EXHIBIT 10.0

JOINT VENTURE AGREEMENT

BETWEEN

ROBIN SCHWARZ,

AYLWARD SCHWARZ,

S & S MINING, A NEVADA CORPORATION

AND

CAN-CAL RESOURCES, LTD.

THIS JOINT VENTURE AGREEMENT, made as of the 13th day of September, 1996, by and between ROBIN SCHWARZ, AYLWARD SCHWARZ, and S & S MINING, a Nevada corporation (hereinafter collectively referred to as "Schwarz" or "Venturer"), and CAN-CAL RESOURCES, LTD., a Nevada Corporation (hereinafter referred to as "Can-Cal" or "Venturer").

RECITALS

WHEREAS, Schwarz owns or has possessory rights to certain mining claims in San Bernardino County, California, and may acquire or stake additional mining claims in San Bernardino County, California (the "Area of Interest" as defined herein) (the "Claims"), and

WHEREAS, Schwarz believes that its claims are prospective for the existence and commercial extraction and production of precious metals; and

WHEREAS, Schwarz does not have funds with which to engage in the necessary work and procedures to determine the existence of precious metals on the claims; and

WHEREAS, Can-Cal is willing to advance certain funds to Schwarz to ascertain whether precious metals exist on the claims;

WHEREAS, Can-Cal is willing to advance funds only if it acquires a 50% interest in the claims and its other advances are secured; and

WHEREAS, the parties believe that it is in their respective best interests to pool their resources to attempt to ascertain the existence of precious metals of the claims and, if so, to commercially exploit the claims and the precious metals contained thereon; and

WHEREAS, Schwarz and Can-Cal wish to make arrangements for the exploration, evaluation, development, production and sale of precious metals, if any, produced from the claims all through this Joint Venture.

NOW THEREFORE, in consideration of the covenants and agreements contained herein, SCHWARZ AND CAN-CAL AGREE AS FOLLOWS:

1.1 "Accounting Procedure" means the procedures as agreed upon by the Venturers.

1.2 "Affiliate" means any person, partnership, joint venture, corporation or other form of enterprise which directly or indirectly controls, is controlled by, or is under common control with, a Venturer. For purposes of the preceding sentence, "control" means possession, directly or indirectly, of the power to direct or cause direction of management and policies through ownership of voting securities, contract, voting trust or otherwise.

1.3 "Agreement" means this Joint Venture Agreement, including all amendments and modifications thereof, and all schedules and exhibits, which are incorporated herein by this reference.

1.4 "Area of Interest" means a five mile radius around the claims listed on Exhibit A and no other physical areas.

1.5 "Assets" means the Property, Products and all other real and personal property, tangible and intangible, held by or for the benefit of the Venturers hereunder.

1.6 "Capital Account" means the Capital Account as defined herein.

1.7 "Claims" means the mining claims listed on Exhibit A hereto.

1.8 "Default" means the occurrence of one or more of the events listed in Section 10.2.

1.9 "Development" means all preparation for the removal and recovery of Products, including the construction or installation of any improvements to be used for the mining or handling, but not the milling or other processing, or Products.

1.10 "Exploration" means all activities directed toward ascertaining the existence, location, quantity, quality or commercial value of deposits of Products.

1.11 "Initial Contribution" means that contribution each Venturer agrees to make, or is deemed to have made, pursuant to Section 5. 1.

1.12 "Joint Account" means the account maintained in accordance with the Accounting Procedure showing the charges and credits accruing to the Venturers.

1.13 "Losses" shall have the meaning set forth in Section 4. 1 (b) herein.

1.14 "Management Committee" means the committee established under Article VII.

1.15 "Milling" means the milling or processing of ores into precious metals.

1. 16 "Mining" means the mining, extracting, producing, hauling and handling of ore from the Property.

1. 17 "Net Proceeds" means net cash flow from Operations.

1.18 "Operations" means the Exploration, Development and Mining activities carried out under this Agreement.

1.19 "Venturer" and "Venturers" mean the persons or entities that from time to time have Participating Interests in the Claims.

1.20 "Participating Interest(s)" means the percentage interest representing the operating ownership interest of a Venturer in Assets, and all other rights and obligations arising under this Agreement, as such interest may from time to time be adjusted hereunder. Participating Interest shall be calculated to three decimal places and rounded to two (e.g., 1.519% rounded to 1.52%). Decimals of .005 or more shall be rounded up to .01; decimals of less than .005 shall be rounded down. The initial Participating Interest of the Venturers are set forth in Section 6. 1.

1.21 "Products" means all ores, minerals, mineral resources and precious metals (including, where appropriate, gold) produced from the Claims.

1.22 "Program" means a description of the Exploration, Development, Mining and Milling to be conducted by the joint venture.

2.1 Representations and Warranties. Each of Robin Schwarz, Aylward Schwarz and S&S Mining and Can-Cal represents and warrants as follows:

(i) that S & S Mining and Can-Cal are each a corporation duly incorporated and in good standing in its state of incorporation and that it is qualified to do business and is in good standing in the state of its incorporation and such other states where necessary in order to carry out the purposes of this Agreement;

(ii) that each has the capacity to enter into and perform this Agreement and all transactions contemplated herein and that all corporate and other actions required to authorize it to enter into and perform this Agreement have been properly taken;

(iii) that this Agreement has been duly executed and delivered by it and is valid, binding and full enforceable against it in accordance with its terms;

(iv) that there is no order, writ, injunction, judgment, award or decree outstanding, and no legal, administration, arbitration or other proceeding ("Legal Proceeding") pending against it or involving any of its directors, officers or employees or properties or assets, or to its knowledge, threatened against it or any of its directors, officers or employees or properties or assets, which Legal Proceedings, if determined adversely, would have a material adverse effect on such Venturer or the Joint Venture;

(v) that (A) the execution, delivery and performance by it of this Agreement and the consummation of the transactions contemplated hereby will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, change or encumbrance upon any of its property or assets pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument by which it is bound or to which any of its property or assets is subject, or will such action result in any violation of the provisions of its charter or by-laws or of any statute or any order, rule or regulation of any court or governmental agency or body of the United States, any State or any political subdivision of either having jurisdiction over it or any of its properties or assets; and (B) except what which has already been obtained by it, no consent, approval, authorization, order, registration, filing, qualification, license or permit of or with any such court or any such regulatory authority or other such governmental agency or body in required to be obtained by or with respect to it in connection with the execution, delivery and performance by it of this Agreement and the consummation of the transactions contemplated hereby.

2.2 Disclosures. Each of the Venturers represents and warrants that it is unaware of any material facts or circumstances which have not been disclosed in this Agreement, and which should be disclosed to the other Venturers in order to prevent the representations in this Article II from being materially misleading or which could foreseeable have a material adverse effect on the business or assets of the Joint Venture.

3.1 Formation of Joint Venture. Schwarz and Can-Cal hereby form a Joint Venture for the purposes set forth below. All real and personal property acquired by the Joint Venture after the date hereof shall be held in its name, and not in the names of the Venturers, and no Venturer shall have any individual ownership in such property except for its rights as a Venturer in the Joint Venture.

3.2 Name. The name of this Joint Venture shall be the Schwarz - Can-Cal Joint Venture or such other name as determined by the Management Committee. The principal place of business of the Joint Venture shall be 3651 Lindell, Suite A, Las Vegas, Nevada, or such other place as the Management Committee may determine.

3.3 Purposes. This Agreement is entered into for the following purposes and for no others, and shall serve as the exclusive means by which the Venturers, or either of them, accomplish such purposes:

(a) to conduct Exploration on the Claims to ascertain whether precious metals exist on the Claims;

(b) to evaluate the possible Development of the Claims;

(c) to engage in Development and Mining Operations on the Claims and milling of the ore to the maximum extent possible;

(d) to engage in marketing of precious metals recovered from the Claims;

(e) to sell forward, purchase or borrow precious metals from such at such prices as determined by the Management Committee;

(f) to borrow money necessary to finance the Joint Venture's activities in accordance with a Program and as directed by the Management Committee; and

(g) to perform any other operation or activity necessary, appropriate, or incidental to any of the foregoing.

3.4 Effective Date and Term. The effective date of this Agreement shall be the date first recited above. The term of this Agreement shall be for fifty
(50) years from the effective date, unless the Agreement is earlier terminated as herein provided.

4.1 Relationship; Indemnification.

(a) No Venturer in its capacity as a Venturer may, without the prior authorization of the Management Committee or except as expressly provided herein, take any act on behalf of the Joint Venture or affecting any of the Assets.

(b) Each Venturer shall indemnify, defend and hold harmless the other Venturer, its directors, officers, and employees from and against any and all losses, claims, damages, liabilities and expenses (including reasonable legal fees and expenses incurred as a result of any such claims

made by third parties against such other Venturer) ("Losses") arising out of (i) any act or any assumption of liability, by the indemnifying Venturer, or any of its directors, officers or employees, done or undertaken, or apparently done or undertaken, on behalf of the other Venturer, except for acts taken in good faith pursuant to the authority expressly granted herein or otherwise agreed in writing between the Venturers, (ii) any breach of this Agreement by the indemnifying Venturer, or (iii) the wilful misconduct or negligence of the indemnifying Venturer.

4.2 Federal Tax Elections and Allocations. The Venturers agree that their relationship shall constitute a tax partnership within the meaning of
Section 761 (a) of the United States Internal Revenue Code of 1986.

4.3 State Income Tax. The Venturers also agree that, to the extent possible under applicable law, their relationship shall be treated for state income tax purposes in the same manner as it is for Federal income tax purposes.

4.4 Tax Returns. The Tax Matters Venturer, Can-Cal, shall prepare and shall file, after approval by the Management Committee, any tax returns or other tax forms required.

4.5 Other Business Opportunities. Subject to the provisions of Article XI and Section 10.7, the parties hereto agree that any Venturer or its Affiliates may engage in any other business or investment, whether or not the same shall be in competition with the business or investment of the Joint Venture or any other venture, including, without limitation, the acquisition of property outside the Area of Interest at any time.

4.6 Termination of Rights to Properties. Except as otherwise provided in this Agreement, neither Venturer shall permit or cause all or any part of its interest in the Property and the assets to be sold, exchanged, encumbered, surrendered, abandoned or otherwise terminated.

4.7 Implied Covenants. There are no implied covenants contained in this Agreement other than those of good faith and fair dealing.

5.1 Venturers' Initial Contributions.

(a) Schwarz, as its Initial Contribution, hereby transfers to Can-Cal (A) a 50% interest in all of its right, title and interest in and to the Claims listed on Exhibit A hereto (subject to the payment of $100,000 by Can-Cal of expenses relating to the purposes for which this Joint Venture was formed); and (B) contributes to the Joint Venture its experience and expertise regarding analyses, processes, formulas and all other information it has regarding the Claims, to the Joint Venture. Schwarz will forthwith execute all documents requested by Can-Cal to transfer a 50% interest in the Claims to Can-Cal.

(b) Can-Cal, as its Initial Contribution,

(i) hereby agrees to contribute $100,000 to the Joint Venture. All such funds shall be spent for the purposes set forth herein and no other.

(ii)Can-Cal hereby issues in Schwarz's name 500,000 Can-Cal common shares. Those shares shall be held in escrow by Can-Cal pending a determination by Can-Cal, in its sole discretion, whether precious metals exist on the Claims and whether it is economically feasible to produce them. Can-Cal shall make that determination no later than September 30, 1997 and shall notify Schwarz in writing within fourteen (14) days of its determination. In the event Can- Cal determines that the production of precious metals from the claims is not economically feasible, Can-Cal shall return those shares from escrow to Can- Cal and Schwarz shall have no claim or right to any of those shares. In the event Can-Cal determines that production of precious metals from the Claims is economically feasible, Can-Cal shall deliver the 500,000 shares to Schwarz. Schwarz represents that they are familiar with the business,

operations and financial condition of Can-Cal and have worked extensively with Can-Cal's management in connection with Can-Cal's other properties and are familiar with them and that they are acquiring those shares for investment purposes. Schwarz shall execute all documents required by law in connection with issuance of those shares, including, but not limited to, investment representations and stop transfer instructions. In addition to restrictions imposed by law restricting resale, Schwarz agrees that the shares shall be, in no event, salable by them earlier than in accordance with the following schedule:

May 5, 1998                  200,000 shares
November 5, 1998             100,000 shares
May 5, 1999                  100,000 shares
November 5, 1999             100,000 shares

Schwarz agrees not to sell any Can-Cal shares except in strict compliance with federal and state securities laws.

5.2 Additional Cash Advances. In addition, Can-Cal agrees to loan the joint venture $48,000, on the terms to be agreed upon, to be used for the purposes set forth herein. Can-Cal reserves the right to loan the Joint Venture additional funds, in its sole discretion, with the consent of the Management Committee.

5.3 Schwarz's Option to Repurchase Can-Cal's 50% Interest.. In the event Can-Cal determines by September 30, 1997 that production of precious metals from the Claims is not economically feasible, Schwarz shall have the option to purchase Can-Cal's 50% interest in the Claims by paying Can-Cal all funds paid by Can-Cal for its 501/6 interest plus all funds advanced by Can-Cal to the Joint Venture. Schwarz must exercise that option and make payment of the option price in full no later than December 31, 1998. If Schwarz does not exercise the option and pay the

option price in full by December 31, 1998, it shall have no further rights with respect to Can-Cal's 50% interest in the Claims.

5.4 Financing. After Can-Cal makes the balance of its Initial Contribution in accordance with Section 5. 1 (b) herein, and makes the determination that production of precious metals from the Claims is economically feasible, Schwarz and Can-Cal through the Management Committee hereby agree to use their best efforts to arrange with third-party lenders for working capital financing for the Joint Venture as required to finance a Program.

5.5 Cash Calls. In the event the Joint Venture is unable to obtain financing from third party lenders, the Management Committee shall make a determination of whether or not to make a cash call on the Venturers. In the event the Management Committee makes a cash call, the parties agree to contribute their portion of any such cash call to the Joint Venture that percentage of funds required equal to its Participating interest, as determined by the Management Committee.

6.1 Initial Participating Interests. The Venturers shall have the following initial Participating Interests subject to Can-Cal contributing the balance of its Initial Contribution in accordance with Section 5. 1 (b)(i) herein:

Schwarz 50% Can-Cal 50%

6.2 Changes in Participating Interests. A Venturer's Participating Interest may be changed as follows:

(a) As provided in Sections 10.2 and 10.3; or

(b) By transfer by a Venturer of less than all its Participating Interest in accordance with Article XII.

6.3 Elimination of Minority Interest. Upon the reduction of its Participating Interest to less than ten percent (10%), a Venturer shall be deemed to have withdrawn from this Agreement and shall relinquish its entire Participating Interest. Such relinquished Participating Interest shall be deemed to have accrued automatically to the other Venturer, who at its option, may cause the interest of the diluted Venturer's Participating Interest to be exchanged for a two percent (2 %) net profits interest of the Joint Venture. For purposes of this Section 6.3, net profits is defined as gross revenue less expenses, where expenses include but are not limited to mining, extraction, haulage, processing, milling, marketing, severance and ad valorem taxes, depreciation of Claims, plant and equipment and amortization of development and exploration, using unit of production method of accounting.

6.4 Continuing Liabilities Upon Adjustments of Participating Interests. Any reduction of a Venturer's Participating Interest Under Article X shall not relieve such Venturer of its share of any liabilities to third persons, whether it accrues before or after such reduction, arising out of Operations conducted prior to such reduction, or of its other obligations under this Agreement. For purposes of this Section, such Venturer's share of such liability shall be equal to its Participating Interest at the time such liability was incurred. The increased Participating Interest accruing to a Venturer as a result of the reduction of the other Venturer's Participating Interest shall be free of royalties, liens or other encumbrances arising by, through or under such other Venturer, other than those existing at the time the Claims were acquired or those to which both Venturers have given their written consent. An adjustment to a Participating Interest need not be evidenced during the term of this Agreement by the execution and recording of instruments, but each Venturer's Participating Interest shall be shown in the books of the Joint Venture. Either Venturer, at any time upon request of the other Venturer, shall execute and acknowledge instruments necessary to evidence such adjustment in form sufficient for recording in the jurisdiction where the Claims are located.

7.1 Organization and Composition. The Venturers hereby establish a Management Committee to determine overall policies, objectives, procedures, methods and actions under this Agreement. The Management Committee shall consist of two members, one member appointed by Schwarz and one member appointed by Can-Cal. Each Venturer may appoint one or more alternates to act in his or her absence as a regular member (including another member by proxy). Any alternate so acting shall be deemed a member. Appointments shall be made or changed by notice to the other Venturer. The initial members shall be Robin Schwarz (appointed by Schwarz) and Ronald Sloan (appointed by Can-Cal).

7.2 Decisions. Each Venturer, acting through its appointed members, shall have one vote on the Management Committee. Unless otherwise specifically provided in this Agreement, the vote of the Venturer with a Participating Interest over fifty percent (50%) shall determine the decisions of the Management Committee, It shall also supervise and control all aspects of the Joint Venture's business and operations including, but not limited to, exploration, a development, haulage, processing, milling and marketing of the ore on the Claims.

7.3 Meetings. The Management Committee shall hold regular meetings, at least quarterly, at 3651 Lindell, Suite A, Las Vegas, Nevada, or at any other mutually agreed upon place. The Secretary shall give five business days' notice to the Venturers of such regular meetings. The initial regular meeting shall be held on June 2, 1997. Additionally, either Venturer may call a special meeting upon five business days' notice to the other Venturer. In case of emergency, reasonable notice of a special meeting shall suffice. There shall be a quorum if at least one member representing a Venturer is present. Each notice of a meeting shall include an itemized agenda prepared by the Secretary in the case of a regular meeting, or by the Venturer calling the meeting in the case of a special meeting, but any matters may be considered with the consent of all Venturers. The Secretary shall prepare minutes of all meetings and shall distribute copies of such minutes of all meetings to the Venturers within 14 days after the meeting. The minutes, when signed

by all Venturers, shall be the official record of the decisions made by the Management Committee and shall be binding on the Venturers. If personnel employed in Operations are required to attend a Management Committee meeting, reasonable out-of-pocket costs incurred in connection with such attendance shall be an expense chargeable to the Joint Venture. All other expenses shall be paid for by the Venturers individually.

7.4 Action Without Meeting. In lieu of participation at meetings in person, any member of the Management Committee may participate by telephone. All decisions made at such telephonic conferences will be immediately confirmed in writing by the Venturers.

7.5 Matters Requiring Approval. The Management Committee shall have exclusive authority to determine all management matters related to this Agreement.

7.6 Appointment of Secretary. The Venturers may appoint a Secretary to keep the books and records of the Joint Venture, give notices and perform such other duties as the Management Committee may delegate.

7.7 Transactions with Affiliates. If the Joint Venture engages Affiliates of either Venturer to provide services hereunder, it shall do so on terms no less favorable to the Joint Venture than would be the case with unrelated persons in arm's-length transactions.

8.1 Initial Program. The initial Program shall be adopted by the Venturers within thirty (30) days of the date that Can-Cal makes its determination pursuant to paragraph 5.1(b)(ii).

8.2 Operations Pursuant to Programs. Operations shall be conducted, expenses shall be incurred, and Assets shall be acquired only pursuant to approved Programs.

8.3 Election to Venturers. Within five (5) days after the final vote adopting a Program or such later date specified by the Management Committee, the Venturers shall contribute to the Joint Venture amounts necessary, over and above that which has been financed with the approval of the Management Committee, to implement such Program in proportion to its respective Participating Interest as of the beginning of the period covered thereby.

8.4 Deadlock on Proposed Programs. If the Venturers, acting through the Management Committee, fail to approve a Program by the beginning of the period to which the proposed Program applies, or fail to present Program, a Program comparable to the last adopted Program shall automatically be adopted.

9.1 Distributions. Joint Venture cash, after due allowance for the cash necessary for the operation of the Joint Venture business and requirements of any agreements relating to indebtedness of the Joint Venture, shall be allocated and distributed to the Venturers in accordance with their respective Participating Interests, subject to the provisions set forth in Article X, in aggregate amounts and at times determined by the Management Committee. Any disproportionate distributions due to differing tax liabilities between the Venturers shall be taken into account in future distributions, subject to other provisions of this Article and Article X, in order to have aggregate distributions to the Venturers in accordance with their respective Joint Venture Interests. In making determinations regarding distributions, and subject to the provisions of this Section, the Management Committee shall act consistently with the principle that available cash should not be distributed to Venturers in any year until annual operating costs and expenses for that year have been paid or reserved against and only after an annual audit has been prepared of the financial statements of the Joint Venture for that year. All funds in excess of immediate cash requirements shall be invested in interest-bearing accounts for the benefit of the Joint Account.

10.1 Dissolution. The Joint Venture shall dissolve upon, but not before, the first occur of:

(a) the expiration of the term of the Joint Venture;

(b) the sale, transfer, condemnation or destruction of all or substantially all of the Claims, except for a sale or transfer in connection with a sale-leaseback financing transaction or in which the Joint Venture acquires a purchase money mortgage;

(c) the unanimous written consent of the Venturers;

(d) an election pursuant to Section 10.2(b) hereof to dissolve. Except as provided herein, no Venturer shall have the right to terminate or dissolve the Joint Venture.

10.2 Events of Default.

(a) If any of the following events occur:

(i) the entry of a decree or order by a court having jurisdiction in the premises adjudging a Venturer a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of a Venturer or any of its Parents under any bankruptcy, insolvency, or other similar state or federal law; or appointing a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Venturer or any of its Parents or of any substantial part of the Claims of a Venturer or any of its Parents, or ordering the winding up or liquidation of the affairs of a Venturer or any of its Parents,

and the continuance of any such decree or order remains unstayed and in effect for a period of ninety (90) consecutive days; or

(ii) the institution by a Venturer or its Parent of bankruptcy proceedings or other proceedings to be adjudicated as bankrupt or insolvent, or the consent by a Venturer or its Parent to the institution of bankruptcy or insolvency proceedings against a Venturer or its Parent, or the filing of a petition or answer of consent by a Venturer or its Parent seeking reorganization or relief under any bankruptcy, insolvency, or other similar state or federal law, or the consent by a Venturer or its Parent to the filing of such petition or to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or similar official) of the Venturer or its Parent or of any substantial part of the Claims of a Venturer or its Parent, or the making by a Venturer or its Parent or an assignment for the benefit of creditors, or the admission by a Venturer or its parent in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by a Venturer or its Parent in furtherance of any such action; or

(iii) any part of the Participating Interest of a Venturer is seized by a creditor of such Venturer, and the same is not released from seizure or bonded out within sixty (60) days from the date of notice of seizure; or

(iv) Can-Cal fails to make the balance of its Initial Contribution or a Venturer fails to advance funds as required by Section 5.2, or any other provisions of this Agreement, or to perform any other material obligation imposed upon such Venturers under any agreement relating to borrowed money of the Joint Venture or of such Venturer; or

(v) a Venturer fails to perform any of its obligations under this Agreement or has breached any of the terms, conditions, representations, warranties or covenants of this Agreement and any such failure or breach has continued for more than thirty (30) days after written notice by Non-Defaulting Venturer to the Venturer so failing to perform any of the obligations, terms, conditions or covenants hereinabove cited, or which has breached, this Agreement; then such

Venturer shall be deemed to be in default hereunder and shall be referred to as the Defaulting Venturer, and the other Venturer shall be referred to as the Non-Defaulting Venturer.

Any Non-Defaulting Venturer shall have the right to give the Defaulting Venturer a Notice of Default ("Notice") which shall be in writing, shall set forth the nature of the Default and, if, applicable, the obligations that the Defaulting Venturer has not performed, or is in breach of, and shall set forth the date by which such Default must be cured, which date shall be ten
(10) days after receipt of the Notice if payment or money is required, or thirty
(30) days after receipt of the Notice for events other than defaults in the payment of money; provided, however, that in the event of a nonmonetary default if, within the thirty (30) day period following receipt of the Notice, the Venturer in good faith commences to perform such obligation and cure such Default and thereafter prosecutes to completion with diligence and continuity the curing thereof and cures such default within a reasonable time, not to exceed an additional sixty (60) days, then no Default shall have occurred and the Venturer shall lose no rights hereunder, or such shorter period as may be necessary in the good faith judgment of such Non-Defaulting Venturer to prevent a default under any agreement for borrowed money to which the Joint Venture is a party or to avoid jeopardizing its investment in the Joint Venture. If, within the period specified in the Notice, the Defaulting Venturer cures such Default, the Notice shall be inoperative and the Defaulting Venturer shall lose no rights hereunder. If, within such specified period, the Defaulting Venturer does not cure such Default, any Non-Defaulting Venturer at the expiration of such period, shall have the rights hereinafter specified.

(b) Upon the occurrence and during the continuance of a Default and the expiration of any applicable grace period, the Non-Defaulting Venturer shall have the option, in its sole discretion, to:

(i) dissolve the Joint Venture; or

(ii) expel the Defaulting Venturer and purchase on a date specified by such Non-Defaulting Venturer in a written notice, which date shall be not more than one hundred

twenty (120) days from the date of such notice, all of the Defaulting Venturer's Participating Interest at a price which for such purposes shall be equal in amount to the Defaulting Venturer's Participating Interest in the lesser of (A) the fair market value of the Joint Venture on the date of such purchase, as determined by an independent recognized expert selected by the Non-Defaulting Venturer, or (B) the net book value of the Joint Venture, as determined by generally accepted accounting principles as consistently applied by the Joint Venture (excluding goodwill and any capital resulting from write-up of assets) as shown on the Joint Venture books as of the date hereof but after deducting any amounts payable to the Joint Venture by the Defaulting Venturer as of the date of purchase;, any costs of remedying the Default and any damages or costs to the Joint Venture or Non-Defaulting Venturer resulting from the Default. Payment to the Defaulting Venturer may take the form of a ten (10) year note with interest at the floating "Prime Rate" announced from time to time by The Chase Manhattan Bank as in effect (the Prime Rate) and providing for ten (10) equal principal payments on the first ten (10) anniversaries of the making of such note, annual payment of interest in arrears, and a right to prepay all of part of the note without penalty. In the event the Joint Venture suffers liability in respect of a period prior to the expulsion of the Defaulting Joint Venture which liability had not been accrued on the books of the Joint Venture on the date the purchase price of the Defaulting Venturer's interest was determined, the payment provided for above shall be reduced by an amount equal to the Defaulting Venturer's Participating Interest in such liability; or

(iii) cure the Default, and the cost of such curing shall be charged against the Defaulting Venturer's Capital Account and credited to the Non-Defaulting Venturer's Capital Account, and the Participating Interest of the Defaulting Venturer shall be decreased, and the Participating Interest of the Non-Defaulting Venturer shall be increased in proportion to the foregoing adjustments to the capital accounts; or

(iv) in the case of a breach of a Venturer's obligation under Sections 5.1(b) or 5.2, exercise the remedies set forth in Section 10. 3.

None of the foregoing options shall relieve the Defaulting Venturer of its share of liabilities to third persons (whether such accrues before or after such Default) arising out of Operations conducted prior to such Default. For purposes of this Section, the Defaulting Venturer's share of such liabilities shall be equal to its Participating Interest immediately prior to Default.

10.3 Default in Making Contributions.

(a) If a Venturer Defaults in making a contribution or cash call required pursuant to Sections 5.1(b) or 5.2, the Non-Defaulting Venturer may advance the defaulted contribution on behalf of the Defaulting Venturer. The Non-Defaulting Venturer may at its election treat such advance, together with accrued interest, as a demand loan to the Defaulting Venturer bearing interest from the date of the advance at the rate provided in Section 10.2(b)(ii). The failure to repay said loan within thirty (30) days of notice of demand shall be an event of Default pursuant to Article X. Each Venturer hereby grants to the other a security interest in its rights under this Agreement and in its Participating Interest in the Assets, and the proceeds therefrom, to secure any loan made hereunder, including the interest thereon, reasonable attorney's fees and all other reasonable costs and expenses incurred in enforcing such lien or security interest, or both. Each Venturer hereby irrevocably appoints the other its attorney-in-fact to execute, file and record all instruments necessary to perfect or effectuate the provisions hereof. No later than the end of the fiscal year in which such advance was made the Non-Defaulting Venturer shall be entitled to receive the amount of such advance plus interest from the Defaulting Venturer. At its election, the Non-Defaulting Venturer may, in lieu of receiving repayment of the advance plus interest from the Defaulting Venturer, instruct the Joint Venture to make a preferential cash distribution equal to the amount of such advance plus a 10% rate of return. No distributions (other than amounts required to pay income taxes on Joint Venture income if any cash is available) shall be made to a Defaulting Venturer until such advance has been repaid. In addition, the amount of such advance, plus interest thereon, shall be credited to the Non-Defaulting Venturer's Capital Account. Upon return of such advance, the amount of such repaid advance, plus interest or other return, shall be deducted from the Non- Defaulting Venturer's Capital Account.

(b) The Venturers acknowledge that if a Venturer Defaults in making a contribution, or a cash call, or in repaying a loan, as required hereunder, it will be difficult to measure the damages resulting from such Default whether or not a Non-Defaulting Venturer makes an advance under Section 10.3(a). In the event of such Default and in addition to, and not in lieu of, provisions of
Section 10.3(a), as reasonable liquidated damages, the Non-Defaulting Venturer shall be entitled to receive a preferential cash distribution, in addition to any distribution made under Section 9. 1, equal to the Adjusted Percent of the Joint Venture's Net Proceeds for that year (which distribution shall be paid out of the Defaulting Venturer's share of Joint Venture Net Proceeds) and each additional year for which the advance referred to in Section 10.3(a) is outstanding. Any such distribution shall be made at the end of the fiscal year in which any such advance has been outstanding. For purposes of this Section, the "Adjusted Percent" means a percentage equal to the excess of (a) the quotient calculated by dividing (i) the sum of (x) the value of the Non-Defaulting Venturer' s initial contribution under Section 5.1, and (y) the total of all of the Non-Defaulting Venturer's contributions under Sections 5.2
(including amounts advanced pursuant to Section 10.3(4);) by (ii) the sum of (x) and (y) above for all Venturers (with amounts advanced by a Venturer; pursuant to Section 10.3 (a) being treated as a contribution of such Venturer); and then multiplied the result by one hundred, over (b) fifty (50); provided, however, that in no event shall the Adjusted Percent exceed ten (10). Such distribution shall not be deemed a repayment of the advance under Section 10.3(a).

10.4. Continuing Obligations. On dissolution of this Agreement under
Section 10.1, the Venturers shall remain liable for continuing obligations hereunder until final settlement of all accounts and for any liability, whether it accrues before or after termination, if it arises out of Operations during the term of the Agreement.

10.5 Disposition of Assets on Termination.

(a) Upon the dissolution of the Joint Venture pursuant to Section 10.1 the liquidating trustee shall take all action necessary to wind up the activities of the Joint Venture, and

all costs and expenses incurred in connection with the termination of the Joint Venture shall be expenses chargeable to the Joint Venture. Any Venturer that has a negative Capital Account balance when the Joint Venture is terminated shall contribute to the Assets of the Joint Venture an amount sufficient to raise such balance to zero. The Assets shall first be paid, applied, or distributed in the following order of priority to the extent available:

(i) first, to the payment of any debts and liabilities of the Joint Venture to persons who are not Venturers which shall then be due and payable (other than liabilities expressly assumed by one of the Venturers pursuant hereto);

(ii) second, to the Venturers pro-rata until each shall have received the outstanding principal of, and accrued and unpaid interest on, any loans made to the Joint Venture;

(iii) third, to the establishment of any reserve which the Management Committee or liquidating trustee deems necessary in its sold discretion to provide for any contingent or unforeseen liabilities or obligations of the Joint Venture (other than liabilities expressly assumed by one of the Venturer's pursuant hereto). (At the expiration of such period of time as the Management Committee or liquidating trustee deems advisable, the balance remaining in any such reserve after payment of any such liabilities and obligations shall be distributed in the manner hereinafter set forth in this Section;

(iv) fourth, to the Venturers pro rata until each shall have received all accrued and unpaid interest on any additional capital contributions to the Joint Venture made pursuant to Section 10.3(b) hereof;

(v) fifth, to the Venturers in an amount equal to the positive balances in their respective Capital Accounts on the date of distribution; provide, however, that in the event there shall be insufficient funds to repay in full such Capital Accounts, payment shall be made to Venturers with the greatest balances in their capital accounts until capital accounts are all in the same ratio as their respective Participating Interests; and

(vi) the balance, if any, shall be distributed to the Venturers in accordance with their respective Participating Interests in the Joint Venture.

(b) No right, power or remedy conferred upon the Venturers or the Joint Venture with respect to any Defaulting Partner under this Article shall be inclusive, and each such Venturer under this Article shall be exclusive, and each such right, power or remedy shall be cumulative and in addition to every other right, power or remedy whether conferred by this Agreement or hereafter available at law or equity or by statute or otherwise. No course of dealing between the Venturers and any Defaulting Venturer and no delay in exercising any right, power or remedy conferred in this Article or now or hereafter available at law or in equity or by statute or otherwise, shall operate as a waiver or otherwise prejudice any such right, power or remedy.

(c) No Venturer shall be entitled to withdraw any part of its capital contributions to the Joint Venture, or to receive any distribution from the Joint Venture, except as expressly provided in this Agreement.

10.6 Withdrawal. At any time after the third anniversary of the date of this Agreement, a Venturer may elect to withdraw by giving written notice to the other Venturer of the effective date of withdrawal, which shall be the later of the end of the then current Program or at least thirty (30) days after the date of the notice. Upon receipt of such notice the other Venturer may elect at any time to either (a) dissolve the Joint Venture; or (b) purchase, on a date specified by the non- withdrawing Venturer, all of the withdrawing Venturer's Participating Interest at a price which for such purposes be equal in amount to the withdrawing Venturer's Participating Interest in the lesser of (x) the fair market value of the Joint Venture, as determined by an independent recognized expert selected by the non-withdrawing Venturer, or (y) the net book value of the Joint Venture, as determined by generally accepted accounting principles as consistently applied by the Joint Venture (excluding goodwill and any capital resulting from write-up of assets) as shown on the Joint Venture books as of the date hereof but after deducting any amounts payable as of the date of withdrawal to the Joint Venture by the withdrawing Venturer.

10.7 Non-Compete Covenants. A withdrawing Venturer shall not directly or indirectly acquire any interest in Claims within the Area of Interest for twelve
(12) months after the date of withdrawal. If a withdrawing Venturer, or the Affiliate of a withdrawing Venturer, breaches this Section, such Venturer or Affiliate shall be obligated to offer to convey to the non-withdrawing Venturer, without cost, any such Claims or interest acquired in such breach. Such offer shall be made in writing and can be accepted by the non-withdrawing Venturer at any time within fortyfive (45) days after it is received by such non-withdrawing Venturer.

11.1 General. Any interest or option to acquire any interest in real property, including mining claims, within the Area of Interest owned on the date hereof or acquired thereafter during the term of this Agreement by or on behalf of a Venturer or any Affiliate shall, except as provided in this Article, be included in the Claims and shall be subject to the terms and provisions of this Agreement.

11.2 Notice to Nonacquiring Venturer. Within sixty (60) days after the acquisition of any interest or the option to acquire any interest in real Claims wholly or partially within the Area of Interest, the acquiring Venturer shall notify the other Venturer of such acquisition. The acquiring Venturer's notice shall describe in detail the acquisition, the lands and minerals covered thereby, the cost thereof, and the reasons why the acquiring Venturer believes that the acquisition of the interest is in the best interests of the Venturers under this Agreement. In addition to such notice, the acquiring Venturer shall make any and all information concerning the acquired interest available for inspection by the other Venturer.

11.3 Option Exercised. If, within thirty (30) days after receiving the acquired Venturer's notice, the other Venturer notifies the acquiring Venturer of its election to accept a proportionate interest in the acquired interest equal to its Participating Interest, the acquiring Venturer shall convey to the other Venturer, by special warranty deed, such a proportionate undivided interest

therein. The acquired interest shall become a part of the Claims for all purposes of this Agreement immediately upon the notice of such other Venturer's election to accept the proportionate interest therein. Such other Venturer shall promptly pay to the acquiring Venturer its proportionate share of the latter's actual out-of-pocket acquisition costs.

11.4 Option Not Exercised. If the other Venturer does not give such notice within the thirty (30) day period set forth above, it shall have no interest in the acquired interest, and the acquired interest shall not be a part of the Claims or be subject to this Agreement.

12.1 General. A Venturer shall have the right to transfer, grant, assign, encumber, pledge or otherwise commit or dispose of ("transfer") to any third party all of any part of its interests in or to this Agreement, its Participating Interest, or the Assets solely as provided in this Article.

12.2 Limitations on Free Transferability. The transfer right of a Venturer in Section 12.1 shall be subject to the following terms and conditions:

(a) No transferee of all or part of the interests of a Venturer in this Agreement, any Participating Interest, or the Assets shall have the rights of a Venturer unless and until the transferring Venturer has provided to the other Venturer notice of the transfer, and the transferee, as of the effective date of the transfer, has committed in writing to be bound by this Agreement to the same extent and nature as the transferring Venturer; and, except as provided in Sections 12.2(g) and 12.2(h), the transfer, as of the effective date of the transfer, has committed in writing to be bound by this Agreement to the same extent and nature as the transferring Venturer.

(b) No Venturer, without the consent of the other Venturer, shall make a transfer which shall cause termination of the tax partnership established by the provisions of Section 4.2;

(c) No transfer permitted by this Article shall relieve the transferring Venturer of its share of any liability, whether accruing before or after such transfer, which arises out of Operations conducted prior to such transfer;

(d) The transferring Venturer and the transferee shall bear all tax consequences of the transfer;

(e) In the event of a transfer of less than all of a Participating Interest, the transferring Venturer and its transferee shall act and be treated as one Venturer;

(f) No Venturer shall transfer any interest in this Agreement or the Assets except by transfer of part or all of its participating Interest;

(g) If the transfer is the grant of a security interest by mortgage, deed of trust, pledge, lien or other encumbrance of any interest in this Agreement, any Participating Interest or the Assets to secure a loan or other indebtedness of a Venturer in a bona fide transaction, such security interest shall be subordinate to the terms of this Agreement and the rights and interests of the other Venturer hereunder. Upon any foreclosure or other enforcement of rights in the security interest, the acquiring third party shall be deemed to have assumed the position of the encumbering Venturer with respect to this Agreement and the other Venturer, and it shall comply with the terms and conditions of Article XIII;

(h) If a sale or other commitment or disposition of Products or proceeds from the sale of Products by a Venturer upon distribution to it pursuant to
Section 9.1 creates in a third party a security interest in Products or proceeds therefrom prior to such distribution, such sales, commitment or disposition shall be subject to the terms and conditions of this Article;

(i) If, contrary to Section 12.2(b), a transfer is made which causes termination of the tax partnership established by Section 4.2, the transferring Venturer shall indemnify, defend and hold

harmless the other Venturer from and against any and all loss, cost, expense or damage arising from such termination;

(j) Such transfer shall be subject to a preemptive right in the other Venturer as provided in Section 12.3; and

(k) No transfer may be made without the consent of the other Venturer.

12.3 Preemptive Right. Except as otherwise provided in Section 12.4, if a Venturer desires to transfer all or any part of its interest in this Agreement, and Participating Interest, or the Assets, the other Venturer shall have a preemptive right to acquire such interests as provided in this Section on substantially the same terms and conditions as agreed to by any proposed transferee.

12.4 Exceptions to Preemptive Right and Transfer Restrictions. Sections 12.3 and 12.2(k) shall not apply to the following transfers:

(a) (i) Incorporation of a Venturer, or corporate merger, consolidation, amalgamation or reorganization of a Venturer by which the surviving entity shall possess substantially all of the stock, or all of the Claims rights and interests, and be subject to substantially all of the liabilities and obligations of that Venturer or (ii) transfer to an Affiliate, provided that consent is obtained, which consent shall not be unreasonably withheld; and

(b) The grant by a Venturer of a security interest in any interest in this Agreement, any Participating Interest, or the Assets by mortgage, deed of trust, pledge, lien or other encumbrances with the written consent of the Management Committee.

13.1 Notices. All notices, payments and other required communications ("Notices") to the Venturers or the Management Committee members shall be in writing and shall be given (i) by personal delivery to the Venturer, or (ii) by electronic communication, with a confirmation sent by registered or certified mail return receipt requested, or (iii) by registered or certified mail return receipt requested. Notices shall be addressed as follows:

If to Schwarz (or its member representatives on the Management Committee):

Robin Schwarz

16008 Ash Street
Hesperia, CA 92345

If to Can-Cal (or its member representatives on the Management Committee):

Ronald Sloan
110 - 5769 201 A Street Langley, B.C., Canada V3A 8H9

All notices shall be effective if sent to the address specified above and shall be deemed delivered (i) if by personal delivery on the date of delivery, (ii) if by electronic communication on the next business day following receipt of the electronic communication, and (iii) if solely by mail on the next business day after actual receipt. A Venturer may change its address from time to time for the purposes hereof by written notice to the other Venturer.

13.2 Waiver. The failure of a Venturer to insist on the strict performance of any provision of this Agreement or to exercise any right, power or remedy upon a breach hereof shall not constitute a waiver of any provision of this Agreement or limit the Venturer's right thereafter to enforce any provision or exercise right.

13.3 Modification. No modification or amendment of this Agreement shall be valid unless made in writing and duly executed by the Venturers.

13.4 Force Majeure. The obligations of a Venturer shall be suspended to the extent and for the period that performance is prevented by any cause, whether foreseeable or unforeseeable, beyond its reasonable contract, including, without limitation, labor disputes (however arising and whether or not employee demands are reasonable or within the power of the Venturer to grant); acts of God; laws, regulations, orders, proclamations, instructions or requests of any government or governmental entity; judgments or orders of any court; inability to obtain on reasonably acceptable terms any public or private license, permit or other authorization; curtailment or suspension of activities to remedy or avoid an actual or alleged, present or prospective violation of federal, state or local environmental standards; acts of war or conditions arising out of or attributable to war, whether declared or undeclared; riot, civil strife, insurrection or rebellion; fire, explosion, earthquake, storm, flood, sink holes, drought or other adverse weather condition; delay or failure by suppliers or transporters of materials, parts, supplies, services or equipment or by contractors' or subcontractors' shortage of, or inability to obtain, labor, transportation, materials, machinery, equipment, supplies, utilities or services; accidents; breakdown of equipment, machinery or facilities; or any other cause whether similar or dissimilar to the foregoing. The affected Venturer shall promptly give notice to the other Venturer of the suspension of performance, stating therein the nature of the suspension, the reasons therefor, and the expected duration thereof. The affected Venturer shall resume performance as soon as reasonably possible.

13.5 Governing Law. Except as otherwise specifically provided in Article XIV, this Agreement shall be governed by and interpreted in accordance with the internal laws but not the laws of conflict of the State of Nevada.

13.6 Rule Against Perpetuities. Any right or option to acquire any interest in real or personal Claims under this Agreement must be exercised, if at all, so as to vest such interest in the acquirer within twenty-one (21) years after the effective date of this Agreement.

13.7 Further Assurance. Each of the Venturers agrees that it shall take from time to time such actions and execute such additional instruments as may be reasonably necessary or convenient to implement and carry out the intent and purpose of this Agreement.

13.8 Survival of Terms and Conditions. The following Sections shall survive the termination of this Agreement to the full extent necessary for their enforcement and the protection of the Venturers in whose favor they run:
Sections 4.1(b), 6.4, 10.3, 10.4, 10.5 and 10.6.

13.9 Entire Agreement; Successors and Assigns. This Agreement contains the entire understanding of the Venturers and supersedes all prior agreements and understandings between the Venturers relating to the subject matter hereof. This Agreement shall be binding upon and inure to the benefit of the respective successors and permitted assigns of the Venturers.

13.10 Validity and Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under the present or future laws effective during the term of this Agreement, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part of this Agreement; and the remaining provisions of this Agreement shall remain in full force and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid, or unenforceable provision, there shall be added automatically as a part of this Agreement a provision similar in terms to such illegal, invalid or unenforceable provision.

13.11 Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

14.1 Subject of Arbitration. In the event of disagreement between the Venturers with respect to any question of fact involved in the application of this Agreement or of any action of the Management Committee, or the interpretation of any provision of this Agreement or any action of the Management Committee (whether legal or factual), the matter involved in the disagreement shall, upon demand of any Venturer, be submitted to arbitration in the manner hereinafter provided. Submission of a matter to arbitration, as hereinafter provided, shall be a condition precedent to any right to institute proceedings at law or in equity concerning such matter, except for injunctive or other provisions relief pending the arbitration of a matter subject to arbitration pursuant to this Agreement.

14.2 Agreement to Arbitrate. The Venturers will make every responsible effort to resolve disputes, claims and controversies through decisions of the Management Committee prior to any such dispute, claim or controversy reaching a state that required implementation of this Article for resolution. However, should any controversy arise between or among the Venturers as to which the Venturers are unable to effect a satisfactory resolution and which, under the terms and provisions of this Agreement may be submitted to arbitration, such controversy shall be submitted to arbitration in accordance with the terms and provisions of this Article, and in accordance with the rules of the American Arbitration Association (or any successor organization).

14.3 Submission to Arbitration and Selection of Arbitrators. A Venturer desiring to submit to arbitration any such controversy shall furnish its demand for arbitration in writing to the other Venturer, which demand shall contain a brief statement of the matter if controversy, as well as a list containing the names of three (3) suggested arbitrators from which list, or from other sources, all of the Venturers shall choose one (1) mutually acceptable arbitrator. If the Venturers are unable to agree upon the identity of a single arbitrator, within ten (10) days from receipt of such demand, each Venturer, within a period of five (5) additional days, shall name one (1) arbitrator by

written notice to the other Venturer. Within ten (10) days after this notice, the two (2) arbitrators so named shall choose a third arbitrator. If any Venturer fails to name an arbitrator within the specified five (5) day period or if the two arbitrators chosen by the Venturers fail to select a third arbitrator within the ten (10) days period, then either Venturer, on behalf of and on notice to the other Venturer, may request appointment by the American Arbitration Association (or any organization successor thereto) in accordance with its rules then prevailing of the required additional arbitrators. If the American Arbitration Association (or such organization successor thereto) should fail to appoint the necessary arbitrator(s) within fifteen (15) days after such request is made, then either Venturer may apply, on notice to the other Venturer, to a court in Nevada for the appointment of such necessary additional arbitrators. Each of the arbitrator(s) chosen or appointed pursuant to this
Section shall be a person having at least ten (10) years experience in the United States in a profession or professions related to the subject matter involved in the dispute and shall not be a past or present officer, director or employee of, or have any material interest in, any Venturer or its Affiliate.

14.4 Arbitration Procedure. Each Venturer shall furnish the arbitrator or arbitrators and all other Venturers with a written statement of matters it deems to be in controversy for purposes of the arbitration procedures. Such statement shall also include all arguments, contentions and authorities which it contends substantiate its position. Hearings may be scheduled by the arbitrator or arbitrators, provided that if any such hearings are to be held, they shall be scheduled no later than ten (10) days following the appointment of such arbitrator or arbitrators. If only one (1) arbitrator is appointed pursuant to
Section 14.3 hereof, such arbitrator shall render his decision and award as soon as possible but no later than thirty (30) days after the conclusion of any hearings before such arbitrators. Any such hearings shall be held in Las Vegas, Nevada or such other location as the parties may agree upon. If, however, three
(3) arbitrators are appointed, they shall render their decision and award upon the concurrence of at least two (2) of their number, as soon as possible but not later than thirty (30) days after the conclusion of any hearings before such arbitrators. The decision and award shall in either case be in writing and counterpart copies thereof shall be delivered to each of the Venturers. Such decision shall be based solely upon the written arguments

and contentions coupled in appropriate cases with evidence and/or legal authorities, submitted by each Venturer. Except with the consent of each Venturer, the arbitrator shall not retain or consult any experts in arriving at the decision. In rendering such decision and award, the arbitrator(s) shall not add to, subtract from or otherwise modify the provisions of this Agreement. Each Venturer agrees that judicial judgment may be held on the decision and award of the arbitrator(s) so rendered and may be enforced in accordance with the laws of the State of Nevada.

14.5 Successor Arbitrators. Notwithstanding the above, in the event any arbitrator appointed by a Venturer dies, refuses to act, or becomes incapable of acting, then such Venturer shall appoint a successor arbitrator within five (5) days of notice of said disability. In the event such Venturer fails to appoint the required successor within such time, the other Venturer, on notice, may apply to a court in Nevada for the appointment of such necessary arbitrator. If a third arbitrator dies, refuses to act, or become incapable of acting, then a successor arbitrator shall be chosen pursuant to Section 14.3 hereof.

14.6 Cost of Arbitration. Each Venturer shall bear the expense of the arbitrator appointed by or for such Venturer, its own counsel, experts and presentation of proof. The Venturers shall share equally the expense of the additional arbitrators (or the expense of the single arbitrator if only one (1) arbitrator is appointed), and all other expenses of the arbitration.

14.7 Submission to Jurisdiction. Schwarz and Can-Cal hereby irrevocably submit to the non-exclusive jurisdiction of the courts of the State of Nevada and/or the federal courts in the District of Nevada, over any suit, action or proceeding to enforce an arbitration award (each a "Proceeding"). Each Venturer irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such Proceeding brought in any such court and any claim that any such Proceeding brought in such court has been brought in an inconvenient forum. Each Venturer agrees that a final judgment in any such Proceeding brought in such a court shall be conclusive and binding upon it. Each Venturer agrees not to commence any Proceeding in any jurisdiction other than Nevada.

14.8 Choice of Forum. Schwarz and Can-Cal hereby agree that the choice of judicial forum for all matters affecting this Agreement shall be the state or federal courts located in the State of Nevada, except to enforce an arbitration award in such circumstances as the court in Nevada may not have subject matter jurisdiction to enforce the award. Each Venturer irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any such matter brought in any such court and any claim that any such matter brought in such court has been brought in an inconvenient forum. Nothing in this Section shall be deemed to contravene
Section 14. 1.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

     /s/   Robin Schwarz
-----------------------------------------
 Robin Schwarz

     /s/    Aylward Schwarz
-----------------------------------------
Aylward Schwarz

S & S MINING

By:   /s/   Robin Schwarz
    --------------------------------------

CAN-CAL RESOURCES, LTD

By:   /s/   R. D. Sloan
    --------------------------------------
      Ronald Sloan, President

County Document #             Name of Claim                          CAMC
-----------------             -------------                          ----
19960300074                   Aylward 1                            104432
19960300074                   Aylward 2                            104433
19960300074                   Aylward 3                            104434
19960300074                   Lori Lee                             104438
19960300074                   Ruth 1                               133937
19960300074                   Ruth 2                               133938
19960300074                   Ruth 3                               133939
19960300074                   Mill Site                            171940

19960457449                   S&S Mining Placer #1                 271288
19960457450                   S&S Mining Placer #2                 271289
19960457451                   S&S Mining Placer #3                 271290
19960457452                   S&S Mining Placer #4                 271291
19960457453                   S&S Mining Placer #5                 271292

19970136121                   S&S Mining, Inc. Placer #9           271524
19970136122                   S&S Mining, Inc. Placer #10          271525

EXHIBIT 10.1

MINING LEASE AGREEMENT

THIS MINING LEASE AGREEMENT ("Lease") is made and entered into this 1 day of May , 1998 (the "Effective Date"), by and between CAN-CAL RESOURCES, LTD., a Nevada
corporation ("Lessor") and TWIN MOUNTAIN ROCK VENTURE, a California general partnership ("Lessee").

PRELIMINARY STATEMENT. Lessor is the owner of certain real property and all mineral rights with respect thereto located in San Bernardino County, California. Lessee desires to lease such real property from the Lessor together with the appurtenances, rights, interest, easements and privileges pertaining thereto for such purposes and upon such terms and conditions as specified in this Lease.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, and such other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

1. Grant. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, that certain real property situated in San Bernardino County, California, as more specifically described on Exhibit A attached hereto, together with all appurtenances, easements and privileges pertaining thereto (the "Leased Premises"), solely for the purpose of removing volcanic cinders ("Material") and certain rights associated thereto, in accordance with the terms of, and as specified, in this Lease.

2. Amount of Material . Lessor represents and warrants that it will make available to Lessee 600,000 tons of Finished Material during the Initial Term (the "Initial Amount"). Lessor further represents and warrants that it will make available to Lessee 600,000 tons of Finished Material during the Additional Term (the "Additional Amount"). For purposes hereof, "Finished Material" shall mean Material sold, available for sale, or used in block material by or on behalf of Lessee.

3. Use. Lessee shall designate the Portion of the Leased Premises from which it desires to remove Material (the "Designated Portion"), which shall be reasonably calculated to enable Lessee to process the Initial Amount and the Additional Amount. Lessee shall have the use of and right and easement to the Leased Premises for the purpose of mining and removing Material from the Designated Portion. Lessee's rights hereunder shall be exclusive except to the extent of Lessor's rights reserved in Paragraph 9 hereof in connection with Lessee's rights granted herein, Lessee shall have and may exercise the following rights: (a) the right to enter into possession of the Leased Premises, and during the term of this Lease, to remain in possession thereof; (b) the right to use the Leased Premises, including the right to disturb so much of the Leased Premises as Lessee may require to conduct its operation on the Leased Premises and the use of any surface or underground

water or water rights occurring therein or appurtenant to the Leased Premises;
(c) the right to mine, extract, and remove from the Designated Portion the Material in any manner deemed necessary or convenient by Lessee, whether by surface or other mining methods; (d) the right to crush, stockpile, store, bag, and otherwise prepare for market all Material; (e) the right to construct, use, and operate on the Leased Premises structures, excavations, roads, equipment, and other improvements and facilities necessary for Lessee for full use and enjoyment of the Leased Premises; (f) rights of surface access for persons, equipment, supplies, utilities, and water as may be necessary or convenient for the conduct of Lessee's operations, including reasonable access under, upon, and across any other intervening or contiguous land owned or controlled by Lessor or over which Lessor may have dominion or control; (g) the right to temporarily store on or in the Leased Premises those minerals, water, byproduct, or materials produced from the Leased Premises; and (h) all things which in Lessee's judgment with the consent of Lessor (which shall not be unreasonably withheld) are reasonably necessary or incidental to such operations. Lessee's use of and rights to Leased Premises shall not include the right to remove or extract precious metals.

4. Commencement of Operations; Removal of Material. Lessee shall give Lessor three (3) months written notice prior to the commencement of operations on the Leased Premises. Such notice shall state the amount of Material anticipated to be removed, the period of time during which it is anticipated such removal will occur and the means that will be utilized to effect such removal. Lessor shall make all arrangements necessary to permit Lessee to remove the Material.

5. Term and Duration. (a) The initial term of this Lease (the "Initial Term") shall be the period commencing on the Effective Date and terminating on the earlier of: (i) ten (10) years from the Effective Date or (ii) the date upon which Lessee exhausts the Initial Amount.

(b) If Lessee is not then in default under this Lease, Lessee shall have the option to extend the Initial Term of this Lease for one (1) additional period commencing on the date of expiration of the Initial Term and terminating on the earlier of: (i) ten (10) years from the date of expiration of the Initial Term or (ii) the date upon which Lessee has exhausted the Additional Amount (the "Additional Term"), upon all of the terms and conditions of this Lease. Lessee may exercise such option by giving written notice to Lessor prior to the expiration of the Initial Term. If Lessee is entitled to and does exercise such option, then this Lease automatically shall be extended for the Additional Term and no further documentation shall be required.

(c) Lessee shall have a period of three (3) months from the expiration of the term of this Lease to remove all of its personal property and equipment from the Leased Premises and to comply with the terms of the Reclamation Plan filed by Lessee with San Bernardino County.

6. Royalty Payments. (a) Subject to the provisions of this Paragraph 6, during the Initial Term, Lessee shall pay Lessor a minimum annual royalty of $22,500 ("Minimum Royalty") for each twelve (12) month period ("Year") commencing on the Effective Date. The Minimum Royalty for the Additional Term shall be $27,500 a Year. The Minimum Royalty shall be payable by Lessee in advance of the commencement of each applicable Year. The

Minimum Royalty shall be credited as payment on account of all Production Royalty payments to be paid by Lessee to Lessor hereunder.

(b) Subject to the provisions of this Paragraph 6, during the Initial Term and the Additional Term, Lessee shall pay Lessor a monthly production royalty ("Production Royalty") for all Material mined, processed, consumed and sold or removed from the Leased Premises, during such month, calculated as follows: (i) the greater of 5% of gross sales, F.O.B. Pisgah Crater, or $.80 per ton for Material used for block material; and (ii) 10% of gross sales, F.O.B. Pisgah Crater, for all other Material. Lessee shall receive a credit against the amount of any Production Royalty payment payable hereunder in an amount equal to the amount of any Minimum Royalty payments which have not previously been credited against Production Royalty payments.

(c) Lessee shall install and maintain a certified scale to weigh all Material removed from the Leased Premises. Scale tickets or other automatic means shall be used to record the net weight of all such Material removed. For the purpose of permitting verification by Lessor of any amounts due hereunder, Lessee will keep and preserve supporting documentation and records which shall disclose in reasonable detail all information required to permit Lessor to verify the Production Royalty calculations under this Lease. Upon reasonable advance notice to Lessee, Lessor or its agents shall have the right, during Lessee's regular business hours, to examine or audit such supporting documentation and records. Lessee shall retain such supporting documentation and records for a period of one (1) year following the termination or expiration of this Lease.

(d) On or before the 25th day of the month following each full month of this Lease, Lessee shall forward to Lessor, at the address herein given, or at such other place or places as shall from time to time designate in writing, monthly reports indicating thereon the quantity of Material sold or removed from the Leased Premises during the previous month, as well as a computation of the Production Royalty due thereon, and a check in payment of the total amount due thereon.

7. Taxes and Utilities. (a) Lessor shall pay, prior to their delinquency, all real taxes and assessments which may be levied or assessed by any lawful authority against the Leased Premises with respect to any period wholly or partially within the term of this Lease. Lessee shall pay prior to delinquency all personal property taxes applicable to Lessee's personal property fixtures, furnishing and equipment located on the Leased Premises, as well as all production or severance taxes computed or based upon production or removal by Lessee of Materials from the Leased Premises. If Lessee shall in good faith desire to contest the validity or amount of any tax, assessment, levy, or other governmental charge herein agreed to be paid by Lessee, Lessee shall be permitted to do so, and to defer payment of such tax or charge, until final determination of the contest. If the outcome of such contest is unfavorable to Lessee, Lessee shall immediately pay all taxes, charges, interest and penalties determined to be due.

(b) Lessee agrees to pay all expenses for heat, electricity, lighting, telephone, waste management fees and charges for water assessed against the Leased Premises after Lessee takes

possession of the Leased Premises, arising from Lessee's activities thereon, at such time as said charges become due.

8. Permits. (a) Lessee shall use its good faith efforts to cause its Mining Permit, Reclamation Plan and Air Quality Permits to be issued in the names of Lessor and Lessee; provided, however, that the parties agree and acknowledge that such permits are only applicable for activities associated with mining and production of Material. Lessee shall pay for any fees or costs associated with obtaining and maintaining such permits, except that Lessor shall be solely responsible for any additional incremental fees or costs attributable to Lessor's operations. Lessor shall be responsible for posting any required reclamation bond related to its activities. Lessor shall be solely responsible for obtaining any required permits or approvals necessary for Lessor to conduct any other operations.

(b) In the event that Lessee's permits are terminated or not renewed as a result of Lessor's actions, Lessee may, in its sole discretion, either (i) terminate this Lease with no further obligations hereunder; or (ii) suspend the term of this Lease until Lessee reinstates such permits, up to a maximum period of two (2) years. During such suspension period, Lessee shall have no obligation to make any Minimum Royalty payments. In the event Lessee's permits are not reinstated prior to the expiration of such two (2) year period, or in the event Lessee notifies Lessor that it has abandoned its efforts to reinstate such permits, this Lease shall terminate, and Lessee shall have no further obligations hereunder. In the event that Lessee reinstates such permits within such two (2) year period, the applicable term of this Lease shall be extended for the period of suspension.

9. Lessor's Reserved Rights. (a) The rights of Lessee granted hereby shall be subject to Lessor's reserved concurrent right to use the Leased Premises for the purpose of exploration, development and mining of Material and the use of any surface or underground water or water rights occurring on or appurtenant to the Leases Premises; so long as Lessor's use does not interfere with the rights granted Lessee herein. Lessee shall be entitled to compensation for any damages caused by Lessor's use of the Leased Premises.

(b) Lessor shall not be entitled to remove or otherwise take possession of any Material mined or processed by Lessee without Lessee's prior consent; provided, however, that Lessee agrees that it will identify those Materials which it classifies as "reject" Materials, which reject Materials shall immediately, upon identification, become available to Lessor for its use as permitted hereunder.

(c) Lessor shall conduct its operations within the limits of, and pursuant to the terms and conditions of all of Lessee's operating permits, including, without limitation, the Mining Permit and Reclamation Plan and Air Quality Permits issued by San Bernardino County. Lessor shall indemnify Lessee for all costs and liabilities related to, connected with or arising from Lessor's violation of any such permits.

(d) Lessor shall not conduct its operations in any way which would adversely affect Lessee's lawful use of the Leased Premises.

(e) Lessor agrees that for so long as this Lease is in effect, it will not use any Material from the Leased Premises in any manner which is in competition of Lessee's Business.

(f) The rights reserved by Lessor hereby are personal in nature, and may not be assigned, to any party which competes with Lessee's Business, without the prior written consent of Lessee, which consent shall not be unreasonably withheld.

(g) For purposes hereof, "Lessee's Business" shall mean the business of mining, production and sale of Material for sale or use in connection with construction materials, block products, landscaping and snow control within a 500 mile radius of the Leased Premises.

10. Insurance. Each party shall, at its sole cost and expense, commencing no later than the date upon which either Lessor or Lessee commences operations on the Leased Premises, and continuing throughout the duration of this Lease, obtain, keep, and maintain in full force and effect comprehensive general public liability insurance against claims for personal injury, bodily injury, death, or property damage occurring in, upon, or about the Leased Premises in an amount of not less than Two Million Dollars ($2,000,000.00) in respect to injury or death of one person and to the limit of not less than Two Million Dollars ($2,000,000.00) in respect to any one accident, and to the limit of not less than Two Million Dollars ($2,000,000.00) in respect to property damage with respect to the use of the Leased Premises. Each party shall deliver to the other party certificates of insurance, which shall declare that the respective insurer may not cancel the same, in whole or in part, without giving each party written notice of its intention to do so at least thirty (30) days' prior written notice.

11. Indemnification. (a) Lessee shall pay, defend and indemnify and hold Lessor and its officers, directors, shareholders, agents and employees ("Lessor Indemnified Parties," individually a "Lessor Indemnified Party") harmless from and against any and all claims of liability for injury or damage to any person or property arising from the use of the Leased Premises by Lessee, or from the conduct of Lessee's business, or from any activity, work or thing done, permitted or suffered by Lessee or Lessee's invitees, licensees, agents, contractors or employees in or about the Leased Premises or elsewhere. Lessee shall further pay, defend, indemnify and hold the Lessor Indemnified Parties harmless from and against any and all claims arising from any breach of any representation, warranty or covenant hereunder, or default in the performance of any obligation on Lessee's part to be performed under this Lease, or arising from any negligence of Lessee or Lessee's invitees, licensees, agents, contractors or employees, and from and against all costs, attorneys' fees, expenses and liabilities incurred in the defense of any such claim or action or proceeding brought thereon. In the event any action or proceeding is brought against any Lessor Indemnified Party by reason of any such claim, Lessee, upon notice from such Lessor Indemnified Party, shall defend the same at Lessee's expense by counsel reasonably satisfactory to such Lessor Indemnified Party.

(b) Lessor shall pay, defend and indemnify and hold Lessee and its officers, directors, shareholders, agents and employees ("Lessee Indemnified Parties," individually a "Lessee Indemnified Party") harmless from and against any and all claims of liability for injury or damage to any person or property arising from the use of the Leased Premises by Lessor, or from the conduct of Lessor's business, or from any activity, work or thing done, permitted or suffered by Lessor or Lessor's invitees, licensees, agents, contractors or employees in or about the Leased Premises or elsewhere. Lessor shall further pay, defend, indemnify and hold the Lessee Indemnified Parties harmless from and against any and all claims arising from any breach of any representation, warranty or covenant hereunder or default in the performance of any obligation on Lessor's part to be performed under this Lease, or arising from any negligence of Lessor or Lessor's invitees, licensees, agents, contractors or employees, and from and against all costs, attorneys' fees, expenses and liabilities incurred in the defense of any such claim or action or proceeding brought thereon. In the event any action or proceeding is brought against any Lessee Indemnified Party by reason of any such claim, Lessor, upon notice from such Lessee Indemnified Party, shall defend the same at Lessor's expense by counsel reasonably satisfactory to such Lessee Indemnified Party.

12. Liens. If any liens or claims of mechanics, laborers, or materialmen shall be filed against the Leased Premises or any part or parts thereof, for any work, labor, or materials furnished or claimed to be furnished to Lessee, or on behalf of Lessee, then Lessee shall cause such lien to be discharged within thirty (30) days after the date such lien is filed; or if such lien is disputed by Lessee and Lessee contests the same in good faith, Lessee shall cause such lien to be discharged within thirty (30) days after the date of any judgment by any court of competent jurisdiction shall become final.

13. Compliance with Laws. Lessee covenants and agrees that, during the term of this Lease, Lessee shall comply with all applicable laws, ordinances, orders, rules, regulations, and requirements of any federal, state, county, city, and municipal government with respect to the Leased Premises.

14. Default; Remedies. (a) The following shall each be deemed to be an event of default under this Lease:

(i) The failure by Lessee to pay Minimum Royalties, Production Royalties or any other amount payable by Lessee under this Lease if such failure continues for twenty (20) days after written notice from Lessor that such amount is due; or

(ii) A failure by either party to observe and perform any provisions of this Lease to be observed or performed by such party (other than Lessee's obligation to pay), where such failure continues for thirty (30) days after written notice of such failure; provided, however, that if the nature of the obligation is such that more than thirty (30) days are required for performance, then the party shall not be in default if it commences performance within such thirty day period and thereafter diligently prosecutes the same to completion.

(b) In the event of any such default by either party, the non-defaulting party may elect to terminate this Lease by written notice to the defaulting party. In addition to the foregoing, if a party fails to keep or perform any obligation required hereunder, the non-defaulting party shall have the right, but not the obligation, to perform such obligation on behalf of the defaulting party, and the defaulting party shall reimburse the non-defaulting party for any and all sums so paid or costs and expenses incurred within ten (10) days after submission of written verification of such payments. If the defaulting party has not reimbursed the non-defaulting party within said ten (10) day period, the non-defaulting party shall have the right to offset such amounts against any payments due the defaulting party hereunder.

(c) In the event of a default by Lessee and termination of this Lease by Lessor, Lessor may, at any time after such default, without limiting Lessor in the exercise of any rights or remedies at law or in equity which Lessor may have by reason of such default, re-enter and take possession of the Leased Premises and remove any persons or property by appropriate legal action.

(d) No remedy specified herein shall be exclusive of any other remedy, but each shall be cumulative and in addition to every other remedy available hereunder, at law or in equity.

15. Condemnation. (a) In the event a part of the Leased Premises shall be taken, by eminent domain for any public or quasi-public purpose, or transferred by agreement in connection with such public or quasi-public use, with or without any condemnation proceeding being instituted, and such taking does not materially affect Lessee's operations, only the Lease on the portion taken shall then expire, on the date when title to such portion of the Leased Premises vests in the appropriate authority or on the date possession is required to be surrendered, whichever is earlier. The compensation or damages for this taking shall be apportioned by and between the Lessor and Lessee taking into consideration the residual value of the land and surface rights to Lessor, the value of this Lease and the unmined Material at the time of taking to the Lessee, and the future anticipated royalties to the Lessor.

(b) In the event that all or substantially all of the Leased Premises shall be taken by eminent domain for any public or quasi-public purpose such that Lessee's operations are no longer economically feasible, then this Lease shall expire on the date when title to the Leased Premises vests in the appropriate authority or on the date possession is required to be surrendered, whichever is earlier. The compensation or damages for this taking shall be apportioned by and between the Lessor and Lessee taking into consideration the residual value of the land and surface rights to Lessor, the value of this Lease and the unmined Material at the time of taking to the Lessee, and the future anticipated royalties to the Lessor.

(c) A voluntary sale or conveyance under threat of condemnation but in lieu of condemnation shall be deemed an appropriation or taking under the power of eminent domain.

16. Subordination. This Lease at Lessor's option shall be subject and subordinate to the lien of any mortgages or deeds of trust in any amount whatsoever now or in the future placed on or

against the Leased Premises; provided, however, that as long as Lessee is not in default hereunder, any lien or encumbrance shall provide that the holder thereof will recognize Lessee's rights under this Lease notwithstanding foreclosure of such lien or encumbrance.

17. Representations and Warranties. (a) Lessor represents and warrants that: (i) it is the true and lawful owner of the Leased Premises free and clear of all matters affecting the Lessor's title to or possession of the Leased Premises, subject to matters of public record (the "Permitted Encumbrances");
(ii) it has good right and lawful authority to grant to Lessee the rights granted herein; (iii) neither the execution and delivery of this Lease, nor the fulfillment of or compliance with the terms and conditions hereof, conflicts with or results in a breach of any of the terms, conditions or provisions of any other restriction, agreement or instrument to which the Lessor is a party or by which it or the Leased Premises are bound; (iv) to Lessor's actual knowledge, there is no condemnation claim or other litigation or claim pending or threatened with respect to the Leased Premises; (v) except for the Permitted Encumbrances, there are no leases, subleases, licenses or other agreements granting other parties the right to use the Leased Premises or options or rights of refusal to purchase the Leased Premises; and (vi) all buildings, fixtures and improvements located on the Leased Premises are in good operating condition and repair and the use thereof does not violate in any material respects any applicable laws, ordinances, orders, rules, regulations, or requirements of any governmental authority.

(b) Lessor represents and warrants that it has not used the Leased Premises or done or permitted anything to be done in or about the Leased Premises which in any way conflicts with any law, statute, zoning restriction, ordinance or governmental rule or regulation or requirements or duly constituted public authorities.

18. Notices. Any notice or other communication which may be permitted or required under this Lease shall be in writing and shall be delivered personally or sent by United States registered or certified mail, postage prepaid, addressed as follows, or to any other address as either party may designate by notice to the other party:

If to Lessor:        Can-Cal Resources, Ltd.
                     1505 Blackcombe Street
                     Las Vegas, Nevada 89128

With a copy to:      William R. Fishman, Esq.
                     1600 Broadway, Suite 2600
                     Denver, Colorado 80202

If to Lessee:        Twin Mountain Rock Venture
                     1000 Kiewit Plaza
                     Omaha, Nebraska 68131
                     Attention: Real Estate Department

19. Assignment. Lessee shall not assign or transfer this Lease, or sublet the Leased Premises or any part thereof, without Lessor's prior written consent, which consent will not be unreasonably withheld or delayed; except that such consent shall not be required if such sublease, assignment, or transfer by Lessee is to an affiliate of Lessee.

20. Binding on Successors and Assigns. All covenants, agreements, provisions, and conditions of this Lease shall be binding upon and inure to the benefit of the parties hereto, their respective heirs, personal representatives, successors, and assigns.

21. Partial Invalidity. If any term or provision of this Lease shall to any extent be held invalid or unenforceable, then the remaining terms and provisions of this Lease shall not be affected thereby, but each term and provision of this Lease shall be valid and be enforced to the fullest extent permitted by law. In the event that any provision of Agreement relating to the time periods and/or geographic areas of any restriction shall be declared by a court of competent jurisdiction to exceed the maximum time period or areas that such court deems reasonable and enforceable, the time period and/or geographic areas of restriction deemed reasonable and enforceable by the court shall become and thereafter be the maximum time period and/or geographic areas.

22. Quiet Enjoyment. So long as Lessee is not in default under the covenants and agreements of this Lease, Lessee shall and may peaceably and quietly have, hold and enjoy the Leased Premises for the term of this Lease.

23. Governing Law. This Lease shall be governed by the laws of the State of California.

24. Captions. The captions of this Lease are for convenience only and are not to be construed as part of this Lease and shall not be construed as defining or limiting in any way the scope or intent of the provisions of this Lease.

25. No Waiver. No waiver of any covenant or condition contained in this Lease or of any breach of any such covenant or condition shall constitute a waiver of any subsequent breach of such covenant or condition by either party or justify or authorize the non-observance on any other occasion of the same or any other covenant or condition.

26. Entire Agreement: Modification. This Lease represents the entire understanding and agreement between the parties and supersedes all prior written instruments or memoranda with respect thereto. No modification of this Lease shall be binding unless it is in writing and executed by an authorized representative of Lessor and Lessee.

27. Counterparts. This Lease may be executed in one or more counterparts which together, shall constitute an original and binding agreement on the parties hereto.

28. Holding Over . If Lessee remains in possession of the Leased Premises after the expiration of this Lease without the execution of a new lease, then Lessee shall be deemed to

occupying the Leased Premises as a tenant from month-to-month, subject to all of the conditions provisions, and obligations of this Lease.

29. Short Form Lease. This Lease shall not be recorded, but the parties agree, at the request of either of them, to execute a Short Form Lease for recording, containing the names the parties, the legal description of the Leased Premises, and the term of the Lease.

30. Relationship of the Parties. Nothing contained in this Lease shall be deemed construed by the parties hereto, nor by any third party, as creating the relationship of principal and agent, partnership, or joint venture between the parties hereto, it being understood and agreed that no provision contained in this Lease nor any acts of the parties hereto shall be deemed to create any relationship other than the relationship of landlord and tenant.

31. Incorporation of Exhibits. This Lease shall be deemed to have incorporated by reference all of the Exhibits referred to herein to the same extent as if such Exhibits were fully set forth herein.

32. Attorneys' Fees. If either party takes any steps or brings any action to compel performance of or to recover for breach of any term of this Lease, the losing party shall pay reasonable attorneys' fees of the prevailing party, in addition to the amount of any judgment and costs.

33. Access. The parties acknowledge that Lessee's obligations hereunder are conditioned upon its continued access to the Leased Premises.

IN WITNESS WHEREOF, Lessor and Lessee have executed or caused their duly authorized representatives to execute this Lease as of the date first above written.

CAN-CAL RESOURCES LTD.

By:     /s/    Ronald D. Sloan
    ------------------------------------------
Name:    Ronald D. Sloan
Title:      President

TWIN MOUNTAIN ROCK VENTURE

By:     /s/    R. David Jennings
    ------------------------------------------
Name:    R. David Jennings
Title:   Member Mgt.  Committee

EXHIBIT A TO EXHIBIT 10.1

LEASED PREMISES

N 1/2 NW 1/4, W 1/2 NW 1/4 NE 1/4, and N 1/2 SE 1/4 NW
1/4, Section 32, Township 8 North, Range 6 East of the San Bernardino Base and Meridian; and

Parcels 2 and 3 as more fully described in a quitclaim deed dated November 4, 1997 between Aurum, LLC and Can Cal Resources, Ltd. recorded on November 19, 1997 with a document number of 19970424165.

all of the above being in San Bernardino County, California

DESIGNATED PORTION

That portion of the Leased Premises (as described above) that is more specifically illustrated on page 2 of this exhibit. Both the "Mining Area" and the "Plant Area" are to be considered the Designated Portion.

EXHIBIT A TO EXHIBIT 10.1

PHOTOGRAMMETRY SITE MAP

Prepared by:
Zenith Aerial, Inc.
2720 Loker Ave. West
Suite P
Carlsbad, CA 92008

EXHIBIT 10.2

LOAN AGREEMENT

This Agreement is entered into by and between Owen Sequoia, Inc. ("Holder") and Can Cal Resources Limited ("Maker").

RECITALS

WHEREAS, Maker owns certain unimproved real property located in San Bernardino, California (the "Property").

WHEREAS, Maker seeks financing from Holder in the original principal amount of $150,000.

WHEREAS, Maker intends to enter into a Mining Lease Agreement with Twin Mountain Rock Venture, a California general partnership ("Twin Mountain"), for the purpose of permitting Twin Mountain to mine certain minerals from the "Property" for certain consideration.

NOW, THEREFORE, in consideration of the mutual obligations of the parties herein, and other good and valuable consideration, the parties agree as follows:

1. Subject to the following terms and conditions, Holder agrees to lend Maker $150,000 ("principal'). Holder shall deliver to Maker $25,000 on or before close of business February 12, 1998 or on Maker's execution of this Agreement, whichever is later, and the balance of the $150,000, or $125,000, shall, be delivered to Maker upon Maker's delivery to Holder of an executed Mining Lease Agreement in a form satisfactory to Holder.

2. The Maker promises to pay Holder the principal, plus interest at 8% per annum on the amount of principal owing, principal and interest all due and payable on or before June 15, 1998.

3. In order to induce Holder to extend the financing referenced herein and in order to cover certain costs of Holder, including attorney's fees, Maker shall pay Holder a $5,000 non-refundable fee upon execution of this Agreement by Maker.

4. Maker understands that Holder's obligation to lend the $125,000 payment to Maker referenced in paragraph 1 is expressly made conditioned upon Maker and Twin Mountain Rock Venture entering into a Mining Lease Agreement acceptable to Holder. Should Maker or Twin Mountain fail for any reason to make such an agreement, Holder shall be under no obligation to deliver such sum to Maker.

5. The privilege is reserved of prepaying in full or in any amount of the outstanding principal balance due hereunder on any interest date.

6. While any default exists in the making of any of the payments, agreements or conditions of this Agreement or the Deed of Trust, the undersigned recognizes that such default will result in the loss and additional expenses to the Holder of this Agreement in servicing the indebtedness evidenced hereby, handling such delinquent payments and meeting its other financial obligations. Therefore, if any installment of principal and/or interest due hereunder is not paid when due, and Holder of this Agreement does not accelerate this Agreement as provided in Paragraph 8 below, then a reasonable late charge in an amount equal to six percent (6%) of the delinquent payment may be charged by the Holder of this Agreement, at its option, for the purpose of defraying such losses and expenses. If applicable law requires a lesser such charge, however, then the maximum charge permitted by such law may be charged by the Holder of this Agreement for said purposes. The late charges that accrue during any month shall be payable on the next monthly payment date. Failure to assert or collect a late charge for any particular month or months shall not waive Holder's right to assert and collect late charges in subsequent months.

7. Maker agrees that any installment not paid within fifteen days of the date that such installment was due shall be subject to the late charge discussed in Paragraph 6 and shall bear interest from the date such payment was due which shall be compounded monthly on the first day of each calendar mouth at that rate of interest equal to the rate of interest under this Agreement, or the maximum amount allowed by law, whichever is the lesser.

8. While any default exists in the making of any of said payments or in the performance or observance of any of the covenants, agreements or conditions of this Agreement or the Deed of Trust, the Holder of this Agreement may apply payments received on any amounts due hereunder or under the terms of any instrument now or hereafter evidencing or securing said indebtedness as said holder may determine and if the Holder of this Agreement so elects, notice of election being expressly waived, the principal remaining unpaid with accrued interest shall at once become due and payable.

9. If amounts due under this Agreement are not paid when due, whether at maturity or by acceleration, the undersigned promises to pay all costs of collection, including, but not limited to, reasonable attorneys' fees, and all expenses incurred in connection with the protection or realization of any collateral or enforcement of any guaranty, incurred by the holder hereof, on account of any such collection, whether or not suit is filed hereon or on any instrument granting a security interest or on any guaranty related to this Agreement.

10. The Maker expressly waives presentment, protest and demand, notice of protest, demand and dishonor and nonpayment of this Agreement and all other notices of any kind, and expressly agrees that this Agreement, or any payment thereunder, may be extended from time to time without in any way affecting the liability of the Maker. To the fullest extent permitted by law, the defense of the statute of limitations in any action on this Agreement is waiver by the undersigned. This Note is to be governed by the laws of the State of California and venue for any action brought regarding the interpretation or enforcement of this Agreement shall lie exclusively in San Bernardino County, California.

11. No single or partial exercise of any power hereunder shall preclude any other or further exercise thereof or the exercise of any other power. No delay or omission on the part of the holder hereof in exercising any right hereunder shall operate as a waiver of such right or of any other right under this Agreement shall not operate to release any other party liable hereon.

12. All agreements between the undersigned and the holder hereof are expressly limited so that in no contingency or event whatsoever, whether by acceleration of maturity of the unpaid principal balance hereof or otherwise, shall the amount paid or agreed to be paid to the holder hereof for the use, forbearance or detention of the money to be advanced hereunder exceed the highest lawful rate permissible under applicable usury laws. If, for any circumstances whatsoever, fulfillment of any provision hereof at the time performance of such provision shall be due, shall involve transcending the limit of validity prescribed by law which a court of competent jurisdiction may deem applicable hereto, then ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity, and if from any circumstances the holder hereof shall ever receive as interest an amount which would exceed the highest lawful rate, such amount which would be excessive interest shall be applied to the reduction of the unpaid principal balance due hereunder and not to the payment of interest. This provision shall control every other provision of all agreements between the undersigned and the Holder hereof.

13. This Agreement may from time to time be extended or renewed, with notice to and acceptance by the undersigned and any related right may be waived, exchanged, surrendered or otherwise dealt with, all without affecting the liability of the undersigned hereon.

14. If the Maker consists of more than one person or entity, all agreements, conditions, covenants, provisions, stipulations, authorizations made or given by the Maker shall be joint and several and shall bind and affect all persons and entities who are defined as Maker.

15. The obligations referenced in this Agreement are secured by a Deed of Trust.

IN WITNESS WHEREOF, the parties hereto have executed or caused this Agreement to be executed on the date referenced below.

OWEN SEQUOIA, INC.

By:      /s/   John Edwards
    ---------------------------------------------
                       February   12, 1998
                  -------------------------------
                               Date

CAN CAL RESOURCES LIMITED

By:     /s/    R. D. Sloan, President
    ---------------------------------------------
                           FEB   12/98
                  -------------------------------
                               Date

EXHIBIT 10.3

AMENDMENT TO LOAN AGREEMENT

This AMENDMENT TO LOAN AGREEMENT (the "Agreement") is made as of the 9th day of June , 1998 by and between CAN CAL RESOURCES LIMITED ("Borrower") and OWEN SEQUOIA, INC. ("Lender").

RECITALS

A. On or about February 12, 1998, Lender and Borrower entered into a Loan Agreement whereby, subject to the terms and conditions of that agreement, Lender agreed to provide financing to Borrower.

B. Pursuant to the terms of the Loan Agreement, Borrower executed a deed of trust in favor of the Lender recorded against certain real property owned by Borrower located at Pisgah, San Bernardino (the "Deed of Trust"), and Borrower assigned to Lender all rights to income and profits emanating from that certain Mining Lease Agreement executed by and between Borrower and Twin Mountain Rock Venture (the "Mining Lease"), a true and correct copy of which is attached hereto as Exhibit "A".

C. On or about May 1, 1998, Borrower received $22,500 from Twin Mountain Rock Venture pursuant to the terms of the Mining Lease.

D. As of May 15, 1998, Borrower owes Lender the sum of $25,000 as principal plus accrued interest resulting from Lender's loan to Borrower of $25,000 (the "Initial Obligation") pursuant to the terms of the Loan Agreement.

E. The Loan Agreement, the Deed of Trust and Mining Lease will sometimes hereafter be referred to as the "Existing Documents".

F. The Borrower has requested that Lender modify the Existing Documents. As consideration for the requested modification, the Borrower has agreed to the terms and conditions as set forth in this Agreement. The Existing Documents and this Agreement may sometimes hereinafter be referred to as the "Financing Documents".

NOW, THEREFORE, WITNESSETH that 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 Borrower and Lender agree as follows:

1. Recitals. The Recitals are incorporated into and made a part of this Agreement.

2. Existing Financing Modification Terms. The Existing Documents shall be modified as follows:

(a) Additional Loan Amount. On or before July 31, 1998, Lender shall lend Borrower up to the principal sum of $102,500 which represents the $150,000 referenced in the Loan Agreement minus the Initial Obligation minus the $22,500 received by the Borrower from Twin Mountain Rock Venture. The sum of $102,500 representing principal plus the Initial Obligation plus all interest plus any other cost or charge referenced herein will hereafter be referred to as the "Obligation".

(b) Term. The Obligation, including interest and all other charges, is due and payable July 31, 2001.

(c) Interest Rate. The Obligation shall bear interest at the rate depicted in the Loan Agreement.

Unless specifically modified herein, the terms and conditions under the Loan Agreement shall remain in full force and effect.

3. Representation and Warranties. In order to induce Lender to enter into this Agreement, the Borrower, for itself and for its heirs, personal representatives, successors, and assigns, hereby acknowledges, represents, and warrants to Lender as follows:

(a) Lender is not required to extend the Borrower any more financing.

(b) The Loan Agreement constitutes the legal, valid and binding obligation of the Borrower. This Agreement when executed by the Borrower shall constitute the legal, valid, and binding obligations of such party, enforceable in accordance with their respective terms.

(c) The Borrower has no defenses, affirmative defenses, setoffs, claims, counterclaims, actions, or causes of action of any kind of nature whatsoever against Lender or any of its or their respective past, present, or future directors, officers, employees, agents, attorneys, legal representatives, predecessors, affiliates, successors, or assigns, or the Initial Obligation, directly or indirectly, arising out of, based upon, or in any manner connected with any transaction, event, circumstance, action, failure to act, or occurrence of any sort or type, whether known or unknown, which occurred, existed, was taken, permitted, or begun prior to the execution of this Agreement and occurred, existed, was taken, permitted, or begun in accordance with, pursuant to, or by virtue of any of the terms of the Existing Documents.

(d) There is no litigation, at law or in equity, nor any proceeding before any federal, state, or other governmental or administrative agency or any arbitration pending or, to the knowledge of the Borrower, threatened against the Borrower nor any other litigation or proceeding pending or, to the knowledge of the Borrower, threatened affecting any collateral in favor of Lender.

(e) All documents, reports, certificates, and statements furnished to Lender by or on behalf of Borrower in connection with the transactions contemplated hereby are true, correct, and complete; do not contain any untrue statement of material fact; and do not omit any fact necessary to make the information contained therein not misleading.

(f) All taxes, assessments, levies, license fees, permit fees and all other charges heretofore levied, assessed, confirmed, or imposed upon, or in respect of, or which might become a lien upon, any collateral in favor of Lender under the Loan Agreement or the Financing Documents have been paid in full.

(g) Borrower has not received any more money from Twin Mountain Rock Venture pursuant to the Mining Lease other than the $22,500 referenced in the Recitals.

The continued validity in all respects of all representations and warranties made in this Agreement and all other documents delivered by the Borrower in connection with this Agreement will be a condition precedent to Lender obligations and agreements created by this Agreement.

4. Covenants of Obligors. In addition to the covenants and warranties provided to Lender, the Borrower covenants as follows:

(a) The Borrower shall duly and punctually pay all sums to be paid to Lender in accordance with the terms and conditions of this Agreement and the Financing Documents.

(b) The Borrower consents to allow Lender to communicate with Twin Mountain Rock Venture regarding the Mining Lease and consents to allow Lender to receive the income and profits from the Mining Lease directly from Twin Mountain Rock Venture. Borrower agrees that should it receive any monies from Twin Mountain rock Venture pursuant to the Mining Lease, it will immediately deliver such monies to Lender. All monies received by Lender shall be credited towards the Obligation, first to interest, then to principal.

5. Events of Default. The occurrence of any one or more of the following shall constitute an "Event of Default" under this Agreement:

(a) Failure of Borrower to make any payment to Lender on or before the date on which such payment is due or failure to pay all remaining principal and interest and all other charges and costs due Lender.

(b) Default by Borrower under any of the Existing Documents or further default by Borrower under any of the Financing Documents.

(c) Entry of a judgment or filing of a lien against Borrower or any its properties, which remains unpaid, unstayed, unbonded, undischarged, or undismissed for a period longer than thirty (30) days.

(d) Failure of Borrower to execute and/or deliver any of the documents provided for in this Agreement or any other documents required by Lender.

(e) Failure of Borrower to observe or perform any covenant, agreement, term, or condition of this Agreement or the Financing Documents, as and when provided herein.

(f) If any representation or warranty made herein, in the Financing Documents, or in any report, certificate, financial statement or other instrument or document furnished in connection with this Agreement or contemplated hereby, shall prove to have been materially false or misleading on the date as of which it was made.

(g) If Borrower shall: (U) apply for or consent to or suffer the appointment of a receiver, trustee, or liquidator for its properties; (V) admit in writing an inability to pay its debts as they mature; (W) make a general assignment for the benefit of creditors; (X) file a voluntary petition or a petition or answer seeking reorganization or an arrangement with creditors or take advantage of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution, or liquidation statute or law, or make or file an answer admitting material allegations of a petition filed against it in any proceeding under any such law; (Y) fail to cause to be dismissed any bankruptcy proceedings commenced against it within sixty (60) days after commencement of the same; or (Z) have entered against it an order, judgment, or decree of any court of competent jurisdiction, approving a petition seeking reorganization of assets or appointing a receiver, trustee, or liquidator for any assets.

6. Remedies.

(a) Immediately upon the occurrence of any Event of Default, the obligation and agreements of Lender set forth in this Agreement shall terminate and Lender shall have the right to exercise any and all rights and remedies available to it hereunder, under the Financing Documents, and under applicable law to the same extent as though this Agreement had not been executed, without regard to any notice or cure period contained therein or otherwise available.

(b) All rights and remedies available to Lender under any of the Existing Documents, and applicable law may be asserted concurrently, cumulatively, or successively, from time to time, as long as any indebtedness or obligations under the Financing Documents shall remain unpaid or outstanding.

7. Cross-Default. Any default under this Agreement, the Loan Agreement, or any of the Financing Documents shall constitute an event of default under all other agreements, financing statements or documents related to the transaction referenced herein.

8. Release and Waivers. Borrower, for itself and its heirs, personal representatives, successors, and assigns, hereby jointly and severally, knowingly and voluntarily RELEASES, DISCHARGES, and FOREVER WAIVES and RELINQUISHES any and all claims, demands, obligations, liabilities, defenses, affirmative defenses, setoffs, counterclaims, actions, and causes

of action of whatsoever kind or nature, whether known or unknown, which he or it has, may have, or might have or may assert now or in the future against Lender directly or indirectly, arising out of, based upon, or in any manner connected with any transaction, event, circumstance, action, failure to act, or occurrence of any sort or type, whether known or unknown, which occurred, existed, was taken, permitted, or begun prior to the execution of this Agreement and occurred, existed, was taken, permitted, or begun in accordance with, pursuant to, or by virtue of the transaction referenced herein or any of the terms of any of the Existing Documents, or which was related or connected in any manner, directly or indirectly, to the Initial Obligation, the transaction referenced herein or the Existing Documents, or any part thereof. Borrower hereby acknowledges and agrees that the execution of this Agreement by Lender shall not constitute an acknowledgment of or admission by Lender of the existence of any such claims or of liability for any matter or precedent upon which any liability may be asserted. Borrower hereby further acknowledges and agrees that, to the extent that any such claims may exist, they are of a speculative nature so as to be incapable of objective valuation and that, in any event, the value to the Borrower of the covenants and obligations of Lender contained in this Agreement and the other documents and instruments executed and delivered in connection herewith substantially and materially exceeds any and all value of any kind or nature whatsoever of any such claims.

In connection with the general release set forth above, Borrower, for themselves and Borrower's Affiliates, and each of them, hereby waive and relinquish all rights and benefits afforded under the provisions of Section 1542 of the California Civil Code, which provides as follows:

"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."

9. Waiver of Jury by Trial. Each party to this Agreement agrees that any suit, action, or proceeding brought or instituted by any party hereto or any successor or assign of any party on or with respect to this Agreement, any of the documents executed in connection with this Agreement, or any of the Financing Documents or any event, transaction or occurrence arising out of or in any way connected therewith, or the dealings of the parties with respect thereto, shall be tried only by a court and not a jury. EACH PARTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION, OR PROCEEDING. Borrower acknowledges and agrees that this provision is a specific and material aspect of this Agreement between the parties and that Lender would not agree to the restructure of obligations, extension of the time of payment, or forbearance from exercising its rights and remedies if this waiver of jury trial provision were not a part of this Agreement.

10. Miscellaneous.

(a) No Oral Modifications. No modification or waiver of any provision of this Agreement, any documents executed in connection with this Agreement, the Existing Documents, and no consent by Lender to any departure by the Borrower therefrom shall in any event be effective unless the same shall be in writing and then such waiver or consent shall be effective only in the specific instance or for the purpose for which given. No notice to, or demand upon the Borrower in any case shall entitle Borrower to any other or further notice or demand in the same, similar, or other circumstances.

(b) No Release or Discharge; No Novation. Nothing contained in this Agreement is intended to or shall act to nullify, discharge, release, or extinguish, in whole or in part, any or all of the obligations or indebtedness under the Existing Documents or to waive or release any collateral securing the loan referenced herein or discharge any guarantor thereof, nor shall this Agreement and the documents executed in connection herewith be deemed or considered to operate as a novation of any of the Existing Documents, except as otherwise provided in this Agreement and the documents executed in connection herewith. This Agreement represents a modification, amendment, restatement, and continuation of the contractual obligations and indebtedness of the Borrower under certain of the Financing Documents. This Agreement and the documents executed in connection herewith set out the terms and conditions under which the Borrower will satisfy its obligations to Lender pursuant to the Financing Documents. Except to the extent of any express conflict with this Agreement and except to the extent modified by this Agreement, each and all of the terms and conditions of the Existing Documents shall remain in full force and effect.

(c) Interpretation. To the extent, if any, that any of the terms and provisions of this Agreement or of any of the other documents or instruments executed and delivered in connection herewith are inconsistent with any of the terms and provisions of the Existing Documents, this Agreement and the documents and instruments executed and delivered in connection herewith shall control.

(d) Applicable Law. The performance, construction, and enforcement of this Agreement and each of the other Financing Documents shall be governed by the laws of the State of California.

(e) Survival; Successors and Assigns. All covenants, agreements, representations, and warranties made in this Agreement and in the Financing Documents shall survive settlement and shall continue in full force and effect. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party, but this shall not be deemed to permit assignment by the Borrower of any or all of its interests in the Deed of Trust or any part thereof. All covenants, agreements, representations, and warranties by or on behalf of the Borrower that are contained in this Agreement of any of the Financing Documents shall inure to the benefit of Lender and its successors and assigns and shall bind the Borrower, and its respective heirs, personal representatives, successors, and assigns. Borrower may not assign this Agreement or any of its rights hereunder.

(f) Severability. If any term, provision, or condition, or any part thereof, of this Agreement or of any of the Financing Documents shall for any reason be found or held to be invalid or unenforceable by any court or governmental agency of competent jurisdiction, such invalidity or unenforceability shall not affect the remainder of such term, provision, or condition or any other term, provision, or condition, and this Agreement, and any Financing Document shall survive and be construed as if such invalid or unenforceable term, provision, or condition had not been contained therein.

(g) Merger and Integration. This Agreement, the Financing Documents, and any documents or instruments to be delivered in accordance with this Agreement contain the entire agreement of the parties hereto with respect to the matters covered and the transactions contemplated hereby, and no other agreement, statement, representation, warranty or promise made prior hereto or contemporaneously herewith by any party hereto, or any employee, officer, agent, or attorney of any party hereto, shall be valid or binding or relied upon by any party as an inducement to enter into, or as consideration for, this Agreement.

(h) Construction of Agreement. Each party acknowledges (i) that it has participated in the negotiation of this Agreement and the other documents executed and delivered in connection herewith, and no provision of this Agreement or the other documents executed and delivered in connection herewith shall be construed against or interpreted to the disadvantage of any party hereto or thereto by any court or other governmental or judicial authority by reason of such party having or being deemed to have structured, dictated or drafted such provision; (ii) that the Borrower, at all times have had access to an attorney in the negotiation of the terms of and in the preparation and execution of this Agreement and the other documents executed and delivered in connection herewith, and the Borrower, has had the opportunity to review, analyze, and discuss with its counsel this Agreement and the other documents executed and delivered in connection herewith, and the underlying factual matters relevant to this Agreement, for a sufficient period of time prior to the execution and delivery hereof and thereof; (iii) that all of the terms of this Agreement and the other documents executed and delivered in connection herewith were negotiated at arm's-length; (iv) that this Agreement and the other documents executed and delivered in connection herewith were prepared and executed without fraud, duress, undue influence, or coercion of any kind exerted by any of the parties upon the others; and (v) that the execution and delivery of this Agreement is the free and voluntary act of the Borrower.

(i) Notices. Any notices required or permitted by this Agreement shall be in writing and shall be deemed delivered if hand delivered or delivered by certified mail, postage prepaid, return receipt requested, first class mail postage prepaid, or by telecopy (immediately followed by hard copy by first class mail) as follows, unless such address is changed by written notice as provided hereunder:

If to the Borrower:

CAN CAL RESOURCES LIMITED
Attn:
20140 49 A Avenue
Langley, B.C., Canada V3A 3S1
Telephone: (604) 534-7283
Facsimile: (604) 532-6811

If to the Lender:

OWEN SEQUOIA, INC.
c/o Attn: Bruce G. Holden, Esq.
Arter & Hadden LLP
5 Park Plaza, Suite 1000
Irvine, CA 92614-8528
Telephone: (949) 252-3102
Facsimile: (949) 833-96042

(j) Gender. The singular includes the plural and vice versa. Each gender includes all other genders.

(k) Counterparts. This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one in the same agreement.

(l) Binding Effect. This Agreement shall have no effect at law or in equity unless and until this Agreement has been executed by Lender. Lender in its sole discretion may require that all of the exhibits to this Agreement are fully executed and delivered simultaneously with Lender execution of this Agreement.

(m) Third Party Obligations. No person not a party to this Agreement will be a third-party beneficiary or acquire any rights hereunder.

(n) Costs. Any costs incurred by Lender resulting from the transactions contemplated by this Agreement such as legal expense, the filing of any financing statement, or property inspection, shall be solely at Borrower's expense and without right of setoff.

(o) Venue. Venue for any action brought regarding the interpretation of this Agreement shall lie exclusively in Orange County, California.

IN WITNESS WHEREOF, the parties hereto have executed or caused to be executed, this Agreement under seal as of the date first written above.

Borrower:

CAN CAL RESOURCES LIMITED

By:       /s/   R. D. Sloan
    --------------------------------

Lender:
OWEN SEQUOIA, INC.

By:       /s/    John Edwards
    --------------------------------

EXHIBIT 10.4

SECOND AMENDMENT TO LOAN AGREEMENT

This SECOND AMENDMENT TO LOAN AGREEMENT (the "Agreement") is made as of the day of 2nd day of August, 1998 by and between CAN CAL RESOURCES LIMITED ("Borrower") and OWEN SEQUOIA, CORP. ("Lender").

RECITALS

A. On or about February 12, 1998, Lender and Borrower entered into a Loan Agreement whereby, subject to the terms and conditions of that agreement, Lender agreed to provide financing to Borrower.

B. Pursuant to the terms of the Loan Agreement, Borrower executed a deed of trust in favor of the Lender recorded against certain real property owned by Borrower located at Pisgah, San Bernardino (the "Deed of Trust"), and Borrower assigned to Lender all rights to income and profits emanating from that certain Mining Lease Agreement executed by and between Borrower and Twin Mountain Rock Venture (the "Mining Lease").

C. On or about May 1, 1998, Borrower received $22,500 from Twin Mountain Rock Venture pursuant to the terms of the Mining Lease.

D. As of May 15, 1998, Borrower owed Lender the sum of $25,000 as principal plus accrued interest resulting from Lender's loan to Borrower of $25,000 (the "Initial obligation") pursuant to the terms of the Loan Agreement.

E. On or about June 9, 1998 the Loan Agreement was amended pursuant to the terms of an Amendment to Loan Agreement made between Borrower and Lender (the "First Amendment") and the total present principal amount owed by the Borrower to Lender including the Initial Obligation is $100,000 (the "Present Obligation").

F. The Loan Agreement, the Deed of Trust, Mining Lease and First Amendment will sometimes hereafter be referred to as the "Existing Documents".

G. The Borrower has requested that Lender modify the Existing Documents. As consideration for the requested modification, the Borrower has agreed to the terms and conditions as set forth in this Agreement. The Existing Documents and this Agreement may sometimes hereinafter be referred to as the "Financing Documents".

NOW, THEREFORE, WITNESSETH that 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 Borrower and Lender agree as follows:

1. Recitals. The Recitals are incorporated into and made a part of this Agreement.

2. Existing Financing Modification Terms. The Existing Documents shall be modified as follows:

(a) Additional Loan Amount. On or before November 30, 1998, Lender shall lend Borrower up to the principal sum of $50,000. This sum plus the Present Obligation plus interest owed on the Present Obligation and any other cost or charge owed by Borrower pursuant to this Agreement shall hereafter be referred to as the "Obligation".

(b) Term. The obligation, including interest and all other charges, is due and payable July 31, 2001.

(c) Interest Rate. The Obligation shall bear interest at the rate depicted in the Loan Agreement.

Unless specifically modified herein, the terms and conditions under the Loan Agreement as amended by the First Amendment shall remain in full force and effect.

3. Representation and Warranties. In order to induce Lender to enter into this Agreement, the Borrower, for itself and for its heirs, personal representatives, successors, and assigns, hereby acknowledges, represents, and warrants to Lender as follows:

(a) Lender is not required to extend the Borrower any more financing.

(b) The Loan Agreement constitutes the legal, valid and binding obligation of the Borrower. This Agreement when executed by the Borrower shall constitute the legal, valid, and binding obligations of such party, enforceable in accordance with their respective terms.

(c) The Borrower has no defenses, affirmative defenses, setoffs, claims, counterclaims, actions, or causes of action of any kind of nature whatsoever against Lender or any of its or their respective past, present, or future directors, officers, employees, agents, attorneys, legal representatives, predecessors, affiliates, successors, or assigns, or the Obligation, directly or indirectly, arising out of, based upon, or in any manner connected with any transaction, event, circumstance, action, failure to act, or occurrence of any sort or type, whether known or unknown, which occurred, existed, was taken, permitted, or begun prior to the execution of this Agreement and occurred, existed, was taken, permitted, or begun in accordance with, pursuant to, or by virtue of any of the terms of the Existing Documents.

(d) There is no litigation, at law or in equity, nor any proceeding before any federal, state, or other governmental or administrative agency or any arbitration pending or, to the knowledge of the Borrower, threatened against the Borrower nor any other litigation or proceeding pending or, to the knowledge of the Borrower, threatened affecting any collateral in favor of Lender.

(e) All documents, reports, certificates, and statements furnished to Lender by or on behalf of Borrower in connection with the transactions contemplated hereby are true, correct, and complete; do not contain any untrue statement of material fact; and do not omit any fact necessary to make the information contained therein not misleading.

(f) All taxes, assessments, levies, license fees, permit fees and all other charges heretofore levied, assessed, confirmed, or imposed upon, or in respect of, or which might become a lien upon, any collateral in favor of Lender under the Loan Agreement or the Financing Documents have been paid in full.

(g) Borrower has not received any more money from Twin Mountain Rock Venture pursuant to the Mining Lease other than the $22,500 referenced in the Recitals.

The continued validity in all respects of all representations and warranties made in this Agreement and all other documents delivered by the Borrower in connection with this Agreement will be a condition precedent to Lender obligations and agreements created by this Agreement.

4. Events of Default. The occurrence of any one or more of the following shall constitute an "Event of Default" under this Agreement:

(a) Failure of Borrower to make any payment to Lender on or before the date on which such payment is due or failure to pay all remaining principal and interest and all other charges and costs due Lender.

(b) Default by Borrower under any of the Existing Documents or further default by Borrower under any of the Financing Documents.

(c) Entry of a judgment or filing of a lien against Borrower or any its properties, which remains unpaid, unstayed, unbonded, undischarged, or undismissed for a period longer than thirty (30) days.

(d) Failure of Borrower to execute and/or deliver any of the documents provided for in this Agreement or any other documents required by Lender.

(e) Failure of Borrower to observe or perform any covenant, agreement, term, or condition of this Agreement or the Financing Documents, as and when provided herein.

(f) If any representation or warranty made herein, in the Financing Documents, or in any report, certificate, financial statement or other instrument or document furnished in connection with this Agreement or contemplated hereby, shall prove to have been materially false or misleading on the date as of which it was made.

(g) If Borrower shall: (U) apply for or consent to or suffer the appointment of a receiver, trustee, or liquidator for its properties; (V) admit in writing an inability to pay its debts as they mature; (W) make a general assignment for the benefit of creditors; (X) file a voluntary petition or a petition or answer seeking reorganization or an arrangement with creditors or take advantage of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution, or liquidation statute or law, or make or file an answer admitting material allegations of a petition filed against it in any proceeding under any such law; (Y) fail to cause to be dismissed any bankruptcy proceedings commenced against it within sixty (60) days after commencement of the same; or (Z) have entered against it an order, judgment, or decree of any court of competent jurisdiction, approving a petition seeking reorganization of assets or appointing a receiver, trustee, or liquidator for any assets.

5. Remedies.

(a) Immediately upon the occurrence of any Event of Default, the obligation and agreements of Lender set forth in this Agreement shall terminate and Lender shall have the right to exercise any and all rights and remedies available to it hereunder, under the Financing Documents, and under applicable law to the same extent as though this Agreement had not been executed, without regard to any notice or cure period contained therein or otherwise available.

(b) All rights and remedies available to Lender under any of the Existing Documents, and applicable law may be asserted concurrently, cumulatively, or successively, from time to time, as long as any indebtedness or obligations under the Financing Documents shall remain unpaid or outstanding.

6. Cross-Default. Any default under this Agreement, the Loan Agreement, the First Amendment or any of the Financing Documents shall constitute an event of default under all other agreements, financing statements or documents related to the transaction referenced herein.

7. Release and Waivers. Borrower, for itself and its heirs, personal representatives, successors, and assigns, hereby jointly and severally, knowingly and voluntarily RELEASES, DISCHARGES, and FOREVER WAIVES and RELINQUISHES any and all claims, demands, obligations, liabilities, defenses, affirmative defenses, setoffs, counterclaims, actions, and causes of action of whatsoever kind or nature, whether known or unknown, which he or it has, may have, or might have or may assert now or in the future against Lender directly or indirectly, arising out of, based upon, or in any manner connected with any transaction, event, circumstance, action, failure to act, or occurrence of any sort or type, whether known or unknown, which occurred, existed, was taken, permitted, or begun prior to the execution of this Agreement and occurred, existed, was taken, permitted, or begun in accordance with, pursuant to, or by virtue of the transaction referenced herein

or any of the terms of any of the Existing Documents, or which was related or connected in any manner, directly or indirectly, to the obligation, the First Amendment, the transaction referenced herein or the Existing Documents, or any part thereof. Borrower hereby acknowledges and agrees that the execution of this Agreement by Lender shall not constitute an acknowledgment of or admission by Lender of the existence of any such claims or of liability for any matter or precedent upon which any liability may be asserted. Borrower hereby further acknowledges and agrees that, to the extent that any such claims may exist, they are of a speculative nature so as to be incapable of objective valuation and that, in any event, the value to the Borrower of the covenants and obligations of Lender contained in this Agreement and the other documents and instruments executed and delivered in connection herewith substantially and materially exceeds any and all value of any kind or nature whatsoever of any such claims.

In connection with the general release set forth above, Borrower, for themselves and Borrower's Affiliates, and each of them, hereby waive and relinquish all rights and benefits afforded under the provisions of Section 1542 of the California Civil Code, which provides as follows:

"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."

8. Waiver of Jury by Trial. Each party to this Agreement agrees that any suit, action, or proceeding brought or instituted by any party hereto or any successor or assign of any party on or with respect to this Agreement, any of the documents executed in connection with this Agreement, or any of the Financing Documents or any event, transaction or occurrence arising out of or in any way connected therewith, or the dealings of the parties with respect thereto, shall be tried only by a court and not a jury. EACH PARTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION, OR PROCEEDING. Borrower acknowledges and agrees that this provision is a specific and material aspect of this Agreement between the parties and that Lender would not agree to the restructure of obligations, extension of the time of payment, or forbearance from exercising its rights and remedies if this waiver of jury trial provision were not a part of this Agreement.

9. Miscellaneous.

(a) No Oral Modifications. No modification or waiver of any provision of this Agreement, any documents executed in connection with this Agreement, the Existing Documents, and no consent by Lender to any departure by the Borrower therefrom shall in any event be effective unless the same shall be in writing and then such waiver or consent shall be effective only in the specific instance or for the purpose for which given. No notice to, or demand upon the Borrower in

any case shall entitle Borrower to any other or further notice or demand in the same, similar, or other circumstances.

(b) No Release or Discharge; No Novation. Nothing contained in this Agreement is intended to or shall act to nullify, discharge, release, or extinguish, in whole or in part, any or all of the obligations or indebtedness under the Existing Documents or to waive or release any collateral securing the loan referenced herein or discharge any guarantor thereof, nor shall this Agreement and the documents executed in connection herewith be deemed or considered to operate as a novation of any of the Existing Documents, except as otherwise provided in this Agreement and the documents executed in connection herewith. This Agreement represents a modification, amendment, restatement, and continuation of the contractual obligations and indebtedness of the Borrower under certain of the Financing Documents. This Agreement and the documents executed in connection herewith set out the terms and conditions under which the Borrower will satisfy its obligations to Lender pursuant to the Financing Documents. Except to the extent of any express conflict with this Agreement and except to the extent modified by this Agreement, each and all of the terms and conditions of the Existing Documents shall remain in full force and effect.

(c) Interpretation. To the extent, if any, that any of the terms and provisions of this Agreement or of any of the other documents or instruments executed and delivered in connection herewith are inconsistent with any of the terms and provisions of the Existing Documents, this Agreement and the documents and instruments executed and delivered in connection herewith shall control.

(d) Applicable Law. The performance, construction, and enforcement of this Agreement and each of the other Financing Documents shall be governed by the laws of the State of California.

(e) Survival; Successors and Assigns. All covenants, agreements, representations, and warranties made in this Agreement and in the Financing Documents shall survive settlement and shall continue in full force and effect. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party, but this shall not be deemed to permit assignment by the Borrower of any or all of its interests in the Deed of Trust or any part thereof. All covenants, agreements, representations, and warranties by or on behalf of the Borrower that are contained in this Agreement of any of the Financing Documents shall inure to the benefit of Lender and its successors and assigns and shall bind the Borrower, and its respective heirs, personal representatives, successors, and assigns. Borrower may not assign this Agreement or any of its rights hereunder.

(f) Severability. If any term, provision, or condition, or any part thereof, of this Agreement or of any of the Financing Documents shall for any reason be found or held to be invalid or unenforceable by any court or governmental agency of competent jurisdiction, such invalidity or enforceability shall not affect the remainder of such term, provision, or condition or any other term, provision, or condition, and this Agreement, and any Financing Document shall survive and be

construed as if such invalid or unenforceable term, provision, or condition had not been contained therein.

(g) Merger and Integration. This Agreement, the Financing Documents, and any documents or instruments to be delivered in accordance with this Agreement contain the entire agreement of the parties hereto with respect to the matters covered and the transactions contemplated hereby, and no other agreement, statement, representation, warranty or promise made prior hereto or contemporaneously herewith by any party hereto, or any employee, officer, agent, or attorney of any party hereto, shall be valid or binding or relied upon by any party as an inducement to enter into, or as consideration for, this Agreement.

(h) Construction of Agreement. Each party acknowledges (i) that it has participated in the negotiation of this Agreement and the other documents executed and delivered in connection herewith, and no provision of this Agreement or the other documents executed and delivered in connection herewith shall be construed against or interpreted to the disadvantage of any party hereto or thereto by any court or other governmental or judicial authority by reason of such party having or being deemed to have structured, dictated or drafted such provision; (ii) that the Borrower, at all times have had access to an attorney in the negotiation of the terms of and in the preparation and execution of this Agreement and the other documents executed and delivered in connection herewith, and the Borrower, has had the opportunity to review, analyze, and discuss with its counsel this Agreement and the other documents executed and delivered in connection herewith, and the underlying factual matters relevant to this Agreement, for a sufficient period of time prior to the execution and delivery hereof and thereof; (iii) that all of the terms of this Agreement and the other documents executed and delivered in connection herewith were negotiated at arm's-length; (iv) that this Agreement and the other documents executed and delivered in connection herewith were prepared and executed without fraud, duress, undue influence, or coercion of any kind exerted by any of the parties upon the others; and (v) that the execution and delivery of this Agreement is the free and voluntary act of the Borrower.

(i) Notices. Any notices required or permitted by this Agreement shall be in writing and shall be deemed delivered if hand delivered or delivered by certified mail, postage prepaid, return receipt requested, first class mail postage prepaid, or by telecopy (immediately followed by hard copy by first class mail) as follows, unless such address is changed by written notice as provided hereunder:

If to the Borrower:

CAN CAL RESOURCES LIMITED
1505 Blackcombe Street
Unit 203, Building #2
Las Vegas, NV 89123

If to the Lender:

OWEN SEQUOIA, CORP.
c/o Attn: Bruce G. Holden, Esq.
Arter & Hadden LLP
5 Park Plaza, Suite 1000
Irvine, CA 92614-8528
Telephone: (949) 252-3102
Facsimile: (949) 833-9604

(j) Gender. The singular includes the plural and vice versa. Each gender includes all other genders.

(k) Counterparts. This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one in the same agreement.

(1) Binding Effect. This Agreement shall have no effect at law or in equity unless and until this Agreement has been executed by Lender. Lender in its sole discretion may require that all of the exhibits to this Agreement are fully executed and delivered simultaneously with Lender execution of this Agreement.

(m) Third Party Obligations. No person not a party to this Agreement will be a third-party beneficiary or acquire any rights hereunder.

(n) Costs. Any costs incurred by Lender resulting from the transactions contemplated by this Agreement such as legal expense, the filing of any financing statement, or property inspection, shall be solely at Borrower's expense and without right of setoff.

(o) Venue. Venue for any action brought regarding the interpretation of this Agreement shall lie exclusively in Orange County, California.

IN WITNESS WHEREOF, the parties hereto have executed or caused to be executed, this Agreement under seal as of the date first written above.

Borrower:

CAN CAL RESOURCES LIMITED

By:     /s/    R. D. Sloan
     -------------------------------

Lender:

OWEN SEQUOIA CORP.

By:     /s/    John Edwards
     -------------------------------

EXHIBIT 10.5

RECORDING REQUESTED BY

WHEN RECORDED MAIL TO

Arter & Hadden
Attn: Bruce G. Holden, Esq.
5 Park Plaza, Suite 1000
Irvine, CA 92614-8528

DEED OF TRUST, SECURITY AGREEMENT, FINANCING STATEMENT
AND FIXTURE FILING WITH ASSIGNMENT OF RENTS

ATTENTION: COUNTY RECORDER -- THIS INSTRUMENT COVERS GOODS THAT ARE OR ARE TO BECOME FIXTURES ON THE REAL PROPERTY DESCRIBED HEREIN AND IS TO BE FILED FOR RECORD IN THE RECORDS WHERE DEEDS OF TRUST ON REAL ESTATE ARE RECORDED. ADDITIONALLY, AS A DEED OF TRUST, BUT ALSO AS A FINANCING STATEMENT COVERING GOODS THAT ARE OR ARE TO BECOME FIXTURES ON THE REAL PROPERTY DESCRIBED HEREIN. THE MAILING ADDRESSES OF THE TRUSTOR (DEBTOR) AND BENEFICIARY (SECURED PARTY) ARE SET FORTH IN SECTION 4.5 OF THIS DEED OF TRUST.

This Deed of Trust, Security Agreement, Financing Statement and Fixture Filing With Assignment of Rents (this "Deed of Trust") is made as of February 12, 1998 by and among Can Cal Resources Limited, a Nevada corporation ("Trustor"), CHICAGO TITLE INSURANCE COMPANY ("Trustee"), whose address is 560
E. Hospitality Lane, San Bernardino, California, and OWEN SEQUOIA, INC., a Nevada Corporation ("Beneficiary") whose address is 3651 Lindell Road, Suite A, Las Vegas, Nevada 89103.

This Deed of Trust is given, inter alia, for the purpose of securing a loan (the "Loan") from Beneficiary, as lender, to Trustor, as borrower.

FOR GOOD AND VALUABLE CONSIDERATION, including the indebtedness herein recited and the trust herein created, the receipt of which is hereby acknowledged, Trustor hereby irrevocably grants, transfers, conveys and assigns to Trustee, IN TRUST, WITH POWER OF SALE, for the benefit and security of Beneficiary, under and subject to the terms and conditions hereinafter set forth, the real property located in the County of San Bernardino, State of California, more particularly described in Exhibit A attached hereto (the "Premises").

TOGETHER WITH any and all buildings and improvements now or hereafter erected on the Premises including, but not limited to the fixtures, attachments, appliances, equipment, machinery, and other articles attached to said buildings and improvements (the "Improvements"), all of which shall be deemed and construed to be a part of the realty;

TOGETHER WITH all rents, issues profits, royalties, income and other benefits (collectively, the "Rents") derived from any lease, sublease, license, franchise, concession or other agreement (collectively, the "Leases") now or hereafter affecting all or any portion of the Premises and the Improvements or the use or occupancy thereof;

TOGETHER WITH all interests, estates or other claims, both in law and in equity, which Trustor now has or may hereafter acquire in the Premises or the Improvements;

TOGETHER WITH all easements, rights-of-way and rights now owned or hereafter acquired by Trustor used in connection therewith or as a means of access thereto, including, without limiting the generality of the foregoing, all rights pursuant to any trackage agreement and all rights to the nonexclusive use of common drive entries, and all tenements, hereditaments and appurtenances thereof and thereto, and all water and water rights and shares of stock evidencing the same;

TOGETHER WITH all leasehold estate, right, title and interest of Trustor in and to all Leases covering the Premises, the Improvements or any portion thereof now or hereafter existing or entered into, and all right, title and interest of Trustor thereunder including, without limitation, all cash or security deposits, advance rentals, and deposits or payments of similar nature;

TOGETHER WITH all right, title and interest now owned or hereafter acquired by Trustor in and to any greater estate in the Premises or the Improvements;

TOGETHER, with any and all of Trustor's interest in any and all tangible personal property owned by Trustor now or any time hereafter located on or used in any way in connection with the use, enjoyment, occupancy or operation of the Premises or the Improvements or any portion thereof, including, but not limited to, all goods, machinery, tools, equipment (including fire sprinklers and alarm systems, air conditioning, heating, boilers, refrigerating, electronic monitoring, water, lighting, power, sanitation, waste removal, entertainment, recreational, window or structural cleaning rigs, maintenance and all other equipment of every kind), lobby and all other indoor or outdoor furniture (including tables, chairs, planters, desks, sofas, shelves, lockers and cabinets), furnishings, appliances, inventory, rugs, carpets and other floor coverings, draperies, drapery rods and brackets, awnings, venetian blinds, partitions, chandeliers and other lighting fixtures, and all other fixtures, apparatus, equipment, furniture, furnishings, and articles located on or used in any way in connection with the use, enjoyment, occupancy or operation of the Premises or the Improvements or any portion thereof, it being understood that the enumeration of any specific articles of property shall in nowise result in or be held to exclude any items of property not specifically mentioned;

TOGETHER WITH all right, title and interest of Trustor, now owned or hereafter acquired, in and to any land lying within the right-of-way of any street, open or proposed, adjoining the Premises, and any and all sidewalk, alleys and strips and gores of land adjacent to or used in connection with the Premises;

TOGETHER WITH all the estate, interest, right, title, other claim or demand, both in law and in equity, including claims or demands with respect to the proceeds of insurance in effect with respect thereto, which Trustor now has or may hereafter acquire in the Premises or the Improvements, and any and all awards made for the taking by eminent domain, or by any proceeding or purchase in lieu thereof, of the whole or any part of the Trust Estate (as hereinafter defined), including, without limitation, any awards resulting from a change of grade of streets and awards for severance damages.

TOGETHER WITH all collections, proceeds and products of any of the foregoing.

The entire estate, property and interest hereby conveyed to Trustee may hereafter be collectively referred to as the "Trust Estate".

FOR THE PURPOSE OF SECURING:

(a) payment of indebtedness in the total principal amount of up to One Hundred Fifty Thousand Dollars ($150,000) with interest thereon, evidenced by that certain Secured Promissory Note (the "Note") of even date herewith executed by Trustor, which Note and any and all modifications, extensions, renewals and replacements thereof are by this reference hereby made a part hereof;

(b) payment of all sums advanced by Beneficiary to protect the Trust Estate, with interest thereon from the date of the advance at the rate of interest as set forth in the Note (which rate of interest is hereinafter referred to as the "Agreed Rate");

(c) payment of all other sums, with interest thereon, which may hereafter be loaned to Trustor, or its successors or assigns, by Beneficiary, or its successors or assigns when evidenced by a promissory note or notes reciting that they are secured by this Deed of Trust;

(d) payment of all other sums, with interest thereon, becoming due and payable under the provisions of the Loan Documents;

(e) performance of every obligation, covenant or agreement of Trustor contained herein and in the Note, and all supplements, amendments and modifications thereto and all extensions and renewals thereof;

(f) performance of every obligation, covenant and agreement of Trustor contained in any agreement now or hereafter executed by Trustor which recites that the obligations thereunder are secured by this Deed of Trust;

(g) compliance with and performance of each and every material provision of any declaration of covenants, conditions and restrictions pertaining to the Trust Estate or any portion thereof.

This Deed of Trust, the Note, the Assignment of Rents, and any other deeds of trust, mortgages, agreements, guaranties or other instruments given to evidence or further secure the payment and performance of any obligation secured hereby may hereafter be collectively referred to as the "Loan Documents."

TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR, HEREBY COVENANTS

AND AGREES AS FOLLOWS:

ARTICLE I
COVENANTS AND AGREEMENTS OF TRUSTOR

1.1 Payment of Secured Obligations. Trustor shall pay when due the principal of and the interest on the indebtedness evidenced by the Note; all charges, fees and other sums as provided in the Loan Documents; the principal of and interest on any future advances secured by this Deed of Trust; and the principal of and interest on any other indebtedness secured by this Deed of Trust.

1.2 Application of Payment. Except as otherwise expressly provided by applicable law or any other provision of this Deed of Trust, all payments received by Beneficiary from Trustor under the Note or this Deed of Trust shall be applied by Beneficiary in the following order: (1) costs, fees, charges, and advances paid or incurred by Beneficiary or payable to Beneficiary, and interest thereon pursuant to any provision of the Note, this Deed of Trust, and any other loan documents securing the Note, in such order as Beneficiary, in Beneficiary's sole discretion, elects; (2) interest payable under the Note; and (3) principal payable under the Note.

1.3 Estoppel Certificates. Within ten (10) days after any request by Beneficiary for such information, Trustor will execute and deliver to Beneficiary, and any third party designated by Beneficiary, in recordable form, a certificate reciting that the Note and this Deed of Trust are unmodified and in full force and effect, or that the Note and this Deed of Trust are in full force and effect as modified and specifying all modifications asserted by Trustor.

Such certificate shall also recite the amount(s) of principal, interest, and other sums payable under either the Note or this Deed of Trust that remain unpaid, the date(s) through which payments due and owing under the Note or under this Deed of Trust have been paid, the amount(s) of any payments theretofore made under the Note and/or this Deed of Trust, and a

detailed statement of any right of set-off, counterclaim, or other defense that exists or which Trustor contends exists, against any indebtedness secured by this Deed of Trust or any obligation of borrower under this Deed of Trust.

Should Trustor fail to execute and deliver such certificate within ten
(10) day period: (a) the Note and this Deed of Trust shall, as to Trustor, conclusively be deemed to be either in full force and effect, without modification, or in full force and effect, modified in the manner and to the-extent specified by Beneficiary, whichever Beneficiary reasonably and in good faith may represent; and (b) Trustor shall conclusively be deemed irrevocably to have constituted and appointed Beneficiary as Trustor's special attorney-in-fact to execute and deliver such certificate to any third party.

Trustor and Beneficiary expressly agree that any certificate executed and delivered by Trustor, or any representation in lieu of a certificate made by Beneficiary under this Deed of Trust may be relied upon by any prospective purchaser of the estate, or any prospective assignee of any interest of Beneficiary in the Property, and any other person, without independent investigation or examination to determine the accuracy, reasonableness, or good faith of the recitals.

The exercise by Beneficiary of any right or remedy provided by this paragraph shall not constitute a waiver of, or operate to cure any default by Trustor under this Deed of Trust, or preclude any other right or remedy that is otherwise available to Beneficiary under this Deed of Trust or applicable law.

1.4 Future Advances. Upon request by Trustor, Beneficiary, at Beneficiary's option, may make future advances to Trustor. All such future advances, with interest thereon, shall be added to and become a part of the indebtedness secured by this Deed of Trust when evidenced by promissory note(s) reciting that such note(s) are secured by this Deed of Trust.

1.5 Maintenance. Repair. Alterations and Compliance with Laws. Trustor shall:

(a) Maintain, preserve and keep the Trust Estate in good condition and repair;

(b) Not remove, demolish or substantially alter any of the Improvements except upon the prior written consent of Beneficiary;

(c) Complete promptly and in a good and workmanlike manner any Improvement which m ay be now or hereafter constructed on the Premises and promptly restore in like manner any portion of the Improvements which may be damaged or destroyed thereon from any cause whatsoever, and pay when due all claims for labor performed and materials furnished therefor;

(d) Comply with all laws, ordinances, regulations, covenants, conditions and restrictions now and hereafter affecting the Trust Estate or any part thereof or requiring any alterations or Improvements;

(e) Not commit or permit any waste or deterioration of the Trust Estate, and keep and maintain abutting grounds, sidewalks, roads, parking and landscape areas in good and neat order and repair;

(f) Comply with the provisions of any lease, if this Deed of Trust is on a leasehold; and

(g) Not commit, suffer or permit any act to be done in or upon the Trust Estate in violation of any law, ordinance or regulation. Trustor shall not apply for, willingly suffer or permit any change in zoning, subdivision or land use regulations affecting the Property without first obtaining the written consent of Beneficiary which consent shall not be unreasonably withheld.

1.6 Required Insurance. Trustor shall at all times provide, maintain and keep in force or cause to be provided, maintained and kept in force, at no expense to Trustee or Beneficiary, policies of insurance in form and amounts and issued by companies, associations or organizations reasonably satisfactory to Beneficiary covering such casualties, risks, perils, liabilities and other hazards as Beneficiary may reasonably require. All such policies of insurance required by the terms of this Deed of Trust shall contain an endorsement or agreement by the insurer that any loss shall be payable in accordance with the terms of such policy notwithstanding any act or negligence of Trustor or any party holding under Trustor which might otherwise result in forfeiture of said insurance and the further agreement of the insurer waiving all rights of setoff, counterclaim or deductions against Trustor.

1.7 Delivery of Policies. Payment of Premiums.

(a) At Beneficiary's option all policies of insurance shall either have attached thereto a lender's loss payable endorsement for the benefit of Beneficiary in form and substance satisfactory to Beneficiary or shall name Beneficiary as an additional insured. Trustor shall furnish Beneficiary with an original, a certified copy of an original or a certificate of all policies of insurance required under Section 1.6 above which sets forth the coverage, the limits of liability, the name of the carrier, the Policy number and the period of coverage. If Beneficiary consents, Trustor may provide any of the required insurance through blanket policies carried by Trustor and covering more than one location, or by policies procured by a tenant or other party holding under Trustor; provided, however, all such policies shall be in form and substance and issued by companies satisfactory to Beneficiary. At least thirty (30) days prior to the expiration of each required policy, Trustor shall deliver to Beneficiary evidence of the renewal or replacement of such policy, continuing insurance in form and substance as required by this Deed of Trust. All such policies shall contain a provision that, notwithstanding any contrary agreement

between Trustor and insurance company, such policies will not be cancelled, allowed to lapse without renewal, surrendered or materially amended, which term shall include any reduction in the scope or limits of coverage, without at least thirty (30) days' prior written notice to Beneficiary.

(b) In the event Trustor fails to provide, maintain, keep in force or deliver to Beneficiary the policies of insurance required by this Deed of Trust Beneficiary may (but shall have no obligation to) procure such insurance or single-interest insurance for such risks covering Beneficiary's interest, and Trustor will pay all premiums thereon promptly upon demand by Beneficiary, and until such payment is made by Trustor, the amount of all such premiums shall bear interest at the Agreed Rate. Upon the occurrence of an Event of Default and request by Beneficiary, Trustor shall deposit with Beneficiary in monthly installments, an amount equal to one-twelfth (1/12) of the estimated aggregate annual insurance premiums on all policies of insurance required by this Deed of Trust. In such event Trustor further agrees to cause all bills, statements or other documents relating to the foregoing insurance premiums to be sent or mailed directly to Beneficiary. Upon receipt of such bills, statements or other documents evidencing that a premium for a required policy is then payable, and providing Trustor has deposited sufficient funds with Beneficiary pursuant to this Section 1.7, Beneficiary shall timely pay such amounts as may be due thereunder out of the funds so deposited with Beneficiary. If at any time and for any reason the funds deposited with Beneficiary are or will be insufficient to pay such amounts as may be then or subsequently due, Beneficiary shall notify Trustor and Trustor shall immediately deposit an amount equal to such deficiency with Beneficiary. Notwithstanding the foregoing, nothing contained herein shall cause Beneficiary to be deemed a trustee of said funds or to be obligated to pay any amounts in excess of the amount of funds deposited with Beneficiary pursuant to this Section 1.7, nor shall anything contained herein modify the obligation of Trustor set forth in Section 1.6 hereof to maintain and keep such insurance in force at all times. Beneficiary may commingle said reserve with its own funds and Trustor shall be entitled to no interest thereon.

1.8 Casualties: Insurance Proceeds. In the event of any loss, whether or not covered by insurance, Trustor shall give immediate written notice to the Beneficiary and to the insurance carrier, if applicable, on an insured risk. Trustor authorizes and empowers irrevocably, at Beneficiary's option and in Beneficiary's sole discretion as attorney-in-fact for Trustor, to make proof of loss, to adjust and compromise any claim under insurance policies, to appear in and prosecute any action arising from such insurance policies, to collect and receive insurance proceeds, and to deduct therefrom Beneficiary's expenses incurred in the collection of such proceeds, including reasonable attorneys' fees. Trustor further authorizes Beneficiary, at Beneficiary's option and in Beneficiary's sole discretion, and regardless of whether there is any impairment of the security for this Deed of Trust: (a) to apply the balance of such proceeds, or any portion of them, upon any indebtedness secured by this Deed of Trust, whether or not then due, including but not limited to, principal, accrued interest and advances, and in such order or combination as Beneficiary may determine; or (b) to hold the balance of such proceeds, or any portion of them, in a noninterest bearing liability account to be used for the cost of

reconstruction, repair, or alteration of the Improvements on the property; or
(c) to release the balance of such proceeds, or any portion of them, to the Trustor. If the insurance proceeds are held by Beneficiary to be used to reimburse Trustor for the costs of restoration and repair of the Improvements, the Improvements shall be restored to the equivalent of its original condition, or such other condition as Beneficiary may approve in writing, and Beneficiary may, at Beneficiary's option, condition disbursement of the proceeds on Beneficiary's approval of such plans and specifications prepared by an architect satisfactory to Beneficiary, contractor's cost estimates, architect's certificates, waivers of liens, sworn statements of mechanics and materialmen, and such other evidence of costs, percentage completion of construction, application of payments, and satisfaction of liens, as Beneficiary may reasonably require. Prior to disbursement or application of the proceeds, they may be utilized by Beneficiary, who is entitled to all earnings on the proceeds, if any.

If the insurance proceeds are applied to the payment of the sums secured by this Deed of Trust, any such application of proceeds to principal shall not extend or postpone the due date of the monthly installments referred to in this Deed of Trust or change the amount of such installment.

If, after default under this Deed of Trust, the Premises are sold or the Premises are acquired by Beneficiary, all right, title, and interest of Trustor in and to any insurance policies and unearned premiums on those, policies and in and to the proceeds of those policies, resulting from damage to the Premises prior to the sale or acquisition, shall pass to Beneficiary.

In no event shall either Trustee or Beneficiary be obligated to see to, approve, or supervise the proper application of any hazard insurance proceeds released to Trustor.

The receipt, application, use, and release of the hazard insurance proceeds shall not cure or constitute a waiver of any default or pending notice of default under this Deed of Trust, nor invalidate any act done pursuant to such notice.

No hazard insurance proceeds paid or released to Trustor or applied on the cost of repair, restoration, or alteration of the Improvements shall constitute a payment of the indebtedness secured by this Deed of Trust.

It is further expressly understood and agreed between Trustor and Beneficiary that the right and option of Beneficiary, in the exercise of its sole discretion, to apply the proceeds or so much of them as may be necessary to pay the indebtedness secured by this Deed of Trust, in whole or in part, is absolute, and is not contingent or conditional upon the adequacy or value of the remaining property to secure such unpaid indebtedness, or the nature, or extent of the loss or damage for which such insurance proceeds are paid.

1.9 Assignment of Policies Upon Foreclosure. In the event of foreclosure of this Deed of Trust or other transfer of title or assignment of the Trust Estate in extinguishment, in

whole or in part, of the debt secured hereby, all right, title and interest of Trustor in and to all policies of insurance required by Section 1.3 and covering solely the Trust estate or any portion thereof shall inure to the benefit of and pass to the successor in interest to Trustor or to the purchaser or grantee of the Trust Estate.

1.10 Indemnification: Subrogation: Waiver of Offset.

(a) If Beneficiary is made a party to any litigation concerning the Deed of Trust, any of the Loan Documents, the Trust Estate or any part thereof or interest therein, or the occupancy of the Trust Estate by Trustor, then Trustor shall indemnify, defend and hold Beneficiary harmless from all liability by reason of said litigation, including reasonable attorneys' fees and expenses incurred by Beneficiary as a result of any such litigation, whether or not any such litigation is prosecuted to judgment. However, Trustor shall not be obligated to indemnify, defend and hold Beneficiary harmless from and against any claims which arise solely out of the gross negligence or willful misconduct of Beneficiary. Beneficiary may employ an attorney or attorneys to protect its rights hereunder, and in the event of such employment following any breach by Trustor, Trustor shall pay Beneficiary reasonable attorneys' fees and expenses incurred by Beneficiary, whether or not an action is actually commenced against Trustor by reason of its breach.

(b) Trustor waives any and all right to claim or recover against Beneficiary, its officers, employees, agents and representatives, for loss of or damage to Trustor, the Trust Estate, Trustor's property or the property of others under Trustor's control from any cause insured against or required to be insured against by the provisions of this Deed of Trust.

(c) All sums payable by Trustor pursuant to this Deed of Trust shall be paid without notice, demand, counterclaim, setoff, deduction or defense and without abatement, suspension, deferment, diminution or reduction, and the obligations and liabilities of Trustor hereunder shall in no way be released, discharged or otherwise affected (except as expressly provided herein) by reason of: (i) any damage to or destruction of or any condemnation or similar taking of the Trust Estate or any part thereof; (ii) any restriction or prevention of or interference by any third party with any use of the Trust Estate or any part thereof; (iii) any title defect or encumbrance or any eviction from the Premises or the Improvements or any part thereof by title paramount or otherwise; (iv) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to Beneficiary, or any action taken with respect to this Deed of Trust by any trustee or receiver of Beneficiary, or by any court, in any such proceeding; (v) any claim which Trustor has or might have against Beneficiary; (vi) any default or failure on the part of Beneficiary to perform or comply with any of the terms hereof or of any other agreement with Trustor; or (vii) any other occurrence whatsoever, whether similar or dissimilar to the foregoing whether or not Trustor shall have notice or knowledge of any of the foregoing. Except as expressly provided herein, Trustor waives all rights now or hereafter conferred by statute or otherwise to any abatement,

suspension, deferment, diminution or reduction of any sum secured hereby and payable by Trustor.

1.11 Taxes and Impositions.

(a) Trustor shall pay, or cause to be paid prior to delinquency, all real property taxes and assessments, general and special, and all other taxes and assessments of any kind or nature whatsoever, including, without limitation, nongovernmental levies or assessments such as maintenance charges, levies or charges resulting from covenants, conditions and restrictions affecting the Trust Estate, which are assessed or imposed upon the Trust Estate, or become due and payable, and which create, may create or appear to create a lien upon the Trust Estate, or any part thereof, or upon any property, equipment or other facility used in the operation or maintenance thereof (all the above shall collectively be hereinafter referred to as "Impositions"); provided, however, that if, by law any such Imposition is payable, or may at the option of the taxpayer be paid, in installments, Trustor may pay the same or cause it to be paid, together with any accrued interest on the unpaid balance of such Imposition, in installments as the same become due and before any fine, penalty, interest or cost may be added thereto for the nonpayment of any such installment and interest.

(b) If at any time after the date hereof there shall be assessed or imposed (i) a tax or assessment on the Trust Estate in lieu of or in addition to the impositions payable by Trustor pursuant to Section 1.11(a), or (ii) a license fee, tax or assessment imposed on Beneficiary and measured by or based in whole or in part upon the amount of the outstanding obligations secured hereby, then all such taxes, assessments or fees shall be deemed to be included within the term "Impositions" as defined in Section 1.11(a) and Trustor shall pay and discharge the same as herein provided with respect to the payment of Impositions. If Trustor fails to pay such Impositions prior to delinquency or if Trustor is prohibited by law from paying such Impositions, Beneficiary may at its option declare all obligations secured hereby together with all accrued interest thereon, immediately due and payable. Anything to the contrary herein notwithstanding, Trustor shall have no obligation to pay any franchise, estate, inheritance, income, excess profits or similar tax levied on Beneficiary or on the obligations secured hereby.

(c) Subject to the provisions of Section 1.11(d) and upon request by Beneficiary, Trustor shall deliver to Beneficiary within thirty (30) days after the last date prior to delinquency for payment of any such Imposition official receipts of the appropriate taxing authority, or other proof satisfactory to Beneficiary, evidencing the payment thereof.

(d) Trustor shall have the right before any delinquency occurs to contest or object to the amount or validity of any such Imposition by appropriate proceedings, but such right shall not be deemed or construed in any way as relieving, modifying or extending Trustor's covenant to pay any such Imposition at the time and in the manner provided in this Section 1.11, unless Trustor has given prior written notice to Beneficiary of Trustor's intent to so contest or object to an Imposition, and unless, at Beneficiary's sole option,
(i) Trustor shall demonstrate to

Beneficiary's satisfaction that the proceedings to be initiated by Trustor shall conclusively operate to prevent the sale of the Trust Estate, or any part thereof, and to satisfy such Imposition prior to final determination of such proceedings; and (ii) Trustor shall furnish a good and sufficient bond or surety as requested by and satisfactory to Beneficiary; or (iii) Trustor shall demonstrate to Beneficiary's satisfaction that Trustor has provided a good and sufficient undertaking as may be required or permitted by law to accomplish a stay of any such sale.

(e) Upon the occurrence of any Event of Default and request by Beneficiary, Trustor shall pay to Beneficiary an initial cash reserve in an amount adequate to pay all Impositions for the ensuing tax fiscal year and shall thereafter continue to deposit with Beneficiary, in monthly installments, an amount equal to one twelfth (1/12) of the sum of the annual Impositions reasonably estimated by Beneficiary, for the purpose of paying the installment of Impositions next due on the Trust Estate (funds deposited for this purpose shall hereinafter be referred to as "Impounds"). In such event Trustor further agrees to cause all bills, statements or other documents relating to Impositions to be sent or mailed directly to Beneficiary. Upon receipt of such bills, statements or other documents, and providing Trustor has deposited sufficient Impounds with Beneficiary pursuant to this Section 1.11(e), Beneficiary shall timely pay such amounts as may be due thereunder out of the Impounds so deposited with Beneficiary. If at any time and for any reason the Impounds deposited with Beneficiary are or will be insufficient to pay such amounts as may then or subsequently be due, Beneficiary may notify Trustor and upon such notice Trustor shall deposit immediately an amount equal to such deficiency with Beneficiary. Notwithstanding the foregoing, nothing contained herein shall cause Beneficiary to be deemed a trustee of said funds or to be obligated to pay any amounts in excess of the amount of funds deposited with Beneficiary pursuant to this Section 1.11(e). Beneficiary may commingle Impounds with its own funds and shall not be obligated to pay or allow any interest on any Impounds held by Beneficiary pending disbursement or application hereunder. Beneficiary may reserve for future payment of Impositions such portion of the Impounds as Beneficiary may in its absolute discretion deem proper. Upon an Event of Default under any of the Loan Documents or this Deed of Trust, Beneficiary may apply the balance of the Impounds upon any indebtedness or obligation secured hereby in such order as Beneficiary may determine, notwithstanding that said indebtedness or the performance of said obligation may not yet be due according to the terms thereof. Should Trustor fail to deposit with Beneficiary (exclusive of that portion of said payments which has been applied by Beneficiary upon any indebtedness or obligation secured hereby) sums sufficient to fully pay such Impositions at least fifteen (15) days before delinquency thereof, Beneficiary may, at Beneficiary's election, but without any obligation so to do, advance any amounts required to make up the deficiency, which advances, if any, shall be secured hereby and shall be repayable to Beneficiary as herein elsewhere provided, or at the option of Beneficiary the latter may, without making any advance whatever, apply any Impounds held by it upon any indebtedness or obligation secured hereby in such order as Beneficiary may determine, notwithstanding that said indebtedness or the performance of said obligation may not yet be due according to the terms thereof. Should any Event of Default occur or exist on the part of the Trustor in the payment or performance of any of Trustor's or any guarantor's obligations under the terms of the Loan

Documents, Beneficiary may, at any time, at Beneficiary's option, apply any sums or amounts in its hands received pursuant to Sections 1.11(e) hereof, or as rents or income of the Trust Estate or otherwise, to any indebtedness or obligation of the Trustor secured hereby in such manner and order as Beneficiary may elect, notwithstanding said indebtedness or the performance of said obligation may not yet be due according to the terms thereof. The receipt, use or application of any such Impounds paid by Trustor to Beneficiary hereunder shall not be construed to affect the maturity of any indebtedness secured by this Deed of Trust or any of the rights or powers of Beneficiary or Trustee under the terms of the Loan Documents or any of the obligations of Trustor or any guarantor under the Loan Documents.

(f) Trustor shall not suffer, permit or initiate the joint assessment of any real and personal property which may constitute all or a Portion of the Trust Estate or suffer, Permit or initiate any other procedure whereby the lien of the real property taxes and the lien of the personal property taxes shall be assessed, levied or charged to the Trust Estate as a single lien.

(g) If requested by Beneficiary, Trustor shall cause to be furnished to Beneficiary a tax reporting service covering the Trust Estate of the type, duration and with a company satisfactory to Beneficiary.

1.12 Utilities. Trustor shall pay or shall cause to be paid when due all utility charges which are incurred by Trustor for the benefit of the Trust Estate or which may become a charge or lien against the Trust Estate for gas, electricity, water or sewer services furnished to the Trust Estate and all other assessments or charges of a similar nature, whether public or private, affecting or related to the Trust Estate or any portion thereof, whether or not such taxes, assessments or charges are or may become liens thereon

1.13 Actions Affecting Trust Estate. Trustor shall appear in and contest any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; and shall pay all costs and expenses, including the cost of evidence of title and attorneys' fees, in any such action or proceeding in which Beneficiary or Trustee may appear.

1.14 Actions By Trustee or Beneficiary to Preserve Trust Estate. If Trustor fails to make any payment or to do any act as and in the manner provided in any of the Loan Documents, Beneficiary and/or Trustee, each in its own discretion, without obligation so to do, without releasing Trustor from any obligation, and without notice to or demand upon Trustor, may make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof. In connection therewith (without limiting their general powers, whether conferred herein, in another Loan Document or by law), Beneficiary and Trustee shall have and are hereby given the right, but not the obligation, (i) to enter upon and take possession of the Trust Estate; (ii) to make additions, alterations, repairs and improvements to the Trust Estate which they or either of them may consider necessary or proper to keep the Trust Estate in good condition and repair; (iii) to appear and participate in any action or proceeding affecting or which may affect the security hereof or the rights or powers of Beneficiary or Trustee; (iv) to

pay, purchase, contest or compromise any encumbrance, claim, charge, lien or debt which in the judgment of either may affect or appear to affect the security of this Deed of Trust or be prior or superior hereto; and (v) in exercising such powers, to pay necessary expenses, including employment of counsel or other necessary or desirable consultants. Trustor shall, immediately upon demand therefor by Beneficiary and Trustee or any of them, pay to Beneficiary and Trustee an amount equal to all respective costs and expenses incurred by them in connection with the exercise by either Beneficiary or Trustee or both of the foregoing rights, including, without limitation, costs of evidence of title, court costs, appraisals, surveys and receiver's, trustee's and attorneys' fees, together with interest thereon from the date of such expenditures at the Agreed Rate.

1.15 Transfer of Trust Estate by Trustor. In order to induce Beneficiary to make the loan secured hereby, Trustor agrees that, in the event of any transfer of the Trust Estate without the prior written consent of the Beneficiary, Beneficiary shall have the absolute right at its option, without prior demand or notice, to declare all sums secured hereby immediately due and payable. Consent to one such transaction shall not be deemed to be a waiver of the right to require consent to future or successive transactions. Beneficiary may grant or deny such consent in its sole discretion and, if consent should be given, any such transfer shall be subject to this Deed of Trust, and any such transferee shall assume all obligations hereunder and agree to be bound by all provisions contained herein. Such assumption shall not, however, release Trustor or any maker or guarantor of the Note from any liability thereunder without the prior written consent of Beneficiary. As used herein, "transfer" includes the direct or indirect sale, agreement to sell, transfer, conveyance, pledge, collateral assignment or hypothecation of the Trust Estate, or any portion thereof or interest therein, whether voluntary, involuntary, by operation of law or otherwise, the execution of any installment land sale contract or similar instrument affecting all or a portion of the Trust Estate, or the lease of all or substantially all of the Trust Estate. The term "transfer" shall also include the direct or indirect transfer, assignment, hypothecation or conveyance of legal or beneficial ownership of (i) any partnership interest in Trustor (general or limited), or (ii) more than 50% of the voting stock of Trustor. The term "transfer" shall not include the sale of any portion of the Premises so long as Trustor complies with any reasonable conditions specified by Beneficiary relating to such sales activity.

1.16 Full Performance Required: Survival of Warranties. All representations, warranties and covenants of Trustor contained in any loan application or made to Beneficiary in connection with the loan secured hereby or contained in the Loan Documents or incorporated by reference therein, shall survive the execution and delivery of this Deed of Trust and shall remain continuing obligations, warranties and representations of Trustor so long as any portion of the obligations secured by this Deed of Trust remain outstanding.

1.17 Eminent Domain. In the event that any proceeding or action be commenced for the taking of the Trust Estate, or any part thereof or interest therein, for public or quasi-public use under the power of eminent domain, condemnation or otherwise, or if the same be taken or damaged by reason of any public improvement or condemnation proceeding, or in any other

manner, or should Trustor receive any notice or other information regarding such proceeding, action, taking or damage, Trustor shall give prompt written notice thereof to Beneficiary. Beneficiary shall be entitled at its option, without regard to the adequacy of its security, to commence, appear in and prosecute in its own name any such action or proceeding. Beneficiary shall also be entitled to make any compromise or settlement in connection with such taking or damage. All compensation, awards, damages, rights of action and proceeds awarded to Trustor by reason of any such taking or damage to the Premises or the Improvements, or any part thereof or any interest therein for public or quasi-public use under the power of eminent domain by reason of any public improvement or condemnation proceeding, or in any other manner (the "Condemnation Proceeds") are hereby assigned to Beneficiary and Trustor agrees to execute such further assignments of the Condemnation Proceeds as Beneficiary or Trustee may require. After deducting therefrom all costs and expenses (regardless of the particular nature thereof and whether incurred with or without suit), including attorneys' fees, incurred by it in connection with any such action or proceeding, Beneficiary shall apply all such Condemnation Proceeds to the restoration of the Improvements, provided that the taking or damage will not, in Beneficiary's reasonable judgment, materially affect the contemplated use and operation of the Improvements.

If the above condition is met, Beneficiary shall disburse the Condemnation Proceeds as repairs or replacements are effected and continuing expenses become due and payable. If the following completion of all such repairs and replacements any Condemnation Proceeds remain undisbursed, then Beneficiary shall apply such undisbursed Condemnation Proceeds toward payment of the outstanding balance of the Loan, and any Condemnation Proceeds which remain undisbursed after payment in full of the Loan shall be released by Beneficiary to the person or persons legally entitled thereto. If any one or more of the above conditions are not met, Beneficiary shall apply all of the Condemnation Proceeds, after deductions as herein provided, to the repayment of the outstanding balance of the Note, together with accrued interest thereon, notwithstanding that said outstanding balance may not be due and payable. If the Condemnation Proceeds are not sufficient to repay the Note in full, Trustor shall immediately pay any remaining balance, together with accrued interest thereon. Application or release of the Condemnation Proceeds as provided herein shall not cure or waive any default or notice of default hereunder or under any other Loan Document or invalidate any act done pursuant to such notice.

1.18 Additional Security. No other security now existing, or hereafter taken, to secure the obligations secured hereby shall be impaired or affected by the execution of this Deed of Trust, and all additional security shall be taken, considered and held as cumulative. The taking of additional security, execution of partial releases of the security, or any extension of the time of payment of the indebtedness shall not diminish the force, effect or lien of this Deed of Trust and shall not affect or impair the liability of any maker, surety or endorser for the payment of said indebtedness. In the event Beneficiary at any time holds additional security for any of the obligations secured hereby, it may enforce the sale thereof or otherwise realize upon the same, at its option, either before, concurrently, or after a sale in made hereunder.

1.19 Appointment of Successor Trustee. Beneficiary may, from time to time, by a written instrument executed and acknowledged by Beneficiary, mailed to Trustor and recorded in the county in which the Trust Estate is located and by otherwise complying with the provisions of applicable law, substitute a successor or successors to any Trustee named herein or acting hereunder; and said successor shall, without conveyance from the Trustee predecessor, succeed to all title, estate, rights, powers and duties of said predecessor.

1.20 Successors and Assigns. This Deed of Trust applies to, inures to the benefit of and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors and assigns. The term "Beneficiary" shall mean the owner and holder of the Note, whether or not named as Beneficiary herein.

1.21 Inspections. Beneficiary, or it agents, representatives or workers, are authorized to enter at any reasonable time upon or in any part of the Trust Estate for the purpose of inspecting the same and for the purpose of performing any of the acts it is authorized to perform hereunder or under the terms of any of the Loan Documents.

1.22 Liens. Trustor shall pay and promptly discharge, at Trustor's cost and expense, all liens, encumbrances and charges upon the Trust Estate, or any part thereof or interest therein; provided that Trustor shall have the right to contest in good faith the validity of any such lien, the encumbrance or charge. If Trustor shall fail to remove and discharge any such lien, encumbrance or charge, then, in addition to any other right or remedy of Beneficiary, Beneficiary may, but shall not be obligated to, discharge the same, either by paying the amount claimed to be due, or by procuring the discharge of such lien, encumbrance or charge by depositing in a court a bond or the amount claimed or otherwise giving security for such claim, or by procuring such discharge in such manner as is or may be prescribed by law. Trustor shall, immediately upon demand therefor by Beneficiary, pay to Beneficiary an amount equal to all costs and expenses incurred by Beneficiary in connection with the exercise by Beneficiary of the foregoing right to discharge any such lien encumbrance or charge, together with interest thereon from the date of such expenditure at the Agreed Rate.

1.23 Trustee's Powers. At any time, or from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note secured hereby for endorsement, and without affecting the personal liability of any person for payment of the indebtedness secured hereby or the effect of this Deed of Trust upon the remainder of said Trust Estate, Trustee may (i) reconvey any part of said Trust Estate, (ii) consent in writing to the making of any map or plat thereof, (iii) join in granting any easement thereon, (iv) or join in any extension agreement or any agreement subordinating the lien or charge hereof.

1.24 Beneficiary's Powers. Without affecting the liability of any other person liable for the payment of any obligation herein mentioned, and without affecting the lien or charge of this Deed of Trust upon any portion of the Trust Estate not then or theretofore released as

security for the full amount of all unpaid obligations, Beneficiary may, from time to time and without notice (i) release any person so liable, (ii) extend the maturity or alter any of the terms of any such obligation, (iii) grant other indulgences, (iv) release or reconvey, or cause to be released or reconveyed at any time at Beneficiary's option any parcel, portion or all of the Trust Estate,
(v) take or release any other or additional security for any obligation herein mentioned, or (vi) make compositions or other arrangements with debtors in relation thereto.

1.25 Trade Names. At the request of Beneficiary, Trustor shall execute a certificate in form satisfactory to Beneficiary listing the trade names or fictitious business names under which Trustor intends to operate the Trust Estate or any business located thereon and representing and warranting that Trustor does business under no other trade names or fictitious business name*-- with respect to the Trust Estate. Trustor shall immediately notify Beneficiary in writing of any change in said trade names or fictitious business names, and will, upon request of Beneficiary, execute any additional financing statements and other certificates necessary to reflect the change in trade names or fictitious business names.

1.26 Leasehold. If a leasehold estate constitutes a portion of the Trust Estate, Trustor agrees not to amend, change, terminate or modify such leasehold estate or any interest therein without the prior written consent of Beneficiary. Consent to one amendment, change, agreement or modification shall not be deemed to be a waiver of the right to require consent to other, future or successive amendments, changes, agreements or modifications. Trustor agrees to perform all obligations and agreements under said leasehold and shall not take any action or omit to take any action which would effect or permit the termination of said leasehold. Trustor agrees to promptly notify Beneficiary in writing with respect to any default or alleged default by any party thereto and to deliver to Beneficiary copies of all notices, demands, complaints or other communications received or given by Trustor with respect to any such default or alleged default. Beneficiary shall have the option to cure any such default and to perform any or all of Trustor's obligations thereunder. All sums expended by Beneficiary in curing any such default shall be secured hereby and shall be immediately due and payable without demand or notice and shall bear interest from date of expenditure at the Agreed Rate.

ARTICLE II
ASSIGNMENT OF RENTS, ISSUES AND PROFITS

2.1 Assignment of Rents, Issues and Profits. Trustor further irrevocably grants, transfers and assigns to Beneficiary the rents, income, issues, and profits from the Premises, absolutely and unconditionally, and not merely as additional collateral security for the indebtedness secured by this Deed of Trust. In addition, upon execution by Trustor, Trustor assigns all right to income and profits emanating from that certain Mining Lease Agreement by and between Trustor and Twin Mountain Rock Venture to Beneficiary, and Beneficiary shall have the right to directly make demand on Twin Mountain Rock Venture for such income and profits.

2.2 Assignment to Beneficiary. Trustor hereby assigns and transfers to Beneficiary all the Rents of the Trust Estate, and hereby gives to and confers upon Beneficiary the right, power and authority to collect such Rents. Trustor irrevocably appoints Beneficiary its true and lawful attorney-in-fact, at the option of Beneficiary at any time and from time to time, to demand, receive and enforce payment, to give receipts, releases and satisfactions, and to sue, in the name of Trustor, Trustee or Beneficiary, for all such Rents, issues and profits and apply the same to the indebtedness secured hereby; provided, however, that so long as an Event of Default shall not have occurred hereunder and be continuing, Trustor shall have the right to collect such Rents in accordance with and subject to the provisions of the Assignment of Rents. Upon request of Beneficiary, Trustor shall execute and deliver to Beneficiary, in recordable form, a specific assignment of any Lease, now or hereafter affecting the Trust Estate or any portion thereof, to further evidence the assignment hereby made.

2.3 Election of Remedies. Upon the occurrence of an Event of Default hereunder Beneficiary may, at its option, exercise its rights under the Assignment of Rents or exercise (or cause the Trustee to exercise) its rights hereunder. If Beneficiary elects to exercise its rights hereunder, Beneficiary or Trustee may, at any time without notice, either in person, by agent or by a receiver appointed by a court, enter upon and take possession of all or any portion of the Trust Estate, enforce all Leases, collect all Rents, including those past due and unpaid, and apply the same, to the costs and expenses of operation of the Trust Estate and collection, including, without limitation, attorneys' fees, and to any indebtedness then secured hereby, and in such order as Beneficiary may determine. In connection with the exercise by Beneficiary of its rights hereunder or under the Assignment of Rents, Trustor agrees that Beneficiary shall have the right to specifically enforce such rights and to obtain the appointment of a receiver in accordance with the provisions of
Section 3.4 hereof without regard to the value of the Trust Estate or the adequacy of any security for the obligations then secured hereby. The collection of such Rents or the entering upon and taking possession of the Trust Estate, or the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done in response to such default or pursuant to such notice of default, or be deemed or construed to make Beneficiary a mortgage-in-possession of the Trust Estate or any portion thereof.

ARTICLE III
REMEDIES UPON DEFAULT

3.1 Events of Default. Any of the following events shall be deemed an Event of Default hereunder (an "Event of Default"):

(a) Default shall be made in the payment of any installment of principal or interest or any other sum secured hereby when due; or

(b) A failure by Trustor to perform any other covenant or obligation or any breach by Trustor of any other agreements, representations or warranties contained in this Deed of Trust, the Note, the Assignment of Rents, or any other Loan Document; or

(c) the occurrence of a default or an "Event of Default" under any of the Loan Documents;

(d) A writ of execution or attachment or any similar process shall be issued or levied against all or any part of or interest in the Premises, or any judgment involving monetary damages in any such case shall be entered against Trustor which shall become a lien on the Premises or any portion thereof.

(e) A default by Trustor of any terms or conditions of a Prior Encumbrance.

For purposes of this Deed of Trust, the term "Prior Encumbrance" shall mean any lien or encumbrance upon the Premises or any part thereof on a parity with or prior or superior to the lien of this Deed of Trust.

3.2 Acceleration Upon Default, Additional Remedies. Upon the occurrence of an Event of Default, Beneficiary may, at its option, declare all indebtedness secured hereby to be immediately due and payable without any presentment, demand, protest or notice of any kind. Thereafter, Beneficiary may:

(a) Either in person or by agent, with or without bringing any action or proceeding, or by a receiver appointed by a court and without regard to the adequacy of its security, enter upon and take possession of the Trust Estate, or any part thereof, in its own name or in the of Trustee, and do any act which it deems necessary or desirable to preserve the value, marketability or rentability of the Trust Estate, or any part thereof or interest therein, increase the income therefrom or protect the security thereof and, with or without taking possession of the Trust Estate, sue for or otherwise collect the rents, issues and profits thereof, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection including, without limitation, attorneys' fees, upon any indebtedness secured hereby, all in such order as Beneficiary may determine. The entering upon and taking possession of the Trust Estate, the collection of such rents, issues and profits and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done in response to such default or pursuant to such notice of default and, notwithstanding the continuance in possession of all or any portion of the Trust Estate or the collection, receipt and application of rents, issues or profits, Trustee or Beneficiary shall be entitled to exercise every right provided for in any of the Loan Documents or by law upon occurrence of any Event of Default, including the right to exercise the power of sale;

(b) Commence an action to foreclose this Deed of Trust as a mortgage, appoint a receiver, or specifically enforce any of the covenants hereof;

(c) Deliver to Trustee a written declaration of default and demand for sale, and a written notice of default and election to cause Trustor's interest in the Trust Estate to be sold,

which notice Trustee or Beneficiary shall cause to be duly filed for record in the Official Records of the county in which the Trust Estate is located; or

(d) Exercise all other rights and remedies provided herein in any Loan Document or other document or agreement now or hereafter securing all or any portion of the obligations secured hereby, or by law.

3.3 Foreclosure by Power of Sale. Should Beneficiary elect to foreclose by exercise of the power of sale hereby contained, Beneficiary shall notify Trustee and shall deposit with Trustee this Deed of Trust and the Note and such receipt and evidence of expenditures made and secured hereby as Trustee may require.

(a) Upon receipt of such notice from Beneficiary, Trustee shall cause to be recorded, published and delivered to Trustor such Notice of Default and Election to Sell as then required by law and by this Deed of Trust. Trustee shall, without demand on Trustor, after lapse of such time as may then be required by law and after recordation of such Notice of Default and after Notice of Sale having been given as required by law, sell the Trust Estate at the time and place of sale fixed by it in said Notice of Sale, either as a whole, or in separate lots or parcels or items as Trustee shall deem expedient, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States payable at the time of sale. Trustee shall deliver to such purchaser or purchasers thereof its good and sufficient deed or deeds conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including, without limitation, Trustor, Trustee or Beneficiary, may purchase at such sale and Trustor hereby covenants to warrant and defend the title of such purchaser or purchasers.

(b) After deducting all costs, fees and expenses of Trustee and of this Trust, including costs of evidence of title in connection with sale, Trustee shall apply the proceeds of sale in the following priority, to payment of: (i) first, all sums expended under the terms hereof, not then repaid, with accrued interest at the Agreed Rate; (ii) second, all other sums then secured hereby; and (iii) the remainder, if any, to the person or persons legally entitled thereto.

(c) Subject to California Civil Code Section 2924g, Trustee may postpone sale of all or any portion of the Trust Estate by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement or subsequently noticed sale, and without further notice make such sale at the time fixed by the last postponement, or may, in its discretion, give a new notice of sale.

3.4 Appointment of Receiver. Upon the occurrence of an Event of Default hereunder, Beneficiary, as a matter of right and without notice to Trustor or anyone claiming under Trustor, and without regard to the then value of the Trust Estate or the adequacy of any security for the obligations then secured hereby, shall have the right to apply to any court having

jurisdiction to appoint a receiver or receivers of the Trust Estate, and Trustor hereby irrevocably consents to such appointment and waives notice of any application therefor. Any such receiver or receivers shall have all the usual powers and duties of receivers in like or similar cases and all the powers and duties of Beneficiary in case of entry as provided herein and shall continue as such and exercise all such powers until the later of (i) the date of confirmation of sale of the Trust Estate; (ii) the disbursement of all proceeds of the Trust Estate collected by such receiver and the payment of all expenses incurred in connection therewith; or (iii) the termination of such receivership with the consent of Beneficiary or pursuant to an order of a court of competent jurisdiction.

3.5 Remedies Not Exclusive. Trustee and Beneficiary, and each of them, shall be entitled to enforce payment and performance of any indebtedness or obligations secured hereby and to exercise all rights and powers under this Deed of Trust or under any Loan Document or other agreement or any laws now or hereafter in force, notwithstanding some or all of the said indebtedness and obligations secured hereby may now or hereafter be otherwise secured, whether by mortgage, deed of trust, pledge, lien, assignment or otherwise. Neither the acceptance of this Deed of Trust nor its enforcement whether by court action or pursuant to the power of sale or other powers herein contained, shall prejudice or in any manner affect Trustee's or Beneficiary's right to realize upon or enforce any other security now or hereafter held by Trustee or Beneficiary, it being agreed that Trustee and Beneficiary, and each of them, shall be entitled to enforce this Deed of Trust and any other security now or hereafter held by Beneficiary or Trustee in such order and manner as they or either of them may in their absolute discretion determine. No remedy herein conferred upon or reserved to Trustee or Beneficiary is intended to be exclusive of any other remedy herein or by law provided or permitted, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. Every power or remedy given by any of the Loan Documents to Trustee or Beneficiary or to which either of them may be otherwise entitled, may be exercised, concurrently or independently, from time to time and as often as may be deemed expedient by Trustee or Beneficiary and either of them may pursue inconsistent remedies. No waiver of any default of the Trustor hereunder shall be implied from any omission by the Beneficiary to take any action on account of such default if such default persists or be repeated, and no express waiver shall affect any default other than the default specified in the express waiver and that only for the time and to the extent therein stated. No acceptance of any payment of any one or more delinquent installments which does not include interest at the penalty or default rate from the date of delinquency, together with any required late charge, shall constitute a waiver of the right of Beneficiary at any time thereafter to demand and collect payment of interest at such default rate or of late charges, if any.

3.6 Request for Notice. Trustor hereby requests a copy of any notice of default and that any notice of sale hereunder by mailed to it at the address set forth in Section 4.5 of this Deed of Trust.

ARTICLE IV
MISCELLANEOUS

4.1 Amendments. This Deed of Trust nor any provision hereof cannot be waived, changed, discharged or terminated orally, but only by an instrument in writing signed by the party against whom enforcement of any waiver, change, discharge or termination is sought.

4.2 Trustor Waiver of Rights. Trustor waives to the extent permitted by law, (i) the benefit of all laws now existing or that may hereafter be enacted providing for any appraisement before sale of any portion of the Trust Estate, and, (ii) all rights of redemption, valuation, appraisement, stay of execution, notice of election to mature or declare due the whole of the secured indebtedness and marshaling in the event of foreclosure of the liens hereby created, and (iii) all rights and remedies which Trustor may have or be able to assert by reason of the laws of the State of California pertaining to the rights and remedies of sureties; provided, however, nothing contained herein shall be deemed to be a waiver of Trustor's rights under Section 2924c of the California Civil Code.

4.3 Statements by Trustor. Trustor shall, within ten (10) days after written notice thereof from Beneficiary, deliver to Beneficiary a written statement stating the unpaid principal of and interest on the Note and any other amounts secured by this Deed of Trust and stating whether any offset or defense exists against such principal and interest.

4.4 Reconveyance by Trustee. Upon written request of Beneficiary stating that all sums secured hereby have been paid in full, and upon surrender of this Deed of Trust and the Note to Trustee for cancellation and retention, and upon payment by Trustor of Trustee's fees, Trustee shall reconvey to Trustor, or to the person or persons legally entitled thereto, without warranty, any portion of the Trust Estate then held hereunder. The recitals in such reconveyance of any matters or facts shall be conclusive proof of the truthfulness thereof. The grantee in any reconveyance may be described as "the person or persons legally entitled thereto."

4.5 Notices. All notices, requests and demands to be made hereunder to the parties hereto shall be in writing and shall be delivered by hand or sent by registered or certified mail, return receipt requested, postage pre-paid through the United States Postal Service to the addresses shown below or such other addresses which the parties may provide to one another in accordance herewith. Such notices, requests and demands, if sent by mail, shall be deemed given five
(5) days after deposit in the United States mails and if delivered by hand, shall be deemed given when delivered.

To Beneficiary:             Owen Sequoia, Inc.
                            3651 Lindell Road, Suite A
                            Las Vegas, NV 89103

With a copy to:             Arter & Hadden
                            Attn: Bruce G. Holden, Esq.
                            Jamboree Center
                            5 Park Plaza, Suite 1000
                            Irvine, CA 92714

To Trustor:                 Can Cal Resources, Ltd
                            Attn: Ron Sloan
                            1505 Blackcombe St., Unit 203
                            Las Vegas, NV 89128

4.6 Acceptance by Trustee. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law.

4.7 Captions. The captions or headings at the beginning of each Section hereof are for the convenience of the parties and are not a Part of this Deed of Trust.

4.8 Invalidity of Certain Provisions. Every provision of this Deed of Trust is intended to be severable. In any event any term or provision hereof is declared to be illegal or invalid for any reason whatsoever by a court of competent jurisdiction, such illegality or invalidity shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable. If the lien of this Deed of Trust is invalid or unenforceable as to any part of the debt, or if the lien is invalid or unenforceable as to any part of the Trust Estate, the unsecured or partially unsecured portion of the debt shall be completely paid prior to the payment of the remaining and secured or partially secured portion of the debt, and all payments made on the debt, whether voluntary or under foreclosure or other enforcement action or procedure, shall be considered to have been first paid on and applied to the full payment of that portion of the debt which is not secured or fully secured by the lien of this Deed of Trust.

4.9 Subrogation. To the extent that proceeds of the Note are used to pay any outstanding lien, charge or Prior Encumbrance against the Trust Estate, such proceeds have been or will be advanced by Beneficiary at Trustor's request and Beneficiary shall be subrogated to any and all rights and liens held by any owner or holder of such outstanding liens, charges and Prior Encumbrances irrespective of whether said liens, charges or encumbrances are released.

4.10 Attorneys' Fees. If the Note is not paid when due or if any Event of Default occurs, Trustor promises to pay all costs of enforcement and collection, including but not limited to, reasonable attorneys' fees, whether or not such enforcement and collection includes the filing of a lawsuit. As used herein, the term "attorneys' fees" or "attorneys' fees and costs" shall have the meanings usually given such terms.

4.11 No Merger of Lease. If both the lessor's and lessee's estate under any lease or any portion thereof which constitutes a part of the Trust Estate shall at any time become vested in

one owner, this Deed of Trust and the lien created hereby shall not be destroyed or terminated by application of the doctrine of merger unless Beneficiary so elects as evidenced by recording a written declaration so stating, and, unless and until beneficiary so elects, Beneficiary shall continue to have and enjoy all of the rights and privileges of Beneficiary as to the separate estates. In addition, upon the foreclosure of the lien created by this Deed of Trust on the Trust Estate pursuant to the provisions hereof, any leases or subleases then existing and affecting all or any portion of the Trust Estate shall not be destroyed or terminated by application of the law of merger or as a matter of law or as a result of such foreclosure unless Beneficiary or any purchaser at such foreclosure sale shall so elect. No act by or on behalf of Beneficiary or any such purchaser shall constitute a termination of any Lease or sublease unless Beneficiary or such purchaser shall give written notice thereof to such tenant or subtenant.

4.12 Governing Law. This Deed of Trust shall be governed by and construed in accordance with the laws of the State of California.

4.13 Joint and Several Obligations. Should this Deed of Trust as signed by more than one party, all obligations herein contained shall be deemed to be the joint and several obligations of each party executing this Deed of Trust. Any married person signing this Deed of Trust agrees that recourse may be had against community assets and against his or her separate property for the satisfaction of all obligations contained herein.

4.14 Interpretation. In this Deed of Trust the singular shall include the plural and the masculine shall include the feminine and neuter and vice versa, if the context so requires.

4.15 Loan Statement Fees. Trustor shall pay the amount demanded by Beneficiary or its authorized loan servicing agent for any statement regarding the obligations secured hereby; provided, that such amount may not exceed the maximum amount allowed law at the time request for the statement is made.

4.16 Counterparts. This Deed of Trust may be executed and acknowledged in counterparts, all of which executed and acknowledged counterparts shall together constitute a single document. Signature and acknowledgement pages may be detached from the counterparts and attached to a single copy of this document to physically form one document, which may be recorded.

4.17 Financing Statement and Fixture Filing.

(a) This Deed of Trust constitutes a Security Agreement with respect to all personal property and fixtures in which Beneficiary is granted a security interest hereunder, and Beneficiary shall have all of the rights and remedies of a secured party under the California Commercial Code as well as all other rights and remedies available at law or in equity. Trustor hereby agrees to execute and deliver on demand and hereby irrevocably constitutes and appoints Beneficiary the attorney-in-fact of Trustor, to execute, deliver and, if appropriate, to file with the

appropriate filing officer or office such security agreements, financing statements, continuation statements or other instruments as Beneficiary may request or require in order to impose, perfect or continue the perfection of, the lien or security interest created hereby. Upon the occurrence and during the continuance of any default by Trustor hereunder, Beneficiary shall have the right to cause any of the Trust Estate which is personal property and subject to the security interest of Beneficiary hereunder to be sold at any one or more public or private sales as permitted by applicable law, and Beneficiary shall further have all other rights and remedies, whether at law, in equity, or by statute, as are available to secured creditors under applicable law. Any such disposition may be conducted by an employee or agent of Beneficiary or Trustee. Any person, including both Trustor and Beneficiary, shall be eligible to purchase any part or all of such property at any such disposition.

Expenses of retaking, holding, preparing for sale, selling or the like shall be borne by Trustor and shall include Beneficiary's and Trustee's reasonable attorneys' fees and legal expenses. Trustor, upon demand of Beneficiary, shall assemble such personal property and make it available to Beneficiary at the Premises, a place which is hereby deemed to be reasonably convenient to Beneficiary and Trustor. Beneficiary shall give Trustor at least five (5) days prior written notice of the time and place of any public sale or other disposition of such property or of the time of or after which any private sale or any other intended disposition is to be made, and if such notice is sent to Trustor, as the same is provided for the mailing of notices herein, it is hereby deemed that such notice shall be and is reasonable notice to Trustor.

(b) This Deed of Trust constitutes a financing statement filed as a fixture filing in the Official Records of the county recorder of the county in which the Premises are located with respect to any and all fixtures included within the term "Trust Estate" as used herein and with respect to any goods or other personal property that may now be, or hereafter become, such fixtures

4.18 Further Assurances. Trustor, Beneficiary and Trustee agree to do or to cause to be done such further acts and things and to execute and deliver or to cause to be executed and delivered such additional assignments, agreements, powers and instruments, as any of them may reasonably require or deem advisable to keep valid and effective the charges and lien hereof, to carry into effect the purposes of this Deed of Trust or to better assure and confirm unto any of them their rights, powers and remedies hereunder; and, upon request by Beneficiary, shall supply evidence or fulfillment of each of the covenants herein contained concerning which a request for such evidence has been made

4.19 Nonforeign Entity. Section 1445 of the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code") and Section 18805 of the California Revenue and Taxation Code provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. To inform Beneficiary that the withholding of tax will not be required in the event of the disposition of the Premises or Improvements pursuant to the terms of this Deed of Trust, Trustor hereby certifies, under penalty of perjury that:

(a) Trustor is not a foreign corporation, foreign partnership, foreign trust or foreign estate, as those terms are defined in the Internal Revenue Code and the regulations promulgated thereunder; and

(b) Trustor's U.S. employer identification number has been applied for and promptly upon receipt shall be provided to Beneficiary; and

(c) Trustor's principal place of business is 1505 Blackcombe St., Unit 203, Las Vegas, Nevada 89128.

It is understood that beneficiary may disclose the contents of this certification to the Internal Revenue Service and the California Franchise Tax Board and that any false statement contained herein could be punished by fine, imprisonment or both. Trustor covenants and agrees to execute such further certificates, which shall be signed under penalty of perjury, as Beneficiary shall reasonably require. The covenant set fort herein shall survive the foreclosure of the lien of this Deed of Trust or acceptance of a deed in lieu thereof.

IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and year first above written.

Trustor:

CAN CAL RESOURCES LIMITED

By:   /s/ R. D. Sloan - President
   ---------------------------------

EXHIBIT "A"

LEGAL DESCRIPTION OF REAL PROPERTY

PARCEL NO. 1:

A PARCEL OF LAND BEING A PORTION OF THE ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY'S PROPERTY LYING IN SAID RAILWAY COMPANY'S NEEDLES SUBDIVISION AND THIS PARCEL OF LAND BEING ALL OF THAT CERTAIN MINING CLAIM OR PREMISES DESCRIBED IN A MINING CLAIM BETWEEN THE UNITED STATES GOVERNMENT, GRANTOR, AND THE ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY, GRANTEE, (SANTA FE DOCUMENT DEED NO. CL-11310) DATED APRIL 8, 1963, AS RECORDED IN BOOK 5907, PAGE 451, ON MAY 10, 1963 IN THE OFFICE OF THE RECORDS OF SAN BERNARDINO COUNTY, CALIFORNIA, THE ABOVE REFERENCED PARCEL OF LAND, KNOW AS THE CINDER AND CINDER #2 PLACER MINING CLAIMS AND LYING IN THE NORTH HALF OF SECTION 32, TOWNSHIP 8 NORTH, RANGE 6 EAST OF THE SAN BERNARDINO MERIDIAN, SAN BERNARDINO COUNTY, CALIFORNIA BEING DESCRIBED IN SAID MINING CLAIM AS FOLLOWS:

CINDER CLAIM, EMBRACING:

THE NORTH HALF OF THE NORTHWEST QUARTER, (N1/2, NW1/4), AND THE WEST HALF OF THE NORTHWEST QUARTER OF THE NORTHEAST QUARTER, (W1/2, NW1/4, NE1/4), OF SAID
SECTION 32.

CINDER #2, EMBRACING:

THE NORTH HALF OF THE SOUTHEAST QUARTER OF THE NORTHWEST QUARTER, (N1/2, SE1/4, NW1/4) OF SAID SECTION 32.

EXCEPTING THEREFROM ANY VEINS OR LOOKS OF QUARTZ OR OTHER ROCK IN PLACE NEARING GOLD, SILVER, CINNABAR, LEAD, TIN, COPPER OR OTHER VALUABLE DEPOSITS WITHIN THE LAND ABOVE DESCRIBED WHICH MAY HAVE BEEN DISCOVERED OR KNOW TO EXIST PRIOR TO SEPTEMBER 11, 1959.

EXCEPTING THEREFROM CERTAIN OIL, GAS, CASING-HEAD GAS AND ORES AND MINERALS AS RESERVED IN THE DEED RECORDED DECEMBER 19, 1996 AS INSTRUMENT NO. 96-465341 OFFICIAL RECORDS.

PARCEL NO. 2:

AN EASEMENT FOR A PRIVATE ROAD AND A POLE LINE FOR TELEPHONE AND POWER WIRES OVER A STRIP OF LAND SIXTY AND 00/100 (60.00) FEET IN WIDTH BEING ALL THAT PORTION OF SECTION TWENTY-NINE (29), TOWNSHIP EIGHT (8) NORTH, RANGE SIX (6) EAST, SAN BERNARDINO BASE AND MERIDIAN, ACCORDING TO THE OFFICIAL PLAT THEREOF, LYING BETWEEN LINES WHICH ARE PARALLEL WITH AND DISTANT THIRTY AND 00/100
(30.00) FEET MEASURED AT RIGHT ANGLES FROM AND ON EACH SIDE OF THE FOLLOWING DESCRIBED CENTER LINES:

BEGINNING AT A POINT IN THE NORTH LINE OF SAID SECTION TWENTY-NINE (29), DISTANT EASTERLY ALONG SAID NORTH LINE NINE HUNDRED AND 00/100 (900.00) FEET FROM AA ONE-HALF (1/2) INCH PIPE SET FOR THE NORTHWEST CORNER OF SAID SECTION TWENTY-NINE (29); THENCE SOUTHWESTERLY ALONG A DIRECT LINE DEFLECTING SOUTHWESTERLY FROM SAID NORTH LINE AN ANGLE OF SIXTY-ONE DEGREES (61(degree)), A DISTANCE OF ONE THOUSAND FOUR HUNDRED THIRTY-FIVE AND 00/100 (1,435.00) FEET; THENCE SOUTHWESTERLY ALONG A DIRECT LINE DEFLECTING AN ANGLE OF SIXTEEN DEGREES, THIRTY MINUTES (16(degree)30') TO THE LEFT FROM LAST COURSE, A DISTANCE OF ONE THOUSAND SEVEN HUNDRED EIGHT-FIVE AND 00/100 (1,785.00) FEET; THENCE SOUTHEASTERLY ALONG A DIRECT LINE DEFLECTING AN ANGLE OF EIGHTEEN DEGREES, THIRTY MINUTES (18(degree)30') TO THE LEFT FROM LAST COURSE, A DISTANCE OF FOUR HUNDRED FIFTY AND 00/100 (450.00) FEET; THENCE SOUTHEASTERLY ALONG A DIRECT LINE DEFLECTING AN ANGLE OF FORTY-ONE DEGREES, THIRTY MINUTES (23(degree)30') TO THE RIGHT FROM LAST COURSE, A DISTANCE OF SEVEN HUNDRED AND 00/100 (700.00) FEET; THENCE SOUTHEASTERLY ALONG A DIRECT LINE DEFLECTING AN ANGLE OF EIGHTEEN DECREES (18(degree)) TO THE LEFT FROM LAST COURSE, A DISTANCE OF ONE THOUSAND THREE HUNDRED THIRTY AND 00/100 (1,330.00) FEET; THENCE SOUTHWESTERLY ALONG A DIRECT LINE DEFLECTING AN ANGLE OF FORTY-THREE DEGREES, THIRTY MINUTES (43(degree)30') TO THE RIGHT FROM LAST COURSE, A DISTANCE OF SIXTY AND 00/100 (60.00) FEET MORE OR LESS TO POINT OF ENDING IN THE SOUTH LINE OF SAID SECTION TWENTY-NINE (29), AND BEING OVER THE WEST HALF OF WEST HALF (W1/2 OF W1/2) OF SAID SECTION TWENTY-
NINE (29).

THE SIDE LINES OF SAID STRIP TO BE LENGTHENED OR SHORTENED AS THE CASE MAY BE SO THAT ALL PORTIONS OF SAID STRIP SHALL FALL WITHIN THE BOUNDARIES OF SAID SECTION TWENTY-NINE (29).

EXHIBIT 10.6

LEASE AND PURCHASE OPTION AGREEMENT

BY THIS LEASE AND OPTION AGREEMENT dated the 12th day of March, 1998,

by and between ARTHUR JAMES GOOD (also know as A. J. Good) and WANDA MAE GOOD, husband and wife whose address is 620 El Rancho Drive, Kingman Arizona 86401 ("LESSOR" herein),

and

Can-Cal Resources, Ltd., whose address is 1505 Blackcombe Street, Unit 203, Las Vegas, Nevada 89128 ("Lessee" herein)

the Lessor, in consideration of the payments and promises set forth herein, has granted certain rights to Lessee under the following terms and conditions:

1. GRANT

a. LEASE - Lessor hereby grants, demises, leases and lets those certain patented mining claims known as JUROR #1, JUROR #2, CERBAT, REDDOG and ROLLING WAVE, located in the Gold Nugget Cerbat Mountain, Hualapai Mining District, Mojave County, Arizona, more particularly described in the attached Exhibit "A" (the "Property" herein), including all rights appurtenant to the Property recognized under the mining laws of the United States or established under the laws of the State of Arizona, including water rights, easements, and rights-of-way pertaining or appurtenant to the Property, exclusively unto Lessee, its successors, and assigns, with the exclusive rights and privileges to explore for, mine (by open pit, strip, underground, solution mining or any other method, including and method hereafter developed), extract, mill, store, process, remove and market all ores and minerals as may be authorized by the mineral laws of the United States from in, upon or under the Property. Lessee is further granted the right to place, construct, maintain, use, and remove such structures, facilities, equipment, roadways, haulage ways and such other improvements on the surface or subsurface of the Property as Lessee, consistent with authorizations obtained from the Governmental Agencies, if applicable,

may deem necessary, useful or convenient for the full enjoy enjoyment of all the rights herein granted.

2. b. TERM

Unless sooner terminated under the termination provisions hereinafter contained, the term of this Agreement shall be for a term of Twenty (20) years commencing on the effective date hereof.

3. PAYMENTS TO LESSOR

a. COMPENSATION - Lessee shall pay Lessor as compensation upon execution of this Agreement a total of Two Thousand Five Hundred Dollars ($2,500.00).

b. Lessee shall pay Lessor as additional compensation thirty days from the date of execution of this Agreement an additional Two Thousand Five Hundred Dollars ($2,500.00).

c. Lessee shall pay Lessor as additional compensation sixty days from the date of execution of this Agreement an additional Five Thousand Dollars ($5,000.00).

d. MINIMUM ROYALTY - Beginning with the first yearly quarter after the effective date of this agreement, the sum of fifteen hundred dollars ($1,500.00) will be paid. Every quarter thereafter a payment of fifteen hundred dollars ($1,500.00) will be paid. Such advance royalties shall be a credit toward any moneys due Lessor under the provision of subsection c of this Section 3.

e. PRODUCTION ROYALTY - If Lessee mines and markets Leased Substances from the Property, Lessee shall pay to Lessor a production royalty of FIVE PERCENT (%5) of the "Gross Returns" received by Lessee from the sale or other disposition of Leased Substances. The term "Gross Returns" received by Lessee from the sale or other disposition of Leased Substances. The term "Gross Returns" shall mean the total dollar value received from the purchaser of Leased Substances, less only any weighing, sampling, penalty, processing or other charges assessed by the purchaser. Production Royalty is to continue for 10 years or until the Lessee exercises it option to purchase, whichever occurs sooner.

f. PAYMENT OF PRODUCTION ROYALTY -

(1) Production royalty paid to Lessor hereunder shall be due and payable within thirty (30) days after the end of each calendar quarter for those Leased Substances sold and a settlement sheet received during the applicable calendar quarter after first deducting any advance minimum royalty paid under subsection b of Section 3 not previously recovered from prior payments under this subsection d. All production royalty shall be accompanied by the settlement sheets or a similar statement showing the basis upon which the payment was computed.

(2) Lessor may elect to receive its royalty in kind by physical delivery of gold and/or silver bullion for any calendar year, by notifying Lessee of its election on or before December 1 in the preceding calendar year. An election by Lessor to receive its royal in kind shall be irrevocable for the calendar year for which it was made. Failure of Lessor to notify Lessee by December 1 or its election to take the royalty in kind, shall be deemed a waiver by Lessor of all rights to take the royalty in kind during the following calendar year.

(3) On or before the fifth day of the month following the end of each calendar quarter, Lessee shall make the bullion available to Lessor at the place where the bullion has been refined. The bullion shall be in the form in which Lessee sells or otherwise disposes of same. Lessee shall provide ten (10) days' prior notice Lessor of the name and location of the refinery and the date or dates on which the bullion will be available to Lessor. If Lessor desires Lessee to deliver the bullion to it at a place other than the place of refining, Lessor shall reimburse Lessee for the costs incurred by Lessee in making such delivery, which costs include transportation and insurance.

(4) The value of any in kind royalty delivered to Lessor for purposes of establishing the credit for advance minimum royalty shall be based upon the "Quarterly Average Gold Price" as of the date of delivery to Lessor. The Quarterly Average Gold Price shall be the price for immediate delivery quoted at the close of business by the COMEX, calculated by dividing the sum of all such prices reported for the quarter by the number of days for which such prices were quoted.

(e) METHOD OF MAKING PAYMENTS - All payments required hereunder may be mailed or delivered to Lessor's address or to any single depository as Lessor may instruct. Upon making payment to the authorized agent or depository, Lessee shall be relieved of any

responsibility for the distribution of such payment to Lessor. The delivery or the deposit in the mail of any payment hereunder on or before the due date thereof shall be deemed timely payment hereunder.

4. EXERCISE OF OPTION; PURCHASE PRICE

a. Exercise of Option - Lessee may elect to exercise its option to purchase the Property at any time during the term specified in Section 2 by giving written notice of its election in the manner specified in Section 9 of this Agreement, which notice shall also designate a bank or title insurance company within the state of Arizona to serve as escrow agent. Lessor and Lessee shall promptly execute and deliver instructions to the escrow agent consistent with the terms and conditions of this Agreement.

b. PURCHASE PRICE - If Lessee exercises its option to purchase the Property, the purchase price shall be (1) Two Hundred Fifty Thousand Dollars ($250,000.00) plus interest at the rate of EIGHT PERCENT (%8) compounded annually from and after the date of its exercise of the option to purchase the property. If Lessee exercises its option to so purchase, all funds paid to Lessor under the terms of Section 3 hereof shall be a credit toward such purchase price as of the date such payments were made hereunder.

c. CLOSING - Within the (10) days after Lessee has exercised its option to purchase, Lessor shall furnish escrow agent with a conveyance of the Property in a form acceptable to Lessee. Lessee shall, within the (10) days after its receipt of the form of the conveyance pay the purchase price to the escrow agent. Upon such receipt, escrow agent shall close the escrow by recording the conveyance in the official records of Mojave County and paying the purchase price to Lessor. One-half of the charges of the escrow agent shall be paid by each party. Lessee shall pay all recording fees in connection with its exercise of its option to purchase.

5. INSPECTION

Lessor (or any agent of Lessor with authorization in writing), at Lessor's risk and expense, may (1) enter upon the Property to inspect the same at such times and upon such notice to lessee as shall not unreasonably or unnecessarily hinder or interrupt the operations of Lessee, and (2) inspect the accounts and records used in calculating production royalty paid to Lessor hereunder, which right may be exercised, at any reasonable time during a period of one (1) year from and after the date on which the applicable quarterly payment of production royalty was

made. Lessor agrees to treat all information received hereunder as confidential and not to disclose the same without proper permission of Lessee.

6. OBLIGATIONS OF LESSEE

a. CONDUCT OF OPERATIONS - All work performed by Lessee on the Property pursuant to this Agreement shall be done in good and workmanlike manner and in compliance with all state and federal laws and regulations governing such operations, together with all local ordinances, including without limitation, those regulations related to the use of the Property and all sanitary and health regulations. The operations of Lessee shall be further subject to the following special requirements:

(1) Lessor shall be furnished with copies of all notices of intent, plans of operation, or other documents furnished to government entities having supervision or control of Lessee's activities hereunder; and
(2) Lessee shall not stockpile ore or concentrates off of the Property without the prior written consent of Lessor.

b. PROTECTION FROM LIENS - Lessee shall pay all expenses incurred by it in its operation on the Property hereunder and shall allow no liens arising from any act of Lessee to remain upon the property; provided, however, that Lessee shall not be required to remove any such lien as long as Lessee is contesting in good faith the validity or amount thereof. Lessee shall post and maintain upon the Property a notice of non-liability.

c. INDEMNITY AND INSURANCE - Lessee shall protect, defend and indemnify Lessor against and hold Lessor harmless from any suit, claim, judgment or demand, administrative proceeding or sanction, expense, including attorney's fees, whatsoever arising out of Lessee's exercise of any of its rights pursuant to this Agreement, provided that if any individual Lessor or any person or instrumentality acting on Lessor's behalf shall have been a contributing cause to the event giving rise to such suit, claim, demand or judgment, Lessee's obligation to indemnify Lessor hereunder shall be limited to the extent permitted by law under the permitted application of rules of contributory or comparative negligence. Lessee shall further maintain insurance to support the combined bodily injury and property damage, and a similar amount of property damage. Lessor shall be named as co-insured under such policies and Lessee shall furnish Lessor with a certificate of such insurance prior to conducting any activities on the Property

pursuant to this Agreement excepting such activities as securing mine shafts, tunnels, holes or other hazardous situations.

d. PAYMENT OF TAXES - Lessee shall pay all taxes levied against the Property and production therefrom. Lessee shall not be liable for any taxes levied or measured by income of Lessor. Lessee shall have the right to contest, in the courts or otherwise, the validity or amount of any taxes or assessments, before it shall be required to pay the same. If this Agreement is terminated or otherwise expires, and if the Property is classified as an "Operating Mine" as a result of lessee's activities, Lessee shall pay all ad valorem taxes based on such classification until such classification is removed.

7. TITLE MATTERS

a. REPRESENTATION - Lessor represents to lessee that to the best of its knowledge: (1) the patented mining claims constituting the Property have been located and appropriate record made thereof in compliance with the laws of the United States and the laws of Arizona; (2) there is no claim of adverse mineral rights affecting such claims; (3) except as specified in Exhibit A, Lessor's possessory right and title to the Property is free and clear of all lines and encumbrances, and (4) the Lessor has the full right, power and capacity to enter into this Agreement upon the terms set forth herein.

b. TITLE DOCUMENTS; DATA - Upon written request of Lessee at any time during the term hereof, Lessor shall promptly deliver to Lessee all abstracts of title to and copies of all title do cuments affecting the Property which Lessor has in its possession.

c. OBJECTIONS TO TITLE - If, during the first six months from and after the effective date of this Agreement, Lessee notifies Lessor of the existence of any matter related to the status of title to the Property constituting a material violation of the representations made under in subsection a of this
Section 6, Lessor agrees to either (1) remove such defects at lessor's costs, or
(2) return all funds theretofore paid to Lessor under the terms of Section 3.

d. CHANGE OF LAW - If the laws of the United States concerning mineral rights on private managed lands is repealed, amended, or new legislation is enacted, Lessee shall have the right to take whatever action it deems appropriate to preserve a right to explore for, develop, and mine Leased Substances. If Lessee elects to take any action under the terms of this subsection, it shall first notify Lessor in writing setting forth the nature of the proposed action and an

explanation thereof. Lessor agrees to cooperate with Lessee and execute whatever documents are deemed necessary to Lessee to accomplish such action. Nothing in this subsection shall impose any obligation upon Lessee to take any action, or diminish the right of Lessor to take action it deems appropriate; provided, however, that if Lessor chooses to take any action, it will first inform Lessee of the nature of such contemplated action.

e. GENERAL - Nothing herein contained and no notice or action which may be taken under this Section 7 shall limit or detract from Lessee's right to terminate this Agreement in the manner hereinafter provided.

8. TERMINATION; REMOVAL OF PROPERTY; DATA

a. TERMINATION BY LESSOR - If Lessee defaults in the performance of its obligations hereunder, Lessor shall give Lessee written notice specifying the default. If the default is not cured within sixty (60) days after Lessee has received the notice, or if Lessee has not within that time begun action to cure the default and does not thereafter diligently prosecute such action to completion, Lessor may terminate this Agreement by delivering to Lessee written notice of such termination, subject to Lessee's right to remove its property and equipment from the Property, as hereinafter provided. If Lessee in good faith disputes the existence of a default, Lessee shall initiate appropriate action in court of competent jurisdiction within the 60-day period and the time to cure shall run from the date of a final determination that a default exists. Lessor shall have no right to terminate this Agreement except as set forth in this subsection a of Section 8.

b. TERMINATION BY LESSEE - Lessee shall have the right to terminate this Agreement at any time by written notice from Lessee to Lessor. From and after the date of termination, all right, title and interest of Lessee under this Agreement shall terminate, and Lessee shall not be required to make any further payments or to perform any further obligations hereunder concerning the property, except payment and obligations the due dates for the payment or performance of which occur prior to the termination date, including the obligations related to damages to the surface and improvements thereon.

c. REMOVAL OF PROPERTY - Upon any termination or expiration of this Agreement Lessee shall have a period of one (1) year from and after the effective date of termination within which it may elect to remove from the Property all of its machinery, buildings, structures, facilities, equipment and other property of every nature and description erected, placed or

situated thereon, except supports placed in shafts, drifts or opening in the property. Failure of Lessee to do so shall constitute an abandonment by Lessee to Lessor of the same; provided, however, that Lessee may be required to remove such property upon notice form Lessor given at any time during the one-year period and sixty (60) days thereafter.

d. RELINQUISHMENT OF RECORD - If this Agreement is terminated or otherwise expires, Lessee shall provide Lessor with a recordable document sufficient to provide notice that Lessee no longer asserts rights to the Property under this Agreement.

9. NOTICES

Any notice or communication required or permitted hereunder shall be effective when personally delivered or deposited, postage prepaid, certified or registered, in the United States mail to the address specified above. Either party may, by notice to the other given as aforesaid, change its mailing address for future notices.

10. BINDING EFFECT; ASSIGNMENT

The rights of either party hereunder may be assigned in whole or in part and the provisions hereof shall inure to the benefit of and be binding upon the heirs, personal representative, beneficiaries, successors and assigns, but no change or division of ownership of the Property or payments hereunder, however accomplished, shall operate to enlarge the obligations or diminish the rights of Lessee hereunder. No such change or division in the ownership of the Property shall be binding upon Lessee for any purpose until the first day of the month next succeeding the month in which such person acquiring any interest shall furnish evidence to Lessee's satisfaction of such change, transfer or division of ownership.

11. FORCE MAJEURE

If Lessee is delayed or interrupted in or prevented from excising its rights or performing its obligation, as herein provided by reason of "force majeure," then, and in all such cases, Lessee shall be excused, without liability, from performance of its obligations set forth in this Agreement (except as to obligations to pay money set forth in Section 3 and 6), but the provisions shall again come into full force and effect upon the termination of the period of delay, prevention, disability or condition. Lessee shall notify Lessor of the beginning and ending date of any period of force majeure and the period of the disability. "Force majeure" includes all

disabilities arising from causes beyond reasonable control of Lessee, including without limitation, acts of God, accidents, fires, damages to facilities, labor troubles, unavailability of fuels, supplies and equipment, orders or requirements of courts or government agencies, or the inability to obtain environmental clearance or operating permits that may be required by governmental authorities.

12. MEMORANDUM

The parties to this Agreement agree to execute and record a Memorandum of this Agreement in a form sufficient to constitute record notice to third parties of the rights granted hereunder, which may be recorded in the official records of Mojave County, Arizona.

13. CONSTRUCTION

a. GOVERNING LAW - This Agreement shall be construed by the internal laws but not the laws of conflict of the State of Arizona.

b. HEADINGS - The headings used in this Agreement are for convenience only and shall not be deemed to be a part of this Agreement for purposes of construction.

c. INTEGRATION - The entire agreements and understandings of the parties with reference to the Property are contained in this Agreement and this Agreement superseded all prior agreements and understandings regarding the Property.

SIGNED, effective as of the date recited above.

LESSOR                                      LESSEE
                                    .
   /s/   Arthur James Good                  CAN-CAL RESOURCES, LTD
----------------------------------
Arthur James Good
                                                 /s/   R. D. Sloan
                                            ------------------------------------
                                            Ronald D. Sloan, President
   /s/   Wanda Mae Good
----------------------------------
Wanda Mae Good

   /s/ Jean Ervin                                     /s/   Bettyann Sloan
----------------------------------          ------------------------------------
Witness                                            Witness

EXHIBIT 10.7

AGREEMENT

THIS AGREEMENT made this 27th day of October, 1997, by and between Can-Cal Resources, Ltd ("Can-Cal"), a Nevada corporation, and Aurum LLC ("Aurum"), a California limited liability company.

WHEREAS, Aurum owns approximately 120 acres located near Pisgah, San Bernardino County, California ("the Property"), which has approximately 13.5 million tons of volcanic cinders; and

WHEREAS Aurum has loaned $315,045.98 to Can-Cal ("the Indebtedness"); and

WHEREAS, Can-Cal does not have funds with which to repay the Indebtedness; and

WHEREAS, Can-Cal has a continuing need for funds and wishes to be able to obtain those funds on an equity basis to avoid incurring additional indebtedness which it may be unable to repay; and

WHEREAS, Can-Cal wishes to acquire the Property and obtain cancellation of the Indebtedness in exchange for shares of Can-Cal; and

WHEREAS, Aurum is willing to transfer the Property to Can-Cal and cancel the Indebtedness in exchange for shares of Can-Cal's common stock and arrange for equity financing for Can-Cal, all on the terms set forth herein.

NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, receipt whereof is hereby acknowledged, it is agreed as follows:

1. Can-Cal shall purchase and Aurum shall sell to Can-Cal the Property by a Quitclaim Deed identical to the Quitclaim Deed that it received from Burlington Northern Santa Fe Foundation when it acquired the Property. The Property is situated near the station of Pisgah, in San Bernardino County, California, as shown on the map marked Exhibit "A," dated July 22, 1996 attached hereto and made a part hereof. Aurum has furnished Can-Cal with the documentation relating to its acquisition of the Property

2. Aurum hereby cancels and extinguishes the Indebtedness of $315,045.98 which Can- Cal owes it and waives any claim it has to interest on that Indebtedness. Aurum represents that Can- Cal is not indebted to it in any amount.

3. In consideration for the transfer of the Property and the cancellation of the Indebtedness, Can-Cal herewith issues to Aurum 2,181,752 shares of its common stock, par value

$.001. Can-Cal represents and warrants that the 2,181,752 shares of its common stock issued to Aurum are validly issued, fully paid and non-assessable. All such shares are "restricted securities" pursuant to the Securities Act of 1933 and are subject to the restrictions imposed by that Act and Rule 144 promulgated thereunder. Aurum agrees that an appropriate legend shall be printed on the stock certificate evidencing ownership of those shares and appropriate stock transfer instructions will be issued to Can-Cal's stock transfer agent.

4. Aurum agrees that the sale of the Property to Can-Cal will be on the same terms and conditions that it acquired that property from the Burlington Northern Santa Fe Foundation and at its cost plus its out of pocket expenses incurred in connection with the acquisition of that Property. which Aurum represents to be $553,716.94, plus legal fees and related costs of $25,755.59, for a total purchase price of $579,472.53.

5. (a) Aurum also agrees to use its best efforts to furnish funds as may reasonably be requested by Can-Cal by purchasing common shares of Can-Cal at $.41 per share, the same price at which the shares are valued for purposes of acquiring the Property and cancellation of the Indebtedness. In the event Can-Cal requests Aurum to purchase shares of its common stock, it shall do so by written notice not less than ten (10) calendar days prior to the date it wants the funds, which notice shall include the amount of funds it requires and the date it requires those funds. Aurum shall use its best efforts to furnish Can-Cal with the funds it requires by purchasing shares of Can-Cal's common stock. Can-Cal represents and warrants that all shares purchased by Aurum shall be validly issued, fully paid and nonassessable. This agreement by Aurum shall not be construed as a guarantee or assurance that it will be able to purchase a sufficient number of Can-Cal common shares or that Can-Cal will receive the funds it needs on the terms and conditions set forth herein. All shares issued pursuant to purchases made by Aurum will be "restricted shares" as that term is defined in the Securities Act of 1933 and subject to the investment.

(b) Nothing herein shall obligate Can-Cal to obtain financing from Aurum. Can-Cal is free to obtain financing from any source it deems appropriate.

6. Aurum shall convey, or cause to be conveyed, all of Aurum's right, title and interest in and to the Property, if any, to Can-Cal by Quitclaim Deed subject to the exceptions and reservations, whether or not of record and in accordance with the other terms, conditions and reservations contained herein. Aurum represents that the Quitclaim Deed to Can-Cal is identical to the Quitclaim Deed it received from Burlington Northern Santa Fe Foundation from whom it purchased the Property.

7. Wherever referred to herein, Aurum shall imply, mean and apply to Aurum, its successors, assigns, heirs, executors, administrators, or designees, who shall be severally and collectively liable for any and all performance hereunder.

8. Wherever referred to herein, Can-Cal shall imply, mean and apply to Can-Cal, its successors, assigns, heirs, executors, administrators, or designees, who shall be severally and collectively liable for any and all performance hereunder.

9. This Agreement shall bind and inure to the benefit of Aurum, Can-Cal and their heirs, executors, administrators, successors and assigns.

THIS OFFER IS, AND THE CONVEYANCE OF THE PROPERTY SHALL BE, SUBJECT TO THE FOLLOWING TERMS, CONDITIONS AND RESERVATIONS

10. REAL ESTATE COMMISSIONS. Can-Cal and Aurum represent and warrant to each other that no real estate broker or agent has a valid claim for commissions in connection with this transaction and agree to indemnify and hold harmless each other from any such claims arising out of their actions.

11. OTHER LIENS. Any judgment against Aurum which may appear of record as a lien against the Property shall be settled and satisfied by Aurum if and when it is judicially determined to be valid, and Aurum hereby indemnifies Can-Cal for all loss arising out of Aurum's failure to have a judgment lien so settled and satisfied. All outstanding assessments levied or due in the year the deed is delivered shall be paid Can-Cal.

12. GENERAL REAL ESTATE TAXES. Real estate taxes or assessments payable or paid in the year the deed is delivered shall be prorated by the parties as of the date on which the deed is delivered on the basis of the most recent ascertainable taxes assessed against the subject Property, or as may be equitably apportioned thereto by Aurum if the Property is not separately assessed or unless the payment of same has been assumed by a tenant under an existing lease to be assigned to Can-Cal.

13. TRANSFER TAXES. Can-Cal agrees to purchase, affix and cancel any and all documentary stamps in the amount prescribed by statute, and to pay any and all required transfer taxes, excise taxes and any and all fees incidental to recordation of the conveyance instrument. In the event of Can-Cal's failure to do so, if Aurum shall be obligated so to do, Can-Cal shall be liable for all costs, expenses and judgments to or against Aurum, including all of Aurum's legal fees and expenses and same shall constitute a lien against the Property to be conveyed until paid by Can-Cal.

14. NOTICES AND DEMANDS. All notices, demands, payments and other instruments required or permitted to be given or served by either party shall be in writing and deemed to have

been given or serve by either party if sent by registered or certified mail, addressed to the other party at the address shown herein.

15. GOVERNMENTAL APPROVAL. If the approval of any governmental agency is required for the sale of the Property, it is understood and agreed that this Agreement is subject thereto and that both parties shall use their best efforts to obtain such approval.

In the event a city, county, or other governing authority wherein said Property is located requires a survey or plat or has a subdivision ordinance, Can-Cal shall obtain such survey or plat, all at Can-Cal's sole cost and expense. The survey or plat shall be submitted by Can-Cal to Aurum for review and approval prior to recording and within a period of forty-five (45) days after the date of Aurum's acceptance of this offer.

16. COMPLETE AGREEMENT. This Agreement contains the entire agreement between Aurum and Can-Cal with respect to the Property and, except as set forth in this Agreement, neither Aurum, nor Aurum's agents or employees, have made any agreements, covenants, warranties or representations of any kind or character, express or implied, oral or written, with respect to the Property.

17. Aurum is a California limited liability company and not a foreign person as the term is used and defined in Section 1445 of the Internal Revenue Code of 1954, as amended, and the regulations promulgated thereunder.

18. Can-Cal has been allowed to make an inspection of the Property and has knowledge as to the past use of the Property. Based on this inspection and knowledge Can-Cal is aware of the condition of the Property and BUYER IS AWARE THAT BUYER IS PURCHASING THE PROPERTY ON AN "AS-IS WITH ALL FAULTS" BASIS WITH ANY AND ALL PATENT AND LATENT DEFECTS AND THAT CAN-CAL IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY KIND WHATSOEVER FROM AURUM AS TO ANY MATTERS CONCERNING THE PROPERTY, including the physical condition of the property and any defects thereof, the presence of any hazardous substances, wastes or contaminants in, on or under the Property, the condition or existence of any of the above-ground or underground structures or improvements in, on or under the Property, the condition of title to the Property, and the leases, easements or other agreements affecting the Property. Can-Cal is aware of the risk that hazardous substances and contaminants may be present on the Property, and indemnifies, holds harmless and hereby waives, releases and discharges forever Aurum from any and all present or future claims or demands, and any and all damages, loss, injury, liability, claims or costs, including fines, penalties and judgments, and attorney's fees, arising from or in any way related to the condition of the Property or alleged presence, use, storage, generation, manufacture, transport, release, leak, spill disposal or other handling of any hazardous substances or contaminants in, on or under the Property. Losses shall include, without limitation, (a) the cost of any investigation, removal, remedial or other response action that is required by any environmental law, that is required by judicial order or by order of or

agreement with any governmental authority, or that is necessary or otherwise is reasonable under the circumstances, (b) capital expenditures necessary to cause Aurum's remaining property or the operations or business of Aurum on its remaining property to be in compliance with the requirements of any environmental law, (c) losses for injury or death of any person, and (d) losses arising under any environmental law enacted after transfer. The rights of Aurum under this section shall be in addition to and not in lieu of any other rights or remedies to which it may be entitled under this document or otherwise. This indemnity specifically includes the obligation of Can-Cal to remove, close, remediate, reimburse or take other actions requested or required by any governmental agency concerning any hazardous substances or contaminants on the Property. This section shall survive closing.

The term "environmental law" means any federal, state or local statute, regulation, code, rule, ordinance, order, judgment, decree, injunction or common law pertaining in any way to the protection of human health or the environment, including without limitation, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Toxic Substances Control Act, and any similar or comparable state or local law.

The term "hazardous substance" means any hazardous, toxic, infections substance, material or waste as defined, listed or regulated under any environmental law, and incudes, without limitation, petroleum oil and any of its fractions.

19. All terms, conditions and provisions of this Agreement shall survive closing.

AURUM LLC, BY ACQUITAINE TRUST,
ITS MANAGER

    /s/    John D. Edwards
----------------------------------------------
John D. Edwards, Trustee for Acquitaine Trust

CAN-CAL RESOURCES, LTD.

   /s/    R. D. Sloan
----------------------------------------------

        RECORDING REQUESTED BY           Recorded in Official Records, County of
          ARTER & HADDEN              San Bernardino, Errol J. Mackzum, Recorder
                                                   634.00
AND WHEN RECORDED MAIL THIS DEED AND, UNLESS       Doc No.    19970424165
OTHERWISE SHOWN BELOW, MAIL TAX STATEMENT TO:        10:10 am    11/19/97

NAME           BILL FISHMAN, ESQ.
STREET
ADDRESS        1600 Broadway, Suite 2600
CITY, STATE &
ZIP CODE       Denver, CO 80202-4926

TITLE ORDER NO. __________ ESCROW NO.________

DOCUMENTARY TRANSFER TAX $ 605.00
X computed on full value of property conveyed, or

QUITCLAIM DEED                  computed on full value
                            less liens and encumbrances
                            remaining at time of sale.
                            /s/ Bruce G. Holden, Esq.             Arter & Hadden

Signature of Declarant or Agent Determining Tax Firm Name

the following described real property in the City of N/A , County of San Bernardino , State of CA :

Legally described in Exhibit A attached hereto and incorporated herein by reference.

Assessor's parcel No.      0552-0110-10
Executed on     November 4    ,   1997 , at     Irvine, California
            ------------------  -------      ----------------------------------
                                               (CITY AND STATE)

                                                   AURUM, LLC

STATE OF    California                          By Acquitaine Trust, Manager

COUNTY OF    Orange                             By:   /s/ John Edwards, Trustee
                                                    RIGHT THUMBPRINT (Optional)
                                                    Thumbprint on Document Here
On November 4, 1997 before me,
Deborah Kae Colsch personally appeared
John Edwards, Trustee proved me on the
basis of satisfactory evidence) to be
the person whose name is  subscribed
to the within instrument and acknowledged
to me that he executed the                         CAPACITY CLAIMED BY SIGNER(S)
same in his capacity, and that by his              __ INDIVIDUALS
signature on the                                   __ CORPORATE
instrument the person, or the entity upon             OFFICERS(S) ______________
behalf of which the person acted,                                   (TITLES)
executed the instrument.                           __ PARTNER(S) __ LIMITED
                                                                 __ GENERAL
                                                   __ ATTORNEY IN FACT
                                                    X TRUSTEE
WITNESS my hand and official seal.                 __ GUARDIAN/CONSERVATOR
                                                   __ OTHER:____________________
                                           DEBORAH KAE COLSCH
                                         Commission  # 1152519

Notary Public - California Orange County My Comm. Expires Aug 22, 2001

   /s/   Deborah Kae Colsch
------------------------------------
         (SIGNATURE OF NOTARY)

MAIL TAX       Can Cal Resources,  Ltd., c/o Bill Fishman, Esq.
STATEMENTS TO: 1600 Broadway, Suite 2600, Denver, CO 80202-4926
                                                         SIGNER IS REPRESENTING
                                                        Person(s) or Entity(ies)
                                                        cquitaine Trust, Manager

A parcel of land being a portion of the Atchison, Topeka and Santa Fe Railway Company's property lying in said Railway Company's Needles Subdivision and this parcel of land being all of that certain mining claim or premises described in a mining claim between the United States Government, Grantor, and The Atchison, Topeka and Santa Fe Railway Company, Grantee, dated April 8, 1963, and recorded in Book 5907, Page 451, on May 10, 1963 in the Office of Records of San Bernardino County, California, the above referenced parcel of land, known as the Cinder and Cinder No. 2 Placer Mining Claims, being the N1/2NW1/4, the W1/2NW1/4NE1/4 and the Nl/2SE1/4NW1/4 of Section 32, Township 8 North, Range 6 East of the San Bernardino Base and Meridian, San Bernardino County, California, EXCEPTING THEREFROM, any veins or lodes of quartz or other rock in place bearing gold, silver, cinnabar, lead, tin, copper or other valuable deposits within the land above described which may have been discovered or known to exist prior to September 11, 1959; also,

All that certain 60.0 foot wide road described in deed dated November 16, 1956, from Southern Pacific Land Company to The Atchison, Topeka and Santa Fe Railway Company, recorded December 24, 1956 in Book 4117 of Official Records at Page 24 of the Records of the County Recorder's Office of said County, described for reference as follows:

An easement for a private road and a pole line for telephone and power wires over a strip of land 60.0 feet wide, being all that portion of Section 29, Township 8 North, Range 6 East, San Bernardino Base and Meridian, according to the Official Plat thereof, lying between lines which are parallel with and distant 30.0 feet, as measured at right angles from and on each side of the following described centerlines:

Beginning at a point in the North line of said Section 29, distant 900.0 feet Easterly, as measured along said North line from a 1/2 inch pipe set for the Northwest corner of said Section 29; thence Southwesterly along a direct line, deflecting Southwesterly from said North line an angle of 61(degree)00', a distance of 1,435.0 feet; thence Southwesterly along a direct line, deflecting an angel of 16(degree)30' to the left from the last described course, a distance of 1,785.0 feet; thence Southeasterly along a direct line, deflecting an angle of 18(degree)30' to the left from the last described course, a distance of 450.0 feet; thence Southeasterly along a direct line, deflecting an angle of 41(degree)30' to the left from the last described course, a distance of 240.0 feet; thence Southeasterly along a direct line, deflecting an angle of 23(degree)30' to the right from the last described course, a distance of 700.0 feet; thence Southeasterly along a direct line, deflecting an angel of 18(degree)00' to the left from the last described course, a distance of 1,330.0 feet; thence Southwesterly along a direct line, deflecting an angle of 43(degree)30' to the right from the last described course, a distance of

60.0 feet, more or less, to a point in the South line of said Section 29, and there terminating. The side lines of said strip to be lengthened or shortened as the case may be so that all portions of said strip shall fall within the boundaries of said Section 29; also,

PARCEL 3

All of Grantor's right, title and interest in and to the 60.0 foot wide strip lying over, under, upon through and across Sections 20 and 30, all in Township 8 North, Range 6 East of the San Bernardino Base and Meridian, for an existing access roadway to the hereinabove described PARCEL 1, as it now exists.

SUBJECT, however, to all existing interests, including but not limited to all reservations, rights-of-way and easements of record or otherwise.

Grantee has been allowed to make an inspection of the property and has knowledge as to the past use of the property. Based upon this inspection and knowledge, Grantee is aware of the condition of the property and GRANTEE ACKNOWLEDGES THAT GRANTEE IS PURCHASING THE PROPERTY IN AN "AS-IS WITH ALL FAULTS" BASIS WITH ANY AND ALL PATENT AND LATENT DEFECTS AND THAT GRANTEE IS NOT RELYING ON ANY REPRESENTATION OR WARRANTIES, EXPRESS OR IMPLIED, OF ANY KIND WHATSOEVER FROM GRANTOR AS TO ANY MATTERS CONCERNING THE PROPERTY, including the physical condition of the property and any defects thereof, the presence of any hazardous substances, wastes or contaminants in, on or under the property, the condition or existence of any of the above ground or underground structures or improvements in, on or under the property, the condition of title to the property, and the leases, easements or other agreements affecting the property. Grantee is aware of the risk that hazardous substances and contaminants may be present on the property, and indemnifies, holds harmless and hereby waives, releases and discharges forever Grantor from any and all present or future claims or demands, and any and all damages, loss, injury, liability, claims or costs, including fines, penalties and judgments, and attorney's fees, arising from or in any way related to the condition of the property or alleged presence, use, storage, generation, manufacture, transport, release, leak, spill, disposal or other handling of any hazardous substances or contaminants in, on or under the property. Losses shall include without limitation (a) the cost of any investigation, removal, remedial or other response action that is required by any Environmental Law, that is required by judicial order or by order of or agreement with any governmental authority, or that is necessary or otherwise is reasonable under the circumstances, (b) capital expenditures necessary to cause the Grantor's remaining property or the operations or business of the Grantor on its remaining property to be in compliance with the requirements of any Environmental Law, (cr Losses for injury or death of any person, and (d) Losses arising under any Environmental Law enacted after transfer. The rights of Grantor under this section shall be in addition to and not in lieu of any other rights or remedies to which it may be entitled under this document or otherwise. This indemnity specifically includes the obligation of Grantee to remove, close,

remediate, reimburse or take other actions requested or required by any governmental agency concerning any hazardous substances or contaminants on the property.

The term "Environmental Law" means any federal, state or local statute, regulation, code, rule, ordinance, order, judgment, decree, injunction or common law pertaining in any way to the protection of human health or the environment, including without limitation, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Toxic Substances Control Act, and any similar or comparable state or local law.

The term "Hazardous Substance" means any hazardous, toxic, radioactive or infectious substance, material or waste as defined, listed or regulated under any Environmental Law, and includes without limitation petroleum oil and any of its fractions.

EXHIBIT 10.9

AGREEMENT

Agreement dated this 30th day of October, 1997, by and between Tyro Inc., a Nevada corporation, also known as Tyro Precious Metals Processing Center ("Tyro"), Dean Willman ("Willman"), Individually, and Roland S. Ericsson (Ericsson), Individually (collectively referred to as "Debtors"), and Can-Cal Resources Ltd. ("Can-Cal").

WHEREAS, by letter of agreement dated September 11, 1996 and amendments thereto, by and between Tyro, A. R. Trust, acting on behalf of Can-Cal, entered into an agreement to process precious metals and perform other services; and

WHEREAS, disputes have risen by and between the parties with respect to the propriety of expenditures of monies advanced by Can-Cal through A. R. Trust to the escrow account of Ericsson to Tyro; and

WHEREAS, the parties desire to resolve their differences amicably and provide for the repayment of a portion of funds advanced by Can-Cal through A. R. Trust to Tyro; and

WHEREAS, the parties wish to, upon completion of payments required by this Agreement, release each other from any other and further obligations to each other.

NOW, THEREFORE, it is agreed as follows:

Date Due                     Amount
--------                     ------

November 10, 1997            $10,000
December 10, 1997            $10,000
January 10, 1998             $10,000
February 10, 1998            $10,000
March 10, 1998               $10,000
April 10, 1998               $10,000
May 10, 1998                 $ 5,000

There shall be a ten (10) day grace period before a default is declared by Can-Cal, with the exception of the payment due on November 10,1997 which must be made on that date. All payments

shall bear interest at six percent (6%) per annum with the exception of the first payment of $10,000 due on November 10,1997 which shall be paid without any interest.

Debtors each agree that they are primarily liable for the payment of all monies as set forth herein and that, in the event of the occurrence of an event of default, they will pay to Can-Cal all costs including reasonable attorney's fees incurred in enforcing this Agreement, their lien and security interests, or the rights and remedies herein provided.

2. Debtors hereby agree to secure and collateralize the obligation of $65,000 to Can-Cal by pledging to Can-Cal the collateral listed on Exhibit A hereto. Debtors will forthwith execute appropriate financing statements and all other documents as Can-Cal may reasonably require in order to make all required filings as evidence of the pledge of the collateral to Can-Cal.

3. Debtors hereby represent and warrant:

a. that they own each item of collateral set forth on Exhibit A free and clear of all liens, security interests, encumbrances or claims by third parties and that by pledging the collateral to Can-Cal they are not violating any agreement, covenant, promise or undertaking.

b. that the collateral will be kept and stored at Tyro's facilities near Bullhead City, Arizona and will not be removed therefrom without the express prior written consent of Can- Cal; and

c. Debtors will defend the collateral against claims or demands made by all persons claiming either the collateral or any interest in it.

d. Debtors will promptly pay when due all taxes, assessments, liens and encumbrances levied against the collateral or upon the use of the collateral or upon operations in which the collateral is used, or those levied against the obligation secured by this Agreement. If the collateral is attached to real property owned by Debtors or under any contract which obligates Debtors to pay taxes on the real property, Debtors agree to pay taxes, assessments and encumbrances upon the real property on which the collateral is located.

4. Until the occurrence of any event of default, Debtors may have possession of the collateral. Debtors may use the collateral in any lawful manner which is not inconsistent with this Agreement, any policy of insurance upon the collateral or the laws and regulations of the State of Arizona. Debtors will maintain and keep the collateral in good order and repair and agree not to use

the collateral in any manner which results in waste, unreasonable deterioration or depreciation. Can- Cal's representatives may enter upon the Debtors' property and inspect the collateral at any reasonable time.

5. Debtors are in default under this Agreement upon the happening of one or more of the following events or conditions:

a. Default in the payment of monies when due;

b. If a warranty, representation or statement made or furnished by Debtors to Can-Cal is false or proves to have been false in any material respect when it was made;

c. Loss, theft, damage, destruction, sale or encumbrance of the collateral or any part of it, or a levy, seizure or attachment of the collateral or any part of it;

d. Debtors' failure to perform any covenant in this Agreement or the taking of action by Debtors which is inconsistent with or in violation of this Agreement; or which endangers the safety or integrity of the collateral or Can-Cal's security interest;

e. Dissolution, termination of existence, insolvency of any Debtor, appointment of a receiver for any part of any property belonging to Debtors whether or not it is collateral under this Agreement, assignment for the benefit of creditors, or the commencement of proceedings under a bankruptcy or insolvency law by or against the Debtors.

6. Upon the happening of an event of default, all amounts owed by Debtors to Can-Cal, pursuant to this Agreement, shall become immediately due and payable.

7. Upon the occurrence of any event of default hereunder, Can-Cal shall have the right to take possession of the collateral and to sell or any part thereof consistent with commercially reasonable standards at public or private sale at Can-Cal's option at any time or times without advertisement or demand upon or notice to any Debtor (all of which are hereby waived), except such notice as is required by applicable statute and cannot be waived; with the right on the part of Can- Cal or its nominee to become the purchaser thereof at any such sale (unless prohibited by statute), free from any equity of redemption and from all other claims, and after deducting all legal and other expenses for maintaining or selling the collateral and all attorneys fees, legal or other expenses for collection, sale and delivery, to apply the residue of the proceeds of such sale or sales to pay all amounts owed by Debtors to Can-Cal.

8. The amount to be paid by Debtors to Can-Cal pursuant to this Agreement represents a compromise of claims asserted by Can-Cal against Debtors. In the event the Debtors fail to make timely payment of the amounts due pursuant to paragraph 1 herein, Can-Cal, in addition to its rights to obtain judgment for any unpaid balance due, shall have the right to file a lawsuit against Debtors seeking damages in addition to the amounts required to be paid hereunder.

9. Debtors have the authority to enter into this Agreement and any person signing it on Debtors' behalf does so with the authority of the Debtors.

10. Can-Cal represents that it has, either directly or through A. R. Trust advanced funds to Tyro by depositing them in the escrow account of Ericsson and that no other party has any interest in the funds advanced by it. Can-Cal further represents that it has the authority to enter into this Agreement and any person signing it on Can-Cal's behalf does so with the authority of Can-Cal.

11. Debtors, and each of them, hereby assign to Can-Cal any and all rights, claims, or causes of action they have or may have against John Doherty for actions taken or failed to be taken, monies spent, monies received or any other matter relating to services performed or failed to be performed, equipment purchased or obtained in connection with services performed by Debtors for Can-Cal.

12. Upon receipt of all payments required by paragraph 1 of this Agreement timely made by Debtors, Can-Cal irrevocably releases Debtors and each of them from all actions, causes of action, suits, debts and all other matters Can-Cal ever had or has by reason of any matter to the date of this Agreement.

13. In consideration of the execution of this Agreement by Can-Cal, Debtors and each of them hereby release Can-Cal from all actions, causes of action, suits, debts and all other matters Debtors ever had or has by reason of any matter to the date of this Agreement.

TYRO INC., A NEVADA CORPORATION

 By:    /s/   Dean Willman, President
     ------------------------------------
        /s/   Dean Willman
 ----------------------------------------
 Dean Willman, Individually

        /s/    Roland S. Ericsson
-----------------------------------------
Roland S. Ericsson, Individually

CAN-CAL RESOURCES LTD.

By:     /s/   R. D. Sloan
    -------------------------------------

EXHIBIT 10.10

SYLVESTER & POLEDNAK, ESQ.
DONALD T. POLEDNAK, ESQ.
Nevada Bar No. 4721
601 S. Sixth Street
Las Vegas, Nevada 8901
(702) 952-5200

CAL-CAN RESOURCES, LTD.,                    )
                                            )      Case No.      A386420
Plaintiff                                   )      Dept. No.     VII
                                            )      Docket No.    P
vs.                                         )
                                            )      EXEMPT FROM ARBITRATION
TYRO, INC., a Nevada corporation,           )      DISPUTE IN EXCESS OF $40,000
aka TYRO PRECIOUS METALS                    )
PROCESSING CENTER, DEAN                     )
WILLMAN and ROLAND S. ERICSSON,             )
and DOES I through X, inclusive,            )
                                            )
        Defendants                          )
                                            )
--------------------------------------------

COMPLAINT

Cal-Can Resources, Ltd. ("Plaintiff"), by and through its legal counsel, Donald T. Polednak, Esq. of the law firm of Sylvester & Polednak, Ltd., hereby alleges and complains of the Defendants, and each of them, as follows:

GENERAL ALLEGATIONS

1. Plaintiff is a corporation formed and existing under the laws of the State of Nevada, with its principal place of business located at 1505 Blackcombe Street, Suite 203, Las Vegas, Nevada 89128.

2. Defendant Tyro, Inc. aka Tyro Precious Metals Processing Center ("Tyro") is a corporation formed and exiting under the laws of the State of Nevada with its principal place of business located in Clark County, Nevada.

3. Defendant Dean Willman ("Willman") is an individual residing in Clark County, Nevada.

4. Defendant Roland S. Ericsson ("Ericsson") is an individual residing in Clark County, Nevada.

5. The true names and capacities of Defendant DOES I through V are unknown to Plaintiff, and Plaintiff therefore sues said Defendants by said fictitious names. Plaintiff is informed and believes, and thereupon alleges that each of the Defendants designated as DOE is responsible in some manner for the events and happenings referred to and caused the damages to Plaintiff as alleged, and Plaintiff will ask leave of this court to amend this Complaint to insert the true names and capacities of DOES I through V when they are ascertained by Plaintiff together with appropriate charges and allegations to join such Defendants in this action.

6. On or about October 30, 1997, the above-named Defendants, jointly and severally, entered into an agreement (the "Agreement") with Plaintiff memorializing certain

indebtedness owed to Plaintiff by Defendants. A true and correct copy of the Agreement is attached hereto as Exhibit "1" and incorporated herein by this reference.

7. Pursuant to the terms of the Agreement, and repayment schedule contained therein, the Defendants, individually, and jointly and severally, covenanted and promised to pay Plaintiff the total sum of $65,000 pursuant to the terms set forth in the Agreement. 8. The Defendants, and each of them, agreed and covenanted that they were primarily liable for all monies set forth in the Agreement, and in that of the event of any default, they would pay Plaintiff all costs, including reasonable attorney's fees and costs in enforcing the Agreement, its lien and security interest, and the rights and remedies provided within the Agreement. 9. The Agreement contains an "acceleration clause" which provides that upon the occurrence of an event of default all amounts owed by the Defendants pursuant to the Agreement become immediately due and payable to Plaintiff. 10. Events of default under the Agreement specifically include failure to repay any of the amounts set forth in to the Agreement. 11. Defendants, and each of them, have failed to make payments pursuant to the terms of the Agreement despite demand and it has been necessary for Plaintiff to retain the services of an attorney to bring suit to recover amounts due under the Agreement. Pursuant to the specific terms of the Agreement, the Plaintiff is entitled to recover its attorney's fees and costs incurred in the enforcement of the Agreement.

FIRST CLAIM FOR RELIEF

(Breach of Contract)

12. Plaintiff restates and realleges paragraphs 1 through 11 as though fully set forth herein at length.

13. The Agreement between the parties constitutes a contract.

14. Defendants, and each of them, have failed, despite demand, to perform under the terms of the contract by specifically failing and refusing to make payments due under the payment schedule set forth in the Agreement. As of the date of the filing of this Complaint, the Plaintiff is owed the approximate amount of $50,000, exclusive of interest accruing pursuant to the terms of the Agreement and attorney's fees and costs of suit incurred.

15. As a result of Defendants failure to make payment under the terms of the contract between the parties, Plaintiff has been damaged in an amount in excess of $10,000.

16. Plaintiff has been required to retain the services of legal counsel to enforce the Agreement and, pursuant to the terms of the Agreement, is entitled to recovery of attorney's fees and costs of suit.

WHEREFORE, Plaintiff prays that judgment be entered against Defendants, jointly and severally as follows:

(a) For damages pursuant to the terms of the Agreement in the amount of $50,000.00 (in excess of $10.000), plus accruing interest.

(b) For attorney's fees and costs of suit incurred herein.

(c) For such other and further relief as is deemed just and appropriate. DATED this 30th day of March, 1998.

SYLVESTER & POLEDNAK, LTD.

By      /s/     Donald T. Polednak, Esq.
   -----------------------------------------
               Donald T. Polednak, Esq.
               601 S. Sixth Street
               Las Vegas, Nevada 89101

EXHIBIT 1

AGREEMENT DATED OCTOBER 30, 1997 BETWEEN CAN-CAL RESOURCES AND TYRO PRECIOUS METALS CENTER IS FILED AS EXHIBIT 10.9 TO THE FORM 10SB OF WHICH THIS COMPLAINT IS MADE A PART OF AS EXHIBIT 10.10.

EXHIBIT 10.11

SYLVESTER & POLEDNAK, ESQ.
DONALD T. POLEDNAK, ESQ.
Nevada Bar No. 4721
601 S. Sixth Street
Las Vegas, Nevada 8901
(702) 952-5200

CAL-CAN RESOURCES, LTD.,                    )
                                            )      Case No.      A386420
Plaintiff                                   )      Dept. No.     VII
                                            )      Docket No.    P
vs.                                         )
                                            )
TYRO, INC., a Nevada corporation,           )
aka TYRO PRECIOUS METALS                    )
PROCESSING CENTER, DEAN                     )
WILLMAN and ROLAND S. ERICSSON,             )
and DOES I through X, inclusive,            )
                                            )
        Defendants                          )
                                            )
--------------------------------------------

CONFESSION OF JUDGMENT

Defendants, Tyro, Inc., Dean Willman and Roland S. Ericsson, jointly and severally, pursuant to NRS 17.090, et seq., hereby confess judgment in favor of the above named

Plaintiff, Can-Cal Resources, Ltd. (filed as Cal-Can Resources, Ltd. hereafter "Can-Cal") and authorize judgment to be entered in the total amount of:

1. The principal amount of $50,000.00, with interest thereon accruing at the rate of six percent (6%) per annum on the unpaid principal balance from December 10, 1997, together with attorney fees and costs incurred in the amount of $900.00.

2. The total amount above, less any payments made thereon, is justly due from Defendants, jointly and severally, to Can-Cal.

3. The total amount above became payable to Can-Cal as a result of Defendants', and each of them, breach of the Agreement executed by Defendants in favor of Can-Cal. A copy of said Agreement is attached hereto as Exhibit "1" and incorporated herein by this reference.

DATED this 7th day of May, 1998.

   /s/   Roland S. Ericsson                            /s/    Dean Willman
----------------------------------          ------------------------------------
Roland S. Ericsson                                        Dean Willman

TYRO, INC.

By      /s/    Dean Willman
   ---------------------------------
Its     President
   ---------------------------------

VERIFICATION

STATE OF NEVADA )
COUNT OF CLARK )

I hereby certify that I have read the foregoing CONFESSION OF JUDGMENT and know the contents thereof. I am informed and believe, and on that ground state, that the matters set forth therein are true.

      /s/    Roland S. Ericsson
------------------------------------
Roland S. Ericsson

SUBSCRIBED and SWORN before me
this 7th day of May , 1998.

    /s/    Yesenia Otero                               (Notary Seal)
----------------------------------
NOTARY PUBLIC

STATE OF NEVADA )
COUNT OF CLARK )

I hereby certify that I have read the foregoing CONFESSION OF JUDGMENT and know the contents thereof. I am informed and believe, and on that ground state, that the matters set forth therein are true.

                                                  /s/    Dean Willman
                                            ------------------------------------
                                            Dean Willman
SUBSCRIBED and SWORN before me
this 7th day of May , 1998.

    /s/    Veronica Sue Smith                          (Notary Seal)
----------------------------------
NOTARY PUBLIC

STATE OF NEVADA )
COUNT OF CLARK )

I hereby certify that I have read the foregoing CONFESSION OF JUDGMENT and know the contents thereof. I am informed and believe, and on that ground state, that the matters set forth therein are true.
TYRO, INC.

                                            By       /s/    Dean Willman
                                               ---------------------------------
                                            Its      President
                                               ---------------------------------
SUBSCRIBED and SWORN before me
this 7th day of May , 1998.

    /s/    Veronica Sue Smith                          (Notary Seal)
NOTARY PUBLIC

EXHIBIT 1

AGREEMENT DATED OCTOBER 30, 1997 BETWEEN CAN-CAL RESOURCES AND TYRO PRECIOUS METALS CENTER IS FILED AS EXHIBIT 10.9 TO THE FORM 10SB OF WHICH THIS COMPLAINT IS MADE A PART OF AS EXHIBIT 10.11.

EXHIBIT 10.12

THIS AGREEMENT made as of the 29th day of January, 1999.

BETWEEN:

CAN-CAL RESOURCES LTD., a body corporate, having a place of business situate at 3651 Lindell Road, Las Vegas, Nevada USA 89103;

(hereinafter called the "Vendor")

OF THE FIRST PART

AND:
545538 B.C. LTD., (Inc. No. 545538), a body corporate, duly incorporated under the laws of the Province of British Columbia and having its registered office situate at #208 - 1899 Willingdon Avenue, Burnaby, B.C. V5C 5Tl;

(hereinafter called the "Purchaser")

OF THE SECOND PART

AND:
RONALD DANIEL SLOAN, Businessman, of #203, Building 2, 1505 Blackcomb Street, Las Vegas, Nevada USA 89128

(hereinafter called the "Covenantor")

OF THE THIRD PART

WITNESSETH that for and in consideration of the promises, covenants and agreements hereinafter set forth, the parties hereto agree as follows:

1.01 The Vendor warrants and represents that:

(a) SCOTMAR INDUSTRIES INC. (hereinafter called the "Company") is a corporation duly incorporated under the laws of the Province of British Columbia as a non-reporting company, is validly existing, and is in good standing in British Columbia and does not carry on business outside that province;

(b) The authorized capital of the Company is THREE HUNDRED THOUSAND shares divided into One Hundred Thousand Class "A" Voting Common Shares without par value; One Hundred Thousand Class "B" Non-Voting Common Shares without par value; and One Hundred Thousand Class "C" Non-Voting Preference Shares without par value, of which there are Ten (10) Class "A Voting Common Shares and One (1) Class "B" Non-Voting Common Shares issued and outstanding as fully paid and non-assessable Shares;

(c) The Vendor is the registered holder and beneficial owner of

the following, shares:

Name                      Number/Class/Kind
----                      -----------------

Can-Cal Resources Ltd.    Ten (10) Class "A" Voting Common Shares
Can-Cal Resources Ltd.    One (1) Class "B" Non-Voting Share

(hereinafter called the "Vendor's Shares");

(d) The Vendor's Shares are validly issued and outstanding as fully paid and non- accessible in the capital of the Company and are free and clear of all liens, charges and encumbrances;

(e) The Vendor has good and sufficient right and authority to enter into this Agreement on the terms and conditions herein set forth and to transfer the legal and beneficial title and ownership of the Vendor's Shares to the Purchaser;

(f) There are no outstanding securities of the Company which are convertible into shares in the capital of the Company and there are no outstanding options on or rights to subscribe for any of the unissued shares in the capital of the Company or options to purchase the Vendor's Shares;

(g) The directors and officers of the Company are as follows:

Directors:                   -      SCOTT A. NICHOLS

Officers:     President      -      SCOTT A. NICHOLS
              Secretary      -      KIM NICHOLS

(h) The unaudited balance sheet of the Company as of December 31, 1997 and the supporting statements for the year ended December 31, 1997 which are attached to this Agreement as Schedule "A" were prepared by Bouchard & Company, Chartered Accountants, in accordance with generally accepted accounting principles applied on a basis consistent with prior years and the monthly financial statements for the year 1998 are substantially correct in every particular and present fairly and

accurately the financial condition and position of the Company as at December 31, 1998 and the results of its operations for the year ended on December 31, 1998;

(i) There are no liabilities of the Company arising in respect of operations of the Company or incurred on or before December 31, 1998 not disclosed or reflected in Schedule "A" and no such undisclosed liabilities have been paid since December 31, 1998;

(j) There are no liabilities of the Company which are not disclosed or reflected in Schedule "A" except those incurred in the ordinary course of its business since December 31, 1998;

(k) The provision for doubtful accounts receivable as recorded in Schedule "A" are, and collections since December 31, 1998 have proven them to be, adequate;

(l) Since December 31, 1998:

(i) no dividends of any kind have been declared or paid by the Company;

(ii) no capital expenditures or commitments therefore have been made by the Company;

(iii) there has been no material adverse change in the financial position or condition of the Company and no damage, loss or destruction materially affecting the business or property of the Company;

(iv) the Company has not increased the pay of or paid or agreed to pay any pension, bonus, share of profits or other similar benefit to, or for the benefit of, any employee, director, or officer of the Company, except increases in normal course of business to employees other than officers and directors; and

(v) the Company has conducted its business in its usual and normal manner;

(m) The Company has good title to and possession of all the assets referred to in Schedule "A" and all assets acquired since December 31, 1998, are free and clear of all liens, charges or encumbrances except those described in Schedule "B", and is not in default of any term of any lien, charge or encumbrance described in Schedule "B". All machinery and equipment comprised in the assets are in normal operating condition and in a state of reasonable maintenance and repair;

(n) The Company is the holder of a valid and subsisting Lease Agreement with Yuk Lan Kwun and Benny Kwun of the lands and premises more particularly described in Schedule "C" hereto;

(o) All leases of equipment as more particularly described in Schedule "D" hereto are valid and subsisting leases and the rents thereby reserved have been fully and duly paid up to the Closing Date as hereinafter defined and the covenants and conditions therein contained have been duly performed by the Company to the date hereof and the Company has not assigned or encumbered any such leases;

(p) The Company is indebted to the Vendor in the amount of ONE HUNDRED SIXTY- SEVEN THOUSAND FOUR HUNDRED SEVENTY-SEVEN DOLLARS AND SIXTY-THREE CENTS ($167,477.63), which said sum the Vendor shall assign to the Purchaser on the Closing Date (hereinafter called the "Vendor's Shareholder Loans");

(q) The Company is not subject to any contract or agreement running for more than one year save and except for the following: (i) Lease relating to the Promises of the Company.

(r) The Company has been assessed for federal and provincial income tax for all years to and including the fiscal year of the Company ended December 31, 1998 and adequate provision will be made on Closing for any and all taxes payable by the Company for the period of operations to and including December 31, 1998;

(s) The office or employment of all employees and officers of the Company can be terminated by not more than 4 weeks notice;

(t) The Vendor is not indebted to the Company;

(u) To the best of the Vendor's knowledge, the Company is not in breach of any statute, regulation or by-law applicable to the Company or its operations;

(v) The Vendor is not "resident in Canada" within the meaning of that phrase in Section 116 of the Income Tax Act of Canada;

(w) The Company holds all permits, licences, consents and authorities issued by any federal, provincial, regional or municipal government or agency thereof which are necessary or desirable in connection with the operations of the Company and the ownership of its assets and a true and complete list of the permits, authorities, licences and consents held by the Company is set out in Schedule "E";

(x) To the best of the: Vendor's knowledge, the making of this Agreement and the completion of the transactions contemplated hereby and the performance of and compliance with the terms thereof, does not conflict with or result in the breach of or the acceleration of any indebtedness under, any terms, provisions or conditions of, or constitute default under the Memorandum or Articles of the Company or any

indenture, mortgage, deed of trust, agreement, lease, franchise, certificate, consent, permit, licence, authority, or other instrument to which the Company is a party or is bound or any judgment, decree, order, rule or regulation of any court or administrative body by which the Company is bound or, to the knowledge of the Vendor any statute or regulation applicable to the Company;

(y) The Company has no bank or chequing accounts, safety deposit boxes or other depositories except as set out in Schedule "F";

(z) **deleted**

(aa) The Company is not party to any collective agreement with any labour union or other association of employees;

(bb) The Company is not a party to any pension, profit sharing, group insurance, or similar plans or other deferred compensation plans, save and except for a group insurance plan with the Automotive Retailers Association;

(cc) The Company has not experienced nor is it aware of any occurrence or event which has had, or might reasonably be expected to have, a materially adverse effect on its business or the results of its operations;

(dd) The Company has made all elections required to be made under the Income Tax Act in connection with any distributions by the Company and all such elections were true and correct;

(ee) The Company has withheld and remitted to Revenue Canada, or the applicable tax collecting authority, all amounts required to be withheld and remitted to Revenue Canada or the tax collecting authority respecting payments to employees and has paid all installments of corporate taxes due and payable;

(ff) All Workers' Compensation Board, corporation capital tax, provincial sales tax and federal tax returns, and all employee remittances, Canada Pension Plan, Unemployment Insurance and other reports and information required to be filed with all applicable government authorities, agencies and regulatory bodies have been duly and timely filed; and

(gg) **deleted**

the transactions contemplated hereby shall be true at and as of the time of closing as though such representations were made at and as of such time.

2.02 Notwithstanding any investigations or enquiries made by the Purchaser prior to the closing or the waiver of any condition by the Purchaser, the representations, warranties, covenants and agreements of the Vendor and the Purchaser shall survive the closing and notwithstanding the closing of the purchase and sale herein contemplated shall continue in full force and effect.

TOTAL: $99,800.00

3.02. The Purchase Price shall be paid and satisfied as follows:

(a) the sum of $1,000.00 at or before the execution hereof, the receipt of which the Vendor does hereby acknowledge;

(b) the sum of $43,800.00 shall be paid by the Purchaser to the Vendor on the Closing Date, subject to the provisions of this Agreement; and

(c) the balance, namely the sum of $55,000.00, together with interest at the rate of Eight (8%) Percent per annum, calculated yearly, not in advance, as and from the Closing Date until paid, shall be paid by the Purchaser to the Vendor on February 25, 1999, provided that the Vendor has delivered a Certificate as contemplated in paragraph 4.04. In the event the Vendor has not delivered a Certificate within 90 days from the Closing Date, then the Purchaser shall be entitled to invoke the provisions of paragraph 4.04 hereof.

4.02 The Vendor will cause the Company at all reasonable times prior to the Closing Date to permit representatives of the Purchaser full access to its property and books and records including contracts and agreements, minute books and share registers, to give the Purchaser and its representatives such information with respect thereto as may be reasonably required and to permit the Purchaser to make such audit (at its cost) of the books of account of the Company as the Purchaser may see fit.

4.03 The vendor shall cause to be obtained on the Closing Date the written resignation of Scott A. Nichols as a director and officer and Kim Nichols as an officer.

4.04 The Vendor shall, if required by the Purchaser, cause to be delivered to the Purchaser a certificate issued pursuant to Section 116(4) of the Income Tax Act of Canada, or a certificate issued pursuant to Section 116(2) of the Income Tax Act of Canada in respect of the purchase and sale contemplated by this Agreement fixing a certificate limit which is not less than the cost to the Purchaser of the Assets, or failing delivery of either certificate, will permit the Purchaser to withhold such amount as the Purchaser would be liable to pay on behalf of the Vendor pursuant to Section 116(5) of the Income Tax Act of Canada (hereinafter called the "Holdback") from any amount or amounts otherwise payable to the Vendor pursuant to this Agreement. The Holdback will be paid in trust to Messrs. Hawthorne, Piggott & Company to pay the Holdback to the Vendor upon delivery to Messrs. Hawthorne, Piggott & Company of a certificate issued pursuant to Section 116 of the Income Tax Act of Canada which is satisfactory to the Purchaser or to pay out of the Holdback the tax payable by the Purchaser pursuant to Section 116(5) of the Income Tax Act of Canada and the balance, if any, to the Vendor.

4.05 The Vendor shall pay all wages and salaries and all amounts due in lieu of holiday pay to and including the Effective Date to all officers and employees of the Company. The Vendor shall and the Covenantor shall remain solely liable for any and all severance due to any such officer and/or employee

4.06 The Vendor will cause its Chartered Accountants to prepare audited Financial Statements for the Company as of December 31, 1998, together with all schedules and corporate Income Tax Returns, at the Vendor's cost.

(a) that on the Closing Date the warranties and representations of the Vendor as set forth in paragraph 1 of this Agreement shall be true in every particular as if such warranties and representations had been made by the Vendor on the Closing Date;

(b) that all of the agreements to be performed by the Vendor hereunder shall have been performed;

(c) that the Vendor shall have delivered to the Purchaser:

(i) Resignations in writing of all directors and officers of the Company;

(ii) a certified copy of a resolution of the directors of the Company authorizing the transfer of the Vendor's Shares and registration of the same in the name of the Purchaser and authorizing the issue of new share certificates representing the Vendor's Shares in the name of the Purchaser;

(iii) a duly executed share certificate in the name of the Purchaser representing the Vendor's Shares;

(iv) all corporate records of the Company including the minute books, share register book, share certificate books and annual reports as well as the common seal of the Company;

(v) all share certificates of the Vendor, duly endorsed, for transfer; and

(vi) a General Security Agreement executed by the Company in order to secure the balance due under paragraph 3.02(c);

(vii) a guarantee in the form set forth in Schedule "G";

(viii) **deleted**

(ix) an Assignment of Shareholder Loans in favour of the Purchaser.

5.02 The conditions set forth in paragraph 5 of this Agreement are for the exclusive benefit of the Purchaser and may be waived by the Purchaser in writing in whole or in part on or before the Closing Date but except as so waived the completion of the purchase referred to in paragraph 3 hereof by the Purchaser shall not prejudice or affect in any way the rights of the Purchaser in respect of the warranties and representations of the Vendor set forth in paragraph 1 of this Agreement.

Covenantor acknowledge and agree that the Purchaser has entered into this Agreement relying on the warranties and representations and other terms and conditions of this Agreement and that no information which is now known or which may hereafter become known to the Purchaser or its officers, directors or professional advisors shall limit or extinguish the right to indemnity hereunder. The Purchaser may deduct the amount of any loss or damage from any installment of the unpaid purchase price.

7.02 The parties hereto shall execute and deliver such further and other documents, instruments and things and do all acts and things as may be requisite either before or after the Closing Date to carry out the full intent and meaning of this Agreement.

7.03 This Agreement contains the whole agreement between the parties hereto in respect of the purchase and sale contemplated herein, and there are no warranties, representations, terms, conditions or collateral agreements, express, implied or statutory other than as expressly set forth in this Agreement.

7.04 Delivery of an executed copy of this Agreement by telecopy, telex or other means of electronic communication producing a printed copy will be deemed to be execution and delivery of this Agreement on the date of such communication by the party so delivering such copy, subject to delivery of an originally executed copy of this Agreement to the other parties hereto within two (2) weeks of the date of delivery of the copy sent via the electronic communication.

7.05 This Agreement may be executed by the parties in two or more counterparts and such counterparts as so executed together form one original Agreement and shall be read together and construed as if all the parties had executed one original Agreement

(a) To the Purchaser:

545538 B.C. LTD.,
#208-1899 Willingdon Avenue, Burnaby, B.C. V5C 5T1

(b) To the Vendor:

CAN-CAL RESOURCES LID.,
3651 Lindell Road,
Las Vegas, Nevada USA 89103

(d) To the Covenantor:

RONALD DANIEL SLOAN,
#203 Building 2, 1505 Blackcomb Street,
Las Vegas, Nevada USA 89128

or at such other address as the Purchaser or the Vendor may from time to time designate by notice in writing to the other.

IN WITNESS WHEREOF the parties hereto have hereunto set their hands and seals the day and year first above written.

The Common Seal of CAN-CAL                  )
RESOURCES LTD. was                          )
hereunto affixed in the presence of:        )
                                            )       c/s
                                            )
                                            )
Per:      /s/   Brian Wolfe                 )
      ------------------------------
        Authorized Signatory



SIGNED, SEALED AND DELIVERED                )
by the Covenantor, RONALD DANIEL            )
SLOAN in the presence of:                   )
                                            )    /s/   R. D. Sloan
    Robin Schwarz                           )  ----------------------
-----------------------------------         )       RONALD D. SLOAN
    16008 Ash St.                           )
------------------------------------        )
    Hesperia, CA 92345                      )
------------------------------------

The Common Seal of 545538 B.C. LTD.         )
was hereunto affixed in the presence of:    )
                                            )
                                            )       c/s
                                            )
Per:    /s/   Michael Gordon                )
     -------------------------------
        Authorized Signatory