EXHIBIT 10.1
SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE
This Settlement Agreement and Mutual General Release (hereinafter, this
"Agreement") is made and entered into on this ____ day of March, 2004 by and
between: Calais Resources, Inc., a corporation organized under the laws of
British Columbia ("Calais"), Xxxxxxx and Xxxx Xxxxxx ("Mr. and Xxx. Xxxxxx"),
Aardvark Enterprises, Inc. ("AEI"), Aardvark Agencies, Inc. ("AAI"), White Cap
Mines, Inc. ("WCM"), Argus Resources, Inc. ("Argus"), and Xxxxx Holdings. Mr.
and Xxx. Xxxxxx, AEI, AAI, WCM, Xxxxx Holdings, and Argus are collectively
referred to as the "Xxxxxx Parties"; Calais and the Xxxxxx Parties are
collectively referred to as the "Parties."
RECITALS
A. Calais is a publicly-held company based in Greenwood Village,
Colorado, with properties in Boulder County, Colorado, Xxx County,
Nevada, and the Republic of Panama, which has obligations to file
reports and disclosure information with the British Columbia
Securities Commission ("BCSC") and the United States Securities and
Exchange Commission ("SEC").
B. Xx. Xxxxxx has been an officer and director of Calais in the past and
with the other Xxxxxx Parties is a significant shareholder of Calais,
appears to own more than 10% of the outstanding common stock of Calais
as such ownership is calculated pursuant to Rule 13d-3 promulgated by
the SEC, The topic of the Xxxxxx Parties being a 10% or greater
shareholder has been interpreted by Xxxxx Figa and Will. The Xxxxxx
Parties have presently engaged an SEC attorney to independently
determine if they are 10% or greater shareholders under US Rule 13d-3
and whether they owe any reporting obligations under Sections 13(d),
13(g), or 16(a) of the US Securities Exchange Act of 1934.
C. The association of the Parties has given rise to certain disputes and
differences and may give rise to other disputes and differences,
whether foreseen or unforeseen (collectively referred to herein as the
"Disputes") between and among them.
D. Pursuant to the terms and conditions set forth in this Agreement, the
Parties desire, without admitting any fault or liability, now to
settle completely and for all time any and all Disputes among them
regarding any matters, including (but without limitation) those which
arose from or were related to or which may arise in the future from or
which may in the future be related to the Disputes, and the
circumstances and relationships attendant thereto;
NOW THEREFORE, in consideration of the following covenants and promises
and for other valuable consideration, this Agreement is entered into by the
Parties.
AGREEMENT
1. AGREEMENTS. There are a number of existing agreements and
relationships between Calais and the Xxxxxx Parties which are intended to be set
forth in, and modified by, this Agreement as described herein. These include:
a. CONVERTIBLE DEBENTURES. Calais originally issued convertible debentures
in July 2000, and reissued those debentures in May 2001 (as follows),
each of which are convertible into common stock at the conversion price
of Cdn$1.23 through May 11, 2011 and, based on the records of Calais
are owned as follows:
Name of Holder Amount (Cdn$) Underlying Shares
----------------------------------------------------------------------------------------
Xxx. Xxxxxx $ 3,149,955 2,560,939
----------------------------------------------------------------------------------------
Argus Resources, Inc. $ 215,422 175,140
----------------------------------------------------------------------------------------
AAI $ 747,728 607,909
----------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxxxxx $ 984,000 893,864
----------------------------------------------------------------------------------------
Total $ 5,097,105 4,237,852
----------------------------------------------------------------------------------------
ii. Of the debentures owned by Xxx. Xxxxxx, she is holding
Cdn$1,103,214 for Xxxxxx Xxxxxx and disclaims any interest in
debentures in that amount and the underlying shares. Xxx.
Xxxxxx assigned the Cdn$984,000 debenture to Xx. Xxxxxxxxx on
August 11, 2000 in connection with the settlement agreement
described in (para). 1(b)(iii), below.
b. CARIBOU PROPERTY AGREEMENTS. Two agreements recorded in the records of
Boulder County, Colorado, by which Calais has the right to redeem or
reacquire certain of the Caribou properties from AEI and/or AAI. The
two agreements, which each address different properties, are dated
March 26, 1999 (the "1999 Agreement," finally signed by AAI on August
9, 2000) and dated July 20, 2000 (the "2000 Agreement," finally signed
by AAI on July 20, 2000). The properties addressed by the two
agreements are referred to herein as the "1999 Properties" and the
"2000 Properties," respectively. The 1999 Agreement and the 2000
Agreement are attached as exhibits. As a result of the agreements and
the transactions leading to the agreements:
i. AAI sold certain property it owned and used the proceeds from
the property sale to purchase the 1999 Properties (for
$500,000, pursuant to the exercise of an option). AAI deferred
recognition of any gain on that sale pursuant to Section 1031
under the Internal Revenue Code. At the time, Calais did not
have the funds necessary to exercise the option it had
obtained.
ii. On July 20, 2000 (after the date of the Xxxxxxxxx Settlement
described below, and approximately the same date as the mutual
release (which was dated July 18, 2000 but apparently executed
in August 2000), but prior to the date that AAI signed the
1999 Agreement), Calais and AAI entered into the 2000
Agreement by which:
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- AAI purchased the 2000 Properties from Calais for
US$3,500,000, paying [US$1,200,000] cash and a
promissory note payable to Calais for [US$2,300,000],
which promissory note is secured by a deed of trust
against the 2000 Properties; and
- AAI agreed to reconvey the 2000 Properties to Calais
for US$3,500,000 less the amount of the note and deed
of trust remaining on the 2000 Properties, with
Calais having such right for a ten year period from
the date (July 20, 2000) of the 2000 Agreement.
- AAI has made no payments on the promissory note.
- The 2000 Properties are recorded in the name of AAI
in the Boulder County, Colorado, records.
iii. Xxxxxx X. Xxxxxxxxx brought litigation against Xx. Xxxxxx,
Calais, and others, which litigation was resolved in a mutual
release dated July 18, 2000 and apparently signed by facsimile
in August 2000. Prior to the mutual release, on June 8, 2000,
the parties executed a memorandum intended to "serve as a
final settlement agreement" among the parties (the "Xxxxxxxxx
Settlement").
iv. It was and remains the intention of the parties to the
Xxxxxxxxx Settlement, the 1999 Agreement, and the 2000
Agreement that the agreements be interpreted together as
reflective of a single agreement, although there are
inconsistencies in those agreements which are intended to be
addressed in this Agreement.
v. As a result of the 1999 Agreement, the 2000 Agreement, and the
Xxxxxxxxx Settlement, the following circumstances exist and
transactions took place to the extent relevant to the Caribou
Property (including, without limitation, the 1999 Properties
and the 2000 Properties):
1. Calais issued a debenture to AAI in the amount of
Cdn$747,728.47 to comply with (para) 3(a)(2) of the
Xxxxxxxxx Settlement, and this debenture reflects the
total dollar amount that Calais must pay to AAI for
both satisfaction of the debenture and to obtain
reconveyance of the 1999 Properties and the 2000
Properties.
2. Although the Xxxxxxxxx Settlement states in (para)
3(a)(3) that Calais will have an unlimited amount of
time to exercise the option to reacquire the 1999
Properties and the 2000 Properties, the 1999
Agreement (signed by AAI on August 9, 2000) and the
2000 Agreement provided for a ten year right to
reacquire the 1999 Properties and the 2000
Properties, respectively.
3. At the same time, Calais issued a debenture to Xxx.
Xxxxxx including the principal amount of
Cdn$2,628,963 (US$1,753,464) to reflect amounts
advanced by Mr. and Xxx. Xxxxxx.
c. NEVADA PROPERTY AGREEMENTS. In December 1994, Calais paid Xx. Xxxxxx
US$1,176,000 for an interest in various properties located in Nevada
(the "Manhattan project") which consist of 28 patented mining claims
and 147 unpatented mining claims.
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i. Based on the preliminary research done to date, the Parties
agree that none of the claims are (or have been) owned by
Calais, that Xx. Xxxxxx only had at the time limited interests
in the Manhattan project (none of which he has conveyed to
Calais), and the claims constituting the Manhattan project
appear to be owned of record by one or more of the following:
1. Argus Resources, Inc. ("Argus," a Nevada corporation has 8.2
million shares outstanding. 4.2 million or 52% of which is
owned by Xxxxx Holdings a Nevada Corporation. Xxxx Xxxxxx owns
approximately 50% of Xxxxx. There are also 15 additional
shareholders in Xxxxx, and all Xxxxx shareholders are also
Calais shareholders.
2. Xxxxx Holdings
3. Nevada Manhattan Mines, Inc. ("NMMI"),
4. White Cap Mines, Inc. ("WCM," a Nevada corporation owned by
Xx. Xxxxxx who represents to Calais that he owns 100% of the
outstanding WCM stock), and 5. Xxxxxxx Xxxxx (of Las Vegas,
Nevada) and various entities owned by Xx. Xxxxx.
ii. Calais entered into an agreement and settlement dated
September 7, 2000 with NMMI, among others (the "NMMI
Settlement") to settle litigation and to purchase its interest
in the property. Calais made four annual payments of US$75,000
to comply with its obligations under the agreement with NMMI.
Xx. Xxxxxx represents to Calais that he has no affiliation
with and no control over NMMI. NMMI has not completed the
conveyance to Calais of any interest in the property described
in the NMMI Settlement.
iii. There are several agreements to which some of NMMI, Calais,
Argus, Xx. Xxxxxx and Xx. Xxxxx are parties (commencing in
April 1982) which establish various rights, and then form and
then amend a joint venture for a portion of the claims.
iv. Based on the information from the Parties and the record, it
appears (and none of the Parties has any information to the
contrary) that the record ownership of the various properties
is as follows:
1. 28 patented mining claims and approximately 12 unpatented
mining claims appear to be owned by Argus.
2. 17 owned by Argus as to a 60% undivided interest, and by NMMI
as to a 40% undivided interest, which NMMI interest is subject
to the NMMI Settlement.
3. 42 unpatented mining claims appear to be owned by WCM.
4. 55 unpatented mining claims appear to be owned by Xx. Xxxxx or
entities associated with Xx. Xxxxx and as to which WCM claims
an interest.
5. 20 additional claims which are included within the Manhattan
project but which are in the names of vendees of Xxxxxxx
Xxxxx.
d. CALAIS STOCK OWNERSHIP. The Xxxxxx Parties individually and
collectively are beneficial owners of a significant amount of common
stock of Calais (as the term "beneficial
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ownership is defined in SEC Rule 13d-3) including (to the best of the
Parties' knowledge at the present time) 5,192,488 shares consisting of
the following:
i. 1,766,000 shares of common stock, to be verified with SEDAR.
ii. Options to acquire 82,500 shares of Calais common stock,
exercisable through November 15, 2004 at Cdn$1.26 per share;
and
iii. 3,343,988 shares underlying convertible debentures described
above, each of which can be convertible into common stock at
the conversion price of Cdn$1.23 through May 11, 2011.
2. INTENT TO RESOLVE ALL DISPUTES. The relationships described
above have led to disputes and disagreements with respect to property ownership,
payments of money owed, value of consideration received, stock ownership and
reporting, obligations of the Parties, and other issues, disputes and
disagreements that the Parties desire to resolve pursuant to this Agreement (all
of which are included within the term "Disputes" as that term is defined in
Recital C, above, and used in this Agreement). In order to accomplish such
settlement, the Parties agree to the following points, each of which is intended
to interpret the underlying rights and obligations of the Parties to be
consistent with the following, whether or not the agreements originally
establishing the rights and obligations are consistent with the following (which
agreements are hereby automatically and without further action of the Parties
amended effective upon the signature to this Agreement to reflect the
following):
a. RESOLUTION OF CARIBOU PROPERTY ISSUES.
i. Calais may repurchase the 1999 Properties and the 2000
Properties from AAI by paying to AAI the principal amount of
the debenture AAI currently holds as described above in (para)
1(b)(v)(1), which payment will result in the cancellation of
the debenture and will require the reconveyance of the 1999
Properties and 2000 Properties to Calais. The Xxxxxx Parties
holding the debentures retain the right to convert the
debenture to shares within 30 days of notice from Calais to
eliminate the debt.
ii. Calais may exercise its right to complete that purchase at any
time through August 31, 2011. At the time that Calais
exercises its rights to complete the purchase of either the
1999 Properties and the 2000 Properties, AAI will give to
Calais a general warranty deed for the property being
purchased transferring such property to Calais free and clear
of any claims of others, except those created by Calais.
iii. During the period through August 31, 2011, Calais and its
servants, agents, employees, officers, directors, and
contractors:
1. May enter in, under, and upon the 1999 Properties and the 2000
Properties;
2. Have quiet possession of the 1999 Properties and the 2000
Properties;
3. Do such prospecting, exploration, development, and/or other
mining work thereon and thereunder as Calais, in its sole
discretion, may determine advisable;
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4. Bring upon and erect upon the 1999 Properties and the 2000
Properties buildings, plants, machinery and equipment as
Calais may deem advisable;
5. Remove from the Property and for Calais' own account dispose
of ores, minerals, and metals without accounting to any of the
Xxxxxx Parties (including, without limitation, AAI) for the
value of, or costs associated with, such ores, minerals and
metals;
6. May in its sole discretion obtain loans for the exploration,
development, or mining of either or both of the 1999
Properties and the 2000 Properties or other property owned by
Calais in the Caribou district, and secure such loan by a
mortgage or deed of trust encumbering the 1999 Properties
and/or the 2000 Properties;
7. Shall maintain adequate liability and other appropriate
insurance with respect to the 1999 Properties and the 2000
Properties and Calais' other properties within the Caribou
mining district and Calais' operations and activities thereon
(whether Calais directly performs such activities or does so
through independent contractors or others);
8. Shall maintain in good standing the 1999 Properties and the
2000 Properties by the doing and filing of assessment work or
the making of payments in lieu thereof, by the payment of
property taxes and rentals, and the performance of all other
actions which may be necessary in that regard and in order to
keep the 1999 Properties and the 2000 Properties free and
clear of all liens and other charges arising from Calais'
activities thereon (except those permitted by (para)
2(a)(iv)(6) above or those at the time contested by Calais in
good faith); and
9. Shall do all work in the 1999 Properties and the 2000
Properties in a good and minerlike fashion and in accordance
with all applicable laws, regulations, orders, and ordinances
of any governmental authority.
iv. During the period through August 31, 2011, neither Calais nor
Aardvark [AEI or AAI?] may transfer, convey, or assign, an
interest in either the 1999 Properties or the 2000 Properties
(except as permitted by (para) 2(a)(iv)(6) above).
v. After August 31, 2011, if Calais has not repurchased either
the 1999 Properties and the 2000 Properties from AAI, AAI
agrees to extend the repurchase right for an additional ten
more years. If Calais elects to take this ten year extension,
it also extends the convertibility of the debenture in (para)
2(a)(i).
vi. At Calais' request, AAI will execute and deliver for recording
in Boulder county, Colorado, a document as may be recommended
by counsel to Calais that sets forth the foregoing provisions
which will supersede the previously recorded documents
providing notice of the previous understanding between the
parties.
b. NEVADA PROPERTIES.
i. At the time of execution of this document, Argus Resources,
Xxxxxxx Harvey, Moran, and White Caps will convey all of their
interests, including the 24.5% owned, held, or assigned to by
and for Argus, in the Manhattan project including previously
identified claims (para) 1(c)(i)(ii)(iii)(iv), without
limitation, including
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entire right, title, and interest in and to any claims,
leases, or other property constituting the Manhattan project.
ii. It is recognized that Xxxxxxx will need to get shareholder
approval from Argus to execute the Argus portion of the
agreements in (para) 2(b)(i) above.
iii. On or before December 31, 2005, Xx. Xxxxxx will convey, help
to convey, or cause others to convey the Manhattan project to
Calais so that Calais will receive title to the entire right,
title, and interest in and to any claims, leases, or other
property constituting the Manhattan project (including,
without limitation, title to the claims that are currently in
the name of Argus, Xxxxxxx Xxxxx or his affiliates, NMMI, WCM,
AAI, AEI, or Mr. and Xxx. Xxxxxx) which, in the reasonable
opinion of counsel to Calais, is marketable and which is
subject to no liens, obligations, or other encumbrances except
those acceptable to Calais in its sole discretion ("marketable
title").
iv. In exchange for marketable title as described in the preceding
paragraph 2(b)(i) and paragraph 2(b)(ii), Calais will issue to
Argus 250,000 shares of Calais common stock (subject to the
establishment of an exemption from the registration
requirements of Canadian and US federal, provincial, and state
laws).
v. Upon receipt of marketable title to the Manhattan project (and
subject to the possibility that Calais may be prevented from
completing any of the following activities within the time
limits set forth by strikes, labor shortages, inability to
comply with administrative or other regulatory or
environmental requirements notwithstanding exerting reasonable
efforts to do so, and other acts of God ("force majeure") (in
which case the times periods set forth will each be extended
by the amount of the time Calais was delayed by the force
majeure event):
1. Calais will drill not less than 15,000 feet of exploration
drilling within the two years following receipt of marketable
title and,
2. if (following the completion of the work described in (para)
2(b)(v)(1)) Calais determines in its sole discretion that
further work is warranted, Calais will drill at least an
additional 50,000 feet in the following five years (a total of
seven years after receipt of marketable title), and
3. if (following the completion of the work described in (paras)
2(b)(v)(1) and (2)) Calais determines in its sole discretion
that further work is warranted, Calais will develop a
feasibility study for the exploration, development, or mining
of the Manhattan project by the end of the tenth year after
receipt of marketable title, and
4. if (following the completion of the work described in (paras)
2(b)(v)(1), (2) and (3)) Calais determines in its sole
discretion that further work is warranted, Calais will have a
plan for production from the Manhattan project by the end of
the twelfth year following receipt of marketable title.
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vi. If, after each stage of the above, and following receipt of
marketable title, subject to extension as a result of force
majeure) Calais has failed to move forward to the next stage
as required in (para) 2(b)(v)(4) above, after notice from Xx.
Xxxxxx identifying such failure and a 60 day opportunity to
cure such default by presenting such plan, Calais will assign
the original 24.5% Argus interest in the Manhattan project to
Argus or at their direction.
vii. Calais will issue to Argus 2,500,000 shares of Calais common
stock (or, if greater, a number of shares then equal to 5% of
the total number of shares of Calais common stock then
outstanding on a fully-diluted basis, subject to the
establishment of an exemption from the registration
requirements of Canadian and US federal, provincial, and state
laws) if Calais identifies gold or gold equivalent within the
Manhattan project equal to 2,000,000 ounces of Indicated
Mineral Resources or Inferred or Indicated Mineral Reserves as
determined by a Qualified Person retained by Calais as those
terms are defined in the CIM Standards on Mineral Resources
and Reserves (approved August 20, 2000) or any modification,
amendment, or replacement thereto issued by the Canadian
Institute of Mining, Metallurgy and Petroleum.
viii. If Calais has determined to place the Manhattan project into
production before identifying 2,000,000 ounces of Indicated
Mineral Resources or Inferred or Indicated Mineral Reserves as
described in the preceding (para) 2(b)(iv), it will issue a
reduced number of shares of its common stock to Argus based on
the proportion of Indicated Mineral Resources and Inferred and
Indicated Mineral Reserves actually identified bears to
2,000,000. For example, if Calais has identified only
1,500,000 ounces at the time it places the Manhattan project
into production it will issue to Argus 75% of the 2,500,000
shares (in all cases, subject to compliance with Canadian and
US federal, provincial, and state laws).
c. STOCK OWNERSHIP AND REPORTING.
i. Not later than April 30, 2004, the Xxxxxx Parties will comply,
and thereafter will continue to comply, with their obligations
to report their stock ownership and transactions to US federal
and British Columbia provincial authorities in compliance with
the requirements established by such authorities including,
but not limited to, obligations to report trades of securities
of Calais, early warning reporting, control person and take
over bid provisions contained in applicable securities laws
and the rules, regulations and policies made thereto.
Thereafter, the Xxxxxx Parties will comply with their
reporting obligations, limitations and disclosure provisions
as may be required by applicable law in Canada or the United
States. The Xxxxxx Parties will also report all stock
transactions since the time Calais stock CAAUF started trading
on the OTCBB.
ii. Assuming that (and only after) the Xxxxxx Parties comply with
the reporting obligations set forth in (para) 2(c)(i) above,
Calais will cooperate with the Xxxxxx
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Parties in making sales of common stock of Calais they may
beneficially own provided all such sales are in compliance
with applicable law in the United States and Canada without
any requirement for registration of Calais as an underwriter
pursuant to such law and (for the purposes of United States
law) pursuant to a plan that qualifies under SEC Rule 10b5-1.
1. All such sales are in compliance with applicable law in the
United States and Canada without any requirement for
registration of Calais as an underwriter pursuant to such law
and (for the purposes of United States law) pursuant to a plan
that qualifies under SEC Rule 10b5-1; and
2. To the extent that Xxxxxx X. Xxxxxxxxx, Xxxxxxx X. Xxxx, or
members of the board of directors generally (collectively the
"Calais Parties") agree to limit the number of shares that
they can sell in any defined period, the Xxxxxx Parties will
be collectively subject to the same limitation as the total
limitation of the Calais Parties.
iii. If any or all of Xxxxxx X. Xxxxxxxxx, Xxxxxxx X. Xxxx, or
members of the board of directors generally (collectively the
"Calais Parties") have agreed to limit the number of shares of
Calais that they can sell in any defined period, then Xxxxxx
Parties will, collectively, be subject to the same limitation
as the total limitation of the Calais Parties and the Xxxxxx
Parties will enter into an agreement similar to any agreement
entered into by the Calais Parties to that effect.
iv. If and for so long as Xxxxxx X. Xxxxxxxxx and Xxxxxxx X. Xxxx
remain executive officers of Calais, the Xxxxxx Parties will
cast their votes at any meeting of shareholders of Calais in
favor of management's nominees for election as directors of
Calais and in favor of any other resolution proposed by
management of Calais as set forth in any proxy statement sent
to the shareholders for such meeting and the Xxxxxx Parties
will, at the request of the Calais, deliver to Calais a proxy,
in the form and substance required by Calais and which shall
be irrevocable to the fullest extent permitted by law, with
respect to the shares referred to above.
v. Xx. Xxxxxx will (not later than the fifteenth day after his
execution of this Agreement) execute and return to Calais an
option agreement in the form of Exhibit "A" to this Agreement
to reflect the options he owns to purchase 82,500 shares of
Calais common stock described in more detail in (para)
1(d)(ii) above, which option agreement will define Xx.
Xxxxxx'x rights and Calais' responsibilities with respect to
such option.
d. DEBENTURES.
i. Subject to and following the Xxxxxx Parties' compliance
with (paras) 2(c)(i), (ii) and (v) above, Calais agrees to
submit to the approval of its disinterested shareholders at
the next annual general meeting (unless prevented in doing so
by comments from or actions by the SEC or the BCSC after
having submitted a proxy statement
9
for review by such authorities in advance of mailing it to the
shareholders) a proposal by which Calais will reprice the
conversion price for the outstanding debentures from Cdn$1.23
to US$0.55 and calculated from the exchange rate on August 1,
2003. If the shareholders approve such repricing, Calais will
effectuate such repricing immediately. The Xxxxxx Parties
understand that their compliance with (paras) 2(c)(i), (ii)
and (v) above is necessary for Calais to make proper
disclosure about the debentures and the repricing thereof to
the shareholders in the proxy statement or information
statement required to be delivered to the shareholders under
British Columbia and U.S. federal law.
ii. Xxxxxx X. Xxxxxxxxx will assign the debenture he holds for
Cdn$984,000 to Xx. Xxxxxx, subject to compliance with
applicable law in Canada or the United States. By
participating in this Agreement, Xx. Xxxxxxxxx acknowledges
that this Agreement and the resolution of the Disputes
accomplished herein, is of significant value to him and serves
as sufficient consideration for his agreement in this
paragraph to assign the debenture. Calais will also agree to
honor the August 21, 2001 Board Resolution in compensating, in
a like manner, to Xxx Xxxxxxxxx for the debenture surrender.
iii. Xxx. Xxxxxx will assign to Xx. Xxxxxx Xxxxxx all right, title
and interest in and to a debenture for a principal amount of
Cdn$1,103,214.
iv. Calais agrees to recognize the validity of the debentures held
by Xxx. Xxxxxx or which Xx. Xxxxxxxxx will assign to Xxx.
Xxxxxx and the conversion privilege granted therein.
v. Xxxxxx X. Xxxxxxxxx will deliver the original certificates
representing the debentures, with any other documentation
reasonably requested or required by Calais to effect the
repricing and/or assignments contemplated herein, against
delivery of replacement certificates representing the
repricing and/or assignments contemplated herein.
e. RETENTION OF XX. XXXXXX. Calais agrees to retain Xx. Xxxxxx as a
consultant pursuant to a consulting agreement in the form of Exhibit
"B."
f. ROYALTY BUYDOWN. Calais or interested parties could acquire up to 4% of
applicable 5% NSR royalties to Xxxxxxx Xxxxxx or assignee as recorded in the
Nevada property agreements for $3,000,000 per 1%.
3. REPRESENTATIONS AND WARRANTIES.
a. CALAIS. Calais represents and warrants to each of the Xxxxxx Parties
(understanding that each of the Xxxxxx Parties will be relying on the
accuracy and completeness of the representations and warranties in
their determination to enter into this Agreement to resolve the
Disputes as set forth herein):
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i. Calais is a corporation in good standing in British Columbia
and is qualified to conduct business in the state of Colorado.
ii. The persons executing this Agreement on behalf of Calais are
its president. Calais has authorized its president to sign
this Agreement on its behalf, and has further authorized such
officers to deliver this Agreement to each of the Xxxxxx
Parties and intends to be bound by this Agreement in
accordance with its terms.
iii. To the extent that Calais has stated any fact in this
Agreement, Calais (acting through and based on the knowledge
of its president) believes such fact to be true and correct in
all material respects.
b. THE XXXXXX PARTIES. Each of the Xxxxxx Parties represents and warrants
to Calais (understanding that Calais will be relying on the accuracy
and completeness of the representations and warranties in its
determination to enter into this Agreement to resolve the Disputes as
set forth herein):
i. Each of the Xxxxxx Parties that is a corporation, is a
corporation in good standing under the laws of its
jurisdiction of organization and is qualified to conduct
business in the states or provinces where the conduct of its
business so requires.
ii. The persons executing this Agreement on behalf of each of the
Xxxxxx Parties that is a corporation are its duly constituted
officers as named on the signature page hereof. Each of the
Xxxxxx Parties that is a corporation has authorized such
officers to sign this Agreement on its behalf, and has further
authorized such officers to deliver this Agreement to Calais
and intends to be bound by this Agreement in accordance with
its terms.
iii. To the extent that this Agreement states or sets out any
matters of fact with respect to the rights, interests, claims
or obligations of the Xxxxxx Parties, such statements of fact
are true and correct in all material respects and any such
statements of fact do not omit to state a fact that ought
reasonably to be stated or that is necessary to make the
statement not misleading in light of the circumstances in
which it was made.
4. MUTUAL RELEASES.
a. CALAIS RELEASE.
i. Upon its receipt of a fully executed and notarized copy of
this Agreement, Calais, for itself, its administrators,
officers, directors, shareholders, agents, representatives,
successors, and assigns, family members and related entities
(the "Calais Releasors"), shall and hereby does release,
acquit, and forever discharge the Xxxxxx Parties and each of
them, their affiliates, heirs, successors, officers,
directors, shareholders, and assigns, family members and
related entities (the "Xxxxxx Releasees"), of and from any and
all obligations or liability which he now has, has had, or may
have, and from all claims, demands, liens, actions,
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administrative proceedings, and causes of action, and from all
damages, injuries, losses, contributions, indemnities,
compensation, costs, attorney's fees and expenses of every
kind and nature whatsoever, whether known or unknown, fixed or
contingent, whether in law or in equity, whether asserted or
unasserted, whether sounding in tort or in contract, from the
beginning of the world to the date of this Agreement, related
to, arising from, or which may in the future arise from, the
Disputes, except for obligations or liability, or all claims,
demands, liens, actions, administrative proceedings or causes
of action contained in, created by or arising from this
Agreement.
ii. Calais, on behalf of itself and the other Calais Releasors
agrees not to initiate or maintain any claim, suit or cause of
action, of any kind whatsoever, in or by way of any legal
proceedings or otherwise, against any of the Xxxxxx Releasees
based on any obligation or liability arising directly or
indirectly out of, or relating in any way to the subject
matter of any matter released hereunder pursuant to the
preceding paragraph 4(a)(i).
x. XXXXXX PARTIES' RELEASE.
i. Upon their receipt of a fully executed and notarized copy of
this Agreement, each of the Xxxxxx Parties, for himself,
herself, or itself, his or her heirs, for his or her or its
administrators, agents, officers, directors, shareholders,
representatives, successors, and assigns, family members and
related entities (the "Xxxxxx Releasors"), shall and hereby
does release, acquit, and forever discharge Calais, together
with its affiliates, managers, members, creditors, officers,
directors, shareholders, administrators, and agents, and its
and their respective representatives, successors and assigns,
family members and related entities (the "Calais Releasees"),
of and from any and all obligations or liability which it now
has, has had, or may have, and from all claims, demands,
liens, actions, administrative proceedings, and causes of
action, and from all damages, injuries, losses, contributions,
indemnities, compensation, costs, attorney's fees and expenses
of every kind and nature whatsoever, whether known or unknown,
fixed or contingent, whether in law or in equity, whether
asserted or unasserted, whether sounding in tort or in
contract, from the beginning of the world to the date of this
Agreement, related to, arising from, or which may in the
future arise from, the Disputes, except for obligations or
liability, or all claims, demands, liens, actions,
administrative proceedings or causes of action contained in,
created by or arising from this Agreement.
ii. Xx. Xxxxxx, on behalf of himself and the other Xxxxxx
Releasors agree not to initiate or maintain any claim, suit or
cause of action, of any kind whatsoever, in or by way of any
legal proceedings or otherwise, against any of the Calais
Releasees based on any obligation or liability arising
directly or indirectly out of, or relating in any way to the
subject matter of any matter released hereunder pursuant to
the preceding paragraph 4(b)(i), except for matters contained
in this agreement, such as repricing of debenture.
12
c. The Parties warrant and represent to each other that they have had the
opportunity to be represented by legal counsel regarding this Agreement
and freely and voluntarily entered into this Agreement upon the advice
of such counsel as deemed by such Party to be necessary or appropriate.
5. NO ADMISSION OF LIABILITY. This Agreement, and compliance with
or performance of any obligations imposed by this Agreement, shall not be
construed as an admission of liability on the part of the Parties, such
liability being hereby expressly denied. The Parties' intent in this Agreement
is to resolve the Disputes and avoid any further differences or conflicts. The
Parties hereby represent that they have neither filed nor caused to be filed any
pending charges, suits, claims, grievances or other action (hereinafter referred
to as "Claims") which in any way arise from or relate to the Disputes. Each
Party further represents to each other that such Party has not directly or
indirectly assigned any Claims or which are released hereby to any other person.
6. WAIVER. Each of the Parties recognizes that, by the releases
contained herein, they are releasing claims and other matters that may be
unknown at the present time, and claims and other matters which may arise in the
future from actions taken prior to the date hereof. Each of the Parties
affirmatively states that this accurately sets forth the intent of such Party
and waives any right he, she, or it may have to claim differently at any time in
the future.
7. DEFENSE. This Agreement and the releases contained herein, may
be pled as a full and complete defense, counterclaim or cross-claim to, and may
be used as a basis for an injunction against, any action, suit, or other
proceeding which may be instituted, prosecuted or attempted in breach of this
Agreement or the releases contained herein. In the event of any action by any
Party hereto to enforce this Agreement, the releases contained herein, or any
other agreement delivered pursuant hereto, the prevailing party shall be
entitled to recover reasonable attorneys' fees and costs.
8. COSTS AND EXPENSES. The Parties shall each be responsible to
pay their own attorneys' fees and other costs and expenses incurred in
connection with the negotiation and drafting of this Agreement. Each Party shall
release and forever hold the other harmless from any liability to their
attorneys for payment of such fees pursuant to any agreement or understanding
between each Party and their attorneys.
9. NO RELIANCE. The Parties warrant to each other that in
agreeing to the terms of this Agreement or any of the documents included as
exhibits hereto, they have not relied in any way upon any representations or
statements of any other Party regarding the subject matter hereof for the basis
or effect of this Agreement other than those representations or statements
contained herein. In entering into this Agreement and except as otherwise set
forth herein,
a. Each Party represents that in entering into this Agreement and
completing the transactions hereunder, he, she, or it has done so after
completing such investigation as he or it has determined to be
necessary or appropriate in the circumstances, and after having
consulted with and taken advice from such Party's legal, financial,
tax, investment, and
13
other advisors to the extent such Party has determined such
consultation to be necessary or appropriate in the circumstances;
b. Each Party assumes the risk of any misrepresentation, concealment or
mistake. If any Party should subsequently discover that any fact relied
upon by it in entering into this Agreement was untrue, or that any fact
was concealed from it, or that its understanding of the facts or of the
law was incorrect, such Party shall not be entitled to any relief in
connection therewith, including without limitation, any alleged right
or claim to set aside or rescind this Agreement; and
c. This Agreement is intended to be, and is, final and binding among the
Parties hereto, regardless of any claims or misrepresentation, promise
made without the intention of performing, concealment of fact, mistake
of fact or law, or any other circumstance whatsoever.
10. NO MISTAKE. In connection with this Agreement, the Parties
hereby acknowledge that they are aware that they may hereafter discover facts in
addition to or different from those which they now know or believe to be true
with respect to this Agreement (except as specifically set forth herein), but
that it is their intention hereby to fully, finally and forever settle and
release all matters, disputes and differences, known or unknown, suspected or
unsuspected, which now exist, which may exist, or which heretofore have existed
against any and all Parties under this Agreement.
11. ACCURACY OF FACTUAL STATEMENTS. Each of the Parties represents
to each of the other Parties that the factual statements contained herein are
true and correct to the best of such Party's knowledge, and no Party will take
any action or assert any position that places into question or disputes the
accuracy of any of the factual statements made herein.
12. GOVERNING LAW; JURISDICTION. This Agreement shall be governed
by the laws of Colorado except to the extent that the laws of Nevada govern
transactions and statements with respect to the Manhattan project or the laws of
British Columbia govern the validity of the outstanding shares of Calais common
stock and debentures. Each of the Parties consents to the jurisdiction of the
federal courts whose districts encompass any part of the City of Denver,
Colorado, or the state courts of the City and County of Denver, Colorado, in
connection with any dispute arising under this Agreement and hereby waives, to
the maximum extent permitted by law, any objection, including any objection
based on forum non coveniens, to the bringing of any such proceeding in such
jurisdictions. Each of the Parties agree that service in person or by certified
or registered U.S. Mail to their respective last known address shall constitute
valid in personam service upon such Party in any action or proceeding with
respect to any matter as to which such Party has submitted to jurisdiction
hereunder.
13. SEVERABILITY. If any part of this Agreement shall be
determined to be illegal, invalid or unenforceable, the remaining part shall not
be affected thereby, and the illegal, unenforceable or invalid parts shall be
deemed not to be a part of this Agreement. Each Party represents and warrants
that it has full capacity and authority to settle, compromise, and release its
claims and to enter into this Agreement and that no other person or entity has
acquired, or will
14
in the future acquire or have any right to assert, against any person or entity
released by this Agreement any portion of that Party's claims released herein.
14. INTEGRATED AGREEMENT. This Agreement constitutes a single
integrated contract expressing the entire agreement of the Parties with respect
to the subject matter hereof, compromising any and all rights and obligations of
the Parties, without exception, and supersedes all prior and contemporaneous
oral and written agreements and discussions with respect to the subject matter
hereof. This Agreement may be amended or modified only by an agreement in
writing signed by the Parties. The failure by a Party to declare a breach or
otherwise to assert its rights under this Agreement shall not be construed as a
waiver of any right the Party has under this Agreement.
15. CONFIDENTIALITY. The Parties agree that this Agreement, the
releases contained herein, and the agreements delivered pursuant hereto, shall
remain confidential between and among the Parties except as required to be
disclosed under applicable law, governmental regulation or pursuant to judicial
order or decree. If any inquiry is made of the Parties concerning this
Agreement, the Parties may only disclose that the disputes between and among
them have been resolved to the Parties' mutual satisfaction.
16. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
17. AUTHORITY. Each person executing this Agreement on behalf of
an entity represents and warrants to each other Party that such person has
executed this Agreement with all appropriate corporate or other authority, and
that this Agreement is intended to be, and is, binding upon such entity in
accordance with its terms.
18. GOOD FAITH. Each of the Parties to this Agreement will work in
good faith to accomplish the purposes of this Agreement.
19. NOTICES. All written notices required by this Agreement or any
document delivered pursuant hereto or as contemplated herein, must be delivered
to the following addresses (or to such other address as may be specified by a
Party) by a means evidenced by a delivery receipt and will be effective upon
receipt.
If to Calais If to Xx. Xxxxxx or any of the Xxxxxx Parties
----------------------------------------------------------------------------------
0000 Xxxx Xxxxxxxx Xxxxxxx 00000 Xxxxxx Xxxx
#000 Xxxxxxxxxx, X.X. X0X-0X0
Xxxxxxxxx Xxxxxxx, XX 00000 Canada
Attn: Xxxxxxx X. Xxxx, CFO
----------------------------------------------------------------------------------
20. SURVIVAL. The Parties agree that the obligations,
representations and warranties contained herein shall indefinitely survive the
execution of this Agreement, the delivery of all documents hereunder, and the
completion of the transactions contemplated herein.
15
21. EXHIBITS. There are two exhibits attached to this Agreement,
as follows:
a. Exhibit A, option agreement to be executed by Calais and Xx.
Xxxxxx pursuant to (para) 2(c)(vi) hereof; and
b. Exhibit B, consulting agreement to be executed by Calais and
Xx. Xxxxxx pursuant to (para) 2(e) hereof.
c. Exhibit C, "1999 Property Agreement"
d. Exhibit D, "2000 Property Agreement"
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed as of the date first mentioned above.
THE UNDERSIGNED HAVE CAREFULLY READ THE FOREGOING SETTLEMENT AGREEMENT AND
GENERAL RELEASE OF ALL CLAIMS, KNOW THE CONTENTS THEREOF, FULLY UNDERSTAND IT,
AND SIGN THE SAME AS HIS OR ITS OWN FREE ACT.
CAUTION! READ BEFORE SIGNING
Calais Resources, Inc.
BY: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------
Xxxxxx X. Xxxxxxxxx, President
STATE OF COLORADO )
) ss.
COUNTY OF BOULDER )
Subscribed, sworn to, and acknowledged before me by Xxxxxx X. Xxxxxxxxx, as
President for and on behalf of Calais Resources, Inc, on this 5th day of March
2004.
Witness my hand and official seal.
My commission expires: November 4, 2006
/s/ Xxxx X. Xxxxxxxxxx
--------------------------------
Notary Public
16
THE UNDERSIGNED HAVE CAREFULLY READ THE FOREGOING SETTLEMENT AGREEMENT AND
GENERAL RELEASE OF ALL CLAIMS, KNOW THE CONTENTS THEREOF, FULLY UNDERSTAND IT,
AND SIGN THE SAME AS HIS OR ITS OWN FREE ACT.
CAUTION! READ BEFORE SIGNING
/s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxxxx, individually, solely for the purposes of his agreement in
(para) 2(d)(ii)
STATE OF COLORADO )
) ss.
COUNTY OF BOULDER )
Subscribed, sworn to, and acknowledged before me by Xxxxxx X. Xxxxxxxxx,
individually, on this 5th day of March 2004.
Witness my hand and official seal.
My commission expires: November 4, 2006
/s/ Xxxx X. Xxxxxxxxxx
--------------------------------
Notary Public
17
CAUTION! READ BEFORE SIGNING
/s/ Xxxxxxx Xxxxxx
-----------------------------------------
Xxxxxxx Xxxxxx, individually
/s/ Xxxx Xxxxxx
-----------------------------------------
Xxxx Xxxxxx, individually
PROVINCE OF BC )
) ss.
CITY OF CHILLIWACK )
Subscribed, sworn to, and acknowledged before me by Xxxxxxx Xxxxxx and Xxxx
Xxxxxx, individually, on this 9th day of March 2004.
Witness my hand and official seal.
My commission expires: "Permanent Commission"
/s/ R. Xxxx Xxxxxxx
----------------------------------------------
Notary Public
18
THE UNDERSIGNED HAVE CAREFULLY READ THE FOREGOING SETTLEMENT AGREEMENT AND
GENERAL RELEASE OF ALL CLAIMS, KNOW THE CONTENTS THEREOF, FULLY UNDERSTAND IT,
AND SIGN THE SAME AS HIS OR ITS OWN FREE ACT.
CAUTION! READ BEFORE SIGNING
Argus Resources, Inc.
BY: /s/ Xxxxxxx Xxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxx
President
BY: /s/ Xxxxxxx Xxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxx
Secretary
PROVINCE OF BC )
) ss.
CITY OF CHILLIWACK )
Subscribed, sworn to, and acknowledged before me by Xxxxxxx Xxxxxx, as
President, and Xxxxxxx Xxxxxx, as Secretary, for and on behalf of Argus
Resources, Inc, on this 9th day of March 2004.
Witness my hand and official seal.
My commission expires: "Permanent Commission"
/s/ R. Xxxx Xxxxxxx
----------------------------------------------
Notary Public
19
THE UNDERSIGNED HAVE CAREFULLY READ THE FOREGOING SETTLEMENT AGREEMENT AND
GENERAL RELEASE OF ALL CLAIMS, KNOW THE CONTENTS THEREOF, FULLY UNDERSTAND IT,
AND SIGN THE SAME AS HIS OR ITS OWN FREE ACT.
CAUTION! READ BEFORE SIGNING
Aardvark Agencies, Inc.
BY: /s/ Xxxx Xxxxxx
-----------------------------------------
Name: Xxxx Xxxxxx
President
BY: /s/ Xxxx Xxxxxx
-----------------------------------------
Name: Xxxx Xxxxxx
Secretary
PROVINCE OF BC )
) ss.
CITY OF CHILLIWACK )
Subscribed, sworn to, and acknowledged before me by Xxxx Xxxxxx, as President,
and Xxxx Xxxxxx, as Secretary, for and on behalf of Aardvark Agencies, Inc, on
this 9th day of March 2004.
Witness my hand and official seal.
My commission expires: "Permanent Commission"
/s/ R. Xxxx Xxxxxxx
----------------------------------------------
Notary Public
20
THE UNDERSIGNED HAVE CAREFULLY READ THE FOREGOING SETTLEMENT AGREEMENT AND
GENERAL RELEASE OF ALL CLAIMS, KNOW THE CONTENTS THEREOF, FULLY UNDERSTAND IT,
AND SIGN THE SAME AS HIS OR ITS OWN FREE ACT.
CAUTION! READ BEFORE SIGNING
Aardvark Enterprises, Inc.
BY: /s/ Xxxx Xxxxxx
-----------------------------------------
Name: Xxxx Xxxxxx
President
BY: /s/ Xxxx Xxxxxx
-----------------------------------------
Name: Xxxx Xxxxxx
Secretary
PROVINCE OF BC )
) ss.
CITY OF CHILLIWACK )
Subscribed, sworn to, and acknowledged before me by Xxxx Xxxxxx, as President,
and Xxxx Xxxxxx, as Secretary, for and on behalf of Aardvark Enterprises, Inc,
on this 9th day of March 2004.
Witness my hand and official seal.
My commission expires: "Permanent Commission"
/s/ R. Xxxx Xxxxxxx
----------------------------------------------
Notary Public
21
