perform obligations shall not be deemed a breach of this Lease.
Lessee agrees to use reasonable diligence to remove such causes of disability as
may occur from time to time. This paragraph shall not excuse payment or delay
payment of royalties.
IX. Lease Premises.
9.1 The parties hereto agree that during the term of this Lease, in
the event title to any of the Leased Premises is contested by any person or
persons, corporation or corporations, or governmental agencies, Lessee will, at
its own election and expense, defend the title to any of the Leased Premises
before any court of competent jurisdiction or any administrative body. Lessee
will defend any actions for damages relating to exploration, development, or
mining activities by Lessee on Leased Premises.
9.2 Lessor, upon executionof this Lease, shall furnish Lessee with
copies of all property maps possessed by Lessor on the Leased Premises and
adjacent lands.
X. TAXES AND DUTIES
10.1 Lessee agrees to pay (i) all taxes hereafter levied and assessed
upon all machinery and improvements placed by Lessee upon the Leased Premises,
(ii) taxes hereafter levied upon the Leased Premises, including taxes assessed
by reason of net annual proceeds, and (iii) occupation or severance taxes
imposed upon the mining or production of Leased Minerals from the Leased
AMENDMENT AGREEMENT
- -------------------
November 09, 1992
Page 14 of 20
Premises or any other taxes, assessments or charges resulting from Lessee
activities on Leased Premises.
10.2 Lessor agrees to promptly transmit to Lessee any notices
pertaining to taxes, assessments and charges which Lessor may receive.
10.3 Lessee, in all operations under this Lease, will comply with all
applicable State and Federal laws, including the social laws relative to
employment, safety, workmen's compensation insurance, social security,
unemployment tax and tax withholding. Lessee shall hold Lessor harmless from
claims of damage to persons or property arising from Lessee's operations under
this Lease. Lessee will comply with hazardous waste, air and water quality
requirements.
10.4 Lessee will do all reclamation work required by the Bureau
of Land Management, the State of Utah or Beaver County in a timely manner.
XI. ASSIGNMENT AND TRANSFER
11.1 Lessee can convey, assign or transfer its interest in this lease
or any part of this Lease without the prior notification and consent in writing
of the Lessor. The assignee party will, as a condition of consent to the
transfer, agree to be bound by and subject to the terms of this Lease. Any
assignee party will provided a photocopy of the executed copy of assignment and
is delivered to the other party. Overriding royalty assignments will not become
effective, even if otherwise valid without the consent in writing of the Lessor.
Lessee, its successor and assigns, may not assign or convey royalty, overriding
royalty, production payment or like interest in the Leased Premises
AMENDMENT AGREEMENT
- -------------------
November 09 , 1992
Page 15 of 20
without Lessor's prior written consent.
XII. MISCELLANEOUS
12.1 This agreement shall be governed by the laws of the State of
Utah.
12.2 Title headings are for convenience only and shall not be deemed
a part of this Lease.
12.3 This Lease and Its Exhibit contain the entire agreement between
the parties and supersedes entirely any prior understandings whether oral or
written.
12.4 If any provisions of this Lease is or becomes void or
unenforceable by Force of Law, the other provisions shall remain valid and
enforceable.
12.5 Lessor's and Lessee's proper address shall be the following,
which either may change by giving written notice to the other.
Don W. Fullmer
P.O. Box 268
800 North Main
Filmore, Utah 84631
Daniel H. Engh, Dennis S. Engh
2340 East Germania Circle
Sandy, Utah 84093-1174
12.6 The failure to enforce at any time any provisions of this Lease,
shall in no way be construed to be a waiver of such provisions, or to affect
validity of the Lease.
12.7 This Lease shall be binding upon and inure to the
AMENDMENT AGREEMENT
- -------------------
November 09, 1992
Page 16 of 20
benefit of the successors and permitted assigns of the parties.
12.8 A Memorandum of this Lease may be filed by either party.
12.9 Lessee will diligently explore and conduct operations on or
near Leased Premises throughout the term of this Lease in a manner reasonably
calculated to advance the production of minerals from Leased Premises.
IN WITNESS WHEREOF, this Lease has been executed and delivered by
Lessor to Lessee as of the day and year first above written.
/s/Don W. Fullmer
- -------------------------------
Don W. Fullmer
LESSOR
/s/Daniel H. Engh /s/Dennis S. Engh
- -------------------------------- ----------------------------------
Daniel H. Engh Dennis S. Engh
LESSEE LESSEE
AMENDMENT AGREEMENT
- -------------------
November 09, 1992
Page 17 of 20
ACKNOWLEDGEMENT
STATE OF UTAH
SS.
COUNTY OF Millard
On this 9th day of November, 1992, before me personally appeared DON W.
FULLMER to me known to be the person described in and who executed the foregoing
instrument and acknowledged that he executed the same as a free act and deed.
Given under my hand and seal this 9th day of November, 1992.
My Commission Expires October 11, 1994.
----------------------------------
ACKNOWLEDGEMENT
STATE OF UTAH
SS.
COUNTY OF Salt Lake
On this 9th day of November, 1992, before me personally appeared DANIEL H.
ENGH to me known to be the person described in and who executed the foregoing
instrument and acknowledged that he executed the same as a free act and deed.
Given under my hand and seal this 9th day of November, 1992.
My Commission Expires April 15, 1995.
----------------------------------
AMENDMENT AGREEMENT
- -------------------
November 09, 1992
Page 18 of 20
ACKNOWLEDGMENT
STATE OF UTAH
SS.
COUNTY OF Salt Lake
On this 9th day of November, 1992, before me personally appeared DENNIS S.
ENGH to me known to be the person described in and who executed the foregoing
instrument and acknowledged that he executed the same as a free act and deed.
Given under my hand and seal this 9th day of November, 1992.
My Commission Expires April 15, 1995.
----------------------------------
AMENDMENT AGREEMENT
- -------------------
November 09, 1992
Page 19 of 20
EXHIBIT A
To the Mining Lease Agreement
Between Don W. Fullmer, and Daniel H. Enqh, Dennis S. Enqh.
-------------- ------------------------------
Dated the 9th day of November, 1992.
The Property consists of Lode Claims and Placer claims Plus,
all other claims located in Townships 29 South Range 13 West and
Township 29 South 14 West Salt Lake Medrian, Beaver County, Utah which
Owner has claim to in this area.
CLAIM NAME DESCRIPTION UMC NUMBER
- --------------- ------------------------------------------ ----------
Julie White #1 NW 1/4 SEC. 9, TWNS. 29 SO. R-13. (PLACER) 303016
Julie White #2 SW 1/4 SEC. 9, TWNS. 29 SO. R-13. (PLACER) 303017
Julie White #3 NE 1/4 SEC. 8, TWNS. 29 SO. K-13. (PLACER) 303018
Julie White #4 SE 1/4 SEC. 8, TWNS. 29 SO. R-13. (PLACER) 303019
Julie White #5 NW 1/4 SEC. 8, TWNS. 29 SO. R-13. (PLACER) 303020
Julie White #6 NE 1/4 SEC. 7, TWNS. 29 SO. R-13. (PLACER) 303021
Julie White #7 NW 1/4 SEC. 7, TWNS. 29 SO. R-13. (PLACER) 303022
Julie White #8 NE 1/4 SEC. 12,TWNS. 29 SO. R-14. (PLACER) 303023
Julie White #9 SE 1/4 SEC. 1, TWNS. 29 SO. R-14. (PLACER) 303024
(LODES CLAIMS)
--------------------
Julie White #ll NE 1/4 SEC. 7 & NW 1/4 SEC. 8,TWNS. 29 SO. R-13 W 302980
Julie White #12 NE 1/4 SEC. 7 & NW 1/4 SEC. 8,TWNS. 29 SO. R-13 W 302981
Julie White #l3 NW 1/4 SEC. 8, TWNS. 29 SO. R-13 W. 302982
Julie White #14 NW 1/4 % 1/4 NE 1/4 SEC. 8, TWNS. 29 SO. R-13 W. 302983
Julie White #15 NW 1/4 SEC. 8. TWNS. 29 SO. R-13 W. 302984
Julie White #16 NW 1/4 & NE 1/4 SEC. 8, TWNS. 29 SO. R-13 W. 302985
Julie White #17 NE 1/4 SEC. 8, TWNS. 29 SO. R-13 W. 302986
Julie White #18 NE 1/4 SEC. 8, TWNS. 29 SO. R-13 W. 302987
Julie White #19 NE 1/4 SEC. 8, TWNS. 29 SO. R-13 W. 302988
Julie White #20 NE & NW 1/4 SEC. 8, TWNS. 29 SO. R-13 W. 302989
Julie White #21 NE 1/4 SEC. 8, TWNS. 29 SO. R-13 W. 302990
Julie White #22 NE & SE 1/4 SEC. 8, TWNS. 29 SO. R-13 W. 302991
Situated in Township 29 South, Range 13 West, Township 29 South,
Range 14, Salt Lake Meridian, Beaver County, Utah.
AMENDMENT AGREEMENT
- -------------------
November 09, 1992
Page 20 of 20
CLAIM NAME UMC NUMBER
- --------------------- ----------
Julie White #23 326947
Julie White #24 326948
Julie White #25 326949
Julie White #26 326950
Julie White #27 326951
Julie White #28 326952
Julie White #29 326953
Julie White #30 326954
Julie White #31 326955
Julie White #32 326956
Julie White #33 326957
Julie White #34 326958
Julie White #35 326959
Julie White #36 326960
Julie White #37 326961
Julie White #38 326962
Situated in Township 29 South, Range 13 West, Salt Lake Meridian,
Beaver County, Utah.
ADDENDUM TO MINING LEASE
This Addendum to Mining Lease is made tlxis lSth day of March, 2000 by and
between Don W. Fullmer and Areola B. Fullmer, his wife. 905 North Main Street,
Fillmore, Utah 94631. hereinafter referred to as "Lessor;" and Daniel H. Engh
and Dennis S. Engh whose address is 2340 East Oennania Circle. Sandy, Utah
84093-1174, hereinafter referred to as "Lessee." In consideration: of bringing
minimum royalty payments up to date through paynents in the amount of
$24.976.21, the receipt and adequacy of which is hereby acknowledged, Lessor
hereby acknowledges that file items of default contained in the Notice dated
December 31, 1999. incorporated by this reference, are hereby satisfied in full
or waived as to past acts only.
In consideration of the foregoing funds paid to Lessor. Lessor also
ratifies the following Mining Lease No. 1 - dated November 9, 1992 with Daniel
H. Engh and Dennis S. Engh as being in full force and effect, without any
modification of the lease or any waiver of the lease term as to future
performance except at Paragraph 3.1 of the Mining Lease, the primary term and
the requirement to obtain commercial production are extended for five (5) years
hereof.
The leases and claims covered thereby are more particularly described on
the attached Exhibit A, incorporated by this reference.
This Addendum shall be effective on the date above.
/s/Don W. Fullmer /s/Daniel H. Engh
- --------------------------------- ----------------------------------
Don W. Fullmer, (Lessor) Daniel H. Engh, (Lessee)
/s/Arnola B. Fullmer /s/Dennis S. Engh
- --------------------------------- ----------------------------------
Arnola B. Fullmer (Lessor) Dennis S. Engh, (Lessee)
To The ADDENDUM TO MINING LEASE
Page 2
STATE OF UTAH
SS
County of Millard
On this 15th day of March, 2000, personally appeared before me Don W.
Fullmer and Arnola B. Fullmer, his wife, who acknowledged to me
that they executed the foregoing Addendum to Mining Lease.
/s/Barbara-Ann Iverson
----------------------------------
NOTARY PUBLIC
Residing at: 390 S. 100E
---------------------
Fillmore, UT
My Commission Expires:
- ---------------------------------
STATE OF UTAH
SS
COUNTY OF Millard
On this 15th day of March, 2000, personally appeared before me Daniel H.
Engh and Dennis S. Engh, who acknowledge to me that they executed the foregoing
Addendum to Mining Lease.
/s/Barbara-Anne Iverson
----------------------------------
NOTARY PUBLIC
Residing At: 390 S. 100E
----------------------
Fillmore, UT
My Commission Expires:
- ---------------------------------
To The ADDENDUM TO MINING LEASE
Page 3
Exhibit A
Mining Lease #1
- ---------------
With respect to the Properties, Daniel H. Engh and Dennis S. Engh have a
AMENDMENT AGREEMENT Dated November 9th 1992 by and between Don W. Fullmer
Lessor) and Daniel H. Engh, Dennis S. Engh (Lessee). All terms and conditions of
the November 9, 1992. AMENDMENT AGREEMENT will be a part of this Letter
Agreement. Said claims of this AMENDMENT AGREEMENT are described below:
The Property consists of Lode Claims and Placer claims Plus, all other
claims located in Townships 29 South Range 13 West and Township 29 South 14 West
Salt Lake Medrian. Beaver County, Utah which Owner has claim to in this area.
CLAIM NAME DESCRIPTION UMC NUMBER
- ---------- ------------ ----------
Julia White #1 NW 1/4 SEC. 9, TWNS. 29 SO. R-13. (PLACER) 303016
Julia White #2 SW 1/4 SEC. 9, TWNS. 29 SO. R-13. (PLACER) 303017
Julia White #3 NE 1/4 SEC. 8, TWNS. 29 SO. R-13. (PLACER) 303018
Julie White #4 SE 1/4 SEC. 8, TWNS. 29 SO. R-13. (PLACER) 303019
Julia White #5 NW 1/4 SEC. 6, TWNS. 29 SO. R-13. (PLACER) 303020
Julia White #6 NE 1/4 SEC. 7, TWNS. 29 SO. R-13. (PLACER) 303021
Julia White #7 NW 1/4 SEC. 7, TWNS. 29 SO. R-13. (PLACER) 303022
Julia White #8 NE 1/4 SEC. 12,TWNS. 29 SO. R-14. (PLACER) 303023
Julia White #9 SE 1/4 SEC. 1, TWNS. 29 SO. R-14. (PLACER) 303024
(LODES CLAIMS)
--------------------
Julia White #11 NE 1/4 SEC. 7 & NW 1/4 SEC. 8, TWNS. 29 SO. R-13 W 302980
Julia White #12 NE 1/4 SEC. 7 & NW 1/4 SEC. 8, TWNS. 29 SO. R-13 W 302981
Julia Whi~e #13 NW 1/4 SEC. 8, TWNS. 29 SO. R-13 W. 302982
Julia White #14 NW 1/4 & NE 1/4 SEC. 8, TWONS. 29 SO. R-13 W. 302983
Julia White #15 NW 1/4 SEC. 8, TWNS. 29 SO. R-13 W. 302984
Juli~ White #16 NW 1/4 & NE 1/4 SEC. 8, TWONS. 29 SO. R-13 W. 302985
Juli~ White #17 NE 1/4 SEC. 8, TOWNS. 29 SO. R-13 W. 302986
Julia White #18 NE 1/4 SEC.8, TOWNS. 29 SO. R-13 W. 302987
Julia White #l9 NE 1/4 SEC. 8, TWNS. 29 SO. R-13 W. 302988
Julia.White #20 NE & NW 1/4 SEC. 8, TWNS. 29 SO. R-13 W. 302989
Julia White #21 NE 1/4 SEC. 8, TWNS. 29 SO. R-13 W. 302990
Julia white #22 NE & SE 1/4 SEC. 8, TWNS. 29 SO. R-13 W. 302991
Situated in Township 29 South, Range 13 West, Township 29 South, Range 14,
Salt Lake Meridian, Beaver County, Utah.
Exhibit A
Mining Lease Blawn Wash
- -----------------------
To Mining Lease Agreement dated as of December 31st, 1999, by and among Daniel
H. Engh, Connie L. Engh, Dennis S. Engh, Judy A. Engh, Darin Engh, Holly Engh
(a.k.a. Holly Kingdon) and Utah Clay Technology, Inc.
PART 1
- ------
With respect to the Properties, Daniel H. Engh and Dennis S. Engh are in
control and ownership of Engh Family Lode and placer claims described below:
The Following Property consists of Placer Claims plus, all other claims
located in Townships 29 South Range 13 & 14 West Salt Lake Medrian, Beaver
County, Utah which Owner has claim to in this area.
The Property consists of Lode Claims and Placer claims Plus, all other
claims located in Townships 29 South Range 15 West and Township 30 South 15 West
Salt Lake Medrian, Beaver County, Utah which Owner has claim to in this area.
Claim Name UMC Nos.
---------- --------
Meadow Nos. 15-20 305325-305330
Brooke Nos. 30-33 305331-305334
Blue Nos. 20-46 310617-310643
Blue Nos. 47-62 312037-312052
Blue Nos. 63-64 313298-313299
Blue Nos. 65-66 312053-312054
Blue Nos. 67-68 313300-313301
Blue Nos. 69-70 312055-312056
Blue Nos. 71-76 313302-313307
Page 1
CLAIM NAME BOOK PAGE UMC NUMBER
---------- ---- ---- ----------
BLUE #93 238 366 313308
BLUE #94 238 367 313309
BLUE #95 238 368 313310
BLUE #96 238 369 313311
BLUE #97 238 370 313312
BLUE #98 238 371 313313
BLUE #99 238 372 313314
BLUE #100 238 373 313315
CLAIM NAME BOOK PAGE UMC NUMBER
---------- ---- ---- ----------
ENGH #1 252 654 335833
ENGH #2 252 765 335962
(AMENDED) 253 119
ENGH #3 252 766 335963
(AMENDED) 253 120
ENGH #4 252 767 335964
(AMENDED) 253 121
ENGH #5 252 768 335965
(AMENDED) 253 122
ENGH #6 252 769 335966
(AMENDED) 253 123
CLAIM NAME BOOK PAGE UMC NUMBER
---------- ---- ---- ----------
ENGH #7 252 770 335967
(AMENDED) 253 124
ENGH #8 252 771 335968
(AMENDED) 253 125
ENGH #9 252 772 335969
(AMENDED) 253 126
ENGH #10 252 773 335970
(AMENDED) 253 127
ENGH #11 252 774 335971
(AMENDED) 253 128
ENGH #12 252 775 335972
(AMENDED) 253 129
ENGH #13 252 776 335973
Page 2
(AMENDED) 253 130
ENGH #14 252 777 335974
(AMENDED) 253 131
ENGH #15 252 778 335975
(AMENDED) 253 132
ENGH #16 252 779 335976
(AMENDED) 253 133
Situated in Township 29 South, Range 15 West, Salt Lake Meridian, Beaver
County, Utah.
NAME TYPE OF
OF CLAIM CLAIM FILING DATE BOOK & PAGE UMC NUMBER
- --------- -------- ----------- ----------- ----------
BLUE #201 (PLACER) 07/22/88 238 374 313316
BLUE #202 (PLACER) 07/22/88 238 375 313317
BLUE #203 (PLACER) 07/22/88 238 376 313318
BLUE #204 (PLACER) 07/22/88 238 377 313319
BLUE #205 (PLACER) 07/22/88 238 378 313320
BLUE #206 (PLACER) 07/22/88 238 379 313321
BLUE #207 (PLACER) 07/22/88 238 380 313322
BLUE #208 (PLACER) 07/22/88 238 381 313323
BLUE #209 (PLACER) 07/22/88 238 382 313324
BLUE #210 (PLACER) 07/22/88 238 383 313325
BLUE #211 (PLACER) 07/22/88 238 384 313326
BLUE #212 (PLACER) 07/22/88 238 385 313327
BLUE #213 (PLACER) 07/22/88 238 386 313328
BLUE #214 (PLACER) 07/22/88 238 387 313329
BLUE #215 (PLACER) 07/22/88 238 388 313330
BLUE #216 (PLACER) 07/22/88 238 389 313331
BLUE #217 (PLACER) 07/22/88 238 390 313332
BLUE #218 (PLACER) 07/22/88 238 391 313333
BLUE #219 (PLACER) 07/22/88 238 392 313334
BLUE #220 (PLACER) 07/22/88 238 393 313335
The above claims are Located and Recorded in Beaver County, Utah.
This mining lease contains a Reserved Royalty of 3% on all ores, minerals or
Products (called "Production") mined and removed from the leased Premises. Said
Royalty shall be calculated based upon the gross value of the production.
Additionally, the above claims and the below mineral leases have a minimum
royalty of $5,000.00 and or a production royalty of $2.50/ton which is adjusted
by the Consumer Prices Index for all Urban Consumers for U.S. City average as
published by the U.S. Department of Labor Bureau of Labor Statistics.
Additionally, the property includes subleases to the following Sate of Uah
mineral leases. The State of Utah mineral leases have a 5 1/2% Royalty.
Page 3
A Sub-Lease to the following State of Utah mineral Leases:
Clay lease ML-43616 (ALL)
Clay lease ML-43648 (All)
Industrial Sands lease ML-43649 (All)
Industrial Sands lease ML-43650 (ALL)
Metalliferous Minerals lease ML-43651 (All)
Metalliferous Minerals lease ML-43652 (All)
The State mineral leases will be subject to the same terms and conditions of
this lease and approval of sub-lease assignment from the State of Utah.
End of Exhibit A.
Exhibit A
Mining Lease White Mountain
To Mining Lease Agreement dated as of March 1st, 1994, by and among Daniel H.
Engh, Connie L. Engh, Dennis S. Engh, Judy A. Engh, Darin Engh, Holly Engh
(a.k.a. Holly Kingdon) and Utah Clay Technology, Inc.
PART 1
- ------
With respect to the Properties, Daniel H. Engh and Dennis S. Engh are in
control and ownership of Engh Family placer claims described below:
The Following Property consists of Placer Claims plus, all other claims
located in Townships 29 South Range 13 & 14 West Salt Lake Medrian, Beaver
County, Utah which Owner has claim to in this area.
NAME TYPE OF
OF CLAIM CLAIM FILING DATE BOOK & PAGE UMC NUMBER
- --------- -------- ----------- ----------- ----------
BLUE #201 (PLACER) 07/22/88 238 374 313316
BLUE #202 (PLACER) 07/22/88 238 375 313317
BLUE #203 (PLACER) 07/22/88 238 376 313318
BLUE #204 (PLACER) 07/22/88 238 377 313319
BLUE #205 (PLACER) 07/22/88 238 378 313320
BLUE #206 (PLACER) 07/22/88 238 379 313321
BLUE #207 (PLACER) 07/22/88 238 380 313322
BLUE #208 (PLACER) 07/22/88 238 381 313323
BLUE #209 (PLACER) 07/22/88 238 382 313324
BLUE #210 (PLACER) 07/22/88 238 383 313325
BLUE #211 (PLACER) 07/22/88 238 384 313326
BLUE #212 (PLACER) 07/22/88 238 385 313327
BLUE #213 (PLACER) 07/22/88 238 386 313328
BLUE #214 (PLACER) 07/22/88 238 387 313329
BLUE #215 (PLACER) 07/22/88 238 388 313330
BLUE #216 (PLACER) 07/22/88 238 389 313331
BLUE #217 (PLACER) 07/22/88 238 390 313332
BLUE #218 (PLACER) 07/22/88 238 391 313333
BLUE #219 (PLACER) 07/22/88 238 392 313334
BLUE #220 (PLACER) 07/22/88 238 393 313335
The above claims are Located and Recorded in Beaver County, Utah.
Page 1
This mining lease contains a Reserved Royalty of 3% on all ores, minerals or
Products (called "Production") mined and removed from the leased Premises. Said
Royalty shall be calculated based upon the gross value of the production.
Additionally, the below Julie White lode or placer claims have a minimum royalty
of $5,000.00 and or a production royalty of $2.50/ton which is adjusted by the
Consumer Prices Index for all Urban Consumers for U.S. City average as published
by the U.S. Department of Labor Bureau of Labor Statistics.
With respect to the Properties, Daniel H. Engh and Dennis S. Engh have a mining
lease Dated November 9th 1992 by and between Don W. Fullmer (Lessor) and Daniel
H. Engh, Dennis S. Engh (Lessee). All terms and conditions of the November 9,
1992 mining lease will be a part of this mining lease. Said claims of this
mining lease are described below:
The Property consists of Lode Claims and Placer claims Plus, all other
claims located in Townships 29 South Range 13 West and Township 29 South 14 West
Salt Lake Medrian, Beaver County, Utah which Owner has claim to in this area.
CLAIM NAME DESCRIPTION UMC NUMBER
- ---------- ----------- ----------
Julie White #1 NW1/4SEC. 9, TWNS. 29 SO. R-13. (PLACER) 303016
Julie White #2 SW1/4SEC. 9, TWNS. 29 SO. R-13. (PLACER) 303017
Julie White #3 NE1/4SEC. 8, TWNS. 29 SO. R-13. (PLACER) 303018
Julie White #4 SE1/4SEC. 8, TWNS. 29 SO. R-13. (PLACER) 303019
Julie White #5 NW1/4SEC. 8, TWNS. 29 SO. R-13. (PLACER) 303020
Julie White #6 NE1/4SEC. 7, TWNS. 29 SO. R-13. (PLACER) 303021
Julie White #7 NW1/4SEC. 7, TWNS. 29 SO. R-13. (PLACER) 303022
Julie White #8 NE1/4SEC. 12,TWNS. 29 SO. R-14. (PLACER) 303023
Julie White #9 SE1/4SEC. 1, TWNS. 29 SO. R-14. (PLACER) 303024
(LODES CLAIMS)
--------------
Julie White #11 NE1/4SEC. 7 & NW1/4SEC. 8,TWNS. 29 SO. R-13 W 302980
Julie White #12 NE1/4SEC. 7 & NW1/4SEC. 8,TWNS. 29 SO. R-13 W 302981
Julie White #13 NW1/4SEC. 8, TWNS. 29 SO. R-13 W. 302982
Julie White #14 NW1/4& NE1/4SEC. 8, TWNS. 29 SO. R-13 W. 302983
Julie White #15 NW1/4SEC. 8. TWNS. 29 SO. R-13 W. 302984
Julie White #16 NW1/4& NE1/4SEC. 8, TWNS. 29 SO. R-13 W. 302985
Julie White #17 NE1/4SEC. 8, TWNS. 29 SO. R-13 W. 302986
Julie White #18 NE1/4SEC. 8, TWNS. 29 SO. R-13 W. 302987
Julie White #19 NE1/4SEC. 8, TWNS. 29 SO. R-13 W. 302988
Julie White #20 NE & NW1/4SEC. 8, TWNS. 29 SO. R-13 W. 302989
Julie White #21 NE1/4SEC. 8, TWNS. 29 SO. R-13 W. 302990
Julie White #22 NE & SE1/4SEC. 8, TWNS. 29 SO. R-13 W. 302991
Situated in Township 29 South, Range 13 West, Township 29 South, Range
14, Salt Lake Meridian, Beaver County, Utah.
End of Exhibit A.
ADDENDUM TO MINING LEASE
(WHITE MOUNTAIN)
This Addendum to the MINING LEASE, herein referred to as "Lease", made
and entered into the 27th day of March, 2000, by and between DANIEL H. ENGH,
CONNIE L. ENGH, at 2340 East Germania Circle, Sandy, Utah 84093-1174, DENNIS S.
ENGH, JUDY A. ENGH, at 4532 Briarcreek Drive, Salt Lake City, Utah 84124, DARIN
ENGH, at 437 Elise Street, Sandy, Utah 84070, HOLLY ENGH (a.k.a. HOLLY KINGDON)
at 9064 Cheyenne Way, Park City, Utah 84060 hereinafter referred to as "Owner or
Lessor", and UTAH CLAY TECHNOLOGY INC., a Utah corporation, having an address at
3985 South 2000 East, Salt Lake City, Utah 84124 (hereinafter designated as
"Lessee"):
In consideration, of providing copies of testing, analysis and
geological mapping of the White Mountain claims describe in Exhibit A and the
acknowledgment of the payments due the Lessor from the starting date of March
1st, 1994, the receipt of information and acknowledgment of payments due is
adequacy of which is hereby acknowledged.
In consideration of the foregoing acknowledgment to Lessor, Lessor also
ratifies the following Mining Lease for the White Mountain claims described in
Exhibit A - dated March 1st, 1994 with UTAH CLAY TECHNOLOGY INC., as being in
full force and effect, without any modification of the lease or any waiver of
the lease terms as to future performance, except at Paragraph 3.5 of the Mining
Lease, the primary term and the requirement to obtain commercial production are
extended for four (4) years from the date hereof.
The leases and claims covered thereby are more particularly described on
the attached Exhibit A, incorporated by this reference.
To The ADDENDUM TO MINING LEASE (WHITE MOUNTAIN)
Page 2 of 5
IN WITNESS WHEREOF, this Addendum To Mining Lease has been executed and
delivered by Lessor to Lessee as of the day and year first above written.
/s/ Daniel H. Engh
- ---------------------------------
Daniel H. Engh
LESSOR
/s/ Connie L. Engh
- ---------------------------------
Connie L. Engh
LESSOR
/s/ Dennis S. Engn
- ---------------------------------
Dennis S. Engh
LESSOR
/s/ Judy A. Engh
- ---------------------------------
Judy A. Engh
LESSOR
/s/ Darin Engn
- ---------------------------------
Darin Engh
LESSOR
/s/ Holly Engh
- ---------------------------------
Holly Engh (a.k.a. Holly Kingdon)
LESSOR
To The ADDENDUM TO MINING LEASE (WHITE MOUNTAIN)
Page 3 of 5
UTAH CLAY TECHNOLOGY, INC.
BY:/s/ Dennis S. Engh
------------------------------
President
LESSEE
To The ADDENDUM TO MINING LEASE (WHITE MOUNTAIN)
Page 4 of 5
Exhibit A
Mining Lease White Mountain
- ---------------------------
To Mining Lease Agreement dated as of March 1st, 1994, by and among Daniel H.
Engh, Connie L. Engh, Dennis S. Engh, Judy A. Engh, Darin Engh, Holly Engh
(a.k.a. Holly Kingdon) and Utah Clay Technology, Inc.
PART 1
- ------
With respect to the Properties, Daniel H. Engh and Dennis S. Engh are in
control and ownership of Engh Family placer claims described below:
The Following Property consists of Placer Claims plus, all other claims
located in Townships 29 South Range 13 & 14 West Salt Lake Medrian, Beaver
County, Utah which Owner has claim to in this area.
NAME TYPE OF
OF CLAIM CLAIM FILING DATE BOOK & PAGE UMC NUMBER
- --------- ------- ----------- ----------- ----------
BLUE #201 (PLACER) 07/22/88 238 374 313316
BLUE #202 (PLACER) 07/22/88 238 375 313317
BLUE #203 (PLACER) 07/22/88 238 376 313318
BLUE #204 (PLACER) 07/22/88 238 377 313319
BLUE #205 (PLACER) 07/22/88 238 378 313320
BLUE #206 (PLACER) 07/22/88 238 379 313321
BLUE #207 (PLACER) 07/22/88 238 380 313322
BLUE #208 (PLACER) 07/22/88 238 381 313323
BLUE #209 (PLACER) 07/22/88 238 382 313324
BLUE #210 (PLACER) 07/22/88 238 383 313325
BLUE #211 (PLACER) 07/22/88 238 384 313326
BLUE #212 (PLACER) 07/22/88 238 385 313327
BLUE #213 (PLACER) 07/22/88 238 386 313328
BLUE #214 (PLACER) 07/22/88 238 387 313329
BLUE #215 (PLACER) 07/22/88 238 388 313330
BLUE #216 (PLACER) 07/22/88 238 389 313331
BLUE #217 (PLACER) 07/22/88 238 390 313332
BLUE #218 (PLACER) 07/22/88 238 391 313333
BLUE #219 (PLACER) 07/22/88 238 392 313334
BLUE #220 (PLACER) 07/22/88 238 393 313335
The above claims are Located and Recorded in Beaver County, Utah.
To The ADDENDUM TO MINING LEASE (WHITE MOUNTAIN)
Page 5 of 5
This mining lease contains a Reserved Royalty of 3% on all ores, minerals or
Products (called "Production") mined and removed from the leased Premises. Said
Royalty shall be calculated based upon the gross value of the production.
Additionally, the below Julie White lode or placer claims have a minimum royalty
of $5,000.00 and or a production royalty of $2.50/ton which is adjusted by the
Consumer Prices Index for all Urban Consumers for U.S. City average as published
by the U.S. Department of Labor Bureau of Labor Statistics.
With respect to the Properties, Daniel H. Engh and Dennis S. Engh have a mining
lease Dated November 9th 1992 by and between Don W. Fullmer (Lessor) and Daniel
H. Engh, Dennis S. Engh (Lessee). All terms and conditions of the November 9,
1992 mining lease will be a part of this mining lease. Said claims of this
mining lease are described below:
The Property consists of Lode Claims and Placer claims Plus, all other
claims located in Townships 29 South Range 13 West and Township 29 South 14 West
Salt Lake Medrian, Beaver County, Utah which Owner has claim to in this area.
CLAIM NAME DESCRIPTION UMC NUMBER
- ---------- ----------- ----------
Julie White #1 NW1/4SEC. 9, TWNS. 29 SO. R-13. (PLACER) 303016
Julie White #2 SW1/4SEC. 9, TWNS. 29 SO. R-13. (PLACER) 303017
Julie White #3 NE1/4SEC. 8, TWNS. 29 SO. R-13. (PLACER) 303018
Julie White #4 SE1/4SEC. 8, TWNS. 29 SO. R-13. (PLACER) 303019
Julie White #5 NW1/4SEC. 8, TWNS. 29 SO. R-13. (PLACER) 303020
Julie White #6 NE1/4SEC. 7, TWNS. 29 SO. R-13. (PLACER) 303021
Julie White #7 NW1/4SEC. 7, TWNS. 29 SO. R-13. (PLACER) 303022
Julie White #8 NE1/4SEC. 12,TWNS. 29 SO. R-14. (PLACER) 303023
Julie White #9 SE1/4SEC. 1, TWNS. 29 SO. R-14. (PLACER) 303024
(LODES CLAIMS)
Julie White #11 NE1/4SEC. 7 & NW1/4SEC. 8,TWNS. 29 SO. R-13 W 302980
Julie White #12 NE1/4SEC. 7 & NW1/4SEC. 8,TWNS. 29 SO. R-13 W 302981
Julie White #13 NW1/4SEC. 8, TWNS. 29 SO. R-13 W. 302982
Julie White #14 NW1/4& NE1/4SEC. 8, TWNS. 29 SO. R-13 W. 302983
Julie White #15 NW1/4SEC. 8. TWNS. 29 SO. R-13 W. 302984
Julie White #16 NW1/4& NE1/4SEC. 8, TWNS. 29 SO. R-13 W. 302985
Julie White #17 NE1/4SEC. 8, TWNS. 29 SO. R-13 W. 302986
Julie White #18 NE1/4SEC. 8, TWNS. 29 SO. R-13 W. 302987
Julie White #19 NE1/4SEC. 8, TWNS. 29 SO. R-13 W. 302988
Julie White #20 NE & NW1/4SEC. 8, TWNS. 29 SO. R-13 W. 302989
Julie White #21 NE1/4SEC. 8, TWNS. 29 SO. R-13 W. 302990
Julie White #22 NE & SE1/4SEC. 8, TWNS. 29 SO. R-13 W. 302991
To The ADDENDUM TO MINING LEASE (WHITE MOUNTAIN)
Page 6 of 5
Situated in Township 29 South, Range 13 West, Township 29 South, Range
14, Salt Lake Meridian, Beaver County, Utah.
End of Exhibit A.