ASSIGNMENT OF INTEREST IN JOINT VENTURE AGREEMENT
THIS AGREEMENT
is entered into this 3rd day of March, 2005, by and
between Caldera Partners Limited
Partnership, a Washington limited partnership
("Caldera"), and LKA International, Inc., a
Delaware corporation ("LKA").
WHEREAS, in
December, 1982, the Company's wholly-owned subsidiary, LKA
International, Inc., a Nevada corporation
("LKA Nevada"), entered into a Joint
Venture Agreement with Lake City Mines,
Inc., a Colorado corporation, by which
LKA Nevada acquired a 51% interest in the
proceeds and benefits derived from
the Ute-Ule and Golden Wonder mining
properties located in Lake City, Colorado
(collectively, the "Properties");
WHEREAS,
immediately after the execution of the Joint Venture Agreement,
LKA Nevada assigned to Caldera 90% of its
interest in the Properties
thereunder, such that Caldera currently
owns a 45.9% interest in the proceeds
and benefits derived from the
Properties;
WHEREAS, on
December 15, 1993, LKA Nevada acquired all of Lake City
Mines' interests in the Properties pursuant
to a Sheriff's Deed, with the
result that LKA Nevada currently owns a
54.1% interest in the Properties and
Caldera currently owns a 45.9% interest
therein;
WHEREAS, the
holders of approximately 67.4% of the partnership interests
in Caldera have voted in favor of Caldera's
assignment of all of its interest
in the Properties to LKA in consideration
of LKA's issuance of 6,434,042
"unregistered" and "restricted" shares of
its common stock to Caldera ; and
WHEREAS, such
vote is sufficient under its Limited Partnership Agreement
to enable Caldera to proceed with the
proposed assignment;
NOW, THEREFORE,
the parties hereby agree as follows:
1. Assignment of Interest in
Golden Wonder Property. Caldera hereby
assigns all of its interest in the proceeds
and benefits derived from the
Properties to LKA.
2. Issuance of LKA common
stock. In
consideration of the above
assignment, LKA hereby agrees to issue to
Caldera 6,434,042 "unregistered" and
"restricted" shares of its common stock
(the "Common Stock").
3. Representations and
Warranties of Caldera.
Caldera hereby
represents and warrants as follows:
A. It is a
limited partnership duly organized and in good
standing in the State of Washington, has full power and authority
to
execute and deliver this Agreement, without qualification, and
has
obtained all approvals and consents that are required for it to
enter into this Agreement;
B. Neither the
execution and delivery of this Agreement nor the
consummation or performance of any of the transactions
contemplated
hereby will, directly or indirectly (with or without notice or
lapse
of time):
(i) Breach any provision of any of its
governing documents;
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(ii) Breach or
give any governmental body or other entity the right to
challenge
the contemplated transactions or to exercise any remedy or
obtain any relief under any legal
requirement or any order to which
Caldera or
either of the Properties may be subject;
(iii)
contravene, conflict with or result in a violation or breach of
any of the
terms or requirements of, or give any governmental body the
right to
revoke, withdraw, suspend, cancel, terminate or modify, any
governmental authorization that is
held by Caldera or that otherwise
relates to
the Properties;
(iv) Breach any
provision of, or give any entity the right to declare a
default or
exercise any remedy under, or to accelerate the maturity or
performance of, or payment under, or to cancel, terminate or
modify, any
contract
by which Caldera or either of the Properties is or may become
bound;
or
(v) result in the imposition or
creation of any encumbrance upon or with
respect to
either of the Properties.
C. Caldera is
not required to give any notice to or obtain any
consent from any entity in connection with the execution and
delivery of this Agreement or the consummation or performance of
any
of the transactions contemplated hereby.
D. Caldera's
interest in the Properties is free and clear of any
encumbrances.
E. There is no
pending or, to Caldera's knowledge, threatened
proceed
