Document:

form8k053008ex10-16.htm

    

     

    PROPERTY OPTION
AGREEMENT

     

     

    THIS
AGREEMENT made and entered into as of the 30th day of June, 2004.

     

    BETWEEN:

     

    MinQuest Inc., a company
having a mailing address at 4235 Christy Way, Reno,Nevada 89509, U.S.A
;

     

    (herein
called the “Optionor “)

     

    OF THE
FIRST PART

     

    AND:

    American Goldfields Inc., a
company having an office at

    #200 –
4170 Still Creek Dr, Burnaby, B.C. Canada, V5C 6C6;

     

    

     

    (herein
called the “Optionee “)

     

    OF THE
SECOND PART

     

    

     

    WHEREAS
the Optionor has represented that it is the sole recorded and beneficial owner
in and to the Imperial Property (the “Property”) described in Schedule “A”
attached hereto;

     

    AND
WHEREAS the Optionor, subject to the Net Smelter Royalty reserved to the
Optionor, now wishes to grant to the Optionee the exclusive right and option to
acquire an undivided 100% right, title and interest in and to the Property on
the terms and conditions hereinafter set forth;

     

    NOW
THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises, the
mutual covenants herein set forth and the sum of One Dollar ($1.00) of lawful
money of U.S. currency now paid by the Optionee to the Optionor (the receipt
whereof is hereby acknowledged), the Parties hereto do hereby mutually covenant
and agree as follows:

     

    
      	
              1.

            	
              Definitions

            

    

     

    
      	
               
      

            	
              The
      following words, phrases and expressions shall have the following
      meanings:

            

    

     

    
      	
               
      

            	
              (a)

            	
              “After
      Acquired Properties” means any and all mineral interests staked, located,
      granted or acquired by or on behalf of either of the parties hereto during
      the currency of this Agreement which are located, in whole or in part,
      within one mile of the perimeter of the
  Property;

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (b)

            	
              “Work
      Commitment” includes all direct or indirect expenses [net of government
      incentives and net of payments to the Optionor pursuant to paragraph 4
      hereof] of or incidental to Mining Operations.  The certificate
      of the Controller or other financial officer of the Optionor, together
      with a statement of expenditures in reasonable detail shall be prima facie
      evidence of such expenditures.  In the event the commitment is
      not met on any year, the balance will be due in cash and or free trading
      stock paid to the Optionor.  Any and all excess amounts expended
      in one year may offset commitments to future
  commitments;

            

    

     

    
      	
               
      

            	
              (c)

            	
              “Facilities”
      means all mines and plants, including without limitation, all pits,
      shafts, adits, haulageways, raises and other underground workings, and all
      buildings, plants, facilities, and other structures, fixtures, and
      improvements, and all other property, whether fixed or moveable, as the
      same may exist at any time in, or on the Property and relating to the
      operator of the Property as a mine or outside the Property if for the
      exclusive benefit of the Property
only.

            

    

     

    
      	
               
      

            	
              (d)

            	
              “Force
      Majeure” means an event beyond the reasonable control of the Optionee that
      prevents or delays it from conducting the activities contemplated by this
      Agreement other than the making of payments referred to in Section 0 herein.  Such events
      shall include but not be limited to acts of God, war, insurrection, and
      inclement weather conditions.  Any action or inaction of
      governmental agencies, inability to obtain any environmental, operating or
      other permits or approvals, authorizations or consents within 18 months of
      application assuming continual persistance by the Optionee shall also
      constitute grounds for Force
Majeure;

            

    

     

    
      	
               
      

            	
              (e)

            	
              “Mineral
      Products” means the commercial end products derived from operating the
      Property as a mine;

            

    

     

    
      	
               
      

            	
              (f)

            	
              “Mining
      Operations” includes:

            

    

     

    
      	
               
      

            	
              (i)

            	
              every
      kind of work done on or with respect to the Property by or under the
      direction of the Optionee during the Option Period or pursuant to an
      approved Work Program except expansion of the property boundaries;
      and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              without
      limiting the generality of the foregoing, includes all work capable of
      receiving assessment credits pursuant to The Mines and Minerals
      Act of Nevada and the work of assessment, geophysical, geochemical
      and geological surveys, studies and mapping, investigating, drilling,
      designing, examining equipping, improving, surveying, shaft sinking,
      raising, cross-cutting and drifting, searching for, digging, trucking,
      sampling, working and procuring minerals, ores and metals, in surveying
      and bringing any mineral claims to lease or patent, in doing all other
      work usually considered to be prospecting, exploration, development, a
      feasibility study, mining work, milling, concentration, bonification or
      ores and concentrates, as well as the separation and extraction of mineral
      products;

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (g)

            	
              “Net
      Smelter Royalty” means that Net Smelter Royalty as defined in Schedule “B”
      attached hereto (“NSR”);

            

    

     

    
      	
               
      

            	
              (h)

            	
              “Option”
      means the option granted by the Optionor to the Optionee to acquire,
      subject to the NSR reserved to the Optionor, an undivided 100% right,
      title and interest in and to the Property as more particularly set forth
      in Section 4.

            

    

     

    
      	
               
      

            	
              (i)

            	
              “Option
      Period” means the period from the date hereof to the date at which the
      Optionee has performed its obligations to acquire its 100% interest in the
      Property as set out in Section 0
      hereof, which ever shall be the lesser
period;

            

    

     

    
      	
               
      

            	
              (j)

            	
              “Property”
      means the mineral claims described in Schedule
  “A”;

            

    

     

    
      	
               
      

            	
              (k)

            	
              “Work
      Program” means, a program of work reasonably acceptable to both parties in
      respect of a particular Property, contained in a written document setting
      out in reasonable detail:

            

    

     

    
      	
               
      

            	
              (i)

            	
              an
      outline of the Mining Operations proposed to be undertaken and conducted
      on the Property, specifically stating the period of time during which the
      work contemplated by the proposed program is to be done and
      performed;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      estimated cost of such Mining Operations including a proposed budget
      providing for estimated monthly cash requirements in advance and giving
      reasonable details;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              the
      total estimated cash costs shall be put in escrow each month to cover
      expenses of Optionor, including but not restricted to cost of initial
      expansion of claim position by location and filing at an estimated cost of
      US$5,000 per year: and

            

    

     

    
      	
               
      

            	
              (iv)

            	
              the
      identity and credentials of the person or persons undertaking the Mining
      Operations so proposed if not the
Optionor.

            

    

     

    reasonably
acceptable to both parties hereto.

     

    
      	
              2.

            	
              Headings

            

    

     

    
      	
               
      

            	
              Any
      heading, caption or index hereto shall not be used in any way in
      construing or interpreting any provision
hereof.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              3.

            	
              Singular,
      Plural

            

    

     

    
      	
               
      

            	
              Whenever
      the singular or masculine or neuter is used in this Agreement, the same
      shall be construed as meaning plural or feminine or body politic or
      corporate or vice versa, as the context so
  requires.

            

    

     

    
      	
              4.

            	
              Option

            

    

     

    
      	
               
      

            	
              The
      Optionor hereby grants to the Optionee the sole exclusive right and option
      (the “Option”) to earn a 100% interest in the Property exercisable as
      follows:

            

    

     

    
      	
               
      

            	
              (a)

            	
              the
      Optionee paying the sum of $60,000 US to the Optionor by way of cash upon
      signing.

            

    

     

    
      	
               
      

            	
              (b)

            	
              on
      or before July 1, 2005:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Optionee makes a work commitment of $75,000 on the
    Property;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              and
      the Optionee paying $20,000 to the
Optionor;

            

    

     

    
      	
               
      

            	
              (c)

            	
              on
      or before July 1, 2006:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Optionee makes a work commitment of $100,000 on the Property in addition
      to the expenditure referred to in clauses  (b)(i)
      hereof;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              and
      the Optionee paying $20,000 to the
Optionor;

            

    

     

    
      	
               
      

            	
              (d)

            	
              on
      or before July 1, 2007:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Optionee makes a work commitment of $100,000 on the Property in addition
      to the expenditure referred to in clauses  (b)(i) and (c)(i)
      hereof;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              and
      the Optionee paying $20,000 to the
Optionor;

            

    

     

    
      	
               
      

            	
              (e)

            	
              on
      or before  July 1, 2008

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Optionee makes a work commitment of $100,000 on the Property in
      addition  to the expenditures referred to in clauses (b)(i),
      (c)(i) and  (d)(i)

            

    

     

    
      	
               
      

            	
              (ii)

            	
              and
      the Optionee paying $20,000 to the
Optionor;

            

    

     

    (f)             on
or before July 1 ,2009

     

    
      	
               
      

            	
              (i)

            	
              the
      Optionee makes a work commitment of  $125,000 on the Property in
      addition  to the expenditures referred to in clauses
      (b)(i),(c)(i),(d)(i) and (e)(i).

            

    

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    following
which the Optionee shall be deemed to have exercised the Option (the “Exercise
Date”) and shall be entitled to an undivided 100% right, title and interest in
and to the Property with the full right and authority to equip the Property for
production and operate the Property as a mine subject to the rights of the
Optionor to receive the  NSR.

     

    
      	
              5.

            	
              Transfer of
      Title

            

    

     

    
      	
               
      

            	
              Upon
      completion of all work commitments and property payments by Optionee the
      Optionor will deliver or cause to be delivered to the Optionee’s
      solicitors a duly executed transfer of Property in favour of the Optionee
      (the “Optionee Transfer”) to be held in trust by said solicitors subject
      to the terms and conditions of this Agreement.  The Optionee
      shall be entitled to record the Optionee Transfer with the appropriate
      government offices to effect transfer of legal title of the Property into
      its own name upon the full and complete exercise of the Option by the
      Optionee. In the event the Optionee Transfer is recorded the Optionor
      shall be entitled to record notice of its NSR
  interest.

            

    

     

    
      	
              6.

            	
              Mining Operations
      during Option

            

    

     

    
      	
               
      

            	
              During
      the Option Period, the Optionor shall conduct the Mining Operations on the
      Property for and on behalf of the Optionee and shall invoice the Optionee
      in respect of the expenses of such Mining Operations from time to time and
      the prompt payment of such invoices when due shall constitute Expenditures
      by the Optionee as contemplated under Section 0
hereof.

            

    

     

    
      	
              7.

            	
              Assignment

            

    

     

    
      	
               
      

            	
              During
      the Option Term, no party shall sell, transfer, assign, mortgage, pledge
      or otherwise encumber its interest in this Agreement or its right or
      interest in the Property without the consent of the other parties, such
      consent to be not unreasonably withheld, provided that any party shall be
      permitted to assign this Agreement to an “affiliate”, as that term is
      defined in The
      Company Act
      (Nevada).  It will be a condition of any assignment under this
      Agreement that such assignee shall agree in writing to be bound by the
      terms of this Agreement applicable to the assignor.  In the
      event Optionee completes all obligations to acquire a 100% interest in the
      Property the Optionor will have the right to transfer, assign an or sell
      the NSR on the open market.

            

    

     

    
      	
              8.

            	
              Termination

            

    

     

    
      	
               
      

            	
              This
      Agreement shall forthwith terminate in circumstances
  where:

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (a)

            	
              the
      Optionee fails to make the payments for or carry out the expenditures
      required in Section 0 of this
      Agreement on or before the dates set out herein provided that, in
      circumstances where the Optionee is prevented from carrying out any of the
      expenditures contemplated in Section 0 prior to the dates set out therein
      due to Force Majeure, then the Optionee shall forthwith give the Optionor
      written notice of the commencement and termination of the said Force
      Majeure and thereafter such dates shall be deemed to have been extended by
      the period of time during which the Force Majeure remains in effect;
      or

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      Optionee gives notice of termination to the Optionor which it shall be at
      liberty to do at any time after the execution of this Agreement. If and
      when the Optionee elects to terminate this agreement, at such time the
      property will be returned to the Optionor with at least 1 year assessment
      requirement credit.

            

    

     

    
      	
              9.

            	
              Representations,
      Warranties and Covenants of the
Optionor

            

    

     

    
      	
               
      

            	
              The
      Optionor represents, warrants and covenants to and with the Optionee as
      follows:

            

    

     

    
      	
               
      

            	
              (a)

            	
              the
      Optionor is a company duly organized validly existing and in good standing
      under the laws of Nevada;

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      Optionor has full power and authority to carry on its business and to
      enter into this Agreement and any agreement or instrument referred to or
      contemplated by this Agreement;

            

    

     

    
      	
               
      

            	
              (c)

            	
              neither
      the execution and delivery of this Agreement, nor any of the agreements
      referred to herein or contemplated hereby, nor the consummation of the
      transactions hereby contemplated conflict with, result in the breach of or
      accelerate the performance required by, any agreement to which it is a
      party;

            

    

     

    
      	
               
      

            	
              (d)

            	
              the
      execution and delivery of this Agreement and the agreements contemplated
      hereby will not violate or result in the breach of the laws of any
      jurisdiction applicable or pertaining thereto or of its constating
      documents;

            

    

     

    
      	
               
      

            	
              (e)

            	
              the
      Agreement constitutes a legal, valid and binding obligation of the
      Optionor;

            

    

     

    
      	
               
      

            	
              (f)

            	
              the
      Property is accurately described in Schedule “A”, is in good standing
      under the laws of the jurisdiction in which it is located and is free and
      clear of all liens, charges and
encumbrances;

            

    

     

    
      	
               
      

            	
              (g)

            	
              the
      Optionor is the sole recorded and beneficial owner of the Property and has
      the exclusive right to enter into this Agreement and all necessary
      authority to transfer its interest in the Property in accordance with the
      terms of this Agreement;

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (h)

            	
              no
      person, firm or corporation has any proprietary or possessory interest in
      the Property other than the Optionor, and no person, firm or corporation
      is entitled to any royalty or other payment in the nature of rent or
      royalty on any minerals, ores, metals or concentrates or any other such
      products removed from the Property other than the government of the state
      of Nevada pursuant to statute;

            

    

     

    
      	
               
      

            	
              (i)

            	
              upon
      request by the Optionee, the Optionor shall deliver or cause to be
      delivered to the Optionee copies of all available maps and other documents
      and data in its possession respecting the Property;
  and

            

    

     

    
      	
               
      

            	
              (j)

            	
              subject
      to performance by the Optionee of its obligations under Section 4, during
      the Option Period, the Optionor will keep the Property in good standing,
      free and clear of all liens, charges and encumbrances, will carry out all
      Mining Operations on the Property in a miner-like fashion, will obtain all
      necessary licenses and permits as shall be necessary and will, file all
      applicable work up to the legal limits as assessment work under The Mines and Minerals Act
      (Nevada).

            

    

     

    
      	
              10.

            	
              Representations,
      Warranties and Covenants of the
Optionee

            

    

     

    
      	
               
      

            	
              The
      Optionee represents, warrants and covenants to and with the Optionor
      that:

            

    

     

    
      	
               
      

            	
              (a)

            	
              the
      Optionee is a company duly organized validly existing and in good standing
      under the laws of Nevada;

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      Optionee has full power and authority to carry on its business and to
      enter into this Agreement and any agreement or instrument referred to or
      contemplated by this Agreement;

            

    

     

    
      	
               
      

            	
              (c)

            	
              neither
      the execution and delivery of this Agreement, nor any of the agreements
      referred to herein or contemplated hereby, nor the consummation of the
      transactions hereby contemplated conflict with, result in the breach of or
      accelerate the performance required by, any agreement to which it is a
      party;

            

    

     

    
      	
               
      

            	
              (d)

            	
              the
      execution and delivery of this Agreement and the agreements contemplated
      hereby will not violate or result in the breach of the laws of any
      jurisdiction applicable or pertaining thereto or of its constating
      documents;

            

    

     

    
      	
               
      

            	
              (e)

            	
              this
      Agreement constitutes a legal, valid and binding obligation of the
      Optionee; and

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              11.

            	
              Indemnity and Survival
      of Representations

            

    

     

    
      	
               
      

            	
              The
      representations and warranties hereinbefore set out are conditions on
      which the parties have relied in entering into this Agreement and shall
      survive the acquisition of any interest in the Property by the Optionee
      and each of the parties will indemnify and save the other harmless from
      all loss, damage, costs, actions and suits arising out of or in connection
      with any breach of any representation, warranty, covenant, agreement or
      condition made by them and contained in this
  Agreement.

            

    

     

    
      	
               
      

            	
              The
      Optionor agrees to indemnify and save harmless the Optionee from any
      liability to which it may be subject arising from any Mining Operations
      carried out by the Optionor or at is direction on the
      Property.  The Optionee agrees to indemnify and save harmless
      the Optionor from any liability to which it may be subject arising from
      any Mining Operations carried out by the Optionee or at its direction on
      the Property.

            

    

     

    
      	
              12.

            	
              Confidentiality

            

    

     

    
      	
               
      

            	
              The
      parties hereto agree to hold in confidence all information obtained in
      confidence in respect of the Property or otherwise in connection with this
      Agreement other than in circumstances where a party has an obligation to
      disclose such information in accordance with applicable securities
      legislation, in which case such disclosure shall only be made after
      consultation with the other party.

            

    

     

    
      	
              13.

            	
              Notice

            

    

     

    
      	
               
      

            	
              All
      notices, consents, demands and requests (in this Section 0 called the “Communication”)
      required or permitted to be given under this Agreement shall be in writing
      and may be delivered personally sent by telegram, by telex or telecopier
      or other electronic means or may be forwarded by first class prepaid
      registered mail to the parties at their addresses first above
      written.  Any Communication delivered personally or sent by
      telegram, telex or telecopier or other electronic means shall be deemed to
      have been given and received on the second business day next following the
      date of sending.  Any Communication mailed as aforesaid shall be
      deemed to have been given and received on the fifth business day following
      the date it is posted, addressed to the parties at their addresses first
      above written or to such other address or addresses as either party may
      from time to time specify by notice to the other; provided, however, that
      if there shall be a mail strike, slowdown or other labour dispute which
      might affect delivery of the Communication by mail, then the Communication
      shall be effective only if actually
delivered.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              14.

            	
              Further
      Assurances

            

    

     

    
      	
               
      

            	
              Each
      of the parties to this Agreement shall from time to time and at all times
      do all such further acts and execute and deliver all further deeds and
      documents as shall be reasonably required in order fully to perform and
      carry out the terms of this
Agreement.

            

    

     

    
      	
              15.

            	
              Entire
      Agreement

            

    

     

    
      	
               
      

            	
              The
      parties hereto acknowledge that they have expressed herein the entire
      understanding and obligation of this Agreement and it is expressly
      understood and agreed that no implied covenant, condition, term or
      reservation, shall be read into this Agreement relating to or concerning
      any matter or operation provided for
herein.

            

    

     

    
      	
              16.

            	
              Proper Law and
      Arbitration

            

    

     

    
      	
               
      

            	
              This
      Agreement will be governed by and construed in accordance with the laws of
      the State of Nevada and the laws of the United States of America
      applicable therein.  The parties hereto hereby irrevocably
      attorn to the jurisdiction of the Courts of Nevada. All disputes arising
      out of or in connection with this Agreement, or in respect of any defined
      legal relationship associated therewith or derived therefrom, shall be
      referred to and finally resolved by a sole arbitrator by arbitration under
      the rules of The
      Arbitration Act of Nevada.

            

    

     

    
      	
              17.

            	
              Enurement

            

    

     

    
      	
               
      

            	
              This
      Agreement will enure to the benefit of and be binding upon the parties
      hereto and their respective successors and permitted
    assigns.

            

    

     

    18.           After Acquired
Properties

     

    
      	
               
      

            	
              (i)

            	
              The
      parties covenant and agree, each with the other, that any and all After
      Acquired Properties shall be subject to the terms and conditions of this
      Agreement and shall be added to and deemed, for the purposes hereof, to be
      included in the Property.  Any costs incurred by the Optionor in
      staking, locating, recording or otherwise acquiring any “After Acquired
      Properties” will be deemed to Mining Operations for which the Optionor
      will be entitled to reimbursements as part of the Expenditures payable by
      the Optionee hereunder.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              Any
      additional claims staked within a 1 mile radius (1.6 km.) of the property
      boundaries by the Optionor shall form part of this agreement. As per
      1k(iii), the Optionee will escrow $5,000 US for the costs of staking
      additional claims undertaken by the Optionor at the request of the
      Optionee.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    19.           Default

     

    
      	
               
      

            	
              Notwithstanding
      anything in this Agreement to the contrary if any party (a “Defaulting
      Party”) is in default of any requirement (other than as set forth in
      Section 0) herein set forth the
      party affected by such default shall give written notice to the Defaulting
      Party specifying the default and the Defaulting Party shall not lose any
      rights under this Agreement, unless thirty (30) days after the giving of
      notice of default by the affected party the Defaulting Party has failed to
      take reasonable steps to cure the default by the appropriate performance
      and if the Defaulting Party fails within such period to take reasonable
      steps to cure any such default, the affected party shall be entitled to
      seek any remedy it may have on account of such default including, without
      limiting, termination of this
Agreement.

            

    

     

    20.           Payment

     

    
      	
               
      

            	
              All
      references to monies hereunder shall be in U.S. funds.  The
      Optionee shall escrow projected monthly costs into an account for the
      Expenditures.  Escrow funds will be used to pay invoices
      delivered by the Optionor which for the purposes of this agreement shall
      constitute prompt and due payment.

            

    

     

    21.           Option
Only

     

    
      	
               
      

            	
              This
      is an option only and except as herein specifically provided otherwise,
      nothing herein contained shall be construed as obligating the Optionee to
      do any acts or make any payments hereunder, and any act or acts or payment
      or payments as shall be made hereunder shall not be construed as
      obligating the Optionee to do any further act or make any further payment
      or payments.

            

    

     

    22.           Revisionary
Rights

     

    
      	
               
      

            	
              Optionor
      retains reversionary rights to all property within the boundary of the
      Area of Interest as long as Optionee, its subsidiaries or assigns holds
      title.  At such time in the future that Optionee, its
      subsidiaries or assigns decides any and all property held by Optionee
      within the referenced Area of Interest is unnecessary to the pursuit of an
      ore deposit, Optionee, its subsidiaries or assigns will offer said
      Property to Optionor, its subsidiaries or assigns at least 60 days prior
      to any fees, taxes, payments or other assessment being due and
      payable.  Optionee, its subsidiaries or assigns will make
      available any and all data to Optionor to evaluate the potential or lack
      thereof of the offered property.  Optionor will be obligated to
      accept in writing, by fax or verbally within 30 days of
      notification.  At such time that Optionor accepts any part of a
      Property, Optionee, its subsidiaries or assigns will transfer any and all
      drill core, pulps, rejects, digital and other data available for the above
      referenced property.

            

    

     

    

     

    23.           Supersedes Previous
Agreements

     

    
      	
               
      

            	
              This
      Agreement supersedes and replaces all previous oral or written agreements,
      memoranda, correspondence or other communications between the parties
      hereto relating to the subject matter
hereof.

            

    

     

    IN
WITNESS WHEREOF the Parties hereto have duly executed this Agreement effective
as of the 30th day of June, 2004

     

    

     

                MinQuest
Inc.

     

    

    Per:           

    Authorized Signatory

     

    

     

    

     

              American
Goldfields Inc.

     

    

    Per:                                                                

    Authorized Signatory

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    

     

    SCHEDULE
A

    

    LIST OF IMPERIAL PROPERTY UNPATENTED
CLAIMS, SECTIONS 34-36, T4S, R40E,
MDB&M, ESMERALDA
COUNTY, NEVADA

     

    

    
      	
              Claim Name

            	
              BLM Serial Number

            
	
              Lida
      1-10

            	
              838518-838527

            
	
              Helen

            	
              833046

            
	
              Helen
      1-9

            	
              833047-833055

            
	
              Imperial
      20-21

            	
              833056-833

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

        
           

        

      

    

    

     

    SCHEDULE
“B”

     

    

     

    “Net
Smelter Return” shall mean the aggregate proceeds received by the Optionee from
time to time from any smelter or other purchaser from the sale of any ores,
concentrates, metals or any other material of commercial value produced by and
from the Property after deducting from such proceeds the following charges only
to the extent that they are not deducted by the smelter or other purchaser in
computing the proceeds:

     

    
      	
              (a)

            	
              the
      cost of transportation of the ores, concentrates or metals from the
      Property to such smelter or other purchaser, including related
      insurance;

            

    

     

    (b)           smelting
and refining charges including penalties; and

     

    The
Optionee shall reserve and pay to the Optionor a NSR equal to three (3%) percent
of Net Smelter Return.

     

    Payment
of NSR payable to the Optionor hereunder shall be made quarterly within thirty
(30) days after the end of each calendar quarter during which the Optionee
receives Net Smelter Returns.  Within thirty (30) days after the end
of each calendar quarter for which the NSR are payable to the Optionor, the
records relating to the calculation of NSR for such year shall be audited by the
Optionee and any adjustments in the payment of NSR to the Optionor shall be made
forthwith after completion of the audit.  All payments of NSR to the
Optionor for a calendar year shall be deemed final and in full satisfaction of
all obligations of the Optionee in respect thereof if such payments or the
calculations thereof are not disputed by the Optionor within ninety (90) days
after receipt by the Optionor of the same audited statement.  The
Optionee shall maintain accurate records relevant to the determination of NSR
and the Optionor, or its authorized agent, shall be permitted the right to
examine such records at all reasonable times.exh10-1_note.htm

     

    
      

      

    

     

     

     

     

     

    EXHIBIT 10.1

     

    DEMAND PROMISSORY NOTE DATED MAY 27, 2008

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    DEMAND
PROMISSORY NOTE

     

    $50,000.00                                                                                                                                          Lakewood,
Colorado

                                                                                                                                                                 
May
27, 2008

    

    For value
received, the undersigned, V2K INTERNATIONAL, INC., a Colorado corporation (the
“Borrower”),
hereby promises to pay on demand, to the order of Gordon E. Beckstead (the
“Lender”), at,
6635 East Sage Lane, Parker, CO 80138, or at any other place designated at any
time by the holder hereof, in lawful money of the United States of America and
in immediately available funds, the principal sum of FIFTY THOUSAND AND NO/100
DOLLARS ($50,000.00) together with interest on the principal amount hereunder,
computed on the basis of the actual number of days elapsed and a 365-day year,
from the date hereof until this Note is fully paid at the rate of TWELVE PERCENT
(12%) per annum.

    

    The
Borrower hereby agrees to pay all costs of collection, including attorneys’ fees
and legal expenses, in the event this Note is not paid when due, whether or not
legal proceedings are commenced.

    

    Presentment
or other demand for payment, notice of dishonor and protest are expressly
waived.

    

    
      	 
      	
              V2K
      INTERNATIONAL, INC., a Colorado corporation

            
	 
      	
               

              By___________________________________

               

              Its___________________________________

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