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EXHIBIT
10.16
ENGLISH
VERSION OF 2008 LEASE AGREEMENT
BY
AND BETWEEN COMMERCE GROUP CORP. AND CORSAIN
WE, GINO ROLANDO
BETTAGLIO RIVAS of fifty four years of age, Bachelor in
Economy, of domicile
in Antiguo Cuscatlan, Department of La Libertad,
bearer of my Sole
Identity Document number zero two million one hundred
eighty three
thousand eight hundred seventy seven acting in the name and
representation, in
his capacity of President and Legal Representative of
the CORPORACION
SALVADORENA DE INVERSIONES that is abbreviated CORSAIN,
official Institution
of Autonomous character, of this domicile, with Tax
Identification
Number zero six hundred fourteen - zero ten thousand one
hundred eighty two
zero zero one-one; who in the course of this document
will be called "THE
LESSEE" OR CORSAIN; for the other part Mr. EDWARD A.
MACHULAK OF FIFTY
SIX years of age, businessman, of American nationality,
bearer of passport
number TWO ZERO SEVEN FIVE SIX SEVEN ONE ZERO ZERO,
issued by the
immigration authorities of that country, the day of
December 18, of the
year two thousand two, with expiration dat e of
December 17, of the
year two thousand twelve, in capacity of Special
Power for the
company COMMERCE GROUP CORP, corporation of the State of
Wisconsin, United
States of America, who for not speaking or reading
Spanish is
accompanied by his translator Mr. JOHN HOWARD CURRY, of sixty
seven years of age,
businessman, of nationality of the United States of
America, bearer of
passport number zero four five five two seven three
six two, issued by
the Migratory Authorities of that country, the day of
July 13, of one
thousand nine hundred ninety nine, with expiration date
of July 12, of two
thousand nine; the company referred to above
henceforth will be
called "THE LESSOR", through this instrument we agree
to sign a SIMPLE
LEASING CONTRACT" which will be subject to the following
clauses: I.
DECLARATION OF DOMINION. That the leasing entity is owner
and current
possessor of a portion of rustic land and constructions that
it contains, that
was dismembered from a land of greater size of SIX TY
SIX HECTARES SEVENTY
TWO AREAS FIVE POINT TWENTY FIVE CENTIAREAS,
equivalent to NINETY
SIX MANZANAS EIGHT THOUSAND NINE HUNDRED SIXTY FOUR
POINT TWENTY THREE
SQUARE VARAS, that forms part of the CORSAIN property,
known jointly as
MONTECRISTO MINES, located in
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Jurisdiction of
Jocoro, Department of Morazan, inscribed in favor of
CORSAIN to Number
ONE HUNDRED SEVENTY NINE of the Book TWO HUNDRED
SEVENTY FIVE
of the Registry of Property in Morazan whose description
is
the following:
Starting from the geodesic marker Valle Santiago in
direction
North fifty six degrees zero six point zero minutes West and
a
distance of ninety
six point fifty four meters one arrives at a point
from where with
direction North twenty five degrees
thirty four
point zero minutes
East and a distance of one hundred meters, one
arrives at another
point from where with direction North twenty eight
degrees thirty
four point three minutes East and a distance of one
hundred meters
one arrives at another point from where with direction
North thirty
eight degrees thirty four point six minutes East
and a
distance of three
hundred meters one arrives at another point from where
with direction
North forty one degrees fifteen point zero
minutes
East and at a
distance of three hundred meters is found the corner
South-West of the
property that is described below,
whose measures
and borders
are the following: TO THE WEST: Straight line with
direction
North thirty six degrees forty two point sixty five
minutes
West and a distance
of eight hundred thirty eight point zero fifty six
meters,
bordering with lands of the general property of greater
capacity
property of CORSAIN;
TO THE NORTH: broken line that consists of thirty
one straight
lines; the first with direction North
seventy three
degrees twenty four
point fifty eight minutes East and a distance of
sixty three meters
twenty one centimeters; the second with
direction
North forty three
degrees thirty six point thirty one minutes East and a
distance of forty
meters sixty nine centimeters; the third with direction
North thirty six
degrees forty two point sixty six minutes East and
a
distance of fifty
six meters sixty eight centimeters; the fourth with
direction
North forty three degrees eighteen point
eighty four
minutes East and a
distance of eighty one meters thirty centimeters,
eight
millimeters; the fifth with direction North seven
degrees three
point twenty
one minutes East and a distance of twenty meters
eighty
four
centimeters, eight millimeters; the sixth
with direction North
seventy
degrees fifty six point seven minutes
West and a distance of
thirteen
meters fifty centimeters; the seventh with a
direction North
seventy degrees
forty point fourteen minutes West and a distance of
forty seven meters
sixty centimeters, six millimeters; the
eighth
with direction
North and one degree thirty six point forty seven
minutes East and a
distance of forty eight meters twenty one centimeters,
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millimeters; the
ninth with direction North forty five degrees fifty one
point ninety seven
minutes East and a distance of ninety eight meters
thirty seven
centimeters, two millimeters; the tenth with
direction
North forty three
degrees fifty nine point zero seven minutes East and a
distance of one
hundred forty meters twenty three centimeters, one
millimeter; the
eleventh with direction South twenty nine degrees
thirty seven point
sixty minutes East and a distance of thirty one
meters, ninety three
centimeters, five millimeters; the twelfth with
direction
South forty five degrees twenty three point eighty
seven
minutes East
and a distance of forty four meters eighty centimeters,
three
millimeters; the thirteenth with direction South forty
one
degrees two point
fifty one minutes East and a distance of thirty
meters forty five
centimeters, five millimeters; the fourteenth
with
direction South
sixty six degrees sixteen point thirty one minutes East
and a distance of
twenty five meters eighty seven centimeters; the
fifteenth with
direction North seventy three degrees thirteen
point
thirteen
minutes East and a distance of fifteen meters, sixty
nine
centimeters;
the sixteenth with direction South
eighty degrees
seventeen
point fifty two minutes East and a distance of
twenty nine
meters forty one
centimeters, four millimeters; the seventeenth with
direction South five
degrees forty eight point seventy four minutes West
and a distance of
fifty two meters, sixty seven centimeters, one
millimeter;
the eighteenth with direction South twenty five
degrees
fifty eight point
sixty nine minutes East and a distance of thirty two
meters, twenty
centimeters, six millimeters; the nineteenth
with
direction
South forty four degrees forty one point forty nine
minutes
East and a distance
of thirty two meters, ninety seven centimeters, two
millimeters;
the twentieth with direction south sixty degrees thirty
nine point twenty
six minutes East and a distance of
forty six
meters, twenty
five centimeters, eight millimeters; the twenty
first
with direction South
fifty one degrees one point one seventy one minutes
East and a distance
of thirty eight meters, one millimeter; the
twenty
second with
direction South seventy degrees forty two point eleven
minutes East and a
distance of twenty six meters, twenty centimeters,
two millimeters; the
twenty third with direction South seventy nine
degrees forty
nine degrees forty four point forty five
minutes
East and a distance
of ten meters fifty five centimeters,
six
millimeters;
the twenty fourth with direction North seventy
degrees
sixty five point
eight minutes East and a distance of twenty seven
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meters twenty one
centimeters, eight millimeters; the twenty fifth with
direction
North fifty eight degrees twenty nine point
twelve minutes
East and a distance
of one hundred five meters, fifty eight
centimeters,
three millimeters; the twenty sixth with
direction
South eighty degrees
thirty eight point ninety two minutes East and a
distance of twenty
meters, sixty one centimeters, seven millimeters; the
twenty seventh
with direction South fifty one degrees zero
point
eighty four minutes
East and a distance of eleven meters, ninety
centimeters,
five millimeters; the twenty eighth with
direction South
forty two degrees
fifty three point thirty seven minutes East and a
distance of
eighty four meters, seventy seven
centimeters, two
millimeters; the
twenty ninth with direction South seventy six degrees
forty seven point
forty six minutes East and a distance of eighty nine
meters, five
centimeters, seven millimeters; the thirtieth with
direction South
seventy seven degrees forty five point thirteen
minutes
East and a distance
of thirty meters, eighty two centimeters, nine
millimeters;
the thirty first with direction South sixty four
degrees
fifty one point
fourteen minutes East and a distance of sixteen meters,
thirty
centimeters, eight millimeters. All the
pieces border with
lands of Mr. Rene
Gonzalez, deep ravine in the middle, TO THE EAST:
Broken line made up
by twenty one straight lines: the first with
direction South
forty one degrees forty seven point
sixty eight
minutes West
and a distance of forty nine meters, fifty six
centimeters,
two millimeters; the second with direction
South twenty
seven degrees forty
point eighty six minutes West and a distance of
forty five
meters, twenty three centimeters,
eight millimeters;
the third with
direction South twenty nine degrees fifty
seven point
nineteen
minutes West and a distance of thirty two meters,
twenty eight
centimeters,
two millimeters; the fourth with direction South
eighteen
degrees twenty eight
point zero one minutes West and a distance of eleven
meters, ninety five
centimeters, six millimeters; the fifth
with
direction
South seventeen degrees thirty point ninety seven
minutes
East and a distance
of nine meters, seventy four centimeters, two
millimeters; the
sixth with direction South forty one degrees thirty
five point fifty
three minutes East and a distance of twenty seven
meters, six
centimeters, three millimeters; the seventh
with
direction South
eighty seven degrees twenty three point ninety
three
minutes East and a
distance of thirty two meters, seventeen centimeters,
one millimeter; the
eighth with direction North eighty one degrees
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zero point zero five
minutes East and a distance of twenty meters, ninety
centimeters,
five millimeters; the ninth with direction South
eighty
eight degrees
zero seven point twenty five minutes East and a distance
of twenty eight
meters, ninety seven centimeters; the tenth with
direction
South eighty five degrees zero two point eleven
minutes
East and a distance
of twenty six meters, fifty seven centimeters,
six
millimeters;
the eleventh with direction South eighty
two degrees
fifty eight point
forty nine minutes East and a distance of twenty six
meters, forty
nine centimeters, one millimeter; the twelfth
with
direction
South eleven degrees zero zero point thirty six
minutes and
a distance of twelve
meters, seventy five centimeters, five
millimeters; the
thirteenth with direction South twelve degrees thirty
five point
seventeen minutes West and a
distance of sixty nine
meters, two
centimeters, nine millimeters; the fourteenth with
direction South six
degrees twenty four point sixteen minutes
East
and a distance
of twenty six meters ninety three centimeters,
eight
millimeters; the
fifteenth with direction South seventy degrees
sixteen
point twenty nine
minutes East and a distance of fifty five meters
forty eight
centimeters, six millimeters; the
sixteenth with
direction South
sixty seven degrees fifty one point fifty two
minutes
East and a distance
of forty meters, eighty centimeters, seven
millimeters;
the seventeenth with direction South thirty
three
degrees twenty three
point thirty two minutes East and a distance of
twenty two meters,
fifty one centimeters, six millimeters; the eighteenth
with direction South
four degrees eighty two point zero three minutes
West and a
distance of twenty six meters,
seventy four
centimeters,
four millimeters; the nineteenth with direction
South
forty one degrees
twenty six point twenty seven minutes West and a
distance of seventy
meters, thirty one centimeters, one
millimeter;
the twentieth
with direction South twenty one degrees
forty nine
point thirty
one minutes East and a distance of forty six meters,
seventy three
centimeters, nine millimeters; the twenty
first with
direction
South forty four degrees twenty point
fifty minutes
East and a distance
of sixty one meters, eighty four centimeters, four
millimeters.
The first fifteen pieces border with lands of Mr. Rene
Gonzalez, deep
ravine in the middle; the other six pieces border with
Colonia Monte
Cristo; TO THE SOUTH: Broken line made up of thirteen
straight lines:
the first with direction South seventy degrees
fifty
seven point fifty
seven minutes West and a distance of fifty meters,
ninety two
centimeters, six millimeters;
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the second with
direction South sixty seven degrees twenty
four
point forty
one minutes West and a distance of fifty seven
meters,
eighty one
centimeters, six millimeters; the third with
direction
South sixty two
degrees thirty nine point seventy nine minutes
West
and a distance of
fifty nine meters, thirteen centimeters,
eight
millimeters;
the fifth with direction South fifty seven
degrees forty
eight point forty
eight minutes West and a distance of thirty seven
meters, ninety six
centimeters, three millimeters; the seventh
with
direction
South fifty two degrees forty five point forty four
minutes
West and a distance
of forty three meters, sixty two centimeters, eight
millimeters;
the eighth with direction South fifty four degrees fifty
five point forty one
minutes West and a distance of one hundred twenty
six meters,
fourteen centimeters, two millimeters; the
ninth with
direction
South fifty six degrees zero three point zero one minutes
West
and a distance of
two hundred thirty four meters, ninety six
centimeters, four
millimeters; the tenth with direction North
seventy
degrees twenty nine
point twenty nine minutes West and a distance of two
meters, three
centimeters, six millimeters; the eleventh with
direction
North twenty five degrees North zero four point twenty eight
minutes East and a
distance of one meter, seventy one centimeters, six
millimeters;
the twelfth with direction North seventy one degrees
fifty
three point forty
one minutes West and a distance of six meters, twenty
nine
centimeters, six millimeters; the thirteenth with
direction South
thirteen
degrees forty three point ninety five minutes
West and a
distance of sixteen
meters, seventy centimeters, six
millimeters;
arriving thus to the
Southwest corner where the present
description
started. The
first eight (straight line) sections border with
lands
known as Montecristo
Isle, property of CORSAIN. The other five
pieces
border with lands of
Mr. Bartolo Berrios; the thirteen prior pieces
border with the Ruta
Militar Highway with Santa Rosa de Lima in the
middle. That
on the built area of the land that is leased there is
found iron and wood
galleys with roofs of channeled, laminated
metal, also
property of CORSAIN. II.) OBJECT OF THE CONTRACT. Both
parties agree that
for having incurred in past due payments on the lease,
application of
clause V) of the original contract was made in such sense
and having paid the
past due amount, we agree to sign a new contract that
will be governed
under the clauses that are detailed in this instrument.
The representative
of the lessor delivers in simple lease to the lessee
the portion of the
land described above and in such
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capacity the
lessee's special Power receives the referred to property to
his complete
satisfaction, obliging himself to return it to the lessor in
the same conditions
at the termination of the lease term. III) TERM AND
EXTENSION. The term
of the lease is agreed to for nineteen months
starting counting
from the day of November 12 of the year two thousand
six with expiration
on the day of June 11 of the year two thousand eight,
both dates
inclusive, which will be extended automatically each three
months, always and
when, there does not exist an express statement on the
part of CORSAIN to
terminate it in the established term with at least
thirty days of
advance notice. If the Lessee complies with the clauses of
this contract in
joint agreement with the Lessor they may decide to
continue with the
lease, its conditions will be discussed and protected
under a new
contract. In the case that the Lessee deoccupies the property
under lease before
the end of the term it should pay and all the surface
taxes pending as if
it were the end of the term. IV) PRICE AND FORM OF
PAYMENT: The total
price of the lease during the first year is EIGHTEEN
THOUSAND SIX HUNDRED
EIGHT DOLLARS WITH TWENTY ONE CENTS OF A DOLLAR OF
THE UNITED STATES OF
AMERICA ($18,608.21) PLUS THE CORRESPONDING TAX FOR
THE Transfer of Real
Estate and the Rendering of Services (VAT), payable
through monthly
quotas, successive and beforehand, the first for ONE
THOUSAND FIVE
HUNDRED FIFTY DOLLARS WITH SIXTY EIGHT CENTS OF A DOLLAR OF
THE UNITED STATES OF
AMERICA, ($1,550.68), PLUS THE CORRESPONDING TAX FOR
THE Transfer of Real
Estate and the Rendering of Services (VAT). This
price will be
increased annually in conformance to the inflation rate of
the United States of
America and the increase will begin once the
corresponding report
is obtained from the Embassy of that country
accredited in E l
Salvador and will be added to the corresponding monthly
quota effective on
the twenty fifth day of the month of each one of the
months included in
the term. V) EFFECTS OF THE PAST DUE: The delay
in
payment of one of
the quotas agreed to will cause the term to end, giving
the right to the
Lessor to require the Lessee the immediate deoccupation
of the leased
property, without need for any judicial process and require
him executively to
pay the owed taxes as well as those that remain to be
complied with for
the original term, including the termination of the
contract as the case
may be. VI) DEPOSIT. Both parties agree
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that the obligations
contracted in the present instrument on the part of
the Lessor are
guaranteed with the deposits made by it in favor of the
Lessee for the
amount of ELEVEN THOUSAND SEVEN HUNDRED AND FORTY ONE
DOLLARS WITH FIFTY
CENTS OF A DOLLAR OF THE UNITED STATE OF AMERICA
protected by income
receipt number six thousand seven hundred and seventy
four-A, dated
November 15 of one thousand nine hundred ninety three and
deposited to the
account of CORSAIN dated February 16, one thousand nine
hundred ninety five
for the amount of THREE HUNDRED AND THIRTY THREE
DOLLARS WWWITH FIFTY
CENTS OF A DOLLAR OF THE UNITED STATES OF AMERICA,
that will serve to
respond for the owed taxes or for payments which the
Lessee might incur
and that were charges of the Lessor and which will be
returned to him in a
term of thirty days following the termination of the
present contract, in
case what was mentioned above does not happen. VII)
SPECIAL CONDITIONS:
The Lessor commits to: 1) inform in writing to
CORSAIN within
thirty days following the date of this instrument, about
which installations
will be used, upon not doing it, he will incur a fine
equivalent to one
quarter of the lease price. 2) The Lessor will not be
responsible for the
deterioration that these installations suffer and
that are not used by
them. 3) Answer for all kinds of damages that may
be caused as a
consequence of the operations that are done in the leased
property. 4)
The Lessor may make use of the water resources that are
within the leased
portion and of the sources known as Santa Francisca,
Adolfo, Quebrada
Seca and Quebrada Honda for whose use the corresponding
rights of way for
transit and aqueducts will be constituted, it ought to
use these by means
of underground piping. In addition the Lessee
authorizes to the
Lessor to construct a tank in the source known as
Adolfo. It is
understood that the ac cess to the sources mentioned and
the use of the water
coming from these does not have an exclusive
character for the
Lessor; 5) The Lessor will have the right to use the
surface of the
leased area to construct, maintain, repair installations,
machinery, materials
and residues from the ore that will be brought to be
processed in said
place, as well as build roads, trenches, deposits for
minerals, waste and
ore, piping for potable water, telephone lines,
electric lines of
transmission and distribution. As well, it may build
all the facilities
necessary to use what is leased for the end of
crushing, milling
and processing of raw material and precious mineral
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ore, all on the
account of the Lessor. The use of what is leased should
be the most adequate
in accordance with the works that the Lessor
proposes to carry
out on the property object of this contract and in
whose execution he
is obliged to not cause any ecological damages; and 6)
In the case that
Corsain decides to sell the property object of the
present contract, it
is obliged to give a preferential right to COMMERCE
GROUIP to acquire
dominion over it, always if the proposed conditions of
sale are accepted,
to the contrary, CORSAIN remains free to terminate the
lease contract
without anymore responsibility than to give the respective
notice to the
Lessor. VIII) RIGHTS OF THE LESSEE: The Lessee will
have
free access to the
leased property for the purpose of inspection, being
able to delegate
such faculty to the person or persons it deems
convenient, for
which it will give prior notice to the Lessor of the
reasons for its
decision with at least two days of anticip ation for
reasons of security.
IX). DESTINY OF USE. The leased property will be
destined exclusively
for the use of the surface of the leased area to
construct, maintain,
repair installations, machinery, residues of ore
that will be brought
to be processed in said place, as well to build
roads, trenches,
deposits for minerals, waste and ore, piping for potable
water, telephone
lines, electric transmission and distribution lines; to
construct all the
facilities necessary to use what is leased to the end
of crushing, milling
and processing raw materials and ore of precious
minerals. X).
PROHIBITIONS. A) The Lessee may not exploit any mineral
that might exist on
the leased property in virtue of the fact that the
present contract
only covers the use of the surface of the land and the
use of the
installatio
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