Registration of Securities of a Small-Business Issuer — Form 10-SB
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10SB12G Form 10-Sb 55 235K
2: EX-3.0 Articles of Incorporation 8 25K
3: EX-3.1 Amendment to Articles of Incorporation 1 10K
4: EX-3.2 By-Laws 7 22K
5: EX-10.0 Joint Venture Agreement - Schwarz 36 90K
6: EX-10.1 Mining Lease - Twin Mountain Rock 12 47K
15: EX-10.10 Complaint 6 17K
16: EX-10.11 Confession of Judgment 4 16K
17: EX-10.12 Agreement - 545538 11 43K
7: EX-10.2 Loan Agreement 3 18K
8: EX-10.3 Amendment to Loan 9 35K
9: EX-10.4 Second Amendment to Loan 8 35K
10: EX-10.5 Deed of Trust 27 101K
11: EX-10.6 Lease and Purchase Option 9 32K
12: EX-10.7 Agreement - Aurum 5 23K
13: EX-10.8 Quit Claim Deed 4 22K
14: EX-10.9 Agreement - Tyro 5 22K
18: EX-11.0 Computations of Earnings Per Share 1 8K
19: EX-16.0 Chage in Auditors 1 9K
20: EX-23.0 Consent of Auditors 1 8K
21: EX-27 Financial Data Schedule 1 11K
EX-10.0 — Joint Venture Agreement – Schwarz
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EXHIBIT 10.0
JOINT VENTURE AGREEMENT
BETWEEN
ROBIN SCHWARZ,
AYLWARD SCHWARZ,
S & S MINING, A NEVADA CORPORATION
AND
CAN-CAL RESOURCES, LTD.
72
JOINT VENTURE AGREEMENT
-----------------------
THIS JOINT VENTURE AGREEMENT, made as of the 13th day of September,
1996, by and between ROBIN SCHWARZ, AYLWARD SCHWARZ, and S & S MINING, a Nevada
corporation (hereinafter collectively referred to as "Schwarz" or "Venturer"),
and CAN-CAL RESOURCES, LTD., a Nevada Corporation (hereinafter referred to as
"Can-Cal" or "Venturer").
RECITALS
WHEREAS, Schwarz owns or has possessory rights to certain mining claims
in San Bernardino County, California, and may acquire or stake additional mining
claims in San Bernardino County, California (the "Area of Interest" as defined
herein) (the "Claims"), and
WHEREAS, Schwarz believes that its claims are prospective for the
existence and commercial extraction and production of precious metals; and
WHEREAS, Schwarz does not have funds with which to engage in the
necessary work and procedures to determine the existence of precious metals on
the claims; and
WHEREAS, Can-Cal is willing to advance certain funds to Schwarz to
ascertain whether precious metals exist on the claims;
WHEREAS, Can-Cal is willing to advance funds only if it acquires a 50%
interest in the claims and its other advances are secured; and
WHEREAS, the parties believe that it is in their respective best
interests to pool their resources to attempt to ascertain the existence of
precious metals of the claims and, if so, to commercially exploit the claims and
the precious metals contained thereon; and
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WHEREAS, Schwarz and Can-Cal wish to make arrangements for the
exploration, evaluation, development, production and sale of precious metals, if
any, produced from the claims all through this Joint Venture.
NOW THEREFORE, in consideration of the covenants and agreements
contained herein, SCHWARZ AND CAN-CAL AGREE AS FOLLOWS:
ARTICLE I
---------
DEFINITIONS
-----------
1.1 "Accounting Procedure" means the procedures as agreed upon by the
Venturers.
1.2 "Affiliate" means any person, partnership, joint venture,
corporation or other form of enterprise which directly or indirectly controls,
is controlled by, or is under common control with, a Venturer. For purposes of
the preceding sentence, "control" means possession, directly or indirectly, of
the power to direct or cause direction of management and policies through
ownership of voting securities, contract, voting trust or otherwise.
1.3 "Agreement" means this Joint Venture Agreement, including all
amendments and modifications thereof, and all schedules and exhibits, which are
incorporated herein by this reference.
1.4 "Area of Interest" means a five mile radius around the claims listed
on Exhibit A and no other physical areas.
1.5 "Assets" means the Property, Products and all other real and
personal property, tangible and intangible, held by or for the benefit of the
Venturers hereunder.
1.6 "Capital Account" means the Capital Account as defined herein.
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1.7 "Claims" means the mining claims listed on Exhibit A hereto.
1.8 "Default" means the occurrence of one or more of the events listed
in Section 10.2.
1.9 "Development" means all preparation for the removal and recovery of
Products, including the construction or installation of any improvements to be
used for the mining or handling, but not the milling or other processing, or
Products.
1.10 "Exploration" means all activities directed toward ascertaining the
existence, location, quantity, quality or commercial value of deposits of
Products.
1.11 "Initial Contribution" means that contribution each Venturer agrees
to make, or is deemed to have made, pursuant to Section 5. 1.
1.12 "Joint Account" means the account maintained in accordance with the
Accounting Procedure showing the charges and credits accruing to the Venturers.
1.13 "Losses" shall have the meaning set forth in Section 4. 1 (b)
herein.
1.14 "Management Committee" means the committee established under
Article VII.
1.15 "Milling" means the milling or processing of ores into precious
metals.
1. 16 "Mining" means the mining, extracting, producing, hauling and
handling of ore from the Property.
1. 17 "Net Proceeds" means net cash flow from Operations.
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1.18 "Operations" means the Exploration, Development and Mining
activities carried out under this Agreement.
1.19 "Venturer" and "Venturers" mean the persons or entities that from
time to time have Participating Interests in the Claims.
1.20 "Participating Interest(s)" means the percentage interest
representing the operating ownership interest of a Venturer in Assets, and all
other rights and obligations arising under this Agreement, as such interest may
from time to time be adjusted hereunder. Participating Interest shall be
calculated to three decimal places and rounded to two (e.g., 1.519% rounded to
1.52%). Decimals of .005 or more shall be rounded up to .01; decimals of less
than .005 shall be rounded down. The initial Participating Interest of the
Venturers are set forth in Section 6. 1.
1.21 "Products" means all ores, minerals, mineral resources and precious
metals (including, where appropriate, gold) produced from the Claims.
1.22 "Program" means a description of the Exploration, Development,
Mining and Milling to be conducted by the joint venture.
ARTICLE II
----------
REPRESENTATIONS AND WARRANTIES, TITLE TO ASSETS
-----------------------------------------------
2.1 Representations and Warranties. Each of Robin Schwarz, Aylward
Schwarz and S&S Mining and Can-Cal represents and warrants as follows:
(i) that S & S Mining and Can-Cal are each a corporation 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 the state of its
incorporation and such other states where necessary in order to carry out the
purposes of this Agreement;
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(ii) that each 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;
(iii) that this Agreement has been duly executed and delivered by it and
is valid, binding and full enforceable against it in accordance with its terms;
(iv) that there is no order, writ, injunction, judgment, award or decree
outstanding, and no legal, administration, arbitration or other proceeding
("Legal Proceeding") pending against it or involving any of its directors,
officers or employees or properties or assets, or to its knowledge, threatened
against it or any of its directors, officers or employees or properties or
assets, which Legal Proceedings, if determined adversely, would have a material
adverse effect on such Venturer or the Joint Venture;
(v) that (A) the execution, delivery and performance by it of this
Agreement and the consummation of the transactions contemplated hereby will not
conflict with or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
change or encumbrance upon any of its property or assets pursuant to the terms
of any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument by which it is bound or to which any of its property or assets is
subject, or will such action result in any violation of the provisions of its
charter or by-laws or of any statute or any order, rule or regulation of any
court or governmental agency or body of the United States, any State or any
political subdivision of either having jurisdiction over it or any of its
properties or assets; and (B) except what which has already been obtained by it,
no consent, approval, authorization, order, registration, filing, qualification,
license or permit of or with any such court or any such regulatory authority or
other such governmental agency or body in required to be obtained by or with
respect to it in connection with the execution, delivery and performance by it
of this Agreement and the consummation of the transactions contemplated hereby.
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2.2 Disclosures. Each of the Venturers represents and warrants that it
is unaware of any material facts or circumstances which have not been disclosed
in this Agreement, and which should be disclosed to the other Venturers in order
to prevent the representations in this Article II from being materially
misleading or which could foreseeable have a material adverse effect on the
business or assets of the Joint Venture.
ARTICLE III
-----------
FORMATION, PURPOSES AND TERM
----------------------------
3.1 Formation of Joint Venture. Schwarz and Can-Cal hereby form a Joint
Venture for the purposes set forth below. All real and personal property
acquired by the Joint Venture after the date hereof shall be held in its name,
and not in the names of the Venturers, and no Venturer shall have any individual
ownership in such property except for its rights as a Venturer in the Joint
Venture.
3.2 Name. The name of this Joint Venture shall be the Schwarz - Can-Cal
Joint Venture or such other name as determined by the Management Committee. The
principal place of business of the Joint Venture shall be 3651 Lindell, Suite A,
Las Vegas, Nevada, or such other place as the Management Committee may
determine.
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
Venturers, or either of them, accomplish such purposes:
(a) to conduct Exploration on the Claims to ascertain whether
precious metals exist on the Claims;
(b) to evaluate the possible Development of the Claims;
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(c) to engage in Development and Mining Operations on the Claims and
milling of the ore to the maximum extent possible;
(d) to engage in marketing of precious metals recovered from the
Claims;
(e) to sell forward, purchase or borrow precious metals from such at
such prices as determined by the Management Committee;
(f) to borrow money necessary to finance the Joint Venture's
activities in accordance with a Program and as directed by the Management
Committee; and
(g) to perform any other operation or activity necessary,
appropriate, or incidental to any of the foregoing.
3.4 Effective Date and Term. The effective date of this Agreement shall
be the date first recited above. The term of this Agreement shall be for fifty
(50) years from the effective date, unless the Agreement is earlier terminated
as herein provided.
ARTICLE IV
----------
RELATIONSHIP OF THE VENTURERS
-----------------------------
4.1 Relationship; Indemnification.
(a) No Venturer in its capacity as a Venturer may, without the prior
authorization of the Management Committee or except as expressly provided
herein, take any act on behalf of the Joint Venture or affecting any of the
Assets.
(b) Each Venturer shall indemnify, defend and hold harmless the
other Venturer, its directors, officers, and employees from and against any and
all losses, claims, damages, liabilities and expenses (including reasonable
legal fees and expenses incurred as a result of any such claims
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made by third parties against such other Venturer) ("Losses") arising out of (i)
any act or any assumption of liability, by the indemnifying Venturer, or any of
its directors, officers or employees, done or undertaken, or apparently done or
undertaken, on behalf of the other Venturer, except for acts taken in good faith
pursuant to the authority expressly granted herein or otherwise agreed in
writing between the Venturers, (ii) any breach of this Agreement by the
indemnifying Venturer, or (iii) the wilful misconduct or negligence of the
indemnifying Venturer.
4.2 Federal Tax Elections and Allocations. The Venturers agree that
their relationship shall constitute a tax partnership within the meaning of
Section 761 (a) of the United States Internal Revenue Code of 1986.
4.3 State Income Tax. The Venturers also agree that, to the extent
possible under applicable law, their relationship shall be treated for state
income tax purposes in the same manner as it is for Federal income tax purposes.
4.4 Tax Returns. The Tax Matters Venturer, Can-Cal, shall prepare and
shall file, after approval by the Management Committee, any tax returns or other
tax forms required.
4.5 Other Business Opportunities. Subject to the provisions of Article
XI and Section 10.7, the parties hereto agree that any Venturer or its
Affiliates may engage in any other business or investment, whether or not the
same shall be in competition with the business or investment of the Joint
Venture or any other venture, including, without limitation, the acquisition of
property outside the Area of Interest at any time.
4.6 Termination of Rights to Properties. Except as otherwise provided in
this Agreement, neither Venturer shall permit or cause all or any part of its
interest in the Property and the assets to be sold, exchanged, encumbered,
surrendered, abandoned or otherwise terminated.
4.7 Implied Covenants. There are no implied covenants contained in this
Agreement other than those of good faith and fair dealing.
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ARTICLE V
---------
CONTRIBUTIONS BY VENTURERS; CERTAIN COVENANTS
---------------------------------------------
5.1 Venturers' Initial Contributions.
(a) Schwarz, as its Initial Contribution, hereby transfers to
Can-Cal (A) a 50% interest in all of its right, title and interest in and to the
Claims listed on Exhibit A hereto (subject to the payment of $100,000 by Can-Cal
of expenses relating to the purposes for which this Joint Venture was formed);
and (B) contributes to the Joint Venture its experience and expertise regarding
analyses, processes, formulas and all other information it has regarding the
Claims, to the Joint Venture. Schwarz will forthwith execute all documents
requested by Can-Cal to transfer a 50% interest in the Claims to Can-Cal.
(b) Can-Cal, as its Initial Contribution,
(i) hereby agrees to contribute $100,000 to the Joint Venture. All
such funds shall be spent for the purposes set forth herein and
no other.
(ii)Can-Cal hereby issues in Schwarz's name 500,000 Can-Cal common
shares. Those shares shall be held in escrow by Can-Cal pending
a determination by Can-Cal, in its sole discretion, whether
precious metals exist on the Claims and whether it is
economically feasible to produce them. Can-Cal shall make that
determination no later than September 30, 1997 and shall notify
Schwarz in writing within fourteen (14) days of its
determination. In the event Can- Cal determines that the
production of precious metals from the claims is not
economically feasible, Can-Cal shall return those shares from
escrow to Can- Cal and Schwarz shall have no claim or right to
any of those shares. In the event Can-Cal determines that
production of precious metals from the Claims is economically
feasible, Can-Cal shall deliver the 500,000 shares to Schwarz.
Schwarz represents that they are familiar with the business,
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operations and financial condition of Can-Cal and have worked
extensively with Can-Cal's management in connection with
Can-Cal's other properties and are familiar with them and that
they are acquiring those shares for investment purposes. Schwarz
shall execute all documents required by law in connection with
issuance of those shares, including, but not limited to,
investment representations and stop transfer instructions. In
addition to restrictions imposed by law restricting resale,
Schwarz agrees that the shares shall be, in no event, salable by
them earlier than in accordance with the following schedule:
May 5, 1998 200,000 shares
November 5, 1998 100,000 shares
May 5, 1999 100,000 shares
November 5, 1999 100,000 shares
Schwarz agrees not to sell any Can-Cal shares except in strict
compliance with federal and state securities laws.
5.2 Additional Cash Advances. In addition, Can-Cal agrees to loan the
joint venture $48,000, on the terms to be agreed upon, to be used for the
purposes set forth herein. Can-Cal reserves the right to loan the Joint Venture
additional funds, in its sole discretion, with the consent of the Management
Committee.
5.3 Schwarz's Option to Repurchase Can-Cal's 50% Interest.. In the event
Can-Cal determines by September 30, 1997 that production of precious metals from
the Claims is not economically feasible, Schwarz shall have the option to
purchase Can-Cal's 50% interest in the Claims by paying Can-Cal all funds paid
by Can-Cal for its 501/6 interest plus all funds advanced by Can-Cal to the
Joint Venture. Schwarz must exercise that option and make payment of the option
price in full no later than December 31, 1998. If Schwarz does not exercise the
option and pay the
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option price in full by December 31, 1998, it shall have no further rights with
respect to Can-Cal's 50% interest in the Claims.
5.4 Financing. After Can-Cal makes the balance of its Initial
Contribution in accordance with Section 5. 1 (b) herein, and makes the
determination that production of precious metals from the Claims is economically
feasible, Schwarz and Can-Cal through the Management Committee hereby agree to
use their best efforts to arrange with third-party lenders for working capital
financing for the Joint Venture as required to finance a Program.
5.5 Cash Calls. In the event the Joint Venture is unable to obtain
financing from third party lenders, the Management Committee shall make a
determination of whether or not to make a cash call on the Venturers. In the
event the Management Committee makes a cash call, the parties agree to
contribute their portion of any such cash call to the Joint Venture that
percentage of funds required equal to its Participating interest, as determined
by the Management Committee.
ARTICLE VI
----------
INTERESTS OF VENTURERS
----------------------
6.1 Initial Participating Interests. The Venturers shall have the
following initial Participating Interests subject to Can-Cal contributing the
balance of its Initial Contribution in accordance with Section 5. 1 (b)(i)
herein:
Schwarz 50%
Can-Cal 50%
6.2 Changes in Participating Interests. A Venturer's Participating
Interest may be changed as follows:
(a) As provided in Sections 10.2 and 10.3; or
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(b) By transfer by a Venturer of less than all its Participating
Interest in accordance with Article XII.
6.3 Elimination of Minority Interest. Upon the reduction of its
Participating Interest to less than ten percent (10%), a Venturer shall be
deemed to have withdrawn from this Agreement and shall relinquish its entire
Participating Interest. Such relinquished Participating Interest shall be deemed
to have accrued automatically to the other Venturer, who at its option, may
cause the interest of the diluted Venturer's Participating Interest to be
exchanged for a two percent (2 %) net profits interest of the Joint Venture. For
purposes of this Section 6.3, net profits is defined as gross revenue less
expenses, where expenses include but are not limited to mining, extraction,
haulage, processing, milling, marketing, severance and ad valorem taxes,
depreciation of Claims, plant and equipment and amortization of development and
exploration, using unit of production method of accounting.
6.4 Continuing Liabilities Upon Adjustments of Participating Interests.
Any reduction of a Venturer's Participating Interest Under Article X shall not
relieve such Venturer of its share of any liabilities to third persons, whether
it accrues before or after such reduction, arising out of Operations conducted
prior to such reduction, or of its other obligations under this Agreement. For
purposes of this Section, such Venturer's share of such liability shall be equal
to its Participating Interest at the time such liability was incurred. The
increased Participating Interest accruing to a Venturer as a result of the
reduction of the other Venturer's Participating Interest shall be free of
royalties, liens or other encumbrances arising by, through or under such other
Venturer, other than those existing at the time the Claims were acquired or
those to which both Venturers have given their written consent. An adjustment to
a Participating Interest need not be evidenced during the term of this Agreement
by the execution and recording of instruments, but each Venturer's Participating
Interest shall be shown in the books of the Joint Venture. Either Venturer, at
any time upon request of the other Venturer, shall execute and acknowledge
instruments necessary to evidence such adjustment in form sufficient for
recording in the jurisdiction where the Claims are located.
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ARTICLE II
----------
MANAGEMENT COMMITTEE
--------------------
7.1 Organization and Composition. The Venturers hereby establish a
Management Committee to determine overall policies, objectives, procedures,
methods and actions under this Agreement. The Management Committee shall consist
of two members, one member appointed by Schwarz and one member appointed by
Can-Cal. Each Venturer may appoint one or more alternates to act in his or her
absence as a regular member (including another member by proxy). Any alternate
so acting shall be deemed a member. Appointments shall be made or changed by
notice to the other Venturer. The initial members shall be Robin Schwarz
(appointed by Schwarz) and Ronald Sloan (appointed by Can-Cal).
7.2 Decisions. Each Venturer, acting through its appointed members,
shall have one vote on the Management Committee. Unless otherwise specifically
provided in this Agreement, the vote of the Venturer with a Participating
Interest over fifty percent (50%) shall determine the decisions of the
Management Committee, It shall also supervise and control all aspects of the
Joint Venture's business and operations including, but not limited to,
exploration, a development, haulage, processing, milling and marketing of the
ore on the Claims.
7.3 Meetings. The Management Committee shall hold regular meetings, at
least quarterly, at 3651 Lindell, Suite A, Las Vegas, Nevada, or at any other
mutually agreed upon place. The Secretary shall give five business days' notice
to the Venturers of such regular meetings. The initial regular meeting shall be
held on June 2, 1997. Additionally, either Venturer may call a special meeting
upon five business days' notice to the other Venturer. In case of emergency,
reasonable notice of a special meeting shall suffice. There shall be a quorum if
at least one member representing a Venturer is present. Each notice of a meeting
shall include an itemized agenda prepared by the Secretary in the case of a
regular meeting, or by the Venturer calling the meeting in the case of a special
meeting, but any matters may be considered with the consent of all Venturers.
The Secretary shall prepare minutes of all meetings and shall distribute copies
of such minutes of all meetings to the Venturers within 14 days after the
meeting. The minutes, when signed
85
by all Venturers, shall be the official record of the decisions made by the
Management Committee and shall be binding on the Venturers. If personnel
employed in Operations are required to attend a Management Committee meeting,
reasonable out-of-pocket costs incurred in connection with such attendance shall
be an expense chargeable to the Joint Venture. All other expenses shall be paid
for by the Venturers individually.
7.4 Action Without Meeting. In lieu of participation at meetings in
person, any member of the Management Committee may participate by telephone. All
decisions made at such telephonic conferences will be immediately confirmed in
writing by the Venturers.
7.5 Matters Requiring Approval. The Management Committee shall have
exclusive authority to determine all management matters related to this
Agreement.
7.6 Appointment of Secretary. The Venturers may appoint a Secretary to
keep the books and records of the Joint Venture, give notices and perform such
other duties as the Management Committee may delegate.
7.7 Transactions with Affiliates. If the Joint Venture engages
Affiliates of either Venturer to provide services hereunder, it shall do so on
terms no less favorable to the Joint Venture than would be the case with
unrelated persons in arm's-length transactions.
ARTICLE VIII
------------
PROGRAMS
--------
8.1 Initial Program. The initial Program shall be adopted by the
Venturers within thirty (30) days of the date that Can-Cal makes its
determination pursuant to paragraph 5.1(b)(ii).
8.2 Operations Pursuant to Programs. Operations shall be conducted,
expenses shall be incurred, and Assets shall be acquired only pursuant to
approved Programs.
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8.3 Election to Venturers. Within five (5) days after the final vote
adopting a Program or such later date specified by the Management Committee, the
Venturers shall contribute to the Joint Venture amounts necessary, over and
above that which has been financed with the approval of the Management
Committee, to implement such Program in proportion to its respective
Participating Interest as of the beginning of the period covered thereby.
8.4 Deadlock on Proposed Programs. If the Venturers, acting through the
Management Committee, fail to approve a Program by the beginning of the period
to which the proposed Program applies, or fail to present Program, a Program
comparable to the last adopted Program shall automatically be adopted.
ARTICLE IX
----------
DISTRIBUTIONS
-------------
9.1 Distributions. Joint Venture cash, after due allowance for the cash
necessary for the operation of the Joint Venture business and requirements of
any agreements relating to indebtedness of the Joint Venture, shall be allocated
and distributed to the Venturers in accordance with their respective
Participating Interests, subject to the provisions set forth in Article X, in
aggregate amounts and at times determined by the Management Committee. Any
disproportionate distributions due to differing tax liabilities between the
Venturers shall be taken into account in future distributions, subject to other
provisions of this Article and Article X, in order to have aggregate
distributions to the Venturers in accordance with their respective Joint Venture
Interests. In making determinations regarding distributions, and subject to the
provisions of this Section, the Management Committee shall act consistently with
the principle that available cash should not be distributed to Venturers in any
year until annual operating costs and expenses for that year have been paid or
reserved against and only after an annual audit has been prepared of the
financial statements of the Joint Venture for that year. All funds in excess of
immediate cash requirements shall be invested in interest-bearing accounts for
the benefit of the Joint Account.
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ARTICLE X
---------
DISSOLUTION AND TERMINATION
---------------------------
10.1 Dissolution. The Joint Venture shall dissolve upon, but not before,
the first occur of:
(a) the expiration of the term of the Joint Venture;
(b) the sale, transfer, condemnation or destruction of all or
substantially all of the Claims, except for a sale or transfer in connection
with a sale-leaseback financing transaction or in which the Joint Venture
acquires a purchase money mortgage;
(c) the unanimous written consent of the Venturers;
(d) an election pursuant to Section 10.2(b) hereof to dissolve.
Except as provided herein, no Venturer shall have the right to terminate or
dissolve the Joint Venture.
10.2 Events of Default.
(a) If any of the following events occur:
(i) the entry of a decree or order by a court having
jurisdiction in the premises adjudging a Venturer a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of a Venturer or any of its Parents
under any bankruptcy, insolvency, or other similar state or federal law; or
appointing a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Venturer or any of its Parents or of any substantial
part of the Claims of a Venturer or any of its Parents, or ordering the winding
up or liquidation of the affairs of a Venturer or any of its Parents,
88
and the continuance of any such decree or order remains unstayed and in effect
for a period of ninety (90) consecutive days; or
(ii) the institution by a Venturer or its Parent of bankruptcy
proceedings or other proceedings to be adjudicated as bankrupt or insolvent, or
the consent by a Venturer or its Parent to the institution of bankruptcy or
insolvency proceedings against a Venturer or its Parent, or the filing of a
petition or answer of consent by a Venturer or its Parent seeking reorganization
or relief under any bankruptcy, insolvency, or other similar state or federal
law, or the consent by a Venturer or its Parent to the filing of such petition
or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator
(or similar official) of the Venturer or its Parent or of any substantial part
of the Claims of a Venturer or its Parent, or the making by a Venturer or its
Parent or an assignment for the benefit of creditors, or the admission by a
Venturer or its parent in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by a Venturer or its Parent
in furtherance of any such action; or
(iii) any part of the Participating Interest of a Venturer is
seized by a creditor of such Venturer, and the same is not released from seizure
or bonded out within sixty (60) days from the date of notice of seizure; or
(iv) Can-Cal fails to make the balance of its Initial
Contribution or a Venturer fails to advance funds as required by Section 5.2, or
any other provisions of this Agreement, or to perform any other material
obligation imposed upon such Venturers under any agreement relating to borrowed
money of the Joint Venture or of such Venturer; or
(v) a Venturer fails to perform any of its obligations under
this Agreement or has breached any of the terms, conditions, representations,
warranties or covenants of this Agreement and any such failure or breach has
continued for more than thirty (30) days after written notice by Non-Defaulting
Venturer to the Venturer so failing to perform any of the obligations, terms,
conditions or covenants hereinabove cited, or which has breached, this
Agreement; then such
89
Venturer shall be deemed to be in default hereunder and shall be referred to as
the Defaulting Venturer, and the other Venturer shall be referred to as the
Non-Defaulting Venturer.
Any Non-Defaulting Venturer shall have the right to give the
Defaulting Venturer a Notice of Default ("Notice") which shall be in writing,
shall set forth the nature of the Default and, if, applicable, the obligations
that the Defaulting Venturer has not performed, or is in breach of, and shall
set forth the date by which such Default must be cured, which date shall be ten
(10) days after receipt of the Notice if payment or money is required, or thirty
(30) days after receipt of the Notice for events other than defaults in the
payment of money; provided, however, that in the event of a nonmonetary default
if, within the thirty (30) day period following receipt of the Notice, the
Venturer in good faith commences to perform such obligation and cure such
Default and thereafter prosecutes to completion with diligence and continuity
the curing thereof and cures such default within a reasonable time, not to
exceed an additional sixty (60) days, then no Default shall have occurred and
the Venturer shall lose no rights hereunder, or such shorter period as may be
necessary in the good faith judgment of such Non-Defaulting Venturer to prevent
a default under any agreement for borrowed money to which the Joint Venture is a
party or to avoid jeopardizing its investment in the Joint Venture. If, within
the period specified in the Notice, the Defaulting Venturer cures such Default,
the Notice shall be inoperative and the Defaulting Venturer shall lose no rights
hereunder. If, within such specified period, the Defaulting Venturer does not
cure such Default, any Non-Defaulting Venturer at the expiration of such period,
shall have the rights hereinafter specified.
(b) Upon the occurrence and during the continuance of a Default and
the expiration of any applicable grace period, the Non-Defaulting Venturer shall
have the option, in its sole discretion, to:
(i) dissolve the Joint Venture; or
(ii) expel the Defaulting Venturer and purchase on a date
specified by such Non-Defaulting Venturer in a written notice, which date shall
be not more than one hundred
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twenty (120) days from the date of such notice, all of the Defaulting Venturer's
Participating Interest at a price which for such purposes shall be equal in
amount to the Defaulting Venturer's Participating Interest in the lesser of (A)
the fair market value of the Joint Venture on the date of such purchase, as
determined by an independent recognized expert selected by the Non-Defaulting
Venturer, or (B) the net book value of the Joint Venture, as determined by
generally accepted accounting principles as consistently applied by the Joint
Venture (excluding goodwill and any capital resulting from write-up of assets)
as shown on the Joint Venture books as of the date hereof but after deducting
any amounts payable to the Joint Venture by the Defaulting Venturer as of the
date of purchase;, any costs of remedying the Default and any damages or costs
to the Joint Venture or Non-Defaulting Venturer resulting from the Default.
Payment to the Defaulting Venturer may take the form of a ten (10) year note
with interest at the floating "Prime Rate" announced from time to time by The
Chase Manhattan Bank as in effect (the Prime Rate) and providing for ten (10)
equal principal payments on the first ten (10) anniversaries of the making of
such note, annual payment of interest in arrears, and a right to prepay all of
part of the note without penalty. In the event the Joint Venture suffers
liability in respect of a period prior to the expulsion of the Defaulting Joint
Venture which liability had not been accrued on the books of the Joint Venture
on the date the purchase price of the Defaulting Venturer's interest was
determined, the payment provided for above shall be reduced by an amount equal
to the Defaulting Venturer's Participating Interest in such liability; or
(iii) cure the Default, and the cost of such curing shall be
charged against the Defaulting Venturer's Capital Account and credited to the
Non-Defaulting Venturer's Capital Account, and the Participating Interest of the
Defaulting Venturer shall be decreased, and the Participating Interest of the
Non-Defaulting Venturer shall be increased in proportion to the foregoing
adjustments to the capital accounts; or
(iv) in the case of a breach of a Venturer's obligation under
Sections 5.1(b) or 5.2, exercise the remedies set forth in Section 10. 3.
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None of the foregoing options shall relieve the Defaulting
Venturer of its share of liabilities to third persons (whether such accrues
before or after such Default) arising out of Operations conducted prior to such
Default. For purposes of this Section, the Defaulting Venturer's share of such
liabilities shall be equal to its Participating Interest immediately prior to
Default.
10.3 Default in Making Contributions.
(a) If a Venturer Defaults in making a contribution or cash call
required pursuant to Sections 5.1(b) or 5.2, the Non-Defaulting Venturer may
advance the defaulted contribution on behalf of the Defaulting Venturer. The
Non-Defaulting Venturer may at its election treat such advance, together with
accrued interest, as a demand loan to the Defaulting Venturer bearing interest
from the date of the advance at the rate provided in Section 10.2(b)(ii). The
failure to repay said loan within thirty (30) days of notice of demand shall be
an event of Default pursuant to Article X. Each Venturer hereby grants to the
other a security interest in its rights under this Agreement and in its
Participating Interest in the Assets, and the proceeds therefrom, to secure any
loan made hereunder, including the interest thereon, reasonable attorney's fees
and all other reasonable costs and expenses incurred in enforcing such lien or
security interest, or both. Each Venturer hereby irrevocably appoints the other
its attorney-in-fact to execute, file and record all instruments necessary to
perfect or effectuate the provisions hereof. No later than the end of the fiscal
year in which such advance was made the Non-Defaulting Venturer shall be
entitled to receive the amount of such advance plus interest from the Defaulting
Venturer. At its election, the Non-Defaulting Venturer may, in lieu of receiving
repayment of the advance plus interest from the Defaulting Venturer, instruct
the Joint Venture to make a preferential cash distribution equal to the amount
of such advance plus a 10% rate of return. No distributions (other than amounts
required to pay income taxes on Joint Venture income if any cash is available)
shall be made to a Defaulting Venturer until such advance has been repaid. In
addition, the amount of such advance, plus interest thereon, shall be credited
to the Non-Defaulting Venturer's Capital Account. Upon return of such advance,
the amount of such repaid advance, plus interest or other return, shall be
deducted from the Non- Defaulting Venturer's Capital Account.
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(b) The Venturers acknowledge that if a Venturer Defaults in making
a contribution, or a cash call, or in repaying a loan, as required hereunder, it
will be difficult to measure the damages resulting from such Default whether or
not a Non-Defaulting Venturer makes an advance under Section 10.3(a). In the
event of such Default and in addition to, and not in lieu of, provisions of
Section 10.3(a), as reasonable liquidated damages, the Non-Defaulting Venturer
shall be entitled to receive a preferential cash distribution, in addition to
any distribution made under Section 9. 1, equal to the Adjusted Percent of the
Joint Venture's Net Proceeds for that year (which distribution shall be paid out
of the Defaulting Venturer's share of Joint Venture Net Proceeds) and each
additional year for which the advance referred to in Section 10.3(a) is
outstanding. Any such distribution shall be made at the end of the fiscal year
in which any such advance has been outstanding. For purposes of this Section,
the "Adjusted Percent" means a percentage equal to the excess of (a) the
quotient calculated by dividing (i) the sum of (x) the value of the
Non-Defaulting Venturer' s initial contribution under Section 5.1, and (y) the
total of all of the Non-Defaulting Venturer's contributions under Sections 5.2
(including amounts advanced pursuant to Section 10.3(4);) by (ii) the sum of (x)
and (y) above for all Venturers (with amounts advanced by a Venturer; pursuant
to Section 10.3 (a) being treated as a contribution of such Venturer); and then
multiplied the result by one hundred, over (b) fifty (50); provided, however,
that in no event shall the Adjusted Percent exceed ten (10). Such distribution
shall not be deemed a repayment of the advance under Section 10.3(a).
10.4. Continuing Obligations. On dissolution of this Agreement under
Section 10.1, the Venturers shall remain liable for continuing obligations
hereunder until final settlement of all accounts and for any liability, whether
it accrues before or after termination, if it arises out of Operations during
the term of the Agreement.
10.5 Disposition of Assets on Termination.
(a) Upon the dissolution of the Joint Venture pursuant to Section
10.1 the liquidating trustee shall take all action necessary to wind up the
activities of the Joint Venture, and
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all costs and expenses incurred in connection with the termination of the Joint
Venture shall be expenses chargeable to the Joint Venture. Any Venturer that has
a negative Capital Account balance when the Joint Venture is terminated shall
contribute to the Assets of the Joint Venture an amount sufficient to raise such
balance to zero. The Assets shall first be paid, applied, or distributed in the
following order of priority to the extent available:
(i) first, to the payment of any debts and liabilities of the
Joint Venture to persons who are not Venturers which shall then be due and
payable (other than liabilities expressly assumed by one of the Venturers
pursuant hereto);
(ii) second, to the Venturers pro-rata until each shall have
received the outstanding principal of, and accrued and unpaid interest on, any
loans made to the Joint Venture;
(iii) third, to the establishment of any reserve which the
Management Committee or liquidating trustee deems necessary in its sold
discretion to provide for any contingent or unforeseen liabilities or
obligations of the Joint Venture (other than liabilities expressly assumed by
one of the Venturer's pursuant hereto). (At the expiration of such period of
time as the Management Committee or liquidating trustee deems advisable, the
balance remaining in any such reserve after payment of any such liabilities and
obligations shall be distributed in the manner hereinafter set forth in this
Section;
(iv) fourth, to the Venturers pro rata until each shall have
received all accrued and unpaid interest on any additional capital contributions
to the Joint Venture made pursuant to Section 10.3(b) hereof;
(v) fifth, to the Venturers in an amount equal to the positive
balances in their respective Capital Accounts on the date of distribution;
provide, however, that in the event there shall be insufficient funds to repay
in full such Capital Accounts, payment shall be made to Venturers with the
greatest balances in their capital accounts until capital accounts are all in
the same ratio as their respective Participating Interests; and
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(vi) the balance, if any, shall be distributed to the Venturers
in accordance with their respective Participating Interests in the Joint
Venture.
(b) No right, power or remedy conferred upon the Venturers or the
Joint Venture with respect to any Defaulting Partner under this Article shall be
inclusive, and each such Venturer under this Article shall be exclusive, and
each such right, power or remedy shall be cumulative and in addition to every
other right, power or remedy whether conferred by this Agreement or hereafter
available at law or equity or by statute or otherwise. No course of dealing
between the Venturers and any Defaulting Venturer and no delay in exercising any
right, power or remedy conferred in this Article or now or hereafter available
at law or in equity or by statute or otherwise, shall operate as a waiver or
otherwise prejudice any such right, power or remedy.
(c) No Venturer shall be entitled to withdraw any part of its
capital contributions to the Joint Venture, or to receive any distribution from
the Joint Venture, except as expressly provided in this Agreement.
10.6 Withdrawal. At any time after the third anniversary of the date of
this Agreement, a Venturer may elect to withdraw by giving written notice to the
other Venturer of the effective date of withdrawal, which shall be the later of
the end of the then current Program or at least thirty (30) days after the date
of the notice. Upon receipt of such notice the other Venturer may elect at any
time to either (a) dissolve the Joint Venture; or (b) purchase, on a date
specified by the non- withdrawing Venturer, all of the withdrawing Venturer's
Participating Interest at a price which for such purposes be equal in amount to
the withdrawing Venturer's Participating Interest in the lesser of (x) the fair
market value of the Joint Venture, as determined by an independent recognized
expert selected by the non-withdrawing Venturer, or (y) the net book value of
the Joint Venture, as determined by generally accepted accounting principles as
consistently applied by the Joint Venture (excluding goodwill and any capital
resulting from write-up of assets) as shown on the Joint Venture books as of the
date hereof but after deducting any amounts payable as of the date of withdrawal
to the Joint Venture by the withdrawing Venturer.
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10.7 Non-Compete Covenants. A withdrawing Venturer shall not directly or
indirectly acquire any interest in Claims within the Area of Interest for twelve
(12) months after the date of withdrawal. If a withdrawing Venturer, or the
Affiliate of a withdrawing Venturer, breaches this Section, such Venturer or
Affiliate shall be obligated to offer to convey to the non-withdrawing Venturer,
without cost, any such Claims or interest acquired in such breach. Such offer
shall be made in writing and can be accepted by the non-withdrawing Venturer at
any time within fortyfive (45) days after it is received by such non-withdrawing
Venturer.
ARTICLE XI
----------
ACQUISITIONS WITHIN AREA OF INTEREST
------------------------------------
11.1 General. Any interest or option to acquire any interest in real
property, including mining claims, within the Area of Interest owned on the date
hereof or acquired thereafter during the term of this Agreement by or on behalf
of a Venturer or any Affiliate shall, except as provided in this Article, be
included in the Claims and shall be subject to the terms and provisions of this
Agreement.
11.2 Notice to Nonacquiring Venturer. Within sixty (60) days after the
acquisition of any interest or the option to acquire any interest in real Claims
wholly or partially within the Area of Interest, the acquiring Venturer shall
notify the other Venturer of such acquisition. The acquiring Venturer's notice
shall describe in detail the acquisition, the lands and minerals covered
thereby, the cost thereof, and the reasons why the acquiring Venturer believes
that the acquisition of the interest is in the best interests of the Venturers
under this Agreement. In addition to such notice, the acquiring Venturer shall
make any and all information concerning the acquired interest available for
inspection by the other Venturer.
11.3 Option Exercised. If, within thirty (30) days after receiving the
acquired Venturer's notice, the other Venturer notifies the acquiring Venturer
of its election to accept a proportionate interest in the acquired interest
equal to its Participating Interest, the acquiring Venturer shall convey to the
other Venturer, by special warranty deed, such a proportionate undivided
interest
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therein. The acquired interest shall become a part of the Claims for all
purposes of this Agreement immediately upon the notice of such other Venturer's
election to accept the proportionate interest therein. Such other Venturer shall
promptly pay to the acquiring Venturer its proportionate share of the latter's
actual out-of-pocket acquisition costs.
11.4 Option Not Exercised. If the other Venturer does not give such
notice within the thirty (30) day period set forth above, it shall have no
interest in the acquired interest, and the acquired interest shall not be a part
of the Claims or be subject to this Agreement.
ARTICLE XII
-----------
TRANSFER OF INTEREST
--------------------
12.1 General. A Venturer shall have the right to transfer, grant,
assign, encumber, pledge or otherwise commit or dispose of ("transfer") to any
third party all of any part of its interests in or to this Agreement, its
Participating Interest, or the Assets solely as provided in this Article.
12.2 Limitations on Free Transferability. The transfer right of a
Venturer in Section 12.1 shall be subject to the following terms and conditions:
(a) No transferee of all or part of the interests of a Venturer
in this Agreement, any Participating Interest, or the Assets shall have the
rights of a Venturer unless and until the transferring Venturer has provided to
the other Venturer notice of the transfer, and the transferee, as of the
effective date of the transfer, has committed in writing to be bound by this
Agreement to the same extent and nature as the transferring Venturer; and,
except as provided in Sections 12.2(g) and 12.2(h), the transfer, as of the
effective date of the transfer, has committed in writing to be bound by this
Agreement to the same extent and nature as the transferring Venturer.
(b) No Venturer, without the consent of the other Venturer, shall
make a transfer which shall cause termination of the tax partnership established
by the provisions of Section 4.2;
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(c) No transfer permitted by this Article shall relieve the
transferring Venturer of its share of any liability, whether accruing before or
after such transfer, which arises out of Operations conducted prior to such
transfer;
(d) The transferring Venturer and the transferee shall bear all
tax consequences of the transfer;
(e) In the event of a transfer of less than all of a
Participating Interest, the transferring Venturer and its transferee shall act
and be treated as one Venturer;
(f) No Venturer shall transfer any interest in this Agreement or
the Assets except by transfer of part or all of its participating Interest;
(g) If the transfer is the grant of a security interest by
mortgage, deed of trust, pledge, lien or other encumbrance of any interest in
this Agreement, any Participating Interest or the Assets to secure a loan or
other indebtedness of a Venturer in a bona fide transaction, such security
interest shall be subordinate to the terms of this Agreement and the rights and
interests of the other Venturer hereunder. Upon any foreclosure or other
enforcement of rights in the security interest, the acquiring third party shall
be deemed to have assumed the position of the encumbering Venturer with respect
to this Agreement and the other Venturer, and it shall comply with the terms and
conditions of Article XIII;
(h) If a sale or other commitment or disposition of Products or proceeds
from the sale of Products by a Venturer upon distribution to it pursuant to
Section 9.1 creates in a third party a security interest in Products or proceeds
therefrom prior to such distribution, such sales, commitment or disposition
shall be subject to the terms and conditions of this Article;
(i) If, contrary to Section 12.2(b), a transfer is made which causes
termination of the tax partnership established by Section 4.2, the transferring
Venturer shall indemnify, defend and hold
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harmless the other Venturer from and against any and all loss, cost, expense or
damage arising from such termination;
(j) Such transfer shall be subject to a preemptive right in the
other Venturer as provided in Section 12.3; and
(k) No transfer may be made without the consent of the other
Venturer.
12.3 Preemptive Right. Except as otherwise provided in Section 12.4, if
a Venturer desires to transfer all or any part of its interest in this
Agreement, and Participating Interest, or the Assets, the other Venturer shall
have a preemptive right to acquire such interests as provided in this Section on
substantially the same terms and conditions as agreed to by any proposed
transferee.
12.4 Exceptions to Preemptive Right and Transfer Restrictions. Sections
12.3 and 12.2(k) shall not apply to the following transfers:
(a) (i) Incorporation of a Venturer, or corporate merger,
consolidation, amalgamation or reorganization of a Venturer by which the
surviving entity shall possess substantially all of the stock, or all of the
Claims rights and interests, and be subject to substantially all of the
liabilities and obligations of that Venturer or (ii) transfer to an Affiliate,
provided that consent is obtained, which consent shall not be unreasonably
withheld; and
(b) The grant by a Venturer of a security interest in any interest
in this Agreement, any Participating Interest, or the Assets by mortgage, deed
of trust, pledge, lien or other encumbrances with the written consent of the
Management Committee.
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ARTICLE XIII
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GENERAL PROVISIONS
------------------
13.1 Notices. All notices, payments and other required communications
("Notices") to the Venturers or the Management Committee members shall be in
writing and shall be given (i) by personal delivery to the Venturer, or (ii) by
electronic communication, with a confirmation sent by registered or certified
mail return receipt requested, or (iii) by registered or certified mail return
receipt requested. Notices shall be addressed as follows:
If to Schwarz (or its member representatives on the Management
Committee):
Robin Schwarz
16008 Ash Street
Hesperia, CA 92345
If to Can-Cal (or its member representatives on the Management
Committee):
Ronald Sloan
110 - 5769 201 A Street
Langley, B.C., Canada V3A 8H9
All notices shall be effective if sent to the address specified above
and shall be deemed delivered (i) if by personal delivery on the date of
delivery, (ii) if by electronic communication on the next business day following
receipt of the electronic communication, and (iii) if solely by mail on the next
business day after actual receipt. A Venturer may change its address from time
to time for the purposes hereof by written notice to the other Venturer.
13.2 Waiver. The failure of a Venturer to insist on the strict
performance of any provision of this Agreement or to exercise any right, power
or remedy upon a breach hereof shall not constitute a waiver of any provision of
this Agreement or limit the Venturer's right thereafter to enforce any provision
or exercise right.
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13.3 Modification. No modification or amendment of this Agreement shall
be valid unless made in writing and duly executed by the Venturers.
13.4 Force Majeure. The obligations of a Venturer shall be suspended to
the extent and for the period that performance is prevented by any cause,
whether foreseeable or unforeseeable, beyond its reasonable contract, including,
without limitation, labor disputes (however arising and whether or not employee
demands are reasonable or within the power of the Venturer to grant); acts of
God; laws, regulations, orders, proclamations, instructions or requests of any
government or governmental entity; judgments or orders of any court; inability
to obtain on reasonably acceptable terms any public or private license, permit
or other authorization; curtailment or suspension of activities to remedy or
avoid an actual or alleged, present or prospective violation of federal, state
or local environmental standards; acts of war or conditions arising out of or
attributable to war, whether declared or undeclared; riot, civil strife,
insurrection or rebellion; fire, explosion, earthquake, storm, flood, sink
holes, drought or other adverse weather condition; delay or failure by suppliers
or transporters of materials, parts, supplies, services or equipment or by
contractors' or subcontractors' shortage of, or inability to obtain, labor,
transportation, materials, machinery, equipment, supplies, utilities or
services; accidents; breakdown of equipment, machinery or facilities; or any
other cause whether similar or dissimilar to the foregoing. The affected
Venturer shall promptly give notice to the other Venturer of the suspension of
performance, stating therein the nature of the suspension, the reasons therefor,
and the expected duration thereof. The affected Venturer shall resume
performance as soon as reasonably possible.
13.5 Governing Law. Except as otherwise specifically provided in Article
XIV, this Agreement shall be governed by and interpreted in accordance with the
internal laws but not the laws of conflict of the State of Nevada.
13.6 Rule Against Perpetuities. Any right or option to acquire any
interest in real or personal Claims under this Agreement must be exercised, if
at all, so as to vest such interest in the acquirer within twenty-one (21) years
after the effective date of this Agreement.
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13.7 Further Assurance. Each of the Venturers agrees that it shall take
from time to time such actions and execute such additional instruments as may be
reasonably necessary or convenient to implement and carry out the intent and
purpose of this Agreement.
13.8 Survival of Terms and Conditions. The following Sections shall
survive the termination of this Agreement to the full extent necessary for their
enforcement and the protection of the Venturers in whose favor they run:
Sections 4.1(b), 6.4, 10.3, 10.4, 10.5 and 10.6.
13.9 Entire Agreement; Successors and Assigns. This Agreement contains
the entire understanding of the Venturers and supersedes all prior agreements
and understandings between the Venturers relating to the subject matter hereof.
This Agreement shall be binding upon and inure to the benefit of the respective
successors and permitted assigns of the Venturers.
13.10 Validity and Severability. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under the present or future laws
effective during the term of this Agreement, such provision shall be fully
severable; this Agreement shall be construed and enforced as if such illegal,
invalid, or unenforceable provision had never comprised a part of this
Agreement; and the remaining provisions of this Agreement shall remain in full
force and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance from this Agreement. Furthermore, in lieu of such
illegal, invalid, or unenforceable provision, there shall be added automatically
as a part of this Agreement a provision similar in terms to such illegal,
invalid or unenforceable provision.
13.11 Counterparts. This Agreement may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute but one and the
same instrument.
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ARTICLE XIV
-----------
RESOLUTION OF DISPUTES; ARBITRATION
-----------------------------------
14.1 Subject of Arbitration. In the event of disagreement between the
Venturers with respect to any question of fact involved in the application of
this Agreement or of any action of the Management Committee, or the
interpretation of any provision of this Agreement or any action of the
Management Committee (whether legal or factual), the matter involved in the
disagreement shall, upon demand of any Venturer, be submitted to arbitration in
the manner hereinafter provided. Submission of a matter to arbitration, as
hereinafter provided, shall be a condition precedent to any right to institute
proceedings at law or in equity concerning such matter, except for injunctive or
other provisions relief pending the arbitration of a matter subject to
arbitration pursuant to this Agreement.
14.2 Agreement to Arbitrate. The Venturers will make every responsible
effort to resolve disputes, claims and controversies through decisions of the
Management Committee prior to any such dispute, claim or controversy reaching a
state that required implementation of this Article for resolution. However,
should any controversy arise between or among the Venturers as to which the
Venturers are unable to effect a satisfactory resolution and which, under the
terms and provisions of this Agreement may be submitted to arbitration, such
controversy shall be submitted to arbitration in accordance with the terms and
provisions of this Article, and in accordance with the rules of the American
Arbitration Association (or any successor organization).
14.3 Submission to Arbitration and Selection of Arbitrators. A Venturer
desiring to submit to arbitration any such controversy shall furnish its demand
for arbitration in writing to the other Venturer, which demand shall contain a
brief statement of the matter if controversy, as well as a list containing the
names of three (3) suggested arbitrators from which list, or from other sources,
all of the Venturers shall choose one (1) mutually acceptable arbitrator. If the
Venturers are unable to agree upon the identity of a single arbitrator, within
ten (10) days from receipt of such demand, each Venturer, within a period of
five (5) additional days, shall name one (1) arbitrator by
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written notice to the other Venturer. Within ten (10) days after this notice,
the two (2) arbitrators so named shall choose a third arbitrator. If any
Venturer fails to name an arbitrator within the specified five (5) day period or
if the two arbitrators chosen by the Venturers fail to select a third arbitrator
within the ten (10) days period, then either Venturer, on behalf of and on
notice to the other Venturer, may request appointment by the American
Arbitration Association (or any organization successor thereto) in accordance
with its rules then prevailing of the required additional arbitrators. If the
American Arbitration Association (or such organization successor thereto) should
fail to appoint the necessary arbitrator(s) within fifteen (15) days after such
request is made, then either Venturer may apply, on notice to the other
Venturer, to a court in Nevada for the appointment of such necessary additional
arbitrators. Each of the arbitrator(s) chosen or appointed pursuant to this
Section shall be a person having at least ten (10) years experience in the
United States in a profession or professions related to the subject matter
involved in the dispute and shall not be a past or present officer, director or
employee of, or have any material interest in, any Venturer or its Affiliate.
14.4 Arbitration Procedure. Each Venturer shall furnish the arbitrator
or arbitrators and all other Venturers with a written statement of matters it
deems to be in controversy for purposes of the arbitration procedures. Such
statement shall also include all arguments, contentions and authorities which it
contends substantiate its position. Hearings may be scheduled by the arbitrator
or arbitrators, provided that if any such hearings are to be held, they shall be
scheduled no later than ten (10) days following the appointment of such
arbitrator or arbitrators. If only one (1) arbitrator is appointed pursuant to
Section 14.3 hereof, such arbitrator shall render his decision and award as soon
as possible but no later than thirty (30) days after the conclusion of any
hearings before such arbitrators. Any such hearings shall be held in Las Vegas,
Nevada or such other location as the parties may agree upon. If, however, three
(3) arbitrators are appointed, they shall render their decision and award upon
the concurrence of at least two (2) of their number, as soon as possible but not
later than thirty (30) days after the conclusion of any hearings before such
arbitrators. The decision and award shall in either case be in writing and
counterpart copies thereof shall be delivered to each of the Venturers. Such
decision shall be based solely upon the written arguments
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and contentions coupled in appropriate cases with evidence and/or legal
authorities, submitted by each Venturer. Except with the consent of each
Venturer, the arbitrator shall not retain or consult any experts in arriving at
the decision. In rendering such decision and award, the arbitrator(s) shall not
add to, subtract from or otherwise modify the provisions of this Agreement. Each
Venturer agrees that judicial judgment may be held on the decision and award of
the arbitrator(s) so rendered and may be enforced in accordance with the laws of
the State of Nevada.
14.5 Successor Arbitrators. Notwithstanding the above, in the event any
arbitrator appointed by a Venturer dies, refuses to act, or becomes incapable of
acting, then such Venturer shall appoint a successor arbitrator within five (5)
days of notice of said disability. In the event such Venturer fails to appoint
the required successor within such time, the other Venturer, on notice, may
apply to a court in Nevada for the appointment of such necessary arbitrator. If
a third arbitrator dies, refuses to act, or become incapable of acting, then a
successor arbitrator shall be chosen pursuant to Section 14.3 hereof.
14.6 Cost of Arbitration. Each Venturer shall bear the expense of the
arbitrator appointed by or for such Venturer, its own counsel, experts and
presentation of proof. The Venturers shall share equally the expense of the
additional arbitrators (or the expense of the single arbitrator if only one (1)
arbitrator is appointed), and all other expenses of the arbitration.
14.7 Submission to Jurisdiction. Schwarz and Can-Cal hereby irrevocably
submit to the non-exclusive jurisdiction of the courts of the State of Nevada
and/or the federal courts in the District of Nevada, over any suit, action or
proceeding to enforce an arbitration award (each a "Proceeding"). Each Venturer
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such Proceeding
brought in any such court and any claim that any such Proceeding brought in such
court has been brought in an inconvenient forum. Each Venturer agrees that a
final judgment in any such Proceeding brought in such a court shall be
conclusive and binding upon it. Each Venturer agrees not to commence any
Proceeding in any jurisdiction other than Nevada.
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14.8 Choice of Forum. Schwarz and Can-Cal hereby agree that the choice
of judicial forum for all matters affecting this Agreement shall be the state or
federal courts located in the State of Nevada, except to enforce an arbitration
award in such circumstances as the court in Nevada may not have subject matter
jurisdiction to enforce the award. Each Venturer irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of venue of any such matter brought in any such court and any
claim that any such matter brought in such court has been brought in an
inconvenient forum. Nothing in this Section shall be deemed to contravene
Section 14. 1.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
/s/ Robin Schwarz
-----------------------------------------
Robin Schwarz
/s/ Aylward Schwarz
-----------------------------------------
Aylward Schwarz
S & S MINING
By: /s/ Robin Schwarz
--------------------------------------
CAN-CAL RESOURCES, LTD
By: /s/ R. D. Sloan
--------------------------------------
Ronald Sloan, President
106
EXHIBIT A
County Document # Name of Claim CAMC
----------------- ------------- ----
19960300074 Aylward 1 104432
19960300074 Aylward 2 104433
19960300074 Aylward 3 104434
19960300074 Lori Lee 104438
19960300074 Ruth 1 133937
19960300074 Ruth 2 133938
19960300074 Ruth 3 133939
19960300074 Mill Site 171940
19960457449 S&S Mining Placer #1 271288
19960457450 S&S Mining Placer #2 271289
19960457451 S&S Mining Placer #3 271290
19960457452 S&S Mining Placer #4 271291
19960457453 S&S Mining Placer #5 271292
19970136121 S&S Mining, Inc. Placer #9 271524
19970136122 S&S Mining, Inc. Placer #10 271525
107
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘10SB12G’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 7/9/99 | | | | | | | None on these Dates |
| | 12/31/98 | | 11 | | 12 |
| | 9/30/97 | | 10 | | 11 |
| | 6/2/97 | | 14 |
| List all Filings |
3 Subsequent Filings that Reference this Filing
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Filing Submission 0001028269-99-000035 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)
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