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EXHIBIT 10.8
JOINT VENTURE AGREEMENT
THIS AGREEMENT mired into this the 11th day of May, 2004, by and
between
U.S. Canadian Minerals, Inc. ("U.S. Canadian"), of Las Vegas,
state of Nevada,
and El Capitan Precious Metals, Inc. (El Capitan), of Englewood,
state of
Nevada.
WITNESSETH:
WHEREAS, (U.S. Canadian) is in the business of
Acquiring and Funding Mining Property , and
WHEREAS, (El Capitan) is in the business of:
Operating Mining Property , and
WHEREAS, both parties desire to work together for the purpose
of
Developing the COD Mining Claim
NOW THEREFORE,, for good and valuable consideration, receipt of
which is
hereby acknowledged, and the mutual promises and benefits to be
derived by the
parties, they do hereby agree to the following terms and
conditions:
ARTICLE I
FORMATION
SECTION 1.1 Formation and Name.
1.1.1 FORMATION. The Joint Venturers hereby confirm that they
have
formed a Joint Venture for the purposes and scope set forth in
this agreement.
1.1.2 NAME. The name of the Joint Venture is and shall continue
to be
CanEll ("CanEl"). The business and affairs of the Joint Venture
shall be
conducted solely under that name and under no other unless
modified in writing
by addendum to this agreement:
SECTION 1.2 PURPOSES and Scope of the Joint Venture.
The purpose of the Joint Venture is to:
Explore, operate and otherwise utilize the COD Mining Claim.
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SECTION 1.3 PRINCIPAL Place of Business.
The principal place of business of the Joint Venture shall be
Initially
located at:
4955 S. Durango, #216, Las Vegas, NV 89113.
SECTION 1.4 TERM.
The term of the Joint Venture shall commence on the first above
written
day, and shall continue, unless sooner terminated in accordance
with other
provisions of this Agreement, until May 11, 2020.
SECTION 1.5 No Partition.
No Joint Venturer shall have the right and each Joint Venturer
hereby
agrees not to withdraw from the Joint Venture nor to dissolve,
terminate,
partition, or liquidate, or to petition a court for the
dissolution,
termination, partition, or liquidation of the Joint Venture or
its assets,
except as provided for in this Agreement, and no Joint Venturer
at any time
shall have the right to petition or to take any action to
subject the operation
of the Project or any part thereof or the Joint Venture assets
or any part
thereof to the authority of any court of bankruptcy, insolvency,
receivership,
or similar proceeding.
ARTICLE II
CAPITAL CONTRIBUTIONS, RESERVES, VOTING,
FINANCING, AND DISTRIBUTIONS
SECTION 2.1 Joint VENTURE Percentage Interest.
U.S. Canadian shall receive 80% of the interest in the mining
claims designated
as the COD Mining Claim, currently owned by El Capitan and whose
legal
description is attached as Exhibit A in exchange for 720,000
newly issued shares
of U.S. Canadian. The items in this paragraph are property of
the parties and
not the joint venture and are not subject to termination or sale
to satisfy
liabilities of the Joint Venture.
El Capitan shall operate the operations as they relate to the
tailings and
settlement pond and contribute the equipment needed for such
operations. U.S.
Canadian shall contribute to the operating capital for 90 days
which shall not
exceed the wages for 3 or 4 workers, fuel and equipment repair
and maintenance,
and necessary equipment for operation approved by J.V. Partners.
The net profit
from the tailings and settlement pond operations shall be split
50-50 among the
parties.
SECTION 2.2 ADJUSTMENTS and Interest.
Unless otherwise approved by the Joint Venturers, no adjustment
to the
Percentage Interest of any Joint Venturer shall be made except
as otherwise
provided herein or as a result of a transfer of a Joint
Venturer's Joint Venture
interest or a portion thereof.
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SECTION 2.3 CAPITAL Accounts.
2.3.1 GENERAL. As used herein, the term Capital Account shall
refer to the
capital account of each Joint Venturer reflecting the value of
each Joint
Venturer's relative interest in the capital of the Joint
Venture. A Capital
Account, as defined herein, shall be maintained for each Joint
Venturer and
shall be subject to adjustment as provided in subsection
2.3.3.
2.3.2 INITIAL CAPITAL CONTRIBUTION AND INITIAL CAPITAL. Upon the
execution of
this Agreement, the parties shall make contributions as stated
in paragraph 2.1
of this Agreement.
SECTION 2.4 Allocations of Profits and Losses to Joint
Venturers.
All profits shall be retailed by U. S, Canadian other than as
disclosed
in 2.1.
SECTION 2.5 Time LIMIT for Approval
Where an issue arises needing a vote, such vote shall be given
within
five (5) calendar days of a written request by the other party
for a vote.
Should a response not be returned within the stated period, then
the vote will
be considered in the affirmative.
ARTICLE III
MANAGEMENT
SECTION 3.1 JOINT Venture Manger.
U.S. Canadian is hereby appointed Manager or Venture Manager of
the Joint
Venture and shall be responsible for the internal operation of
the venture. Any
direct cost incurred shall be paid out of Joint Venture
funds.
SECTION 3.2 Other BUSINESS Activities.
Nothing herein is to be construed as giving any party an
interest in
other business of the parties except those construed
specifically by this
Agreement or incorporated by an amendment hereto.
The parties mutually acknowledge that each is involved in
additional
businesses and are not restricted to participating with each
other except as
stated in the first right of refusal for additional
projects.
ARTICLE IV
ACCOUNTING
SECTION 4.1 Books, RECORDS, and Fiscal Year.
4.1.1 GENERAL. The Joint Ventures books and records of account
shall be
maintained in accordance with generally accepted accounting
principles
consistently applied on the cash basis and shall be adequate to
provide any
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Joint Venturer with all financial information as may be needed
by any Joint
Venturer or any Affiliate of any Joint Venturer for purposes of
satisfying the
financial reporting obligations of any Joint Venturer or his or
its respective
affiliate or affiliates. The fiscal year of the Joint Venture
shall end on
December 31 of each year. The books and records shall be
maintained at the Joint
Ventures' principal place of business.
SECTION 4.2 Other ACCOUNTING Decisions.
All accounting decisions and tax elections for the Joint Venture
(other
than those specifically provided for in other Sections of this
Agreement) shall
be made from time to time as required and approved by the
Venture Manager.
ARTICLE V
SALE, TRANSFER, OR MORTGAGE
SECTION 5.1 GENERAL.
Except as expressly permitted herein, no Joint Venturer shall
sell,
sign, transfer, mortgage, charge, or otherwise encumber, or
permit any of the
foregoing, whether voluntarily or by operation of law (herein
sometimes
collectively called a transfer), any part or all of his or its
Joint Venture
interest without the prior written approval of the other Joint
Venturers, and
any attempt to do so shall be void.
5.1.1 PERMITTED TRANSFERS
(a) Any Joint Venturer may transfer or assign his or its
interest in the
Joint Venture to any corporation or general partnership that is
controlled by
such Joint Venturer, or to any limited partnership in which the
Joint Venturer
would be the general partner, and such transfers or assignments
shall not be
subject to this SUBSECTION,, but the transferee thereof shall be
subject to all
the terms and conditions of this Agreement, including without
limitation this
subsection, and as a condition precedent to any such transfer,
such transferee
shall enter into a written agreement agreeing to be bound by the
terms hereof.
SECTION 5.2 CLOSINGS.
5.2.1 TERMINATION OF OBLIGATIONS. As of the effective date of
any
transfer not prohibited hereunder by a Joint Venturer of its
entire interest in
the Joint Venture, such Venturers' rights and obligations
hereunder shall
terminate except as to items accrued as of such date and except
as to any
indemnity obligations of such Joint Venturer attributable to
acts or events
occurring prior to such date. Thereupon, except as limited by
the preceding
sentence, this Agreement shall terminate as to the transferring
Joint Venturer
but shall remain in effect as to the other Joint Venturers. In
the event of a
transfer of its or his entire Joint Venture, interest by a Joint
Venturer to
another Joint Venturer
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