<PAGE> 44
EXHIBIT 10.3
AGREEMENT
THIS AGREEMENT, made and entered into this 10th day of May, 2000, by and
between American Diatomite, L.L.C., a Montana Limited Liability Company, 310
- 19" West, Gooding, Idaho 83330, or P.O. Box 400, Missoula, Montana 59806
(hereinafter "American") and Iron Mask Mining Co., an Idaho Corporation, of
656 Cedar Street, Ponderay, Idaho 83852 (hereinafter "Iron Mask")
WITNESSETH:
In consideration of the promises and covenants set forth herein, and
other good and valuable consideration, the receipt mid adequacy or which is
hereby acknowledged, the parties hereto agree as follows:
1. This Agreement supercedes any and all previous Agreements between the
parties hereto. Consequently, all terms and provisions in any Agreements
existing prior to the date of this Agreement are null and void, and of
no further force and effect.
2. For and in consideration of the covenants provided herein, Iron Mask
agrees to immediately issue 6,000,000 restricted shares of common stock
of Iron Mask stock to American. In exchange for said 6,000,000
restricted shares of common stock of Iron Mask, Iron Mask shall,
immediately upon issuance of said restricted shares of common stock,
have the right to develop, mine, and retain profits from the American
Diatomite property described in Exhibit "A" attached, hereto. In further
consideration for the payment by Iron Mask to American of the
above-described 6,000,000 restricted shares of common stock, Iron Mask
shall have an option to purchase the property described in Exhibit "A"
attached hereto in its entirety, as set forth in paragraph 7 below. As
further consideration for for the execution of this Agreement, and the
previous extension agreement, Iron Mask agrees to issue an additional
200,000 restricted share of common stock of Iron Mask stock to
American.
3. During the first 90 days from full execution of this Agreement, Iron
Mask agrees to work, in good faith, with the Bureau of Land Management
and the State of Idaho to secure permits to improve, roads and to secure
appropriate mining permits. When said permits are effectuated, Iron Mask
will appropriately improve the pertinent roads and appropriately develop
the pit for mining.
4. As a minimum royalty payment, Iron Mask agrees to pay to American
$25,000.00 each quarter year, totaling a $100,000.00 annual royalty
payment. Said quarterly payments will begin 60 days from the date that
Iron Mask is listed on the electronic trading board. Should Iron Mask
fail to pay the above-described quarterly payment, American has the
option to default Iron Mask, consistent with the Notice provisions set
forth herein, and void this Agreement.
5. Iron Mask shall pay all pertinent assessment fees by July 15, 2000 Thru
2005.
6. Iron Mask shall have the option to purchase the entirely of the
diatomaceous earth deposit owned by American upon the subject property
(specifically identified on Exhibit "A" attached hereto) for
$3,000,000.00. Said $3,000,000.00 purchase price shall be exclusive of
any capital gains taxes incurred by American as a result of such payment
(Iron Mask is responsible for any tax ramifications) and may be made via
a like kind, tax free, exchange between American and Iron Mask at
American's option. Therefore, Iron Mask shall be responsible for the
payment of any tax consequences incurred by American as a result of the
aforementioned $3,000,000.00 payment. Said Option shall expire five (5)
<PAGE> 45
years from the date of the full execution or this Agreement. If said
option is not exercised, Iron Mask shall have no further rights in the
property described in Exhibit "A" attached hereto 7. Iron Mask shall pay
$10.00 per ton royalty payment for diatomaceous earth which is both sold
and shipped from American's property. Said tonnage payments shall
continue subsequent to the payment of the $3,000,000.00 option price
described above (should the option be exercised), but shall be the only
payment from Iron Mask to American which shall survive the option
purchase, if exercised. The aforementioned royalty payments shall be
paid on a monthly basis. American has the right to check all shipment
and sales records in order to verify the proper royalty payment.
8. LeRoy and Robie Strout shall receive a combined total of $2,000.00 per
month consulting fee from Iron Mask. Said payments shall commence when
Iron Mask is placed upon the electronic trading board, with the
proration of said payments dating from the date of full execution of
this Agreement. Iron Mask will create an option agreement in order to
accomplish the above-described payment
9. During the 13th through 24th months subsequent to the expiration of the
full execution of this Agreement, Iron Mask shall pay a combined total
of $2,500.00 per month consulting fee to LeRoy and Robie Strout. Iron
Mask will create an option agreement in order to accomplish the
above-described payment.
10. During the 25th through 60th months subsequent to the full execution of
this Agreement, Iron Mask shall pay to LeRoy and Robie Strout a combined
total of $3,000.00 per month consulting fee. Iron Mask will create an
option agreement in order to accomplish the above-described payment.
11. The above-described consulting fees shall only be payable subsequent to
Iron Mask's listing on the electronic trading board.
12. Upon any default of the terms of this Agreement, written notice thereof,
specifically defining the alleged default, shall be transmitted to the
parties, at their addresses set forth above. Should the party in default
not cure the specified default within 90 days from written notice as set
forth above, said default shall be established, and all legal rights and
consequences thereof way be pursued.
13. The certificates(s) representing the shares of restricted shares of
common stock delivered pursuant to this subscription agreement will
contain the folowing restrictive legend and may not be transferred for
a minimum period of one (1) year from the date of issuance and
thereafter only in compliance with Federal and State securities laws.
The securities evidenced hereby have not been registered under the
Securities Act of 1933, as amended, nor any other applicable
securities act (the and may not be sold, transferred, assigned,
pledged or otherwise distributed, unless there is an effective
registration statement under such Acts covering such securities or
the Company receives an opinion of counsel for the holder of these
securities (concurred on by counsel for the Company) stating that
such sale, transfer, assignment, pledge or distribution is exempt
from the registration and prospectus delivery requirements of such
Acts.
14. REPRESENTATIONS, AND WARRANTIES: The undersigned Subscriber hereby
represents and warrants to the Company:
a. THE UNDERSIGNED SUBSCRIBER UNDERSTANDS THAT THE IF COMPANY'S SHARES
OF Restricted shares of common stock HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE UNITED STATES SECURITIES AND EXECHANGE
COMMISSION; ANY STATE SECURITIES AGENCY; OR ANY FOREIGN SECURITIES
AGENCY.
<PAGE> 46
b. The undersigned Subscriber is not an underwriter and would be
acquiring the Company's shares of Restricted shares of common stock
solely for investment for his or her own account and not with a
view to, or for, resale in connection with any distribution within
the meaning of any federal securities act, state securities act or
any other applicable federal or state laws;
c. The undersigned Subscriber understands the speculative nature and
risks of investments associated with the Company, and confirms that
the shares of Restricted shares of common stock would be suitable
and consistent with his or her investment program; that his or her
financial position enable him or her to bear the risks of this
investment; and, that there is no public market for the shares of
Restricted shares of common stock subscribed for herein;
d. The shares of Restricted shares of common stock subscribed for
herein may be not transferred, encumbered, sold, hypothecated, or
otherwise disposed of, if such disposition will violate any federal
and/or state securities acts. Disposition shall include, but is not
limited to acts of selling, assigning, transferring, pledging,
encumbering, hypothecating, giving, and any form of conveying,
whether voluntary or not shares issues for a minimum period of one
(1) year from the date of issuance, and thereafter only in
compliance with applicable state and federal law.
e. To the extent that any federal, and/or state securities laws shall
require, the Subscriber hereby agrees that any shares of Restricted
shares of common stock acquired pursuant to this Agreement shall be
without preference as to assets;
f. The Company is under no obligation to register or seek an exemption
under any federal securities act, state securities act, or any
foreign securities act for any shares of Restricted shares of
common stock of the Company or to cause or permit such share of
Restricted shares of common stock to be transferred in the absence
of any such registration or exemption;
g. The Subscriber has had the opportunity to ask questions of the
Company and has received additional information from the Company to
the extent that the Company possessed such information, necessary
to evaluate the merits. and risks of any investment in the Company.
Further, the Subscriber has been given; (1) All material books,
records and financial statements of the Company; (2) all material
contracts and documents relating to the proposed transaction; (3)
an opportunity to question the appropriate executive officers of
the Company; and, (4) all documents filed with the Securities and
Exchange Commission;
h. The Subscriber has satisfied the suitability standards imposed by
his or her applicable state laws and has a preexisting personal and
business relationship with the Company;
i. The Subscriber has adequate means of providing for his current
needs and personal contingencies and has no need to sell the shares
or Restricted shares of common stock in the foreseeable future
(that is at the time of die investment. Subscriber can afford to
hold the investment for an indefinite period of time);
j. The Subscriber has sufficient knowledge and experience in
financial matters to evaluate the merits and risks of this
investment and furhter, the Subscriber is capable of reading and
interpreting financial statement;
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k. The Subscriber acknowledges that if he/she/it is a resident of the
State of Florida, he/she/it has the privilege of declaring this
transaction null and void provide the Subscriber communicates such
intention to the Company in writing within three (3) days of the
tender of his/her/its consideration.
AMERICAN DIATOMITE, L.L.C. IRON MASK MINING CO.
Members /s/ Robert J. Evans
/s/ Robie Strout
/s/ LeRoy Strout
/s/ Robert L. Delaney
/s/ D. L. Delaney
<PAGE> 48
EXHIBIT "A"
Those certain mining claims located in an unorganized raining district,
Gooding County. Idaho Range
Claim Section Township Range
1 SW1/4 of 35 3S 13E
2 NW1/4 of 35 3S 13E
3 NE1/4 of 34 3S 13E
4 NW1/4 of 34 3S 13E
5 NE1/4 of 33 3S 13E
6 SW1/4 of 28 3S 13E
7 SE1/4 of 28 3S 13E
8 SW1/4 of 27 3S 13E
9 SE1/4 of 27 3S 13E
10 SW1/4 of 26 3S 13E
11 NW1/4 of 26 3S 13E
12 NE1/4 of 27 3S 13E
13 NW1/4 of 27 3S 13E
14 NE1/4 of 28 3S 13E
15 NW1/4 of 28 3S 13E
16 SW1/4 of 21 3S 13E
17 SE1/4 of 21 3S 13E
18 SW1/4 of 22 3S 13E
19 SE1/4 of 22 3S 13E
20 SW1/4 of 23 3S 13E
21 NW1/4 of 23 3S 13E
22 NE1/4 of 22 3S 13E
23 NW1/4 of 22 3S 13E
24 NE1/4 of 21 3S 13E
25 NW1/4 of 21 3S 13E
28 SW1/4 of 15 3S 13E
29 SE1/4 of 15 3S 13E
30 SW1/4 of 14 3S 13E
31 SW1/4 of 34 3S 13E
32 SE1/4 of 34 3S 13E
33 NE1/4 of 3 4S 13E
34 NW1/4 of 2 4S 13E
35 NE1/4 of 2 4S 13E
36 NW1/4 of 1 4S 13E
37 NE1/4 of 1 4S 13E
38 NW1/4 of 12 4S 13E
39 SE1/4 of 1 4S 13E
40 SE1/4 or 2 4S 13E
41 SW1/4 of 1 4S 13E
42 NE1/4 of 11 4S 13E
