Document:

EXHIBIT 10.2

 

REPUBLIC BANK PLACE

3RD FLOOR, HURSTBOURNE

LOUISVILLE, KENTUCKY

9-1-05

 

INDEX TO LEASE

 

	
  Article

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  I.

  	
   

  	
  Premises

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
   

  	
  Term/Option
  to Renew

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
   

  	
  Rent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
   

  	
  Use

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
   

  	
  Possession

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  VI.

  	
   

  	
  Services
  to be Provided

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  VII.

  	
   

  	
  Maintenance
  and Repair; Alterations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  VIII.

  	
   

  	
  Access

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  IX.

  	
   

  	
  Damage or
  Destruction

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  X.

  	
   

  	
  Indemnity

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XI.

  	
   

  	
  Insolvency,
  Etc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XII.

  	
   

  	
  Remedies

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XIII.

  	
   

  	
  Insurance

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XIV.

  	
   

  	
  Liens

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XV.

  	
   

  	
  Assignment;
  Subletting; Mortgaging

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XVI.

  	
   

  	
  Estoppel
  Certificate

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XVII.

  	
   

  	
  Taxes

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XVIII.

  	
   

  	
  Priority
  of Lease

  	
   

  
					

 

1

 

	
  Article

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XIX.

  	
   

  	
  Fixtures
  and Personal Property; Surrender

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XX.

  	
   

  	
  Hold over
  Tenancy

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XXI.

  	
   

  	
  Waiver
  of Subrogation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XXII.

  	
   

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XXIII.

  	
   

  	
  Rights
  Reserved by Landlord

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XXIV.

  	
   

  	
  Condemnation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  XXV.

  	
   

  	
  Miscellaneous
  Provisions

  	
   

  
					

 

2

 

OFFICE LEASE

 

THIS
LEASE, dated this 1st day of September, 2005, is between Jaytee Properties, a
Kentucky general partnership, hereinafter referred to as “Landlord” and
Republic Bank & Trust Company, hereinafter referred to as the “Tenant”.
As parties hereto, Landlord and Tenant agree:

 

ARTICLE I.  PREMISES

 

SECTION 1.  Tenant leases from Landlord
and Landlord leases to Tenant the following described premises (hereinafter
called the “Premises”):

 

Being
approximately 10,798 square feet of rentable office space located on the third
floor in Republic Bank Place (hereinafter called “the Building”) located at
Hurstbourne Parkway and Stone Creek Parkway in Jefferson County, Kentucky.

 

SECTION 2.  The Premises shall be
provided in “as is” condition. Tenant acknowledges he has examined the
Premises, knows the condition of the Premises, and accepts the Premises in the
condition as currently existing. Any remodeling construction and/or
redecorating within the Premises shall be performed to the complete and
absolute satisfaction of Landlord. The Landlord’s written approval shall be
obtained by Tenant prior to commencement of any and all improvements and the
construction of improvements shall be supervised and approved by Landlord on a
continuous basis.

 

SECTION 3.  This lease confers no
rights with respect to the Building other than tenancy of the Premises and the
non-exclusive license to use, during such tenancy, the following facilities
provided by Landlord: (i) toilet facilities on the floor which the
Premises are located (and such other toilet facilities located elsewhere in the
Building as may be designated by Landlord for the general use of tenants); and (ii) the
public entrances to, and main floor lobby in, the Building; (iii) the
passenger elevators serving the Building; (iv) the areas adjacent to the
Building dedicated from time to time for parking purposes by Landlord for the
parking of motor vehicles; and (v) the roadways and passageways adjacent
to the Building for passage by motor vehicle and on foot, as said roadways and
passageways may respectively be dedicated by Landlord.

 

ARTICLE II.  TERM/OPTION TO RENEW

 

Landlord
leases the Premises to Tenant, and Tenant hires and takes the Premises from
Landlord, for a term of five (5) Lease Years commencing on the first day
of September, 2005, or, upon actual possession no later than sixty days from
Landlord’s delivery of the Premises to the Tenant for construction of Tenant’s
improvements, whichever occurs later (the “Lease Commencement Date”) and
expiring at midnight on the last day of the sixtieth month thereafter unless
sooner terminated pursuant to the terms hereof. “Lease Year” shall mean a year
period beginning on the first day of a month, which is the first calendar month
of the term of the Lease and ending on the day before the anniversary of the
first day of such year.

 

Tenant
shall have one five-year option to renew this lease for an additional five-year
period at a rent adjustment proportionate with the increase in the Consumer
Price Index, all urban consumers over each year of the preceding term.  Tenant shall notify Landlord of Tenant’s
intent to exercise such option within 90 days of the expiration of the original
term of this lease.

 

ARTICLE III.  RENT

 

SECTION 1.  Tenant shall pay to
Landlord, at Landlord’s office in the Building or at such place as Landlord may
from time to time designate, as rental for the Premises, the sum of Sixteen
Thousand Two Hundred Dollars and no cents ($16,200.00) per month (the “Rent”).
Rent shall be payable in advance on the first day of each calendar month during
the first five Lease Years.

 

3

 

SECTION 2.  In the event that the Rent,
or any other sum payable by Tenant to Landlord under this lease, shall not be
received (paid) within ten (10) days of the due date thereof, Landlord
may, at its option, add a monthly service charge, at a rate which shall be the
greater of $25.00 or 1% for each month or fraction thereof from such rent due date
during which such Rent or other sum remains unpaid. Further, in the event that
any check which has been remitted to Landlord by Tenant for payment of the
Rent, or any other sum payable under this Lease, shall not be honored upon its
presentation for payment, then the monthly service charge shall be similarly
imposed on said amount from the due date until paid. Acceptance by the Landlord
for such service charge shall not be deemed to be a waiver by Landlord of any
default nor shall it restrict the remedies otherwise available to Landlord
hereunder.

 

ARTICLE IV.  USE

 

The
Premises are to be used only for the purpose of conducting therein the
operation of a Bank and any and all related services and for no other business
or purpose without the prior written consent of Landlord. Tenant shall not do
or permit to be done in or about the Premises anything which is illegal or
unlawful; or which is of a hazardous or dangerous nature; or which will
increase the rate(s) of insurance upon the Building. Tenant shall (and shall
cause its employees to) observe the rules and regulations set forth in Exhibit A
attached hereto and made a part hereof, as the same may be amended by Landlord
from time to time, and Tenant shall comply with all governmental laws and
ordinances and all regulations applicable to the use and occupancy of the
Building.

 

ARTICLE V.  POSSESSION

 

If
Landlord permits Tenant to enter into possession of the Premises prior to the
Lease Commencement Date, all of the terms and conditions of this Lease shall apply
during such prior period.  Tenant’s
taking of possession of the Premises constitutes Tenant’s certification that
the premises are in good and tenantable condition and acceptable for Tenant’s
use thereof as provided in this Lease.

 

ARTICLE VI.  SERVICES TO BE PROVIDED

 

Landlord
shall furnish reasonable amounts of heat, air conditioning, water, elevator
service and janitor service (collectively “Services”) to the Premises, all such
services being subject to energy availability or Energy Consumption Regulations
which may be hereafter promulgated. All services at any other times and all
special equipment which may be required for such services and all above normal
service and special equipment which may be requested for such service during
normal business hours or otherwise should be furnished only upon the request of
and at the sole cost of lessee.  It is
expressly agreed that should any local, state or federal governmental body,
agency or public utility restrict or reduce the amount of fuel or energy which may
be utilized to provide the utilities and services as specified above, then such
restriction or reduction, and the reduction in utilities and services which may
result therefrom, shall in no way create or constitute a default on the part of
the Landlord, and there shall be no reduction or abatement in the Rent or any
other sum payable by Tenant thereunder. 
Further, Landlord shall not be liable for any injury, damage,
inconvenience, or otherwise which may arise or result should the furnishing of
any such services by interrupted or prevented by fire, accident, strike, riot,
act of God, the making of necessary repairs or improvements, or any other cause
beyond the reasonable control or prevention of Landlord, nor, subject only to
the provisions of Article IX of this Lease, shall the Rent payable by
Tenant hereunder abate.

 

ARTICLE VII.  MAINTENANCE AND REPAIR; ALTERATIONS

 

SECTION 1.  Landlord shall keep and
maintain the roof, foundations, floor slab, and all structural walls (including
windows and plate glass), gutters and downspouts of the Premises in good order
and repair. Landlord shall keep or cause to be kept in good repair all common
areas of the Building and appurtenant areas, including lighting systems;
drainage systems; mechanical, plumbing, and electrical systems; heat and air
conditioning units; ductwork, lines, pipes, and conduits serving the Premises;
and parking areas and driveways. Any maintenance, repairs or replacements to
any of the foregoing made necessary by any acts or omissions of the Tenant, its
agents or employees, shall be paid for by Tenant and Tenant shall reimburse
Landlord on demand for the cost of repairing any damage to the Premises or the
Building caused by Tenant or its agents or employees.  In the event, after reasonable notice to
Landlord, Landlord fails to make any repairs as hereinbefore provided, then
Tenant shall have the right to make these repairs and deduct the cost thereof
from any future rental payments.

 

4

 

SECTION 2.  All maintenance, repairs,
or replacements relating to the premises that are not the obligation of
Landlord as set forth in Section 1 above, shall be the obligation of
Tenant and shall be made by Tenant at Tenant’s sole cost and expense.  Tenant shall maintain, at its expense, the
interior of the Premises in good repair and in a clean and attractive
condition.  Tenant’s obligation to
maintain, repair and replace includes, but is not limited to, all the interior
of the Premises.  In the event Tenant
fails to comply with the requirements of this Section, Landlord may effect such
maintenance and repair and the cost thereof, with interest at the rate of 8.5%
per annum, shall be payable immediately to Landlord as additional rent.  In the event the applicable Statute of the
Commonwealth of Kentucky at any time shall allow for a higher rate of interest
under an instrument in writing, then such higher rate shall apply and be
payable.  If Tenant is a corporation,
then the interest rate to be so payable hereunder shall be at the rate of 12%
per annum.

 

SECTION 3.  Tenant shall not make any
alterations, additions or improvements to the Premises without first obtaining
Landlord’s prior written consent. In connection with any such request for
Landlord’s consent to such alterations, additions or improvements to the
Premises, Landlord may retain the services of an architect and/or engineer; and
the reasonable costs for the services of such architect and/or engineer shall
be reimbursed to Landlord by Tenant. Landlord may make any repairs for the
preservation, safety or improvement of the Premises or the Building. All
alterations, and improvements made by Tenant shall become the property of
Landlord upon making thereof and shall be surrendered to landlord upon the
expiration of this Lease.

 

ARTICLE VIII.  ACCESS

 

Landlord
and its agents shall have the right to enter into and upon the Premises at all
reasonable times with reasonable notice for the purpose of inspecting,
cleaning, repairing, altering or improving the Premises or the Building with
the exception of an emergency situation. Landlord shall have the right to show
the Premises to prospective tenants during the ninety (90) day period prior to
the expiration of the term of this Lease and shall have the right at all
reasonable times to show the Premises to prospective purchasers of and lenders
upon the Building. Any damage or loss caused to the Premises and/or to the
Tenant by any use of or access to the Premises by Landlord shall be repaired by
Landlord at Landlord’s expense.

 

ARTICLE IX.  DAMAGE OR DESTRUCTION

 

SECTION 1.  If the Premises is damaged
or destroyed, in whole or in substantial part, and Section 2 does not
apply, then Landlord may elect to terminate this Lease as of the date of the
damage or destruction by notice given to Tenant in writing not more than twenty
(20) days following the date of damage or destruction. If Landlord does not
elect to terminate, Landlord shall, at Landlord’s expense, proceed to restore
the property to substantially the same form, condition and quality as prior to
the damage or destruction. If Landlord elects to rebuild and repair, Landlord
shall proceed as soon as reasonably possible and thereafter shall proceed
without interruption and be completed within one hundred-eighty (180) days after
notice has been given of Landlord’s intent to rebuild and repair, except for
work stoppages on account of labor disputes and matters not under the
control of the Landlord. During such period of repair or restoration, the Rent
shall be abated in the same proportion as the untenantable portion of the
Premises bears to the entire Premises identified in Section 1 of Article I
of the Lease.

 

SECTION 2.  If the Premises is damaged
or destroyed, (i) to the extent that more than fifty percent (50%) of the
Building is damaged or destroyed, or (ii) to the extent that more than
fifty percent (50%) of the Premises is damaged or destroyed, then in such
event, Tenant may elect to terminate this Lease as of the date of the damage or
destruction by notice given to Landlord in writing not more than twenty (20)
days following the date of damage or destruction.

 

SECTION 3.  Notwithstanding anything
contained in this Article to the contrary, Landlord shall not be required
to repair, replace, restore, or rebuild any property which Tenant shall be
entitled to remove from the Premises under the provisions of this Lease; it
being agreed that Tenant shall bear the entire risk of loss, damage or
destruction of such property while it is in the Building.

 

5

 

SECTION 4.  If either party elects to
terminate the Lease, Tenant shall be entitled to reimbursement for any prepaid
rent or other amounts paid by Tenant and attributable to the unused term of the
Lease.

 

ARTICLE X.  INDEMNITY

 

Tenant
shall indemnify and hold Landlord harmless from all loss, damage, liability or
expense resulting from an injury to or death of any person or any loss of or
damage to any property caused by or resulting from any act or omission of
Tenant or any officer, agent, employee, guest, invitee or visitor of Tenant in
or about the Premises or the Building, but the foregoing provision shall not be
construed to make Tenant responsible for injuries to third parties caused by
the negligence of Landlord or any agent or employee of Landlord.  The Landlord shall remain responsible for any
injury to or death of any person or any loss of or damage to property sustained
by any person whatsoever which may be caused by the Building or any equipment
or appurtenances thereto or thereof being or becoming defective or out of
repair.  Landlord shall be and remain
liable for the negligent acts or omissions of Landlord, its agents and
employees.

 

ARTICLE XI. 
INSOLVENCY, ETC.

 

If
leasehold interest of Tenant be levied upon under the execution or be attached,
or if any voluntary or involuntary petition or similar pleading under any Act
of Congress relating to bankruptcy shall be filed by or against Tenant or a
majority of Tenant’s shareholders, or if any voluntary proceedings in any court
or tribunal shall be instituted by or against Tenant or the majority of its
shareholders to declare Tenant or the majority of its shareholders insolvent or
unable to pay debts of Tenant or the majority of its shareholders, or if Tenant
makes an assignment for the benefit of creditors, or if a receiver be appointed
for any property of Tenant, or if Tenant shall default in payment of any other
debt or obligation to Landlord, then in such event Landlord may, if Landlord so
elects and with or without notice of such election and with or without any
demand whatsoever, forthwith terminate this Lease upon notice to Tenant, and
upon such termination all rights of Tenant hereunder shall thereupon cease and
Tenant shall surrender possession and vacate the Premises immediately.

 

ARTICLE XII.  REMEDIES

 

SECTION 1.  If at any time Tenant shall
(a) fail to remedy any default in the payment of any sum due under this
Lease for ten (10) days after notice; (b) fail to remedy any default
with respect to any other of these provisions, covenants or conditions of this
Lease to be kept or performed by Tenant, within thirty (30) days after notice
(or, in the event the default is of such a nature that it cannot be remedied
within said thirty (30) day period, then such additional time as may be
necessary for Tenant to cure such default, within the thirty (30) day period
and thereafter diligently prosecutes the same to completion); or (c) vacate
or abandon the Premises, or fail to conduct its business therein, for a period
of five (5) consecutive business days, and then fail to reoccupy and
reestablish the conduct of business in the Premises within ten (10) days
following the date of written notice from Landlord of such failure; then
Landlord shall have all such rights and remedies as are provided by law in
respect of such default, including, at Landlord’s election, the right to
terminate this Lease, and all Tenant’s rights hereunder shall be terminated.

 

The
liability of Tenant for the Rent, and other payments provided for herein shall
not be extinguished for the balance of this Lease, and Tenant shall make good
to Landlord any deficiency arising from such reletting of the Premises, plus
the costs and expenses of renovating, altering and reletting the Premises, and
including attorneys’ fees or brokers’ fees incident to Landlord’s reentry or
reletting. Tenant shall pay any such deficiency each month, as the amount
thereof is ascertained by Landlord, or, at Landlord’s option, Landlord may
recover, in addition to any other sums, the amount at the time of judgement by
which the unpaid Rent, and other payments for the balance of the term, after
judgement, exceeds the amount thereof which Tenant proves could be reasonably
avoided, discounted at the rate of 7%. In reletting the Premises, Landlord may grant
rent concessions and Tenant shall not be credited therefor. Nothing herein
shall be deemed to affect the right of Landlord to recover for indemnification
under Article X herein arising prior to the termination of this Lease.

 

SECTION 2.  Landlord shall in no event
be in default in the performance of any of its obligations in this Lease
contained unless and until Landlord shall have failed to perform such
obligation within thirty (30) days, or

 

6

 

such additional time as
is reasonably required to correct any such default after notice by Tenant to
Landlord properly specifying wherein Landlord has failed of perform any such
obligation.

 

ARTICLE XIII.  INSURANCE

 

SECTION 1.  Tenant covenants and agrees
that from and after the date of delivery of the Premises from Landlord to
Tenant and at all times during possession thereof, Tenant will procure and
maintain in full force and effect, at its sole cost and expense, the following
types of insurance, in the minimum amounts specified below:

 

A.                                   Public
Liability and Property Damage. 
Personal injury liability, bodily injury liability and property damage
insurance in a single limit of not less than One Million Dollars ($1,000,000),
of which insurance shall insure the performance by Tenant of the indemnity
agreement as to liability for injury to or death of persons and injury or
damage to property as provided in Article X hereof. All of such insurance
shall be primary and noncontributing with any insurance which may be carried by
Landlord. The adequacy of the coverage afforded by said liability and property
damage insurance shall be subject to review by Landlord from time to time, and
Landlord retains the right to increase or decrease said limits at such times.

 

B.                                     Tenant
Improvements.  Insurance covering all
of the lease-hold improvements, (excepting only the structural components of
the Building and demising partitions), and Tenant’s trade fixtures, and
personal property from time to time in and/or upon the Premises, in an amount
of not less than the full replacement cost thereof without deduction for
depreciation, providing protection against any peril included within the
classification “Fire and Extended Coverage”, together with insurance against
sprinkler damage, vandalism and malicious mischief. Any policy proceeds shall
be used for the repair or replacement of the property damaged or destroyed
unless this Lease shall cease and terminate under the applicable provisions
herein. If the Premises shall not be repaired or restored following damage or
destruction in accordance with other provisions herein, Landlord shall received
from such insurance proceeds and amount equal to the replacement cost of the
Tenant’s leasehold improvements.

 

C.                                     Business
Interruption.  Business interruption
insurance with sufficient coverage to provide for payment of rent and other
fixed costs during any interruption of Tenant’s business by reason of fire or
other similar cause.

 

SECTION 2.  All policies shall be for
the mutual and joint benefit and protection of Landlord and Tenant, with
Landlord being named as an additional insured. Certificates of such policies
shall be delivered to Landlord within ten (10) days after delivery of
possession of the Premises to Tenant and thereafter within thirty (30) days
prior to the expiration of the term of each such policy. All public liability
and property damage policies shall contain a provision that Landlord, although
named as an insured, shall nevertheless be entitled to recovery under said
policies for any loss occasioned to it, its servants, agents, and employees by
reason of the acts, omissions and/or negligence of Tenant. As often as any such
policy shall expire or terminate, renewal or additional policies shall be
procured and maintained by Tenant in like manner and to like extent. All
policies of insurance must contain a provision that the company writing said
policy will give to Landlord thirty (30) days’ notice, in writing, in advance
of any cancellation or lapse, or the effective date of any reduction in the
amounts of insurance. All public liability, property damage and other casualty
policies shall be written as primary policies, not contributing with and not in
excess of coverage which Landlord may carry. Landlord may, from time to time,
request Tenant to provide Landlord with a certified copy of all insurance
coverage carried by Tenant.

 

SECTION 3.  Tenant agrees to pay to
Landlord forthwith upon demand the amount of any increase in premiums for
insurance against loss by fire that may be charged during the term of this
Lease on the amount of insurance maintained in force by Landlord on the
Building, of which the Premises are a part, resulting from Tenant doing any act
in or about said Premises which does so increase the insurance rates, whether or
not Landlord shall have consented to such act on the part of Tenant. If Tenant
installs upon the Premises any electrical equipment which constitutes an
overload on the electrical lines of the Premises, Tenant shall at its own
expense make whatever changes are necessary to comply with the requirements of
the insurance underwriters any governmental authority

 

7

 

having jurisdiction
thereover, but nothing herein contained shall be deemed to constitute Landlord’s
consent to such overloading.

 

ARTICLE XIV.  LIENS

 

Tenant
shall keep the Premises free and clear of, and shall indemnify Landlord against
all mechanics’ liens and other liens on account of work done for or materials,
supplies and equipment furnished to Tenant by persons claiming under it for
maintenance, repairs and alterations. Tenant shall reimburse Landlord for all
costs and attorneys’ fees incurred by Landlord in investigating, defending or
clearing such lien to be cleared within thirty (30) days of filing of same
unless Tenant shall have provided security acceptable to landlord against any
loss to Landlord on account thereof. As a condition to Landlord’s consent
pursuant to Article VII, Landlord may require Tenant to provide Landlord
with reasonable payment and performance bonds of those persons contracted by
Tenant to perform work on or in the Premises that could be the subject of such
a lien in order to protect the Premises, the Landlord, and any mortgagee from
and against liens of mechanics and materialmen performing work in or providing
services and equipment to the Premises.

 

ARTICLE XV.  ASSIGNMENT; SUBLETTING; MORTGAGING

 

SECTION 1.  Tenant shall not
voluntarily, involuntarily or by operation of law assign, transfer, mortgage or
otherwise encumber all or any part of Tenant’s interest in this Lease, or
sublet the Premises or any part thereof, without first obtaining in each and
every instance Landlord’s prior written consent. Subject to the foregoing,
Tenant shall not assign, transfer or sublet the Premises, or any part thereof,
at a rent to Assignee, Transferee or Sublessee, greater than $19 per square
foot. Any transfer of this Lease by merger, consolidation, or liquidation, or
any change in the ownership of, or power to vote the majority of its outstanding
voting stock resulting in a change in ownership of more than 50% of the total
issued and outstanding shares of Tenant shall constitute an assignment for the
purposes of the paragraph. If consent is once given by Landlord to any such
assignment or subletting, such consent shall not operate as a waiver of the
necessity for obtaining Landlord’s consent to any subsequent assignment or
subletting. Any legal costs incurred by Landlord related to such assignment or
subletting shall be paid by Tenant to Landlord upon demand. Tenant shall
provide Landlord with executed copies of any Assignment. Transfer or Sublease
Agreement entered into as provided herein.

 

ARTICLE XVI.  ESTOPPEL CERTIFICATE

 

Tenant
shall at any time and from time to time execute, acknowledge and deliver to
Landlord a statement in writing certifying: (a) that this Lease is
unmodified and in full force and effect (or if there has been any modification
hereof that the same is in full force and effect as modified and stating the
nature of the modification or modifications); (b) that to the best of its
knowledge Landlord is not in default under this Lease (or if any such default
exists the specific nature and extent thereof); and (c) the date to which
rent and other charges have been paid in advance, if any.

 

ARTICLE XVII.  TAXES

 

SECTION 1.  Tenant shall pay before
delinquency any and all taxes and assessments, and license, sales, business,
occupation or other taxes, fees or charges levied, assessed or imposed upon its
business operations in the Premises.

 

SECTION 2.  Tenant shall pay before
delinquency any and all taxes and assessments levied, assessed or imposed upon
its trade fixtures, leasehold improvements, merchandise and other personal
property in, on, or upon the Premises.

 

SECTION 3.  In the event any taxes,
fees or charges referred to in the preceding Section 1 and/or Section 2
shall be assessed, levied or imposed upon or in connection with the business or
property of Landlord, such assessment, taxes, fees or charges shall be paid by
Tenant to Landlord promptly upon Landlord’s request for such payment.

 

8

 

SECTION 4.  Landlord shall pay before
delinquency any and all costs and expenses of every kind and nature for real
estate ad valorem taxes, and/or fees, assessments, charges or payments in lieu
thereof, to the Commonwealth of Kentucky, and/or any political subdivision
thereof, including, without limitation, Jefferson County, and/or any city,
municipality, agency or special district, the Jefferson County School Board,
Louisville Water Company, and/or the Louisville and Jefferson County
Metropolitan Sewer District, whether general or special assessments, including,
but not limited to, sewer rents, rates and charges; drainage fees; water charges;
taxes based upon the receipt of rent; and any other federal, state or local
government charge, general, special, ordinary or extra—ordinary (but not
including income or franchise taxes or any other taxes imposed upon or measured
by Landlord’s net income or profits, unless the same is imposed in lieu of real
estate taxes), which may now or hereafter be levied or assessed against the
Building or the land on which the Building and appurtenant parking areas and
driveways are located. If at any time during the term of this Lease the method
of taxation then prevailing shall be altered so that any new tax, assessment,
levy, imposition or charge shall be imposed upon Landlord in place or partly in
place of any such taxes and shall be measured by or be based in whole or in
part upon the Building or the rents or other income therefrom, then all such
new taxes, assessments, levies, imposition or charge shall be imposed upon
Landlord in place or partly in place of any such taxes and shall be measured by
or be based in whole or in part upon the Building or the rents or other income
therefrom, then all such new taxes, assessments, levies, impositions or charges
or part thereof, to the extent that they are measured or based, shall be
included in the definition of Landlord’s costs and expenses within the meaning
of this subparagraph. Tenant shall only be directly responsible for taxes, if
any, on its personal property and on the value of its special leasehold
improvements exclusive of standard building improvements.

 

ARTICLE XVIII.  PRIORITY OF LEASE

 

This
Lease shall, unless Landlord otherwise elects, be subordinate to any and all
mortgages and other security instruments now existing, or which may hereafter
be made covering the Building and/or the real property underlying the same or
any portion or portions thereof, and for the full amount of all advances made
or to be made thereunder (without regard to the time or character of such
advances), together with interest thereon, and subject of all the terms and
provisions thereof and to any renewals, extensions, modifications and
consolidations thereof; and Tenant covenants within ten days of demand to make,
execute, acknowledge and deliver upon request any and all documents or
instruments demanded by Landlord which are or may be necessary or proper for
more fully and certainly assuring the subordination of this Lease to any such
mortgages or other security instruments, provided, however, that any person or
persons purchasing or otherwise acquiring any interest at any sale and/or other
proceedings under such mortgages or other security instruments may elect to
continue this Lease in full force and effect in the same manner, and with like
effect, as if such person or persons had been named as Landlord herein, and in
the event of such election, this Lease shall continue in full force and effect
as aforesaid, and Tenant hereby shall continue in full force and effect as
aforesaid, and Tenant hereby attorns and agrees to attorn to such person or
persons. Tenant hereby irrevocably appoints Landlord the attorney-in-fact of
Tenant, to execute and deliver any document provided for herein, for and in the
name of Tenant.

 

ARTICLE XIX.  FIXTURES AND PERSONAL PROPERTY; SURRENDER

 

SECTION 1.  Upon the termination of
this Lease, Tenant shall surrender to Landlord the Premises (including, without
limitation, all non-moveable leasehold improvements) in good condition and
repair reasonable wear, tear and damage by casualty not caused by Tenant or its
agents or employees excepted. All improvements, additions, and fixtures made or
installed from time-to-time by Landlord to, in, upon, or about the Premises,
including, but not limited to, all lighting fixtures, shall be the property of
Landlord and upon any such termination, shall be surrendered to Landlord by
Tenant without any injury, damage or disturbance thereto or payment thereof.

 

SECTION 2.  All fixtures, furniture,
movable partitions, machinery, equipment and other personal property installed
or placed in said Premises at the cost of or by Tenant shall at all times
remain, be considered and treated as the personal property of Tenant and in no
sense part of the real estate, and Tenant shall have the right at any time
during the term of this Lease and any extension thereof, or within a period of
ten (10) days after any termination hereof to remove the same or any part
thereof from said Premises, provided, however, that upon the removal of any
such personal property, Tenant agrees to restore the area from which the same
has been removed to substantially the same condition as it was prior to the
installation thereof and to the extent necessary to keep Premises in a leasable
and usable condition for future tenants. If Tenant fails to remove any such
personal property, Landlord may at

 

9

 

Landlord’s option retain
all or any of such property and title thereto shall thereupon vest in Landlord,
Landlord may remove from the Premises and dispose of in any manner all or any
of such property, in which latter event Tenant shall, upon demand, pay to
Landlord the actual expense of such removal and disposition, and the cost of
repair of any and all damage to the Premises resulting from or caused by such
removal.

 

ARTICLE XX. 
HOLD OVER TENANCY

 

If
Tenant shall, without execution of a new Lease or written extension, and with
consent of Landlord, hold over after the expiration of the terms of this Lease,
such tenancy shall be a month-to-month tenancy, which may be terminated as
provided by law. During such tenancy, Tenant shall pay to Landlord the greater
of (a) the rental rate then being quoted by Landlord for comparable space
in the Building; or (b) the Rent pursuant to Article III. During such
tenancy, Tenant shall be bound by all of the terms, covenants, and conditions
as herein specified, as far as applicable; provided, however that if Tenant
fails to surrender the Premises upon the termination of this Lease, in addition
to any other liabilities to Landlord arising therefrom Tenant shall indemnify
and hold Landlord harmless from loss or liability resulting from such failure,
including any claims made by any succeeding Tenant founded on such failure.

 

ARTICLE XXI.  WAIVER OF SUBROGATION

 

Landlord
and Tenant each releases and relieves the other and on behalf of its insurer(s)
waives its entire right of recovery against the other for loss or damage
arising out of or incident to the perils of fire, explosion, or any other
perils generally described in the “extended coverage” insurance endorsements
used in Louisville which occur in, on or about the Building and/or the
Premises, whether due to the negligence of such other party, its agents or
employees, or otherwise.

 

ARTICLE XXII.  NOTICES

 

Wherever
in this Lease it shall be required or permitted that notice, approval, advice,
consent or demand be given or served by either party to this Lease to or on the
other, such notice or demand shall be given or served and shall not be deemed
to have been duly given or served unless in writing and forwarded by certified
or registered mail, addressed as follows:

 

	
  To Landlord:

  	
   

  	
  Jaytee
  Properties

  
	
   

  	
   

  	
  Republic
  Corporate Center

  
	
   

  	
   

  	
  Louisville,
  Kentucky 40202-2700

  
	
   

  	
   

  	
  Attention: Mr. Steve
  Trager

  
	
   

  	
   

  	
   

  
	
  To Tenant:

  	
   

  	
  At the Premises

  

 

Either
party may change such address by written notice by certified or registered mail
to the other.

 

ARTICLE XXIII.  RIGHTS RESERVED BY LANDLORD

 

SECTION 1.  Landlord shall have the
sole and exclusive right to designate (and from time to time, in its
discretion, re-designate) the name, address, number and/or designation of the Building.

 

ARTICLE XXIV. 
CONDEMNATION

 

In the
event that during the term of this Lease the Premises as identified in Article I,
Section 1 hereof, or any part thereof, or the use or possession thereof,
is taken in condemnation proceedings or by any right of eminent domain or for
any public or quasi-public use, this Lease and the term hereby granted shall
terminate and expire on the date when possession shall be taken by the
condemnor, and rent and all other charges payable hereunder shall be
apportioned and paid in full up to that date and all prepaid unearned rent and
all other charges payable and paid in full up to that date and all prepaid
unearned rent and all other charges payable hereunder shall forthwith be repaid
by Landlord to Tenant, and Tenant shall not be liable to Landlord for rent or
any other charges payable hereunder, damage, or otherwise, for, or by reason of
any matter or thing occurring thereafter. Tenant hereby waives any and all

 

10

 

rights in, or to any
condemnation awards. In the event that during the term of this Lease a material
amount of the parking area or a material amount of the use or possession
thereof is taken in condemnation proceedings or by any right of eminent domain
or for any public or quasi-public use and no alternative parking is provided,
the term of this Lease shall at the option of Tenant cease and terminate from
the date of title vesting in such proceeding.

 

ARTICLE XXV.  MISCELLANEOUS PROVISIONS

 

SECTION 1.  The term “Landlord” as used
in this Lease, so far as covenants or obligations on the part of Landlord are
concerned, shall be limited to mean and include only the owner or co-owners, at
the time in question, of the Premises, and in the event of any transfer or
transfers of the title to the Premises, Landlord herein named (and in case of
any subsequent transfers or conveyances, the then grantor) shall be
automatically freed and relieved from and after the date of such transfer or
conveyance of all liability as respects the performance or any covenants or
obligations on the part of Landlord contained in this Lease thereafter to be
performed.

 

SECTION 2.  The captions of Articles of
this Lease are for convenience only and shall not be considered or referred to
in resolving questions of interpretation or construction.

 

SECTION 3.  The terms “Landlord and
Tenant”, wherever used herein shall be applicable to one or more persons, as
the case may be, and the singular shall include the plural, and the neuter
shall include the masculine and feminine, and if there be more than one, the
obligations hereof shall be joint and several.

 

SECTION 4.  The word “person” and the
word “persons” wherever used in this Lease shall both include individuals,
partnerships, firms, associations, and corporations of any other form of
business entity.

 

SECTION 5.  The various rights,
options, elections, powers, and remedies contained in this Lease shall be
construed as cumulative and no one of them shall be exclusive of any of the
others, or of any other legal or equitable remedy which either party might
otherwise have in the event of breach or default in the terms thereof, and the
exercise of one right or remedy by such party shall not impair its right to any
other right or remedy until all obligations upon the other party have been
fully performed.

 

SECTION 6.  Time is of essence with
respect to the performance of each of the covenants and agreements under this
Lease.

 

SECTION 7.  Each and all of the
provisions of this Lease shall be binding upon and inure to the benefit of the
parties hereto and, except as set forth in Section 1 of this Article and
as otherwise specifically provided elsewhere in this Lease, their respective
heirs, executors, administrators, successors, and assigns, subject at all
times, nevertheless, to all agreements and restrictions contained elsewhere in
this Lease with respect to the assignment, transfer, encumbering or sub-letting
of all or any part of Tenant’s interest in this Lease.

 

SECTION 8.  This Lease shall be
interpreted in accordance with the law of the Commonwealth of Kentucky.

 

SECTION 9.  No waiver of any default by
Tenant hereunder shall be implied from any omission by Landlord to take any
action on account of such default if such default persists or is repeated, and
no express waiver shall affect any default other than the default specified in
the express waiver, and that only for the time and to the extent therein
stated. The acceptance by Landlord of rent with knowledge of the breach of any
of the covenants of this Lease by Tenant shall not be deemed a waiver of any
such breach. One or more waivers of any breach of any covenant, term or
condition of this Lease shall not be construed as a waiver of any subsequent
breach of the same covenants, term of condition. The consent or approval by
Landlord to or of any act by Tenant requiring Landlord’s consent or approval
shall not be deemed to waive or render unnecessary Landlord’s consent or
approval to or of any subsequent similar acts by Tenant.

 

SECTION 10.  If Tenant shall default in
the performance of any covenant on its part to be performed by virtue of any
provisions of this Lease, Landlord may, after any notice and the expiration of
any period with respect thereto as required pursuant to the applicable
provisions of this Lease, perform the same for the account of Tenant. If
Landlord, at any time, is compelled to pay or elects to pay any sum of money or
do any acts which would require the

 

11

 

payment of any sum of
money by reason of the failure of Tenant, after any notice and the expiration
of any period with respect thereto, as required pursuant to the applicable
provisions of the Lease, to comply with any provisions of this Lease, the sum
or sums so paid by Landlord with all interest, costs and damages, shall be
deemed to be additional rental hereunder and shall be due from Tenant to
Landlord on the first day of the month following the incurring of such
respective expenses, except as otherwise herein specifically provided.

 

SECTION 11.  If Tenant or Landlord shall
bring any action for any relief against the other, declaratory or otherwise,
arising out of this Lease, including any suit by Landlord for the recovery of
rent, additional rent or other payments hereunder or possession of the
Premises, the losing party shall pay the prevailing party a reasonable sum for
attorneys’ fees in such suit, at trial and on appeal, and such attorneys’ fees
shall be deemed to have accrued on the commencement of such action.

 

SECTION 12.  This Lease contains all
covenants and agreements between Landlord and Tenant relating in any manner to
the rental, use and occupancy of the Premises and Tenant’s licensed use of the
Building and other matters set forth in this Lease. No prior agreement or
understanding pertaining to the same shall be valid or of any force or effect,
and the covenants and agreements of this Lease cannot be altered, changed,
modified or added to except in writing signed by Landlord and Tenant. No
representation, inducement, understanding or anything of any nature whatsoever
made, stated or represented on Landlord’s behalf, either orally or in writing
(except this Lease) has induced Tenant to enter into this Lease.

 

SECTION 13.  Any provision or provisions
of this Lease which shall prove to be invalid, void or illegal shall in no way
affect, impair or invalidate any other provision hereof, and the remaining
provisions hereof shall nevertheless remain in full force and effect.

 

SECTION 14.  Except with respect to
those conditions, covenants and agreements of this Lease which by their nature
could only be applicable after the commencement of, during or throughout the
term of this Lease, all of the other conditions, covenants and agreements of
this Lease shall be deemed to be effective as of the date of execution of this
Lease.

 

SECTION 15.  Landlord and Tenant each
represents and warrants to the other that it has not engaged any broker, finder
or other person who would be entitled to any commission or fee in respect of
the negotiation, execution or delivery of this Lease, and shall indemnify each
other against loss, cost, liability, or expense incurred by either as a result
of any claim asserted by any such broker, finder or other person on the basis
on any arrangements or agreements made or alleged to have been made by or on
behalf of either Landlord or Tenant, as the case may be, in breach of the
foregoing warranty.

 

SECTION 16.  Any and all consents and
approvals of Landlord required by or referred to in the Lease shall not be
unreasonably withheld.

 

SECTION 17.  Notwithstanding any other
provisions contained in this lease, in the event the Tenant is closed or taken
over by the banking authority of the State of Kentucky, or other bank
supervisory authority, the Landlord may terminate the lease only with the
concurrence of such banking authority or other bank supervisory authority, and
any such authority shall in any event have the election either to continue or
to terminate the lease: Provided, that in the event this lease is terminated, the
maximum claim of Landlord for damages or indemnity for injury resulting from
the rejection or abandonment of the unexpired term of the lease shall in no
event be in an amount exceeding the rent reserved by the lease, without
acceleration, for the year next succeeding the date of the surrender of the
premises to the Landlord, or the date of re-entry of the Lessor, whichever
first occurs, whether before or after the closing of the bank, plus an amount
equal to the unpaid rent accrued without acceleration up to such date.

 

IN WITNESS WHEREOF, the
parties have caused this Lease to be duly executed and delivered as of the day
and year first above written.

 

12

 

	
  ATTEST:

  	
  JAYTEE
  PROPERTIES

  
	
   

  	
   

  
	
  BY:

  	
  /s/ Pamela
  Anderson

  	
   

  	
  BY:

  	
  /s/ Steve Trager

  	
   

  
	
   

  	
   

  
	
  ATTEST:

  	
  REPUBLIC
  BANK & TRUST COMPANY /s/ MAR

  
	
   

  	
   

  
	
   

  	
   

  
	
  BY:

  	
  /s/ Lara
  Recktenwald

  	
   

  	
  BY:

  	
  /s/ Kevin Sipes

  	
   

  

 

13

 

EXHIBIT A

RULES AND REGULATIONS

 

1.             No
advertisement, sign, lettering, notice or device shall be placed in or upon the
Premises or the Building, including any windows, walls and exterior doors,
except such as may be approved in writing by Landlord.

 

2.             Lettering
upon the doors as required by Tenant shall be made by the sign company
designated by Landlord, but the cost shall be paid by Tenant. The directories
of the Building will be provided exclusively for the display of the name and
location of Tenant and its designated representative only, and Landlord
reserves the right to exclude any other names therefrom.

 

3.             No
additional locks shall be placed upon any doors of the Premises, and Tenant
agrees not to have any duplicate keys made without the consent of Landlord. If
more than two keys for any door lock are desired, such additional keys shall be
paid for by Tenant. Upon termination of this Lease, Tenant shall surrender all
keys.

 

4.             No
furniture, freight, supplies not carried by hand or equipment of any kind shall
be brought into or removed from the Building without the consent of Landlord.
Landlord shall have the right to limit the weight and size and to designate the
position of all safes and other heavy property brought into the Building. Such
furniture, freight, equipment, safes and other heavy property shall be moved in
or out of the Building only at the times and in the manner permitted by
Landlord. Landlord will not be responsible for loss of or damage to any of the
items above referred to, and all damage done to the Premises or the Building by
moving or maintaining any of such items shall be repaired at the expense of
Tenant. Any merchandise not capable of being carried by hand shall utilize hand
trucks equipped with rubber tires and rubber side guards.

 

5.             The
entrances, corridors, stairways and elevators shall not be obstructed by
Tenant, or used for any other purpose than ingress or egress to and from
Premises. Tenant shall not bring into or keep any animal within the Building,
or any bicycle or other type of vehicle.

 

6.             Tenant
shall not disturb other occupants of the Building by making an undue or
unseemly noise, or otherwise. Tenant shall not, without Landlord’s prior
written consent, install or operate in or on Premises any machine or machinery
causing noise or vibration perceptible outside the Premises, electric heater,
stove or machinery or any kind or carry on any mechanical business thereon, or
keep or use thereon oils, burning fluids, camphene, kerosene, naphtha,
gasoline, or other coustible materials. No explosives shall be brought into the
Building.

 

14

 

7.             Tenant
shall not mark, drive nails, screw or drill into woodwork or plaster, paint or
in any way deface the Building or any part thereof, or the Premises or any part
thereof, or fixtures therein. The expense of remedying any breakage, damage or
stoppage resulting from a violation of this rule shall be borne by
Tenant.

 

8.             If
Tenant installs upon the Premises any electrical equipment which constitutes an
overload on the electrical line serving the Premises or the Building, Tenant
shall make all necessary changes to reduce such overload, or at the option of
Landlord, eliminate such equipment as Landlord deems necessary to reduce the
electrical capacity required to serve the Premises.

 

9.             Canvassing,
soliciting, and peddling in the Building is prohibited and Tenant shall
cooperate to prevent such activity.

 

10.           The
requirements of Tenant will be attended to only upon application at the
Landlord’s office in the Building. Building employees shall not perform any
work or do anything outside of the regular duties, except on issuance of
special instructions from the office of the Building. If the Building employees
are made available for the assistance of Tenant, Landlord shall be paid for
their services by Tenant at reasonable hourly rates. No Building employee will
admit any person (Tenant or otherwise) to any office without specific
instructions from the office of the Building.

 

11.           Landlord
reserves the right to close and keep locked all entrance and exit doors of the
Building on Sundays, legal holidays, and between the hours of 7:00 p.m. of
any day and 7:00 a.m. of the following day, and during such further hours
as Landlord may deem advisable for the adequate protection of the Building and
the property of the tenants. Tenant shall have 24-hour access to the Premises.

 

15Untitled Page

		
			

			

			

			

			

			EXHIBIT 10.1

					

					

				

		
			Contract for Transfer of Mining Licenses

		

		

		

		Party A        : 209 Geo-brigade of Yunnan Provincial Nuclear Industry, Mangshi Gold Mine.

		Name of organization:   209 Geo-brigade of Yunnan Provincial Nuclear Industry, Mangshi Gold Mine.

		Address: Santaishan Village, Luxi City of Yunnan Province.

		Legal representative:   Mr. Cheng Huiming

		Authorized person: Mr. Qin Heng  

		

			Party B           : Yunnan Western Mining Ltd.

		Name of organization: Yunnan Western Mining Ltd.

		Address: 2708 Room, A Unit, Dushimingyuan Building, Middle of Renming Road, Kunming City, Yunnan Province, PRC

		Legal representative: Graham R. Taylor

		Authorized person: Anthony Tam 

		Postal code : 650031

		Tel.: (Fax)      : 0871-3642422

		

		In accordance with the Law of Mineral Resources of the People’s Republic of China, Management Method for Transferring Exploration Licenses and Mining Licenses and the Law of Contract of the People’s Republic of China, after both sides engaged in friendly negotiation, this Contract is hereby signed for transferring a Mining License in the Mangshi gold mining area of Santaishan Village, Luxi City of Yunnan Province(“Mangshi Gold Mining License”) from 209 Geo-brigade of Yunnan Provincial Nuclear Industry, Mangshi Gold Mine(“Party A”) to Yunnan Western Mining Ltd.(“Party B”). with the Information listedas follows:

		Certificate Number:5300009940016

			Mining Permit Holder: 209 Geo-brigade of Yunnan Provincial Nuclear Industry, Mangshi Gold Mine.

			Name of Mining Project: 209 Geo-brigade of Yunnan Provincial Nuclear Industry, Mangshi Gold Mine.

			Economy type: Collectivity

			Mineral type: Gold mine

			Mining Method : Open Pit Mining

			Mining Rate: Twenty thousands tonnes per year.

			Mining Area: 0.43Km2(including Maiwoba Permit and Guoyuan Permit)

			Effective Period: From Sep 23, 1999 to Sep 23, 2009

		

		

		

		

		

		

		

		

		Article 1. Party A is a subsidiary of 209 Geo-brigade of Yunnan Provincial Nuclear Industry. The Contract was willingly made between Party A and Party B, and forms a part of the Sino-Foreign Co-operative Joint Venture Contract of Yunnan Western Mining Ltd., entered into by and between 209 Geo-brigade of Yunnan Provincial Nuclear Industry and Golden River Resources Corp., of British Columbia, Canada. The execution of the Contract shall not affect the rights and obligations provided in the aforesaid Sino-Foreign Co-operative Joint Venture Contract.
		

		

		Article 2. Undisputed Ownership of the Mangshi Gold Mining License

		In accordance with the provisions of the laws, regulations and relevant rules of the People’s Republic of China and after being confirmed by Party A, 100% of the ownership and uncontested mining and mining information rights in the Mangshi Gold Mining License, is ownd by Team 209, is clear and definite, which conforms to legal assignment conditions by the Yunnan Provincial State Land and Resource Bureau, and the mining rights are not disputed. The Mangshi Gold Mining License is free and clear of all debts, encumbrances, restrictions or claims of third parties.

		

		Article 3. Independent Investigation by Party B

		Party B declares: Before signing the Contract, Party B has consulted all of the technical and economical information regarding these mining rights, which has satisfied Party B.

		

		Article 4. Environmental Indemnity

		Party A warrants: Party A shall be responsible for the environmental pollution arising from its mining operations within the mining areas of Mangshi Gold Mining License, before or after the execution of the Contract. Party A shall eliminate all environment pollution in accordance with the state and local laws, regulations and rules of mining industry, which shall be examined and approved by the local environmental protection administration. All cost and expense shall be borne by Party A.

		

		Article 5. Main Content and Condition of Assignment

		5.1 This transfer includes the underground exploration and mining of Mangshi Gold Mining License(average depth: more than 15m).

			5.2 Because the mining period of original contractor has not expire, Party A shall retain the rights to use the already explored loose, unconsolidated, red soil (average depth: 15m or less than 15m) for 3 years(2 years for mining, 1 year for eliminating environmental pollution). The aforesaid mining rights shall not be included in this transfer and shall be transferred to Party B after 3 years from the execution of the Contract.

			5.3 The assets of Mangshi Gold Mining, including the use rights of land, real estate and equipment, shall not be included in this transfer. If Party B requires, the relevant purchase agreement may be entered into after 3 years.

			5.4 Party A shall retain the mining rights of Mangshi Gold Mining License loose, unconsolidated, red soil in 3 years and be entitled to benefit from it. Party A shall be responsible for all liabilities arising from its mining operation.

		5.5 In case that Party B agrees to cooperate with Party A in mining of surface unconsolidated, red soil, the relevant cooperate agreements may be entered into otherwise.

		5.6 In case that Party B agrees to purchase the surface unconsolidated, red soil explored by Party A, after the appraise all value has been established by a recognized organization. The relevant purchase agreements may be entered into otherwise.

		

		

		

		

		

		

		

		

		Article 6. Charge Standard and Way of Payment
		6.1       Transfer fee

		

		According to the fair, impartial and open principle and after both sides’ have completed friendly negotiations and mutual approvals, the Mangshi Gold Mining License is transferred for a fee of 150,000 transferable common shares (the “Transfer Fee”) in Magnus International Resources, Inc. (“Magnus”), a Nevada company which has a 90% interest in Party B, and which trades on the Over the Counter Bulletin Board Market in the United States of America under the trading symbol MGNU.OB, or equivalent cash.

		

		6.2       Way of payment

		

		Party B will issue 50% of the transfer fee to Party A within15 days of execution of the Contract.  Party B will issue the remaining 50% transfer fee to Party A within15 days of receiving all necessary government approvals surrounding the transfer of the Mangshi Gold Mining License from Party A to Party B.  If for whatever reason the Chinese government should disallow Party A’s ownership of the 150,000 common shares, within 15 days of Party B receiving the above approvals surrounding the transfer of the Mangshi Gold Mining License from Party A to Party B, Party A shall notify Party B of the government’s position, and Party B shall pay Party A the equivalent US dollar value of 150,000 common shares in Magnus, as calculated on the day this agreement is executed, within 1 year of receiving such written notice.

		

		6.3       Additional Condition of Payment

		The Contract forms a part of the Sino-Foreign Co-operative Joint Venture Contract of Party B. The execution of the Contract shall not affect the rights and obligations provided in the aforesaid Sino-Foreign Co-operative Joint Venture Contract. In the event that the Contract is considered to be an alteration of rights and obligations agreed in the Joint Venture Contract by government authorities, Party A shall be responsible for the approval. Party B will have the option to halt any pending transfer of the Mangshi Gold Mining License, if government authorities shall not approve, and .Party A shall reimburse Party B all cost and expense arising hereof.

		Article 7. Right and Obligations of the Parties 

		7.1       Right and Obligations of Party A

		

		(a) In order for ensuring the assignment of mining right conforms to the provisions of China’s laws and regulations and to safeguard the rights and interests of Party A and Party B, Party A shall have the right to make necessary investigation and understanding upon Party B’s qualifications and credit status.

		

		(b) Based on Party B’s requirement, Party A shall apply to transfer the Mangshi Gold Mining License and fees and expenses incurred in this transfer will be borne by Party B.

		

		(c) When requested by Party B, Party A shall render all necessary and advisable assistance to Party B in the implementation of its business and assist in harmonizing the relationships with local, provincial and federal government where possible.  Party A shall make available to Party B all data and information available to Party A in respect to the Mangshi Gold Mining License, and the surrounding area which Party A can lawfully disclose.

		

		

		

		

		

		

		

		

		

		(d) Party A shall employ best efforts and good faith to fulfill the purpose and intent of this Contract and to assist Party B to acquire a 100% interest in the Mangshi Gold Mining License, without hindrance or restriction by any party to the operations therein or the profits therefrom, and to assist Party B to engage in unhindered and efficient mining exploration and operations and the extraction, transport and sale of any commercial minerals derived therefrom.
		

		7.2. Right and Obligations of Party B

		

		(a) Party B has the right to do some investigation in Party A’s legal geological area.

			(b) Party B shall have the right to understand and find out from Party A the geological and technical conditions and regional circumstances related to the Mangshi Gold Mining License to be transferred, and Party A should supply such available information free of charge.

			(c) Party B shall have the responsibility to keep business secrets of Party A which may be disclosed during this transaction. Prior to the approval by relevant registration and administrative departments for transferring mining right, Party B must not disclose any information related to the mining right to any third parties.

			(d) Party B must completely implement the provisions of Article 5 in this Contract.

			(e) Party B has the right to begin any contemplated geological and manufacturing work immediately after both sides sign this Contract.

		

		Article 8. Declaration, Undertaking and Warranty

		Declaration, undertaking and warranty made by two Parties to each other:

		

		8.1 Having the right to sign this Contract and the capability to fully perform its obligations under the Contract.

		

		8.2 Having the capability to take all necessary actions in order to satisfactorily complete the assignment agreed under this Contract.

		

		

		Article 9. Liabilities for Breach of Contract

		9.1 Upon signing of the Contract by the Parties, each party shall perform its liabilities and obligations under the Contract. No party can be allowed to unilaterally terminate the Contract except as provided below.

		

		9.2 Once any breach of this Contract occurs, if the observant party considers through reasonable and objective judgment that the breach of the Contract will make it impossible or unfair to continue performing its obligations under the Contract, then the observant party shall have the right to either terminate the Contract, or continue to carry out the Contract after the defaulting party ceases its default actions and takes complete and effective measures to eliminate any adverse consequences aroused by breach of the Contract and compensates the observant party for its losses.

		

		8.3 The defaulting party shall compensate the losses of observant party, including direct economic loss, anticipated indirect loss and extra expenses. The compensating amount and schedule can be discussed by both sides, and if the discussion does not result in mutual approval, the matter can be arbitrated by a neutral person.

		

		

		

		

		
			

			

			

			

			

		Article 10. Disputes and Arbitration
		

		10.1 Any dispute of interpretation or performance relating to the Contract shall first be resolved through consultation. Such consultation shall begin immediately after one party hereto has delivered to the other party hereto a written request for such consultation. If within 60 days following the date on which such notice is given the dispute cannot be resolved, the dispute shall be submitted to arbitration upon the request of any party hereto with notice to the other.

		

		10.2 Any dispute, controversy or claim cannot be resolved through consultation shall be submitted to and finally resolved by China International Economic and Trade Arbitration Commission in Beijing in accordance with its Rules, as in effect at the time of the arbitration.

		

		10.3 The award of the arbitration tribunal shall be final and binding upon the disputing parties. Accordingly, the Parties hereby confirm that they shall treat the performance of this award as an obligation and expressly agree to carry out such arbitral award.

		

		10.4 After arising of the disputes and during the course of arbitration, the parties shall continue to execute of the Contract, except the part hereof, which is under dispute.

			

			Article 11. Proprietary of Mangshi Gold Mining License

		

		If both Parties agree that Mangshi Gold Mining License has no further value of exploring and mining, Party A may withdraw the Mangshi Gold Mining License free of charge, on dissolution or termination of Party B.

		

		Article 12. Effectiveness

		

		This Contract shall come into effect on the date it is signed and sealed by the legal representatives or authorized representatives of both Parties.

		

		Article 13. Miscellaneous

		

		The Parties shall settle the other relevant issues, if any, through negotiation and consultation. The Contract is executed in six counterparts, four of which shall be submitted for the transfer and alteration of Mangshi Gold Mining License and each party shall hold one copy.

		

			
					Party A: 209 Geo-brigade of Yunnan Provincial Nuclear Industry, Mangshi Gold Mine.

					
					Party B: Yunnan Western Mining Ltd.

				
	
					Legal representative (authorized person):

					
					Legal representative (authorized person): 

				
	
					/s/ Cheung Huiming

					
					/s/ Graham Taylor

				
	
					Date: October 29, 2005

					
					Date: October 28, 2005

				

		

		

		

		

		

		

		

		

		

		 

			

			

			

			Appendix A – Mangshi Gold Mining License to be Transferred

					

				People’s republic of China

			Mining License

				

			Certificate Number:5300009940016

		

		Mining Permit Holder: 209 Geo-brigade of Yunnan Provincial Nuclear Industry, Mangshi Gold Mine.

			Address: Santaishan Village, Luxi City of Yunnan Province.

			Name of Mining Project: 209 Geo-brigade of Yunnan Provincial Nuclear Industry, Mangshi Gold Mine.

			Economy type: Collectivity

			Mineral type: Gold mine

			Mining Method : Open Pit Mining

			Mining Rate: Twenty thousands tonnes per year.

			Mining Area: 0.43Km2

			Effective Period: From Sep 23, 1999 to Sep 23, 2009

		

		Certificate Issuing Authority: (Special Seal)

			Affixed the Special Registration Seal of Bureau of Geology and mines of Yunnan Provice

		

		Date: Sep 23, 1999

			Printed by Ministry of Land and Resources of the People’s Republic of China

			
					Mineral section

					
					Co-Ordinate

						Of the turns

					
					X

					
					Y

					
					Altitude Limits

						(m)

				
	
					Maiwoba

					
					No.1

					
					2689750.00

					
					33435470.00

					
					1290-1060

				
	
					No.2

					
					2690207.50

					
					33435712.50

				
	
					No.3

					
					2690410.00

					
					33435980.00

				
	
					No.4

					
					2690270.00

					
					33436180.00

				
	
					No.5

					
					2689600.00

					
					33435570.00

				
	
					Guoyuan

					
					No.6

					
					2691144.20

					
					33436886.40

					
					1300-1110

				
	
					No.7

					
					2691078.40

					
					33437005.00

				
	
					No.8

					
					2690717.00

					
					33436519.30

				
	
					No.9

					
					2690560.00

					
					33436516.00

				
	
					No.10

					
					2690427.00

					
					33436274.60

				
	
					No.11

					
					2690466.00

					
					33436247.80

				
	
					No.12

					
					2690772.00

					
					33436267.00

				
	
					No.13

					
					2690977.50

					
					33436417.50

				
	
					No.14

					
					2691056.10

					
					33436526.40

				
	
					No.15

					
					2691141.00

					
					33436800.00

				
	
					

					Mining depth: Maiwoba 1290M—1060M

						           Guoyuan 1300M—1110M

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