Document:

ex410form20f.htm

COOPERATIVE DEVELOPMENT AGREEMENT

This agreement (“Agreement”) is dated effective as of July 15, 2011 (“Effective Date”), by and between Peak Minerals, Inc. (“Peak”), and LUMA Minerals LLC (“LUMA”).

Recitals

A.           Peak was the winning bidder of the certain potash leases at the competitive lease auction held by the Utah State Office of the Bureau of Land Management (the “BLM Leases”), located in Millard County, Utah, more particularly described at Exhibit A hereto.

B.           Under the BLM Leases, Peak has the rights to 95,801.76 acres of Federal potash leases located wholly or in part within the Sevier Dry Lake Bed (“Sevier Lake Bed”).

C.           Peak has also entered into a Commercial Services Agreement with Emerald Peak Minerals, LLC, which holds the rights to 6,409.48 acres of Utah State leases issued by the Utah School and Institutional Trust Lands Administration (“SITLA”), located in Millard County, Utah, on lands more specifically described at Exhibit B hereto (referred to herein as the “State Leases”).

D.           LUMA was a winning bidder of certain potash leases located wholly or in part within the Sevier Lake Bed at the competitive lease auction held by the Bureau of Land Management (“BLM”) and will receive the rights to eleven leases (the “LUMA Leases”), comprising 22,009.97 acres of Federal potash leases located in Millard County, Utah, on lands more particularly described at Exhibit C hereto.

E.           The State Leases, the BLM Leases (collectively referred to as the “Peak Leases”) and the LUMA Leases are all located wholly or in part within the Sevier Lake Bed and LUMA and Peak would like to jointly develop the LUMA Leases with the Peak Leases.

F.           Peak is a wholly-owned subsidiary of EPM Mining Ventures Inc., a public company which will control and fund any development of the Peak Leases and the LUMA Leases under this Agreement.

Based on the foregoing, Peak and LUMA agree as follows:

1.           Unit Agreement and Unit Operating Agreement.  Following the award and issuance of the LUMA Leases and Peak Leases, and for the term of this Agreement, the parties agree to negotiate in good faith together and with the BLM and SITLA to enter into a unit agreement (the “Unit Agreement”) to commit all of the acreage of the Peak and LUMA Leases for the development and operation of said Leases in a federal unit (the “Unit”).  It is the parties’ intent, subject to BLM approval, to include all acreage comprising the Peak Leases and the LUMA Leases in the Unit.  Upon final approval of the Unit Agreement by BLM, the parties agree to record same in Millard County, Utah.  In connection with the formation of the Unit, Peak and LUMA also agree to enter into a unit operating agreement.  The unit operating agreement will designate Peak as unit operator and will incorporate certain terms of this Agreement therein.  As unit operator, Peak will provide development, operations, production and sales services for the entire unitized lands on behalf of the non-operators, including LUMA.

2.           Obligations and Agreements.  In anticipation of a Unit Agreement, Peak and LUMA agree that:

(a)           Contemporaneously with execution of the Unit Agreement, LUMA will grant and convey to LUMA or its designee a 1.25% overriding royalty on all production from or allocated to the LUMA Leases under the Unit Agreement (the “LUMA ORR”).  By the terms of the Unit Agreement, LUMA will receive a portion of all production from the unitized lands on the basis of the LUMA ORR.  The LUMA ORR shall be calculated on a unit Acreage Basis as follows:  1.25% ORR x (22,009.97/123,591.41) = .223 net ORR.  This calculation is based on inclusion of all LUMA Lease acreage and all Peak Lease acreage in the Unit Agreement.  In the event that the LUMA Lease acreage or the Peak Lease acreage is reduced, then in such event, the LUMA ORR will be recalculated in proportion to the new Acreage Basis; provided that in no event shall the LUMA ORR be reduced to less than fifty percent (50%) of the calculation set forth in this Section 2(a) of the Agreement, i.e., not less than .1115 net ORR;

 

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(b)           Peak shall assume and pay 100% of LUMA’s proportionate share, on an Acreage Basis, of the costs of development, operations and production of and from the Unit for so long as the LUMA Leases or any of them are within the Unit, and shall be entitled to LUMA’s share, on an Acreage Basis, of all production of and from the Unit for so long as the LUMA Leases or any of them, are within the Unit, minus the royalty reserved to the United States under the LUMA Leases and the LUMA ORR.  The payment to BLM of all production royalties, including minimum production royalties from LUMA’s Leases, shall be the sole responsibility of Peak as the Unit operator.  For purposes of this Agreement, “Acreage Basis,” when used to describe the basis of allocation to the parties within the Unit, means allocation to each party in the Unit in the proportion that the acreage owned by it under leases in the Unit bears to the total acreage in the Unit;

(c)           LUMA shall continue to hold record title to and operating rights in the LUMA Leases and pay annual rental fees required for maintenance of same and pay advanced minimum royalties when and as required under the LUMA Leases, but shall have no claim to any portion of its working interest share of production from the Unit or any obligation to pay its share of the costs of development and operation of the Unit.  Peak shall reimburse LUMA for such rental fees and any advanced minimum royalties paid by LUMA, on an annual basis, within thirty (30) days notice from LUMA which notice shall itemize the amounts paid.  LUMA shall, at Closing, grant Peak the sole and exclusive right and option to acquire its record title and operating rights, in and to the LUMA Leases for $1 per LUMA Lease if allowed under applicable law, provided that, subject to Section 2(f), LUMA shall except and reserve unto itself the LUMA ORR;

(d)           Peak agrees to relinquish and forego any right to look to LUMA for contribution to development or operation of the Unit once formed, and LUMA hereby elects to relinquish and forego any right to participate in development and operation of the Unit, or share in the production from the Unit other than the LUMA ORR;

(e)           The LUMA ORR shall be free of all costs of production but shall bear its proportionate share of any production, severance and ad valorem taxes on production from the Unit.  The LUMA ORR shall be proportionately reduced to the extent that any of the LUMA Leases terminate, are declared invalid by competent authority or are, at any time, excluded from the Unit; provided, that in no event will the LUMA ORR be reduced to less than fifty percent (50%) of the calculation set forth in Section 2(a) herein.  The LUMA ORR shall be proportionately increased to the extent that any of the Peak Leases terminate, or are declared invalid by competent authority, or are, at any time excluded from the Unit; and

(f)           If at any time after the Closing, LUMA shall wish to sell or assign all or any part of the LUMA ORR, it shall first offer the same to Peak on the same terms and for the same consideration as offered by any prospective buyer.  Peak shall have forty-five (45) days within which to accept such offer in writing and shall thereafter complete the purchase and assignment of the LUMA ORR within thirty (30) days of such acceptance.

 

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3.           LUMA Options for Additional Compensation.  LUMA shall have the right, in addition to the overriding royalty described herein, to elect either: (i) a cash only pursuant to Section 4 of this Agreement; or (ii) the issuance of stock and the cash granted pursuant to Section 5 of this Agreement.  LUMA shall deliver written notice to Peak of the option it will exercise on or prior to Closing.

4.           Option for Cash Only Payment.  Following written notice by LUMA of its election to receive cash pursuant to this Section 4, LUMA shall be paid by Peak at Closing the sum of Two Million Dollars ($2,000,000.00).

5.           Option for Stock and Cash Payment.  In the alternative to the cash only payment pursuant to Section 4 of this Agreement, following written notice by LUMA of its decision to elect the issuance of stock and cash payment pursuant to this Section 5, Peak shall undertake the following:

(a)           Issuance of Shares in EPM Mining Ventures Inc.  LUMA shall receive at Closing the number of shares of common stock in EPM Mining Ventures Inc., equal in value to One Million Dollars ($1,000,000.00) of common stock in EPM Mining Ventures Inc., based on the average closing price for the 10 trading days prior to the Closing date and subject to all applicable laws, regulations and approvals; and

(b)           Cash Payment.  LUMA shall receive $1,000,000.00 cash at Closing or as soon thereafter as approved by EPM’s Board of Directors.

6.           Closing Conditions and Approvals of Peak.  The closing (the “Closing”) under this Agreement and all rights granted by Peak under Sections 2, 3, 4 and 5 of this Agreement shall be conditioned upon and subject to:

(a)           all necessary approvals of Peak and/or EPM Mining Ventures Inc.’s shareholders and board of directors;

(b)           all necessary approvals of United States and Canadian governmental authorities including, but not limited to, those of securities and exchange and environmental regulatory bodies, BLM and SITLA; and

(c)           all applicable stock exchange rules, regulations and approvals.

In addition, this Agreement shall not be binding upon Peak until it is ratified by all necessary corporate approvals.  The Closing shall occur within fourteen (14) business days of the satisfaction of the conditions set forth in this Section 6.  If Closing does not occur on or prior to the first anniversary of the Effective Date, this Agreement shall terminate; provided that the parties may, by written agreement entered into no later than thirty (30) days prior to the first anniversary of the Effective Date, extend the Agreement or amend its terms.

7.           No Shop Agreement.  LUMA agrees that it will not, directly or indirectly, take any action to solicit, initiate, encourage or assist the submission of any proposal, negotiation or offer from any person or entity relating to the acquisition, sale, lease, license of any of the LUMA Leases, or enter into any discussions, negotiations or execute any agreement related to any of the foregoing, and shall notify Peak promptly of any inquiries by any third parties in regards to the foregoing.

8.           Governing Law.  This Agreement shall be governed and construed in accordance with the laws of the State of Utah, without giving effect to any law, rule or regulation (whether of the State of Utah or other jurisdiction) which would cause the application of any law, rule or regulation other than of the State of Utah.

 

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9.           Successors and Assigns.  This Agreement shall be binding upon and inure solely to the benefit of each party hereto and their legal representatives and successors, and nothing in this Agreement, express or implied, is intended to confer upon any other person any rights or remedies of any nature whatsoever under or by reason of this Agreement.

10.           Additional Acreage Within the Unit.  This Agreement applies and extends to any additional acreage added to the Unit.

11.           Severability.  If any provision of this Agreement is held to be invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement shall remain in full force and effect.

12.           Counterparts.  This Agreement may be executed and delivered by each party hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original and all of which taken together shall constitute but one and the same agreement.

13.           Notices.  Any required notice or communication shall be in writing and shall be effective when personally delivered or when sent via certified mail, postage prepaid, and addressed as follows:

	 	
(a)

	
If to Peak:

	
Peak Minerals, Inc.

	 	  	  	
2150 South 1300 East, Suite 350

	 	  	  	
Salt Lake City, UT  84106

	 	  	  	  
	 	
(b)

	
If to LUMA:

	
LUMA Minerals LLC

	 	  	  	
312 North Dale Avenue

	 	  	  	
Mount Prospect, IL 60056

Either Peak or LUMA may, by notice to the other given as aforesaid, change its mailing address for future notices.

AGREED TO AND ACCEPTED THIS 15th day of July, 2011.

	
PEAK MINERALS, INC.

	
LUMA MINERALS LLC

	  	  
	
By: /s/ Lance D’Ambrosio

	
By: /s/ Luke R. Kline

	
Name: Lance D’Ambrosio

	
Name: Luke R. Kline

	
Title: CEO

	
Title: Partner

 

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EXHIBIT A

to

COOPERATIVE DEVELOPMENT AGREEMENT

PEAK BLM LEASES

Federal Mineral Leases issued effective as of June 1, 2011 by the Federal Bureau of Land Management (“BLM”) to Peak Minerals, Inc., located on the following described lands in Millard County, Utah:

UTU-88395

T23S, R11W, SLM, Utah

Sec. 30: lots 1-12, E 1/2;

Sec. 31: lots 1-12, E 1/2;

T23S, R12W, SLM, Utah

Sec. 25: all.

Containing 2,032.74 acres, more or less

UTU-88387

T24S, R12W, SLM, Utah

Sec. 3: lots 1-4, S 1/2 N 1/2; S 1/2;

Sec. 4: lots 1-4, S 1/2 N 1/2; S 1/2;

Sec. 5: lots 1-4, S 1/2 N 1/2; S 1/2.

Containing 1,929.01 acres, more or less

UTU-88388

T24S, R12W, SLM, Utah

Sec. 9: all;

Sec. 10: all;

Sec. 11: all.

Containing 1,920.00 acres, more or less

UTU-88389

T24S, R12W, SLM, Utah

Sec. 14: all;

Sec. 15: all.

Containing 1,280.00 acres, more or less

UTU-88390

T23S, R12W, SLM, Utah

Sec. 26: all;

Sec. 27: all.

Containing 1,280.00 acres, more or less

A-1

  

  

  

UTU-88391

T24S, R12W, SLM, Utah

Sec. 7: lots 1-4, E 1/2 W 1/2, E 1/2;

Sec. 8: all;

Sec. 17: all;

Sec. 18: lots 1-4, E 1/2 W 1/2, E 1/2.

Containing 2,487.76 acres, more or less

UTU-88392

T23S, R12W, SLM, Utah

Sec. 33: all;

Sec. 34: all;

Sec. 35: all.

Containing 1,920.00 acres, more or less

UTU-88393

T24S, R12W, SLM, Utah

Sec. 1: lots 1-4, S 1/2 N 1/2, S 1/2;

Sec. 12: all.

Containing 1,283.38 acres, more or less

UTU-88394

T23S, R12W, SLM, Utah

Sec. 14: all;

Sec. 15: all;

Sec. 22: all;

Sec. 23: all.

Containing 2,560.00 acres, more or less

UTU-88396

T23S, R12W, SLM, Utah

Sec. 21: all;

Sec. 28: all.

Containing 1,280.00 acres, more or less

UTU-88398

T23S, R11W, SLM, Utah

Sec. 19: lots 1-12, E 1/2;

T23S, R12W, SLM, Utah

Sec. 24: all.

Containing 1,335.32 acres, more or less

A-2

  

  

  

UTU-88399

T23S, R12W, SLM, Utah

Sec. 3: lots 1-4, S 1/2 N 1/2, S 1/2;

Sec. 9: all;

Sec. 10: all.

Containing 1,291.63 acres, more or less

UTU-88401

T23S, R12W, SLM, Utah

Sec. 4: lots 1-4, S 1/2 N 1/2, S 1/2;

Sec. 5: lots 1-4, S 1/2 N 1/2, S 1/2;

T22S, R12W, SLM, Utah

Sec. 33: all.

Containing 1,922.86 acres, more or less

UTU-88402

T22S, R12W, SLM, Utah

Sec. 21: all;

Sec. 28: all;

Sec. 29: all.

Containing 1,920.00 acres, more or less

UTU-88403

T23S, R11W, SLM, Utah

Sec. 6: lots 1-14, S 1/2 NE 1/4, SE 1/4;

T23S, R12W, SLM, Utah

Sec. 1: lots 1-4, S 1/2 N 1/2, S 1/2.

Containing 1,366.56, more or less

UTU-88404

T23S, R12W, SLM, Utah

Sec. 2: lots 1-4, S 1/2 N 1/2, S 1/2;

Sec. 11: all.

Containing 1,281.88 acres, more or less

UTU-88405

T22S, R12W, SLM, Utah

Sec. 34: lots 1-4, E 1/2 W 1/2, E 1/2;

Sec. 35: all;

Sec. 36: all.

Containing 1,919.40 acres, more or less

A-3

  

  

  

UTU-88422

T21S, R12W, SLM, Utah

Sec. 1: lots 1-4, S 1/2 N 1/2, S 1/2;

Sec. 2: lots 1-4, S 1/2 N 1/2, S 1/2;

Sec. 11: all;

Sec. 12: all.

Containing 2,406.53 acres, more or less

UTU-88406

T22S, R12W, SLM, Utah

Sec. 25: all;

Sec. 26: all;

Sec. 27: lots 1-4, E 1/2 W 1/2, E 1/2.

Containing 1,918.55 acres, more or less

UTU-88407

T22S, R12W, SLM, Utah

Sec. 22: lots 1-4, E 1/2 W 1/2, E 1/2;

Sec. 23: all;

Sec. 24: all.

Containing 1,917.81 acres, more or less

UTU-88408

T22S, R12W, SLM, Utah

Sec. 13: all;

Sec. 14: all;

Sec. 15, lots 1-4, E 1/2 W 1/2, E 1/2.

Containing 1,917.09 acres, more or less

UTU-88409

T22S, R12W, SLM, Utah

Sec. 9: lots 3, 4 E 1/2 SW 1/4, SE 1/4;

Sec. 10: lots 3, 4 E 1/2 SW 1/4, SE 1/4;

Sec. 11: all;

Sec. 12: all.

Containing 1,918.37 acres, more or less

UTU-88410

T22S, R11W, SLM, Utah

Sec. 18: lots 1-4, PA;

Sec. 19: lots 1-4, E 1/2;

Sec. 29: lots 1-4, S 1/2 N 1/2, SW 1/4;

Sec. 30: lots 1-6, S 1/2 NE 1/4, SE 1/4;

Sec. 31: lots 1-4, E 1/2.

Containing 2,510.11 acres, more or less

A-4

  

  

  

UTU-88411

T22S, R11W, SLM, Utah

Sec. 17: all;

Sec. 10: all;

Sec. 21: lots 1-4, E 1/2 W 1/2, E 1/2.

Containing 1,924.48 acres, more or less

UTU-88412

T22S, R12W, SLM, Utah

Sec. 1: lots 1-4, S 1/2 N 1/2, S 1/2;

Sec. 2: lots 1-4, S 1/2 N 1/2, S 1/2;

T22S, R11W, SLM, Utah

Sec. 6: lots 1-6, S 1/2 NE 1/4, SE 1/4.

Containing 1,798.33 acres, more or less

UTU-88413

T22S, R11W, SLM, Utah

Sec. 7: lots 1-4, E 1/2;

Sec. 8: all;

Sec. 9: all;

Sec. 10: lots 1-7, S 1/2 NE 1/4, SE 1/4 NW 1/4, E 1/2 SW 1/4, SE 1/4.

Containing 2,421.09 acres, more or less

UTU-88414

T21S, R12W, SLM, Utah

Sec. 34: all;

Sec. 35: all;

Sec. 36: all;

T21S, R11W, SLM, Utah

Sec. 31: lots 1-6 NE 1/4, N 1/2 SE 1/4.

Containing 2,400.77 acres, more or less

UTU-88415

T22S, R11W, SLM, Utah

Sec. 3: lots 1-7, S 1/4 NE 1/4, SE 1/4 NW 1/4, E 1/2 SW 1/4, SE 1/4;

Sec. 4: lots 1-4, S 1/2 N 1/2, S 1/2;

Sec. 5, lots 1-4, S 1/2 N 1/2, S 1/2.

Containing 1,982.65 acres, more or less

UTU-88416

T21S, R11W, SLM, Utah

Sec. 32: lots 1-4, N 1/2, N 1/2 S 1/2;

Sec. 33: lots 1-4, N 1/2, N 1/2 S 1/2;

Sec. 34: lots 1-4, N 1/2, N 1/2 S 1/2.

Containing 1,933.20 acres, more or less

A-5

  

  

  

UTU-88417

T21S, R12W, SLM, Utah

Sec. 25: all;

Sec. 26: all;

Sec. 27: all;

T21S, R11W, SLM, Utah

Sec. 30: lots 1-4, E 1/2.

Containing 2,396.57 acres, more or less

UTU-88418

T21S, R11W, SLM, Utah

Sec. 27: all;

Sec. 28: all;

Sec. 29: all.

Containing 1,920.00 acres, more or less

UTU-88419

T21S, R12W, SLM, Utah

Sec. 22: all;

Sec. 23: all;

Sec. 24: all;

T21S, R11W, SLM, Utah

Sec. 19: lots 1-4, E 1/2.

Containing 2,395.65 acres, more or less

UTU-88420

T21S, R12W, SLM, Utah

Sec. 13: all;

Sec. 14: all;

Sec. 15: all;

T21S, R11W, SLM, Utah

Sec. 18: lots 1-4, E 1/2.

Containing 2,394.72 acres, more or less

UTU-88421

T21S, R11W, SLM, Utah

Sec. 20: all;

Sec. 21: all;

Sec. 22: all.

Containing 1,920.00 acres, more or less

A-6

  

  

  

UTU-88397

T23S, R12W, SLM, Utah

Sec. 12: all;

Sec. 13: all.

Containing 1,280.00 acres, more or less

UTU-88423

T21S, R11W, SLM, Utah

Sec. 7: lots 1-4, E 1/2;

Sec. 8: all;

Sec. 16: all;

Sec. 17: all.

Containing 2,393.82 acres, more or less

UTU-88424

T21S, R11W, SLM, Utah

Sec. 4: lots 1-4, S 1/2;

Sec. 5: lots 1-4, S 1/2;

Sec. 6: lots 1-5, SE 1/4;

Sec. 9: all.

Containing 1,869.64 acres, more or less

UTU-88425

T21S, R11W, SLM, Utah

Sec. 3: lots 1-4, S 1/2

Sec. 10: all

Sec. 15: all

Containing 1,728.85 acres, more or less

UTU-88426

T20S, R12W, SLM, Utah

Sec. 25: all;

Sec. 26: all;

Sec. 35: all;

Sec. 36: all.

Containing 2,560.00 acres, more or less

UTU-88427

T20S, R11W, SLM, Utah

Sec. 31: lots 1-4, E 1/2 W 1/2, E 1/2;

Sec. 32: all;

Sec. 33: all;

Sec. 34: all.

Containing 2,559.41 acres, more or less

A-7

  

  

  

UTU-88428

T20S, R11W, SLM, Utah

Sec. 25: all;

Sec. 26: all;

Sec. 35: all;

Sec. 36: all.

Containing 2,560.00 acres, more or less

UTU-88429

T20S, R11W, SLM, Utah

Sec. 27: all;

Sec. 28: all;

Sec. 29: all;

Sec. 30: lots 1-4. E 1/2 W 1/2, E 1/2.

Containing 2,557.64 acres, more or less

UTU-88430

T20S, R11W, SLM, Utah

Sec. 19: lots 1-4, E 1/2 W 1/2, E 1/2;

Sec. 20: all;

Sec. 21: all;

Sec. 22: all.

Containing 2,556.07 acres, more or less

UTU-88443

T20S, R11W, SLM, Utah

Sec. 23: all;

Sec. 24: all.

Containing 1,280.00 acres, more or less

UTU-88457

T20S, R12W, SLM, Utah

Sec. 28: lots 1-18, W 1/2 NW 1/4;

Sec. 33: lots 1-18;

Sec. 34: all.

Containing 1,886.40 acres, more or less

UTU-88461

T21S, R12W, SLM, Utah

Sec. 3: lots 1-4, S 1/2 N 1/2, S 1/2;

Sec. 4: lots 1-7, S 1/2 NE 1/4, SE 1/4 NW 1/4, E 1/2 SW 1/4, SE 1/4;

Sec. 9: lots 1-4, E 1/2, E 1//2 W 1/2;

Sec. 10: all.

Containing 2,393.45 acres, more or less

A-8

  

  

  

UTU-88462

T21S, R12W, SLM, Utah

Sec. 16: lots 1-4, E 1/2, E 1/2 W 1/2;

Sec. 17: all;

Sec. 20: all;

Sec. 21: lots 1-4, E 1/2, E 1/2 W 1/2.

Containing 2,548.83 acres, more or less

UTU-88463

T21S, R12W, SLM, Utah

Sec. 28: lots 1-4, E 1/2, E 1/2 W 1/2;

Sec. 29: all;

Sec. 33: lots 1-4, E 1/2, E 1/2 W 1/2.

Containing 1,911.39 acres, more or less

A-9

  

  

  

EXHIBIT B

to

COOPERATIVE DEVELOPMENT AGREEMENT

STATE LEASES

Utah State Mineral Leases for Potash issued effective as of September 1, 2008 by the State of Utah, School and Institutional Trust Lands Administration to Emerald Peak Minerals, LLC, located on the following described lands in Millard County, Utah:

ML-51479

T21S, R12W, SLB&M

Sec. 32, all.

Containing 640.00 acres, more or less.

ML-51480

T22S, R11W, SLB&M

	
Sec. 2:

	
Lots 1 (41.95), 2 (42.12), 3 (42.29), 4 (41.29), 5 (39.22), 6 (39.53), 7 (39.84),

	  	
S 1/2 NE 1/4, SE 1/4 NW 1/4, E 1/2 SW 1/4, SE 1/4;

Sec. 16, all.

Containing 1,286.24 acres, more or less.

ML-51481

T22S, R12W, SLB&M

Sec. 16, all;

Sec. 32, all.

Containing 1,280.00 acres, more or less.

ML-51482

T23S, R12W, SLB&M

Sec. 16, all;

Sec. 32, all;

Sec. 36, all.

Containing 1,920.00 acres, more or less.

ML-51483

T24S, R12W, SLB&M

Sec. 2: Lots 1 (40.80), 2 (40.81), 3 (40.81), 4 (40.82) S 1/2 N 1/2, S 1/2 [ALL];

Sec. 16, all.

Containing 1,283.24 acres, more or less.

B-1

  

  

  

EXHIBIT C

to

COOPERATIVE DEVELOPMENT AGREEMENT

LUMA BLM LEASES

Federal Mineral Leases to be issued by the Federal Bureau of Land Management (“BLM”) to LUMA Minerals LLC, located on the following described lands in Millard County, Utah:

UTU-88444

T20S, R11W, SLM, Utah

Sec. 15: all;

Sec. 16: all;

Sec. 17: all;

Sec. 18: lots 1-4, E 1/2 W 1/2, E 1/2.

Containing 2,554.50 acres, more or less.

UTU-88445

T20S, R11W, SLM, Utah

Sec. 11: lots 1-4, S 1/2 N 1/2, S 1/2;

Sec. 12: lots 1-4, S 1/2 N 1/2, S 1/2;

Sec. 13: all;

Sec. 14: all.

Containing 2,557.18 acres, more or less.

UTU-88446

T20S, R11W, SLM, Utah

Sec. 3: lots 1-12, S 1/2;

Sec. 10: lots 1-4, S 1/2 N 1/2, S 1/2.

Containing 1,358.44 acres, more or less.

UTU-88448

T20S, R10W, SLM, Utah

Sec. 7: lots 1-12, E 1/2;

Sec. 8: all;

Sec. 17: all.

Containing 2,012.41 acres, more or less.

UTU-88449

T20S, R10W, SLM, Utah

Sec. 18: lots 1-12, E 1/2;

Sec. 19: lots 1-12, E 1/2;

Sec. 20: lots 1-4, S 1/2 N 1/2, S 1/2.

Containing 2,115.47 acres, more or less.

UTU-88450

T20S, R10W, SLM, Utah

Sec. 29: all;

Sec. 30: lots 1-12, E 1/2;

Sec. 31: lots 1-12, E 1/2.

Containing 2,129.20 acres, more or less.

 

 

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UTU-88451

T24S, R12W, SLM, Utah

Sec. 4: lots 1-12, S 1/2;

Sec. 5: lots 1-12, S 1/2;

Sec. 9: all.

Containing 2,048.40 acres, more or less.

UTU-88452

T20S, R11W, SLM, Utah

Sec. 6: lots 1-14, E 1/2 SW 1/4, SE 1/4;

Sec. 7: lots 1-4, E 1/2 W 1/2, E 1/2;

Sec. 8: all.

Containing 1,953.40 acres, more or less.

UTU-88453

T20S, R12W, SLM, Utah

Sec. 12: lots 1, 3-5, 7-17;

Sec. 13: all;

Sec. 24: all.

Containing 1,799.62 acres, more or less.

UTU-88455

T20S, R12W, SLM, Utah

Sec. 11: lots 1, 2, 3, 6-11;

Sec. 14: all;

Sec. 15: lots 1-15, SW 1/4 NE 1/4, SE 1/4 NW 1/4, NE 1/4 SW 1/4, NW 1/4 SE 1/4

Containing 1,561.35 acres, more or less.

UTU-88456

T20S, R12W, SLM, Utah

Sec. 22: all;

Sec. 23: all;

Sec. 27: all.

Containing 1,920.00 acres, more or less.

 

C-2ex411form20f.htm

LICENSE AGREEMENT

THIS LICENSE AGREEMENT (this “Agreement”) is made and entered into as of the 15th day of August, 2011 (the “Effective Date”), by and between EMERALD PEAK MINERALS, L.L.C., a Utah limited liability company (“Licensor”) with an address of 2150 South 1300 East, Suite 350, Salt Lake City, Utah 84106 and PEAK MINERALS INC., a Delaware corporation authorized to do business in the State of Utah (“Licensee”) with an address of 2150 South 1300 East, Suite 350, Salt Lake City, Utah 84106.

RECITALS

A.          Licensor is the Lessee under certain Utah State Mineral Leases (the “State Leases”) issued by the Utah School and Institutional Trust Lands Administration (the “SITLA”) for the mining of Potash as classified and defined in Utah Administrative Code R850-25-100(1)(b) (“Leased Substances”) on lands owned by SITLA (the “SITLA Lands”) located in Millard County, State of Utah.  The State Leases and SITLA Lands covered thereby are more particularly described on Exhibit A attached hereto and incorporated herein.

B.           Licensee desires to obtain an exclusive license from Licensor to enter upon the SITLA Lands to conduct exploration and prospecting operations to determine the presence, location, quantity and value of Leased Substances contained in, on or under the SITLA Lands.

NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.           Grant of Exploration Rights.  Licensor grants Licensee the full and exclusive right and authority to enter upon the SITLA Lands to conduct such exploration and prospecting operations as Licensee may deem appropriate to determine the presence, location, quantity, and value of Leased Substances contained in, on, or under the SITLA lands covered by the SITLA Leases and any water appurtenant to the same.  Such operations may include, but shall not be limited to, mapping, sampling (including bulk sampling), trenching, drilling, testing, assaying, conducting environmental studies, and engaging in other geochemical and geophysical exploration methods whether now known or in the future developed, for such purposes.  Licensee may establish drill sites and construct such minor roads as may be necessary to the conduct of the foregoing activities on the SITLA Lands without the prior consent of Licensor.  Licensee also may mine and remove such amount of Leased Substances as Licensee may deem appropriate for sampling, testing, and evaluation of the SITLA Lands and Leased Substances, however, Leased Substances may not be removed for sale.  In addition, Licensee shall have the right: (a) to use all easements and all rights-of-way for ingress and egress to and from the SITLA Lands to which Licensor may be entitled; (b) to obtain all permits, approvals, and other federal, state, and local governmental authorizations as Licensee deems necessary to conduct its exploration activities on the SITLA Lands; (c) to exercise all other rights that are or may be incidental to any or all of the rights granted, expressly or implicitly, to Licensee in this Agreement; and (d) to the extent Licensor possesses the title and authority to grant it, to possess and use all or any part of the SITLA Lands for the purpose of exploring any adjoining or nearby property optioned, owned, controlled or operated by Licensee.

 

 

  

  

  

 

 

2.           Consideration.  In addition to other good and valuable consideration including but not limited to the overriding royalty granted Licensor by Licensee under that certain Commercial Services Agreement dated April 18, 2011, during the Primary Term and any extended term of the State Leases, Licensee shall pay to Licensor on or before September 1 of each year the sum of forty thousand dollars ($40,000.00).  Said annual payment shall be made until such time as the annual overriding royalty paid to Licensor on production from or attributable to the State Leases is equal to or greater than $40,000.00.  Thereafter provided such annual overriding royalty amount paid to Licensor equals or exceeds said amount no further payments shall be due or payable; provided, however, in the event the annual overriding royalty amount paid to Licensor is less than $40,000.00, then Licensee shall pay to Licensor the difference between the annual overriding royalty amount paid to Licensor and $40,000.00.

3.           Mutual Cooperation.  The parties will cooperate in providing any additional documents that may be required hereunder and will take or cause to be taken such action which may be reasonably necessary to effectuate the purposes of this Agreement.

4.           Applicable Laws and Regulations.  Licensee shall comply with all applicable federal, state, and local statutes, regulations, and ordinances, including without limitation, all current and future rules and regulations adopted by the SITLA and its successor agencies.

5.           Assignment, Successors and Assigns.  This Agreement shall not be assigned, conveyed, or otherwise transferred by a party without the prior written consent of the other party, which consent cannot be unreasonably withheld.  This Agreement shall be binding as to the parties’ representatives, successors and assigns.

6.           Notices.  Any notice expressly provided for under this Agreement must be in writing, given either by hand, by mail or facsimile, and shall be deemed effective when sent in a manner that provides confirmation or acknowledgement of delivery and received at the address of the party set forth in this Agreement (or as such address may be changed from time to time by written notice pursuant to this Section).

7.           Termination.  This Agreement shall terminate upon the expiration or termination of all of the State Leases.

8.           Entire Agreement.  This Agreement sets forth the entire agreement between the parties with respect to the subject matter of this Agreement.  No subsequent alteration or amendment to this Agreement shall be binding upon the parties unless signed by each of them.

9.           Governing Law.  This Agreement shall be construed in accordance with, and governed by, the laws of the State of Utah.

10.         Counterparts.  This Agreement may be executed in Counterparts, each of which shall be deemed an original, but all of which shall together constitute one and the same instrument.

 

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In witness whereof, the parties have caused this Agreement to be duly executed as of the date first set forth above.

	
LICENSOR:

	
LICENSEE:

	  	  
	
Emerald Peak Minerals, L.L.C.,

	
Peak Minerals, Inc.,

	
a Utah limited liability company

	
a Delaware corporation

	  	  
	
By: /s/ Lance D’Ambrosio

	
By: /s/ Woods Silleroy

	
Its: CEO

	
Its: Vice President

 

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EXHIBIT A

to

License Agreement

STATE LEASES

Utah State Mineral Leases for Potash issued effective as of September 1, 2008, by the State of Utah, School and Institutional Trust Lands Administration to Emerald Peak Minerals, LLC, located on the following described lands in Millard County, Utah:

ML-51479

T21S, R12W, SLB&M

Sec. 32, all.

Containing 640.00 acres, more or less.

ML-51480

T22S, R11W, SLB&M

	
Sec. 2:

	
Lots 1 (41.95), 2 (42.12), 3 (42.29), 4 (41.29), 5 (39.22), 6 (39.53), 7 (39.84),

	  	
S1/2 NE1/4, E1/4 NW1/4, E1/2 SW1/4, SE1/4;

Sec. 16, all.

Containing 1,286.24 acres, more or less.

ML-51481

T22S, R12W, SLB&M

Sec. 16, all;

Sec. 32, all.

Containing 1,280.00 acres, more or less.

ML-51482

T23S, R12W, SLB&M

Sec. 16, all;

Sec. 32, all;

Sec. 36, all.

Containing 1,920.00 acres, more or less.

ML-51483

 

T24S, R12W, SLB&M

	
Sec. 2:

	
Lots 1 (40.80), 2 (40.81), 3 (40.81), 4 (40.82) S1/2N1/2, S1/2 [ALL]

Sec. 16, all.

Containing 1,283.24 acres, more or less.

 

4

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