Exhibit 10.36
MINING LEASE WITH OPTION TO
PURCHASE
THIS MINING LEASE WITH OPTION TO PURCHASE ("Agreement") is made
effective this 1st day of January, 2005 by and between CLIFFORD
WILLIAM DeGRAW, a single man; and RICHARD MARKIEWICZ, a married man
(referred to collectively as "Owner"); and NEVADA SUNRISE, LLC, a
Nevada limited liability company ("Lessee").
RECITALS
A. Clifford William DeGraw owns and possesses a
one-hundred percent (100%) interest in the Mildred patented lode
mining claim (MS 4514, Patent No. 891083) situated in the Santa Fe
Mining District, Mineral County, Nevada. Clifford William DeGraw
owns an undivided fifty percent (50%) interest and Richard
Markiewicz owns an undivided fifty percent (50%) interest in the
Copper Queen #1 patented lode mining claim (MS 4514, Patent No.
891083) situated in the Santa Fe Mining District, Mineral County,
Nevada.
The foregoing claims are situated in Section 31, T. 8 N., R. 35
E., MDM. These patented mining claims, together with all ores,
minerals, surface and mineral rights, and the right to explore for,
mine, and remove the same, and all water rights and improvements,
easements, licenses, rights-of-way and other interests appurtenant
thereto, shall be referred to as the "Property."
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B. The parties now desire to enter into an
agreement giving Lessee the exclusive right to explore, develop,
and mine the Property, and further granting to Lessee the exclusive
right and option to purchase the Property.
THEREFORE, the parties have agreed as follows:
SECTION ONE
Lease Term and Royalties
1.1 Term of Lease . Owner hereby leases the
Property to Lessee for a term of seven (7) years. The Effective
Date of this Agreement will be January 1, 2005, and all rights and
obligations shall be calculated on the basis of that date.
1.2 Lease and Option Payments . In order to
maintain the Lease and Option in effect, Lessee shall make the
following payments to Owner:
a. Upon execution of this
Agreement, Lessee shall pay Owner the sum of TWO THOUSAND FIVE
HUNDRED DOLLARS ($2,500.00) to hold the Property to and including
March 31, 2005.
b. Commencing on April 1,
2005, and payable every three months thereafter (i.e. , on
January 1, April 1, July 1, and October 1 of each year) for so long
as this Agreement remains in effect, Lessee shall make the
following quarterly payments to Owner:
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Date of Payments
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Amount of Quarterly
Payment
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April 1, July 1, and October 1,
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$2,500.00
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2005; and January 1, 2006
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April 1, July 1, and October 1, 2006;
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$3,500.00
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and January 1, 2007
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April 1, July 1, and October 1, 2007;
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$4,000.00
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and January 1, 2008
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April 1, July 1, and October 1, 2008
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$5,000.00
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and January 1, 2009
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April 1, 2009 all quarters thereafter
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$7,500.00
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1.3 Option to Purchase . Owner grants to
Lessee the exclusive right and option to purchase the Property for
ONE HUNDRED THIRTY THOUSAND DOLLARS ($130,000.00). Lessee shall
have the right to exercise this option and purchase the Property at
any time during the seven-year term of this Lease. All payments
previously made to Owner pursuant to Section 1.2 above shall be
applied to the purchase price.
Under no circumstance may Lessee place the Property into
production without paying Owner the purchase price in full.
Upon receiving written notice from Lessee that it will purchase
the Property and pay the balance of the purchase price, Owner shall
execute a Quitclaim Deed conveying the Property to Lessee. Owner
shall deposit the Deed into escrow with a mutually acceptable
escrow agent, and Lessee shall deposit the balance of the purchase
price with the escrow agent. Escrow shall close within thirty (30)
days of Lessee's notice to Owner. Lessee shall pay the escrow
costs.
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1.4 Delivery of Data . Upon execution of
this Agreement, Owner shall make available to Lessee copies of all
maps, deeds, and other documents in Owner's possession which
pertain to the claim title and boundaries, prior workings,
production history, and so forth. Lessee shall have the right to
copy any or all of these documents at its expense. Lessee shall
also have the right to inspect and assay drill core, chip trays,
drill cuttings, and other physical samples from the Property in
Owner's possession.
SECTION TWO
Mining Operations
2.1 Right to Explore, Develop and Mine .
Following execution of this Agreement, Lessee shall have the right
to make geological investigations and surveys, to drill on the
Property by any means, and to have all the rights and privileges
incident to ownership of the Property, except that Lessee may not
commence mining operations on the Property without first paying the
purchase price pursuant to Section 1.3 above.
2.2 Conduct of Work . Lessee shall perform
its exploration activities on the Property in accordance with good
mining practice, shall comply with the applicable laws and
regulations relating to the performance of exploration operations
on the Property, and shall comply with the applicable worker's
compensation laws of the State of Nevada.
2.3 Liability and Insurance . During the
term of the Agreement, Lessee shall indemnify and hold Owner
harmless from any claims, demands, liabilities or liens arising out
of Lessee's activities on the Property. To that end, Lessee shall
immediately obtain and carry a policy of public liability insurance
in the amount of $1,000,000.00 or more for personal injury and
$100,000.00 for property damage, protecting Owner against any
claims for injury to persons or damage to property resulting from
Lessee's operations. Lessee shall provide Owner with a certificate
of insurance evidencing such insurance.
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2.4 Liens . Lessee shall keep the Property
free and clear from any and all mechanics' or laborers' liens
arising from labor performed on or material furnished to the
Property at Lessee's request. However, a lien on the Property shall
not constitute a default if Lessee, in good faith, disputes the
validity of the claim, in which event the existence of the lien
shall constitute a default thirty (30) days after the validity of
the lien has been adjudicated adversely to Lessee.
2.5 Installation of Equipment . Lessee may
install, maintain, replace, and remove during the term of this
Agreement any and all mining machinery, equipment, tools, and
facilities which it may desire to use in connection with its mining
activities on the Property. Upon termination of this Agreement for
any reason, period of six (6) months following such termination
during which it may remove all or