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Case 14-33427 Doc 256 Filed 12/14/15 Entered 12/14/15 15:37:17 Desc Main
<br />Document Page 15 of 17
<br />LEASE AND OPTION TO PURCHASE AGREEMENT
<br />THIS LEASE AND OPTION TO PURCHASE AGREEMENT (the "Agreement.), dated NovemberQi, 2015, by and
<br />between RICHARD CIARDO, ("Tenant') and CAMP BIRD COLORADO, INC., a Colorado corporation ('CBCT') and CAMP
<br />BIRD TUNNEL, MINING AND TRANSPORTATION COMPANY ('TMTC"), a Colorado corporation, FEDERAL
<br />RESOURCES CORPORATION, a Nevada corporation (`FRC' and with CBCi and TMTC 'Owner" or "Landlord").
<br />Tenant and Owner each may be referred to herein as a 'Party,' and collet ivelythey may be referred to herein as the "Parties."
<br />con-Mderation of Tell Thousand Dollars ($10.000.00) as 2 months preitaia lent on the irea8e
<br />(see 5.0 below), which prepaid rent shell be fully refundable to 'Tenant if this Agreement is net
<br />Approved by the t3ankruptcy Court idef+n4-d below), Owner and Tenant agree as follows:
<br />1. GRANT OF OPTION TO PURCHASE.
<br />Tenant shall have the exclusive option on the conditions stated herein (the `Option') for 18 Months (the 'Option Period") from
<br />the Effective Date to enter into, obtain approval of the Bankruptcy Court and close a contract (the "Contract') with Owner to
<br />acquire the Option Property (as described below), provided however, that the Owner shall have no less than 45 days from the
<br />dale on which the Contract Is fully executed to obtain approval of the Contract by the Bankruptcy Court. As used herein, the
<br />Effective Data means the first day of the calendar month immediately after the data on which the Bankruptcy Court for the District
<br />of Utah (the `Bankruptcy Court') in that certain Jointly administered bankruptcy case entitled in re Federal Resources
<br />Corporation, jointly administered bankruptcy cases, under case number 14-33427 (coke -lively, the 'Bankruptcy Case) enters
<br />an order approving this Agreement (the 'Effective Bate'). The terms of any Contract must be acceptable to Owner and its
<br />counsel.
<br />2. LEASED PROPERTY AND OPTION PROPERTY DEFINED.
<br />The property to be leased consists of four (4) claims totaling 28.13 acres end are as follows: (a) the Gertrude MIN -site Claim (5.00
<br />acres), (b) the midnight claim (8.58 acres), (c) the Idaho claim (2.57 acres), and (d) the Emily Mlll•skee claim (5.00 acres), plus the
<br />use, during the term of the Lease, of the Water Rights defined below (collectively, the 'Leased Property'). The property
<br />available for purchase under the Option, consists of ten (10) acres described abova as Gertrude Mill -site claim (5.00 acres) and
<br />the Emily Mill -site claim (6.00 acres), plus the Water Rights (collectively, the 'Option Property' The Parties acknowledge that the
<br />Gertrude Mill -site Claim has a concrete slab which previously acted as the mill floor, which is currently covered with fill material.
<br />My modification or reclamation of the Property to make the same suitable for Tenant's use shalt be at Tenant's sole cost and
<br />expense. The Leased Property and the Option Property shall be used and acquired by Tenant as is, where le, with no
<br />warranties.
<br />3. WATER RIGHTS,
<br />Tenant shall have the right to utilize up to 800,000 gallons per year of water from the Tunnel water rights. This water shall be
<br />transported to the location of Tenant's operations, at Tenant's sole cost and expense, by a piping/pumping system from the weir
<br />located at the portal to the tunnel.
<br />3. PURCHASE PRICE FOR OPTION PROPERTY. $8,000,000.00 U.S.
<br />4. TERM OF LEASE.
<br />The lease portion of the Agreement shall be a term of 18 Months commencing on the Effective Date (the 'Term').
<br />5. ADDITIONAL LEASE TERMS AND CONDITIONS.
<br />Tenant's right to lease'the Leased Property during the Term is for the any legal commercial purpose other then mining, but
<br />including the construction and use of commardal buildings to be located on the Leased Property, provided, however, that all such
<br />modifications or Improvements shall be made in accordance with all applicable tures, reguisik ns, environmental requirements
<br />and building codes, and, provided. further, that, et the end of the Term, all improvements made to the Leased Property shall
<br />revert to Owner, unless Tenant purchases the Option Property under the Option. The Tenant may subleeee the Leased Property
<br />during the Term; previder4 however, that Tenant and any subtenant shall Jointly and severely be and remain liable for performance under
<br />the Lease during the Term notwithstanding any such assignment The following additional terms and conditions also apply to the lease:
<br />A) Tenant shall timely pay all taxes due end to become due with respect to the Leased Property, the Water Rights and
<br />the Improvements made by the Tenant on the Leased Property during the Term;
<br />B) Prior to the Effective Date, Tenant shall provide evidence, satisfactory to Owner, of adequate casualty.
<br />liability and environmental insurance to reasonably protect Owner from any potential liabilities associated with Tenant's use of
<br />the Leased Property end Water Rights during the Term, and Owner shall be a named loss payee under ail such policies;
<br />C) Tenant shalt indemnify and hold Owner harmless from any and all losses, claims, environmental hazards and or
<br />damages associated with, rotated to or arising from Tenant's use of the Leased Property during the Term, and, prior to the
<br />Effective Date, Tenant shall provide Owner with satisfactory evidence of Mandel capacity to support such indemnification;
<br />0) During the Term, Tenant shalt pay rent to Owner as follows: 55,000 per month
<br />commencing on the Effective Date, which shall be past due, and In default, if not received by Owner on or before the 10°i day of
<br />each such month during the Term;
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