Document:

<PAGE>

                                                                   EXHIBIT 10.19

                         PRODUCT DEVELOPMENT AGREEMENT

     THIS PRODUCT DEVELOPMENT AGREEMENT ("Agreement") is made this 22nd day of
July, 1999 ("Effective Date"), by and between NEOPOINT, INC., a California
corporation ("NEOPOINT"), located at 4225 Executive Square, 6th Floor, La Jolla,
California  92037, and NEXCOM KOREA, a Korean corporation ("NEXCOM"), located at
2nd Floor, 1600-1 Kwanyang-dong Dongan-gu Kyunggi-do Korea.

     WHEREAS, NEXCOM is in the business of developing technology for hand-held
CDMA wireless telecommunication devices;

     WHEREAS, NEOPOINT desires that NEXCOM develop a *   *   * (the "Product")
and to provide appropriate solutions for research and development, production
technology, service technology and training associated with the Product; and

     WHEREAS, NEXCOM desires to develop the Product for NEOPOINT and to provide
such solutions to NEOPOINT, subject to the terms and conditions set forth in
this Agreement.

     NOW, THEREFORE, NEOPOINT and NEXCOM hereby agree as follows:

1.  NEXCOM Product Development Services.
    -----------------------------------

     1.1  NEXCOM shall develop the Product ("Development Services") on behalf of
NEOPOINT to the specifications set forth in Exhibit A attached hereto
("Specifications").

     1.2  A schedule of the estimated milestones for the Development Services is
set forth in Exhibit B, attached hereto ("Milestones").  NEXCOM agrees to use
             ---------
best efforts to meet the Milestone schedule.  NEXCOM shall provide NEOPOINT with
a written report of any actual or anticipated problems (resolved or unresolved)
and any indication of delay promptly upon becoming aware of such circumstance.
Approximately once every month the parties shall meet in person or convene by
conference call for a formal progress presentation during which NEXCOM shall
describe the status of the work and projections of the time of completion of
each stage of the development.

2.   Acceptance of the Product.
     -------------------------

     2.1  Request for Inspection.  NEXCOM shall request in writing that NEOPOINT
          ----------------------
review the development of the Product upon meeting each of the Milestones and
within thirty (30) days prior to the expiration of the term of the Development
Services, as specified in Section 10.

*  Certain material (indicated by an asterisk) has been omitted from this
   document pursuant to a request for confidential treatment. The omitted
   material has been filed separately with the Securities and Exchange
   Commission.

                                       1
<PAGE>

     2.2  Inspection of the Product.  Upon receipt of NEXCOM'S written request
          -------------------------
for inspection of the Product to determine if NEXCOM has met the relevant
Milestone, NEOPOINT shall review NEXCOM's Development Services. NEOPOINT shall
have up to thirty (30) days after NEXCOM delivers any such inspection request to
NEOPOINT to provide notice to NEXCOM of its failure to satisfactorily comply
with the relevant Milestone. Notwithstanding anything to the contrary contained
in this Section 2, the parties may mutually agree in writing to extend the
inspection time periods.

     2.3  Notice of Non-Compliance.  If NEOPOINT's inspection of the Development
          ------------------------
Services and/or the Product uncovers any non-compliance with any Milestone or
any of the Specifications, then NEOPOINT shall provide written notice of any
specific non-compliance to NEXCOM.  NEXCOM agrees to use its best efforts to
cure any such non-compliance within fifteen (15) days of receipt of NEOPOINT's
notice of non-compliance.  NEXCOM shall request another inspection by NEOPOINT
pursuant to Section 2.2 after curing any non-compliance of the Product.  In the
event NEXCOM is unable to cure to NEOPOINT's sole satisfaction the noncompliance
within the above described fifteen (15) day period, NEOPOINT shall have the
rights set forth in Sections 5.5 and 10 below.

     2.4  Acceptance Notification.  Each Milestone shall be deemed complete upon
          -----------------------
the earlier to occur of (a) written confirmation by NEOPOINT specifying that
NEXCOM has satisfactorily complied with the Milestone and (b) forty five (45)
days after NEOPOINT's receipt of a written request for inspection from NEXCOM to
which a notice of non-compliance has not been issued ("Acceptance").  The
Development Services shall be deemed complete upon NEOPOINT's final acceptance
of the Product as evidenced by its delivery of a final acceptance certificate to
NEXCOM and its release of the Escrowed Funds, as defined below ("Final
Acceptance").

3.   Additional Duties of NEXCOM.
     ---------------------------

     3.1  Upon Final Acceptance, NEXCOM shall provide NEOPOINT with the Product
and all materials and documentation necessary to allow NEOPOINT to manufacture
the Product, including, but not limited to, all required software (both source
and object code), testing procedures, test jig, service manuals and such other
items mutually agreed upon between the parties ("Additional Materials").

     3.2  During the term of this Agreement, NEOPOINT shall be entitled to
modify the properties and specifications of the Product by providing NEXCOM with
a written change order ("Change Order") setting forth the changes to the
Specifications. After receipt of a Change Order, NEXCOM shall provide NEOPOINT
with an estimate of additional expense, if any, and additional time, if any,
required to comply with the modified Specifications. If NEOPOINT agrees to
NEXCOM'S proposed revised Milestone Schedule and any additional costs, then
Exhibits A and B shall be revised and such revised Exhibits shall be executed by
both parties. NEXCOM agrees to use its best efforts to meet the revised
Specifications according to the

                                       2
<PAGE>

revised Milestone schedule.

     3.3  NEXCOM shall provide reasonable technological support to assist
NEOPOINT or its designated manufacturing subcontractor to manufacture the
Product.

     3.4  NEXCOM shall provide reasonable technological support and assist
NEOPOINT in obtaining customer and agency approval of the Product in NEOPOINT's
market.

     3.5  NEXCOM shall provide NEOPOINT with training related to the inspection,
operation and repair of the Product.  The level of training and frequency of
training shall be agreed to by the parties.

4.   Ownership and Intellectual Property Rights.  NEXCOM acknowledges and agrees
     ------------------------------------------
that the Product is a "work for hire" and that NEOPOINT shall be the sole owner
of the Product which is being developed solely for NEOPOINT's use to its
Specifications.  NEXCOM shall have no right to the Product and agrees not to,
directly or indirectly, use, make, market, manufacture, copy, distribute, lease,
license or sell the Product, any Intellectual Property (as defined below) or any
Improvements (as defined below).  NEXCOM agrees that NEOPOINT shall own all
right, title and interest in the intellectual property rights incorporated in
(regardless of whether incorporated by NEOPOINT or NEXCOM or its subcontractors)
and/or related to the Products, including but not limited to all patents, patent
applications, copyrights, trademarks, trademark applications, service marks,
service mark applications, trade names, trade secrets, inventions, software
(whether source or object form), hardware, drawings, designs, specifications,
documentation, proprietary know-how or information or other intellectual or
industrial property rights comprising, incorporated into or related thereto
(collectively, the "Intellectual Property").  NEXCOM further agrees that
NEOPOINT shall own and NEXCOM shall have no right to any and all new releases
and new versions of, modifications, alterations, adaptations, translations,
enhancements and additions to and derivative works of any Intellectual Property
(collectively, the "Improvements").

5.   Compensation; Payment.
     ---------------------

     5.1  Development Services.  In consideration of NEXCOM's performance of the
          --------------------
Development Services, NEOPOINT agrees to pay NEXCOM *   *   *.  Each payment
made hereunder other than the Initial Payment shall be referred to herein as an
"Interim Payment").

     5.2  Tooling.  NEXCOM shall pay for tooling and industrial design cost,
          -------
including plastic housing, press molding, LCD, window, key-pad, antenna and all
customized parts.  NEOPOINT shall approve tooling design and be entitled to
reasonable design modifications.

     5.3  Royalty.  In consideration of the performance of the Development
          -------
Services and the provision of technical and engineering support for the life of
the Product, NEOPOINT shall pay

*  Certain material (indicated by an asterisk) has been omitted from this
   document pursuant to a request for confidential treatment. The omitted
   material has been filed separately with the Securities and Exchange
   Commission.

                                       3
<PAGE>

to NEXCOM a * * * in any market by NEOPOINT or any affiliate, distributor,
representative or agent of NEOPOINT.

     5.4  Escrow of Consideration.  All Interim Payments shall be deposited by
          -----------------------
NEOPOINT in an escrow account (the "Escrow Account") to be established pursuant
to the terms of an Escrow Agreement to be executed by NEXCOM, NEOPOINT and Bank
of America, as Escrow Agent.  The Escrow Agreement shall provide for the Escrow
Agent to release thirty percent (30%) of each Interim Payment to NEXCOM within
five (5) days of the date NEOPOINT deposits such Interim Payment in the Escrow
Account.

     5.5  Refund of Compensation.
          ----------------------

     A.   In the event NEOPOINT terminates this Agreement for cause at any time
          during the term hereof, all funds held in the Escrow Account shall be
          immediately returned to NEOPOINT and NEOPOINT shall have no further
          payment obligations hereunder.

     B.   In the event NEXCOM fails to meet a Milestone in a timely manner and
          NEOPOINT elects not to terminate the Agreement due to such failure,
          NEOPOINT shall have the right to cause the Escrow Agent to refund to
          NEOPOINT three percent (3%) of all funds then held in the Escrow
          Account (the "Refund Right"). This Refund Right shall be additive to
          all other rights NEOPOINT has hereunder and may be exercised by
          NEOPOINT each time a Milestone is missed by NEXCOM.

6.   Additional Duties of NEOPOINT.
     -----------------------------

     6.1  NEOPOINT shall provide NEXCOM with such information and technical
support as is reasonably requested from NEXCOM from time to time during the term
of this Agreement to assist NEXCOM in its performance under this Agreement.

     6.2  *   *   *.  In the event NEOPOINT is unsuccessful in obtaining such
license prior to August 25, 1999, this Agreement shall automatically terminate
and neither party shall have any further obligations hereunder.

     6.3  *   *   *.

     6.4  NEOPOINT shall provide a procurement team that will work closely with
NEXCOM to coordinate delivery of sample components and schedule.

     6.5  NEOPOINT shall provide NEXCOM technical information and specification
requirements from its customers, which information shall be kept strictly
confidential by NEXCOM.

*  Certain material (indicated by an asterisk) has been omitted from this
   document pursuant to a request for confidential treatment. The omitted
   material has been filed separately with the Securities and Exchange
   Commission.

                                       4
<PAGE>

7.  Confidential Information.
    ------------------------

    7.1   Definition of Confidential Information.  "Confidential Information" as
          --------------------------------------
used in this Agreement shall mean any and all technical and non-technical
information including patent, copyright, trade secret, and proprietary
information, techniques, sketches, drawings, models, inventions, know-how,
processes, apparatus, equipment, algorithms, software programs, software source
documents, and formulae related to the current, future and proposed products and
services of either party hereto, its suppliers and customers, and includes,
without limitation, its respective information concerning research, experimental
work, development, design details and specifications, engineering, financial
information, procurement requirements, purchasing manufacturing, customer lists,
business forecasts, sales and merchandising and marketing plans and information.

     7.2  Nondisclosure and Nonuse Obligations.  Each party agrees to use the
          ------------------------------------
Confidential Information obtained from the other party solely to perform their
respective duties and obligations under this Agreement.  Each party agrees that
it will treat all Confidential Information of the other party with the same
degree of care as it accords to its own Confidential Information, and each party
represents that it exercises at least reasonable care to protects its own
Confidential Information.  Each party agrees to immediately give notice to the
other party of any unauthorized use or disclosure of the other party's
Confidential Information.  Each party agrees to assist the other party in
remedying any such unauthorized use or disclosure of the other party's
Confidential Information.

     7.3  Exclusions from Nondisclosure and Nonuse Obligations.   The foregoing
          ----------------------------------------------------
obligations of confidentiality and non-use shall not apply to any Confidential
Information of one party which: (a) was known by the other party prior to its
disclosure by the disclosing party (whether prior or subsequent to the date of
this Agreement) and not obtained or derived, directly or indirectly, from such
party or its affiliates, or if so obtained or derived, was lawfully obtained or
derived, and is not held subject to any confidentiality or non-use obligations;
(b) is or becomes publicly available other than through any act of default of a
party that has an obligation of confidentiality and non-use with respect to such
information; (c) is obtained or derived subsequent to the date of this Agreement
from a third party which, to the best knowledge of the party acquiring such
information, is lawfully in possession of such information and does not hold
such information subject to any confidentiality or non-use obligations; (d) is
developed or derived by a party, prior or subsequent to its disclosure by the
disclosing party, independently and without reference to the Confidential
Information which was disclosed by the other party; or (e) is required to be
disclosed by one of the parties pursuant to applicable law or under a government
or court order; provided, however, that (i) the obligations of confidentiality
and non-use shall continue to the fullest extent not in conflict with such law
or order, and (ii) if and when a party is required to disclose such Confidential
Information pursuant to any such law or order, such party shall promptly notify
the other party and use reasonable best efforts to obtain a protective order or
take such other actions as shall prevent or limit, to the fullest extent
possible,

                                       5
<PAGE>

public access to or disclosure or such Confidential Information.

8.   Representations and Warranties of NEXCOM.  NEXCOM hereby represents and
     ----------------------------------------
warrants to NEOPOINT as follows:

        NEXCOM is a corporation validly existing and in good standing under
the laws of the Republic of Korea and has all requisite power and authority to
enter into this Agreement and to carry on its business as such business is now
being conducted;

        The execution, delivery and performance of this Agreement by NEXCOM and
the consummation of the transactions contemplated hereby do not and will not
conflict with any agreement to which NEXCOM is a party; and

        NEXCOM's performance of the Development Services shall not infringe upon
any third party's intellectual property rights and NEXCOM owns all intellectual
property necessary for the performance of the Development Services and has full
right and authority to develop the Product for NEOPOINT's sole use as
contemplated in this Agreement.

9.   Indemnity.  NEXCOM agrees to indemnify, defend and hold NEOPOINT and its
     ---------
officers, director, agents, representatives and assigns harmless from and
against any and all claims, demands, losses, actions, damages, liabilities, and
expenses (including reasonable attorneys' fees), investigations and penalties of
any kind or nature whatsoever arising out of or resulting from any and all
claims by third parties for loss, damage or injury caused by (i) NEXCOM's
infringement of any third party patent, copyright, trademark, trade secret or
other intellectual property rights in its performance of this Agreement,  (ii)
negligence or wrongful acts of employees or contractors of NEXCOM while
performing the Development Services and (iii) NEXCOM's breach of any term of
this Agreement.  In connection with NEXCOM'S indemnification obligations in this
Section 9, (a) NEOPOINT agrees to give prompt written notice to NEXCOM of any
such claim, action or demand and (b) NEOPOINT agrees to fully assist, at
NEXCOM'S expense, in the defense of such claim.

10.  Term and Termination.
     --------------------

     10.1  Term.  This Agreement shall remain in effect until the later to
           ----
occur of (a) 12 months from the Effective Date, (b) the date of final completion
of Development Services unless earlier terminated as set forth herein below and
(c) the date NEOPOINT notifies NEXCOM that it no longer needs the Support
Services. Notwithstanding the termination of this Agreement, the provisions of
Sections 7, 8, 9, 11 and 13 shall survive the termination of this Agreement.

     10.2  Termination for Cause.  Either party hereto may terminate this
           ---------------------
Agreement at any time following the other party's breach of any material term
hereof upon not less than thirty (30) days' prior written notice to the
breaching party, and provided further, that the breaching party

                                       6
<PAGE>

has not cured its breach within said cure period. Notwithstanding the foregoing,
either party may terminate this Agreement immediately upon the occurrence of one
of the following: (a) any party to this Agreement files for voluntary or
involuntary Bankruptcy; or (b) any party begins dissolution proceedings.

11.  No Consequential Damages.  NEITHER NEXCOM NOR NEOPOINT WILL BE LIABLE
     ------------------------
FOR ANY INTERRUPTION OF BUSINESS, OR ANY INDIRECT, SPECIAL, INCIDENTAL, OR
CONSEQUENTIAL DAMAGES OF ANY KIND (INCLUDING LOST PROFITS) REGARDLESS OF THE
FORM OF ACTION WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT PRODUCT
LIABILITY OR OTHERWISE, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES.

13.  Limitation of Liability.  NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE
     -----------------------
CONTRARY, NEXCOM'S AGGREGATE LIABILITY ARISING FROM OR RELATED TO THIS AGREEMENT
OR NEXCOM'S PERFORMANCE OF ITS DUTIES AND OBLIGATIONS SET FORTH IN THIS
AGREEMENT SHALL NOT EXCEED ONE HUNDRED PERCENT (100%) OF THE AGGREGATE
CONSIDERATION PAID BY NEOPOINT TO NEXCOM.

13.  Miscellaneous Provisions.

        13.1  Notice.  Unless otherwise agreed by the parties, all notices,
              ------
invoices and communications under this Agreement shall be sent to the parties at
their addresses set forth in the initial paragraph of this Agreement.  All
notices shall be sent by registered airmail and where circumstances require,
notices may be sent by wire, cable or telex which shall be confirmed by
registered air mail.

        13.2  Force Majeure.  Neither party ("Affected Party") hereto shall be
              -------------
responsible to the other party ("Non-Affected Party") for non-performance
(either in whole or in part) or delay in performance of the terms and conditions
of this Agreement, due to war, war-like operations; act of God; riot; strikes,
sabotage or other labor disturbances in the manufacturing plant; lockout of the
manufacturing plant; epidemics, floods, earthquakes, typhoon; embargoes, laws
and regulations of the United States or the Korean Government; shortage or
failure in supply of raw materials from the then contemplated sources of supply
or any other causes beyond the control of the parties.  In case of any such
event the terms of this Agreement relating to time and performance shall be
suspended during the continuance of the event.  Within five (5) days from the
date of commencement of the event, the Affected Party shall advise the Non-
Affected Party in writing when such delay in performance commenced, and the
reasons therefor as enumerated in this Agreement.  In addition, within five (5)
days after the delay ends the Affected party shall advise Non-Affected Party in
writing when such delay ended, and shall also specify the time by which the
performance of the obligations hereunder is to be completed.  Notwithstanding
the foregoing, NEOPOINT shall have the right to terminate this Agreement in the
event a force majeure continues for thirty (30) days.

                                       7
<PAGE>

     13.3  Arbitration, Choice of Venue and Governing Law.  Any dispute over
           ----------------------------------------------
performance under the terms of this Agreement shall be resolved by arbitration
in San Diego, California, and shall be binding as to both parties.  This
Agreement shall be governed by and construed in all respects in accordance with
the laws of the State of California without regard to its conflict of laws
provisions.

     13.4  Assignment.  Neither party shall assign this Agreement to any other
           ----------
person without the other party's prior written consent.

     13.5  Non-Waiver.  No claim or right of either party under this Agreement
           ----------
shall be deemed to be waived or renounced in whole or in part unless the waiver
or renunciation of such claim or right its acknowledged and confirmed in writing
by such party.

     13.6  Modification.  This Agreement may be modified only by a written
           ------------
agreement signed by both parties hereto.

     13.7  Conflict.  In the event of a conflict between this Agreement and
           --------
Exhibits A ("Specifications") or B ("Milestone Schedule"), then the provisions
of this Agreement shall prevail.

     13.8  Compliance with Law.  Each party agrees to abide by the terms and
           -------------------
conditions of this Agreement, as well as all pertinent laws and regulations in
performing their duties and obligations set forth in this Agreement.

     13.9  Entire Agreement.  This Agreement constitutes the entire agreement
           ----------------
between the parties relating to this subject matter and supersedes all prior or
contemporaneous oral or written agreements concerning such subject matter.
This Agreement may be executed in one or more counterparts which together shall
constitute one single instrument.

     IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed by duly authorized officers as of the Effective Date.

NEOPOINT:                                NEXCOM:

By:_______________________________       By:________________________________
Name:_____________________________       Name:______________________________
Title:____________________________       Title:_____________________________
Date:_____________________________       Dated:_____________________________

                   [Signature page to Development Agreement]

                                       8
<PAGE>

                                   EXHIBIT A
                                   ---------

                                Specifications

 .   Product Name                   :  * * *

 .   Characteristic                 :  * * *

 .   Baseband Chip Set and SW       :  * * *

 .   Frequency

    --------------------------------------------------------
         * * *                          * * *
    --------------------------------------------------------
         * * *                          * * *

                                        * * *
    --------------------------------------------------------

 .   Weight                         :    * * *

 .   Dimension                      :    * * *

 .   Operating Temperature          :    * * *

 .   Battery Using Time

    --------------------------------------------------------
                                        * * *
    --------------------------------------------------------
         * * *                          * * *

         * * *                          * * *
    --------------------------------------------------------

*  Certain material (indicated by an asterisk) has been omitted from this
   document pursuant to a request for confidential treatment. The omitted
   material has been filed separately with the Securities and Exchange
   Commission.

                                       9
<PAGE>

                                   EXHIBIT B
                                   ---------

                    NeoPoint/NEXCOM Development Milestones

Date            Deliveries

* * *    2 Marketing Functional Samples (English Version with NeoPoint logo)
               with Product Specifications and feature Sheet
               1 Industrial Design Mock-up

* * *    1 set working mockup

* * *    1/st/ Engineering Sample

* * *    2/nd/ Engineering Sample

* * *    Approval Sample

* * *    Final Approved Sample

*  Certain material (indicated by an asterisk) has been omitted from this
   document pursuant to a request for confidential treatment. The omitted
   material has been filed separately with the Securities and Exchange
   Commission.

                                       10EXHIBIT 10.1

                                  MINING LEASE

                           NEW JERSEY MINE AND VICINITY

THIS MINING LEASE, dated as of October  18, 1993, is between GOLD RUN
GULCH MINING COMPANY ("Lessor"), and MINE SYSTEMS DESIGN, INC.
("Lessee").

       RECITALS

A. Lessor owns certain real property more particularly described in
Exhibit A attached hereto and made a part hereof.

B. For the purpose of this Lease, the real property described in Exhibit
A, including the surface and subsurface thereof, all mines, ores, metals,
mineral rights and minerals thereon and thereunder, all veins, lodes,
extralateral rights and mineral deposits now owned or hereafter acquired by
Lessor extending from or onto or contained in said claims, properties and land;
and all water and water rights therein, thereon or thereunder, are herein
called the "Leased Premises."  The parties agree that all timber shall be
specifically excluded from this Lease except such timber as should be required
for developing and mining ores and metals on the Leased Premises.

C. Lessor and Lessee desire to enter into a mining lease covering the
Leased Premises.

       AGREEMENT

IN CONSIDERATION of the sum of $10.00 and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and the promises and covenants contained herein, the parties agree as follows:

1. GRANT.  Lessor hereby grants, demises, leases and lets exclusively
unto Lessee, its successors or assigns, the Leased Premises, including all
flumes, ditches, easements, licenses, rights-of-way and other rights,
heretofore reserved or granted in, upon or pertaining to the Leased Premises,
together with all building and improvements heretofore used in connection with
exploration for minerals, mining or milling, mining and milling machinery and
equipment and personal property used in connection with mining, milling or
exploration for minerals, situated on the Leased Premises, and now belonging to
Lessor, for the purpose of exploring for, developing, mining (by any method
including but not limited to in situ leaching, open pit and (strip mining),

treating, extracting, milling, storing, shipping, removing and marketing
therefrom all minerals, both metallic and nonmetallic, of every nature and
kind, both known and unknown, excepting only sand, gravel, mine waste rock,
oil, gas and other liquid or gaseous hydrocarbons (herein called "Leased
Substances").  It is the purpose and intent of Lessor to lease, and Lessor

<PAGE>
does hereby lease, all of the lands or interest in lands owned by Lessor which
adjoin the Leased Premises described above or which lie in the section or
sections described in any location notices of patents for the claims included
in the Leased Premises.  Lessee, its successors or assigns, is further granted
the exclusive right, insofar as Lessor lawfully may grant the right, to divert
streams, to construct storage ponds, to remove lateral and subjacent supports,
to cave, subside or consume the surface or any part thereof, to deposit earth,
rocks, tailings, waste, lean ore and materials on any part of the Leased
Premises, to leach the same, to construct, replace, maintain and remove all
works, buildings, plants, structures, roads, communication and electrical
systems, residences and offices as may be necessary or convenient in the
exercise of Lessee's rights and privileges granted herein, and to commit waste
to the extent necessary, usual or customary in carrying out any or all of the
above rights, privileges and purposes.

2. TERM.  This Lease is granted for a term ending fifteen (15) years from
the date hereof and as long thereafter as Leased Substances are mined,
processed or marketed from the Leased Premises on a continuous basis or unless
sooner terminated under any of the provisions herein.  For this purpose mining,
processing or marketing operations shall be deemed continuous so long as all of
said operations continue for a minimum of 24 months out of any 60-month period.

3. ADVANCE ROYALTY.  Lessee has this day paid to Lessor the sum of $2,400
(the "Advance Royalty Payment"), in the form of a draft payable to the order of
Lessor as an advance against production royalties which may hereafter become
due during the term hereof. Annually hereafter, Lessee, on or before the
anniversary date of this Lease, shall pay or tender to Lessor an Advance
Royalty Payment of $2,400 for that part of the Leased Premises which Lessee
elects to hold hereunder.  All Advance Royalty Payments shall be cumulative in
nature, and Lessee shall be entitled to take credit for each such payment
against the Production Royalty payable to Lessor hereunder.

4.       PRODUCTION ROYALTY.  Lessor hereby reserves and Lessee shall pay as a
production royalty 5% of the Net Smelter Return of all ores or concentrates of
Leased Substances mined and shipped from the Leased Premises (the "Production
Royalty").  In addition to the production royalty of 5% of the Net Smelter
Return,  Lessee shall pay a production royalty based on the portion of the Net
Smelter Return which is due to the value of gold as follows:
Price of Gold                            Additional Production Royalty
Less than $400/troy ounce                     None
$400 to $450                                   1%
>$450 to $500                                  2%
>$500 to $550                                  3%
>$550 to $600                                  4%
>$600                                          5%

The price of gold to be used to calculate the additional production royalty is
the price received by the Lessee and as adjusted for inflation by the Consumer
Price Index to the December 1988 level. As used herein, "Net Smelter Return"
means the amount paid by any smelter or other ore purchaser for ores or
concentrates sold less actual costs of transportation and other costs in the
course of handling, assumed by or charged to Lessee (including freight,
insurance and tax) in making shipments from the Leased Premises or Lessee's
mill to the smelter or other purchaser, less all charges for refining,
sampling, assaying, and penalties, less all royalties or overriding royalties
burdening the Leased Premises that exist on the date of this Lease or are
created by Lessor after the date hereof, and less gross production, severance,
general property and other taxes attributable to production from the Leased
Premises.

<PAGE>
The Production Royalty shall be accounted for and paid monthly to Lessor within
30 days after the end of each calendar month within which the Leased Substances
are sold.  All payments shall be accompanied by a statement explaining the
manner in which payment was calculated. No royalty shall be due or payable on
any Leased Substances stockpiled on the Leased Premises until the sale or
disposition thereof.  Within 90 days after receiving the above-described
statement of account, Lessor shall give notice of any objections to the
statement, for any reason, touching upon its accuracy or inaccuracy, by mailing
such objections to Lessee as provided in Section 24 below; and in default
thereof, any inaccuracies in such statement shall be deemed waived by Lessor.

4. TITLE TO LEASED PREMISES.  This Lease is executed and delivered
expressly without warranty of any nature whatsoever on the part of Lessor,
either expressed or implied, not even to the return of the consideration paid
herefor.  If Lessor owns less interest than the entire fee mineral estate, the
Advance Royalty and Production Royalty to be paid Lessor may be reduced
proportionately.

6.       OBLIGATION TO PERFORM ASSESSMENT WORK.  Lessee shall perform all
assessment work required to maintain the unpatented mining claims that comprise
the Leased Premises and shall record affidavits of such performance on behalf
of Lessor as required or permitted.  Lessee shall not be liable for loss of any
or all of the Leased Premises for failure to perform assessment work, provided
Lessee has performed work in a timely manner which it
reasonably and in good faith, in accordance with generally accepted principles
of the mining industry, believed was sufficient to satisfy such work
requirements.

7.       INSPECTION OF PROPERTY.  Lessor, or its authorized agents or
representatives, shall have the right to enter in or upon the Leased Premises
during the regular business hours of Lessee for the purpose of inspection, but
shall enter at their own risk and shall not unreasonably interfere with
Lessee's operations.

8.       CONDUCT OF OPERATIONS.

8.1 Use of Leased Premises.  Lessee may use only so much of the surface
of the Leased Premises as shall be reasonably necessary for the exploration
for, development and mining of Leased Substances contemplated in this Lease.
Lessee recognizes the surface of the Leased Premises has many uses, including
mining, exploration, timber cultivation and production, and other activities.
Lessor expressly reserves the right to use and manage the Leased Premises for
all uses except exploration for, development and mining of Leased Substances as
provided herein, provided Lessor shall not conduct or permit others to conduct
any activities on the Leased Premises which unreasonably interfere with
Lessee's rights hereunder.  Lessee shall, wherever practicable, minimize
interference to Lessor's activities as a result of Lessee's activities.

8.2 Use of Roads.  Lessee shall have the right to use Lessor's existing
road networks, whether currently existing or subsequently constructed, as are
necessary to its exercise of the rights conveyed hereunder.  The foregoing
grant of rights is subject to any restriction or prohibition contained in any
easements, permits, or licenses granting Lessor the right to utilize such
roadways, including but not limited to absolute prohibitions against
assignment, if any, hauling fees, traffic regulations, maintenance costs,
construction costs, or other restrictions.  Lessee in its use of roads, whether
currently existing or hereafter constructed by either party, shall comply with
all reasonable regulations promulgated by Lessor.  Nothing contained herein
shall prohibit Lessor from modifying or terminating any easement, license, or
permit granting Lessor a right to use any road.

<PAGE>

8.3 Damage to Premises and Reclamation.  Lessee shall be liable to
Lessor for damage to the Leased Premises (including any improvements, crops or
livestock) caused by Lessee's exercise of its rights under this Lease.  Lessee
shall pay Lessor for said damage or, at Lessor's election, repair the damage.
Disturbances of the surface of the Leased Premises normally incident to
Lessee's activities which do not damage improvements, timber or other crops or
livestock shall not be considered as damage to the Leased Premises.  Lessee
shall notify Lessor, in advance of its operations and activities hereunder and
the location thereof which shall or may require the removal of timber and
from the Leased Premises, and in the event that the operations of Lessee
hereunder, in fact, result in the removal of timber from any portion of the
Leased Premises, Lessee shall cause all merchantable timber so removed to be
decked along a road on the Leased Premises from where it can be removed by
Lessor without expense to Lessor. The determination of merchantability of any
timber removed shall be governed by the standards then generally in effect in
the wood products industry in the area where the Leased Premises are located.
All merchantable timber shall be harvested in accordance with Lessor's
specifications. Upon delivery of such merchantable timber to a pickup point on
the Leased Premises, Lessee shall not be further liable to Lessor as a result
of the cutting and removal of the merchantable timber.  Nonmerchantable timber
shall be considered a crop and damage thereto treated in the manner provided
for in this Section.

9.       INSPECTION OF ACCOUNTS AND RECORDS.  Lessee shall keep accurate,
clear and legible books of accounts and records pertaining to its operations
hereunder, and Lessor shall have the right, either personally or through its
representatives, and at its expense, to examine and inspect the books and
records of Lessee pertaining to the exploration, mining, milling and shipping
operations of Lessee on the Leased Premises.  Any information acquired by
Lessor or its representatives from any such inspection shall be treated as
confidential.

10. TECHNICAL DATA.  Lessee shall furnish Lessor, on an annual basis,
with copies of all technical data pertaining to its operations hereunder,
including but not limited to all geological, geophysical, geochemical, mapping,
drilling, sampling, assay, and other data or information pertaining to Lessee's
operations hereunder.  Such data shall be treated as confidential.
Notwithstanding the foregoing, Lessee shall not be obligated to disclose to
Lessor any interpretive data or information.

11. CONTROL OF MINING.  Lessor's sole right with respect to its
Production Royalty shall be to receive the Production Royalty for Leased
Substances, if any, from the Leased Premises.  Lessee shall have full
discretion in the exploration, development and operation of the Leased Premises
and shall in no event be obliged to explore for, develop, drill, mine, mill or
 concentrate Leased Substances.

12. LESSER INTEREST.  If Lessor owns less than the entire undivided
interest in the Leased Substances, or in any tract included in the Leased
Premises, then the Advance Royalty and Production Royalty shall be due Lessor
only in the proportion that its interest bears to the whole undivided fee
interest.  Any interest in the Leased Premises and/or Leased Substances
hereafter acquired by Lessor shall be automatically subject to this Lease.  If
any such acquisition changes Lessor's interest in the Leased Premises or Leased
Substances, an appropriate adjustment will be made after Lessee receives
written notice thereof from Lessor.

13. INDEMNITY.  Lessee shall assume all liability in connection with its
operations on the Leased Premises and shall hold Lessor harmless from any and
all liability which may arise out of Lessee's development and operation of the
Leased Premises.  Lessee shall use its best efforts to ensure that the work

<PAGE>
performed by Lessee hereunder shall be in compliance with applicable
environmental, safety and health requirements of federal, state and local
governments.  Upon the termination of this Lease, Lessee shall return the
Leased Premises to Lessor free and clear of liens for labor done or work
performed upon the Leased Premises or materials furnished to it for the
exploration, development or operation thereof under the Lease, but Lessee shall
have the right to dispute or contest the validity of such liens.  Lessee's
liability under this Section shall terminate upon termination of this Lease
except for obligations incurred before the date of termination.

14.       CROSS-MINING; OPERATIONS ON OTHER LANDS.  Lessee shall have the
right to use any roads, tunnels, shafts, pits, inclines and workings upon the
Leased Premises for the purpose of transporting Leased Substances, water,
slurries and waste materials from adjoining or nearby properties.  For the
purpose of enabling Lessee to conduct, to Lessee's best advantage and with
operations, the operations of Lessee and the operations on such other lands may
be conducted upon the Leased Premises and upon such other lands as a single
mining operation, to the same extent as if all such properties
constituted a single tract of land.  Leased Substances from the Leased Premises
may be commingled with ores and minerals from such other lands, provided that
nothing herein shall relieve Lessee from its obligation for payment of the
Production Royalty.  In the event of and prior to such commingling, Lessee
shall weigh, sample and assay the Leased Substances mined
from the Leased Premises before they are commingled so as to allow allocation
of the resulting concentrate to the respective properties from which derived.
All such weighing, sampling, assaying and allocation shall be performed in
accordance with good mining practices prevailing at the time.  Lessee shall
have the right to use so much of the surface and subsurface of the Leased
Premises as is required for ingress and egress, conducting exploration and
mining operations, stockpiling of Leased Substances and disposing of wastes
both on the Leased Premises and on lands upon which Lessee or affiliated
parties may be conducting mining operations; Lessee shall also have the right
to use so much of such surface and subsurface of the Leased Premises as may be
required for utility lines, camps, roads, drillsites, leach piles, tailings
disposal sites, dumps, mills, smelters and other structures or facilities
required in its exploration, development mining and milling activities.  Lessee
shall have the right to use, develop and store water on the Leased Premises for
use in its development, mining and milling activities.  Further,
Lessee may use the Leased Premises for the mining, removal, treatment and
transportation of minerals and materials from adjoining or nearby property, or
for any mining or milling purpose connected therewith.  Mining operations on
adjacent properties shall be deemed mining operations on the Leased Premises
for the purposes of Section 2 hereof.

15.       TREATMENT; TAILINGS.  Lessee shall have the right, but shall not be
required, to beneficiate, concentrate, smelt, refine, leach and otherwise
treat, in any manner, either wholly or in part at a plant or plants on the
Leased Premises or on other lands, any Leased Substances or other materials
mined or produced from the Leased Premises and from other lands. Such treatment
shall be conducted in a careful and workmanlike manner. The tailings and
residue from such treatment shall be deemed waste and may be deposited on the
Leased Premises or on other lands.  Lessor shall have no right, title or
interest in any such tailings or residue remaining on the Leased Premises for a
period of one year after the date on which this Lease has expired, or has been
terminated by Lessee as to all of the Leased Premises.  Any tailings or residue
remaining after said date shall be deemed abandoned by Lessee and thereupon
shall become the property of Lessor.

16. TAXES.  During the time this Lease is in effect, Lessee shall pay,
before delinquent, all general property taxes which may be assessed against the
Leased Premises, including the Leased Substances covered by this Lease, and

<PAGE>
Lessee shall be entitled to deduct such amounts from Production Royalty
payments to Lessor as set forth in Section 4.  Lessee shall also pay, before
delinquent, all taxes levied and assessed against any improvements placed
by it upon the Leased Premises.  Lessee shall not be required to pay any income
or other taxes imposed on Lessor by reason of the receipt of any amounts to be
paid Lessor under this Lease.

17. AREA OF MUTUAL INTEREST.  If, during the term of this Lease, Lessor
or Lessor's representative or agent shall locate or acquire any interest in any
mining claim or property contiguous with or proximate to any of the property
described on Exhibit A, all such claims and property shall be subject to this
 Lease, without any additional consideration therefor payable to Lessor, and
all references in this Lease to the Leased Premises shall be deemed to include
all such claims and property.  Lessor agrees to notify Lessee promptly upon the
location of each such claim or acquisition of property.  Lessee and Lessor
agree to execute and acknowledge an amendment to this Lease to include and
describe each such claim or property and to file such amendment for recording
in the real property records of the county where said claim or property is
located.

18. FORCE MAJEURE.  Lessee shall not be liable or in default under any
provisions of this Lease for failure to perform any of its obligations
hereunder during periods in which performance is prevented by any cause
reasonably beyond Lessee's control, which causes hereinafter are called "force
majeure."  For the purposes of this Lease, the term "force majeure" shall
include, but not be limited to, fires, floods, windstorms and other damage from
the elements; strikes, war, insurrection, mob violence and riots;
unavailability of materials, labor and transportation; lack of a reasonable
market for Leased Substances mined from the Leased Premises; unavailability of
smelting or refining facilities; interference, action, legislation or
regulation by governmental or military authority, including a requirement by
such authority that an environmental impact statement, plan of operation or
similar statement or document be prepared or approved; litigation; and acts of
God or acts of the public enemy.  The duration of this Lease and of the time
for completion of performance by Lessee of its rights and obligations hereunder
shall be extended for a period equal to the period of disability as a result of
the event of force majeure, provided Lessee gives Lessor written notice of the
existence of the event of force majeure.  All periods of force majeure shall be
deemed to begin at the time Lessee stops performance hereunder by reason of
force majeure.  Notwithstanding the foregoing, the parties understand that an
event of force majeure shall not excuse any obligation to make a payment of
money required by this Lease.

19. FIRST RIGHT OF REFUSAL.  If, at any time during the term of this
Lease, Lessor shall, in response to a bona fide offer to purchase all or part
of its interest in the Leased Premises from a third party, desire to sell or
otherwise dispose of such interest, it shall notify Lessee in writing of the
party to whom it desires to sell such interest and the price at which and
the terms upon which it desires to sell the same, and Lessee shall, within 30
days of receipt of the notice, notify Lessor in writing whether it wishes to
purchase such interest at the price and on the terms set forth in the notice.
If Lessee elects to purchase such interest, Lessor shall be bound to convey,
assign, or otherwise transfer such interest to Lessee promptly thereafter at
such price and on such terms.  If Lessee elects not to purchase such interest
or fails to give notice of its intention within the 30-day period, Lessor shall
be free to convey, assign, or otherwise transfer such interest to the third
party at a price not less than stated in the notice or on more favorable terms
than those stated in the notice.  Any conveyance by Lessor to a third party
shall be subject to the terms of this Lease.  If Lessor shall not have so
disposed of such interest to said third party within 90 days after receipt of
notice that Lessee elects not to exercise its right of first refusal or after

<PAGE>
expiration of that party's 30-day period within which to give notice, the
provisions of this Section shall again apply to the disposition by Lessor of
any such interest.

20. ASSIGNMENT.  Subject to the provisions of Section 19 above, the
rights of either party hereunder may be assigned in whole or in part and the
provisions hereof shall extend to their successors and assigns, but no change
or division in ownership of the Leased Premises, Advance Royalty or Production
Royalty, however accomplished, shall operate to enlarge the obligations or
diminish the rights of either party under this Lease and neither Lessee nor its
successors or assigns shall ever be required to make payments or to render
reports or notices to more than one party.  In the event Lessor's interest in
the Leased Premises is now or hereafter owned by more than one party, Lessee
may withhold further payments until all such owners have designated a single
party to act for all of them hereunder in all respects, including but not
limited to the giving and receiving of all notices and the receipt of all
payments and reports.  No such change or division in the ownership of the
Leased Premises, Advance Royalty or Production Royalty shall be binding upon
Lessee for any purpose until such person acquiring any interest has further
furnished Lessee with the instrument or instruments, or certified copies
thereof, constituting his claim of title from the original Lessor.  Lessee
shall have the right to subcontract with others for the performance of
exploration, development and mining work hereunder, subject to all of the terms
of this Lease, but no such subcontract shall relieve Lessee of its obligations
to Lessor hereunder.

21.       TERMINATION OF LEASE.

20.1 By Lessor.  If Lessee fails to keep and perform all of the terms
and conditions of this Lease on its part to be kept and performed, then Lessor
may notify Lessee of the default in writing specifying the default.  If within
ten days after Lessee's receipt of such notice, in case of default arising
through failure to account for royalties, or to make the monthly or annual
payments herein mentioned, and within 30 days in the case of any other default,
Lessee shall make such royalty or other payments, or commence and diligently
thereafter proceed to correct such other default, this Lease shall
continue in good standing.  However, upon failure of Lessee to make such
royalty or other payment within ten days or to commence within 30 days to cure
any other default and diligently thereafter proceed to correct the same, Lessor
may then, by written notice or demand, forthwith terminate this Lease and fully
repossess itself of the Leased Premises, and without prejudice to any other
rights which might otherwise accrue to Lessor for the violation of the terms
hereof.  After such default and termination of this Lease, Lessee shall have no
further rights in or right to the possession of the Leased
Premises or any part thereof, except for the purpose of accomplishing the
removal of its machinery and equipment as set forth below in Section 22.

21.2 By Lessee.  Lessee may terminate this Lease in whole or in part at
any time and from time to time upon written notice delivered to Lessor which
termination shall take effect upon any future date set forth in the notice, or,
if no date is specified, upon the date of delivery of the notice with respect
to that part of the Leased Premises specified in the notice.  Upon such
termination, all right, title and interest of Lessee under this Lease as to
that portion of the Leased Premises specified in the notice shall terminate,
and Lessee shall not be required to make any further payments, or to perform
any further obligations hereunder as to said portion of the Leased Premises,
except payments or obligations which then have accrued under the express
provisions of this Lease and which have not been paid or performed.

21. REMOVAL OF EQUIPMENT.  Lessee shall have the right, at any time
within one year after the termination or expiration of this Lease, to remove

<PAGE>
all property, fixtures, structures, machinery or equipment erected or placed by
Lessee on or in the Leased Premises.  Lessor shall have the right to require
Lessee to remove any or all such property, fixtures, structures, machinery or
equipment within one year after the termination or expiration hereof.

23.       RECORDING OF SHORT-FORM NOTICE.  The parties hereby agree to execute
a short-form counterpart of this Lease contemporaneous herewith for the sole
purpose of recordation in the real property records sufficient to give record
notice, pursuant to the laws of the state where the Leased Premises are located
of the existence of this Lease.  This Lease shall not be recorded without the
written consent of Lessee.

24. NOTICES.  Any notice required or permitted to be given hereunder
shall be in writing and shall be delivered in person or sent by registered or
certified mail, return receipt requested.  Notices so mailed shall be deemed
effective on the third business day after mailing. Until change of address is
communicated, all notices shall be addressed to:

Lessor:       Gold Run Gulch Mining Company
              Box 469
              Wallace, Idaho  83873

Lessee:       Mine Systems Design, Inc.
              HC01 Box 246
              Kellogg, Idaho  83837

25.       GENERAL.

25.1 Modification.  The parties hereto by mutual written agreement may,
 at any time and from time to time, amend this Lease and any of the terms
hereof.

25.2 Further Documents.  The parties hereto further agree to execute
all such further documents and do all such further things as may be necessary

25.3 Entire Agreement.  This is the entire agreement between the
parties and no modification shall be effective unless in writing and executed
by the parties hereto.

25.4 Law.  The terms and provisions of this Lease shall be interpreted
 in accordance with the laws of the state where the Leased Premises are
located.

       IN WITNESS WHEREOF, this instrument is executed as of the date above
written.

LESSOR:                                          LESSEE:

GOLD RUN GULCH MINING COMPANY                     MINE SYSTEMS DESIGN, INC.

By: /s/ H. Magnuson                            By:/s/ Fred W. Brackebusch
       -----------------------                     ---------------------
Title:       President                        Title:        President
       -----------------------                        --------------------

STATE OF IDAHO     )
         ) ss.
COUNTY OF SHOSHONE )

       On this 27th  day of September, 1993, before me, the undersigned, a
Notary Public in and for the State of Idaho, personally appeared Fred W.

<PAGE>
Brackebusch, known to me and to me known to be the President of MINE SYSTEMS
DESIGN, INC., a corporation whose name is subscribed to the foregoing
instrument and acknowledged to me that said officer executed the same.

       IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial
seal the day in this certificate first above written.

/s/ Ronald E. Eggart
Notary Public for the State of Idaho
Residing at Kellogg, Idaho
My commission expires:  1/18/97

STATE OF IDAHO     )
         ) ss.
COUNTY OF SHOSHONE )

       On this 18th day of October, 1993, before me, the undersigned, a Notary
Public in and for the State of Idaho, personally appeared H.F. Magnuson, known
to me and to me known to be the President of GOLD RUN GULCH MINING COMPANY, a
corporation whose name is subscribed to the foregoing instrument and
acknowledged to me that said individual executed the same.

       IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial
seal the day in this certificate first above written.

/s/  Teresa Glover
Notary Public for the State of Idaho
Residing at        Wallace, Idaho
My commission expires: 5/8/98

                                  EXHIBIT A

                               TO MINING LEASE

       Description of the Premises covered by Exploration Agreement and Option
to Lease between Gold Run Gulch Mining Company (Grantor), and Mine Systems
Design (Grantee), dated October 18, 1993, covering real property located in
Shoshone County, Idaho and shown on Exhibit B, Property Map, to wit:

a. Blue Jay, Key Hole, Coleman Placer, and Amended Coleman Patented
Mining Claims, Mineral Survey 1998A, containing 57.780 acres.

b. New Jersey Mill Site Patented Mining Claim, Mineral Survey 1998B,
containing 3.971 acres.

c. Scotch Thistle, Triangle Fraction, Homestake, Center, North, South,
and Best Unpatented Mining Claims, IMC Serial Nos. 29642 through 29648.

d. Mineral rights only to SE 1/4 NW 1/4, NE 1/4 SW 1/4, and part of SW
1/4 NE 1/4, all in Section 10, Township 48N, Range 3E, B.M., containing 107.83
acres.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00000-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00000-of-00352.parquet"}]]