Exhibit 10.1
PURCHASE AGREEMENT
BY THIS PURCHASE AGREEMENT effective as of the 19th day of April, 2013 (the
"Effective Date"),
BY AND BETWEEN
Xxxxxxx Ventures Ltd.,
00 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxx,
("Xxxxxx")
AND
Nevada Tungsten Holdings Ltd., with a resident agent address
at 0000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx Xxxx, Xxxxxx
00000 ("Nevada Tungsten")
WHEREAS Vendor, in consideration of the agreements set forth herein, has granted
certain rights to Nevada Tungsten under the following terms and conditions:
1. DEFINITIONS
a. DEFINITIONS - The words and phrases used in this Agreement shall have the
following meanings:
(1) The "Property" shall include those certain unpatented placer mining
claims situated in Xxxxxx County, Idaho, more particularly described in Exhibit
A attached hereto.
(2) "Shares" means fully paid and non-assessable common shares in the
capital of Tungsten Corp., the parent company of Nevada Tungsten, issued
pursuant to exemptions from registration and prospectus requirements contained
in the United States Securities Act of 1933 and the rules and regulations
promulgated thereunder, which Shares shall contain such restrictive legends
regarding applicable hold periods as required by such securities laws.
b. TRANSFER OF TITLE - Upon Nevada Tungsten's completion of its obligations
under subsection (a) of Section 2, Vendor shall transfer title of the Property
to Nevada Tungsten.
2. CONSIDERATION TO VENDOR
a. STOCK TRANSFER - As consideration, the Purchase Price shall be the issuance
of 3,000,000 Shares, subject to such conditions as may be imposed by the rules
and regulations of the United States Securities and Exchange Commission.
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b. CONDITIONS FOR TRANSFER OF TITLE AND SUBSEQUENT LIMITATIONS - At such time as
the Nevada Tungsten has completed the stock transfers specified in subsection
(a) of this Section 2, the Property shall be transferred to Nevada Tungsten by
Quitclaim Deed.
3. OBLIGATIONS OF NEVADA TUNGSTEN
a. INDEMNITY - Nevada Tungsten shall indemnify Vendor against and hold Vendor
harmless from any suit, claim, judgment or demand whatsoever arising out of
negligence on the part of Nevada Tungsten in the exercise of any of its rights
pursuant to this Agreement, provided that if Vendor or any person or
instrumentality acting on Vendor's behalf shall have been a contributing cause
to the event giving rise to such suit, claim, demand or judgment, Nevada
Tungsten's obligation to indemnify Vendor shall not exceed Nevada Tungsten's
liability under the laws applicable to the event giving rise to such suit,
claim, demand or judgment. Likewise, Vendor shall similarly indemnify Nevada
Tungstenfrom claims arising out of its negligence in the conduct of its
activities prior to the transfer of title.
b. PAYMENT OF TAXES - Nevada Tungsten shall pay all taxes levied against the
Property and any improvements on the Property. Nevada Tungsten 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.
4. TITLE MATTERS
a. REPRESENTATIONS AND WARRANTIES RELATED TO THE PROPERTY - Vendor represents
and warrants to Nevada Tungsten that: (1) the unpatented 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 the State of
Idaho, (2) the claim maintenance fees have been paid for the year beginning on
September 1 prior to the effective date of this Agreement and appropriate record
made thereof; (3) there is no claim of adverse mineral rights affecting the
Property, (4) subject to the paramount interest of the United States, Vendor
controls the full undivided possessory title to the Property, (5) Vendor's
possessory right to the Property is free and clear of all liens and
encumbrances.
b. JOINT REPRESENTATIONS - Nevada Tungsten and Vendor jointly represent and
warrant that each company: (1) have the full right, power and capacity to enter
into this Agreement upon the terms set forth herein, (2) is incorporated,
organized and in good standing under the laws of the state of its incorporation
and is qualified to do business and is in good standing in their respective
States; (3) has obtained all necessary corporate and shareholder approvals and
no further action on the part of its directors or shareholders is necessary or
desirable to make this Agreement valid and binding; and (4) neither the
execution and delivery of this Agreement nor any of the agreement referred to
herein or contemplated hereby, nor the consummation of the transactions hereby
contemplated conflict with any agreement to which it is a party and by which it
is currently bound.
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c. TITLE DOCUMENTS; DATA - Upon written request of Nevada Tungsten at any time,
Vendor shall promptly deliver to Nevada Tungsten copies of all title documents
affecting the Property that Vendor has in its possession. If Vendor is in
possession or knows the whereabouts of technical data concerning the mineral
estate of the Property, Vendor shall, at Nevada Tungsten's expense, furnish
copies of such materials to Nevada Tungsten or notify Nevada Tungsten of the
location of such information.
d. TITLE DEFECTS, DEFENSE AND PROTECTION - Nevada Tungsten has, during its
initial due diligence examination of the Property prior to the Effective Date,
examined and approved Vendor's title to the Property. If title to any of the
Property is contested or questioned by any person, entity or governmental agency
Vendor and Nevada Tungsten shall undertake such actions as may be required to
perfect, defend or initiate litigation to protect such title.
e. CHANGE OF LAW - If the law of the United States concerning acquisition of
mineral rights on federally managed lands is repealed, amended, or new
legislation is enacted, Nevada Tungsten shall have the right, at its expense, to
take whatever action it deems appropriate to preserve a right to explore for,
develop, and mine minerals from the Property. If Nevada Tungsten elects to take
any action under the terms of this subsection, it shall first notify Vendor in
writing setting forth the nature of the proposed action and an explanation
thereof. Vendor agrees to cooperate with Nevada Tungsten and execute whatever
documents are deemed necessary by Nevada Tungsten to accomplish such action.
Nothing in this subsection shall impose any obligation upon Nevada Tungsten to
take any action, or diminish the right of Vendor to take action it deems
appropriate; provided, however, that if Vendor chooses to take any action, it
will first inform Nevada Tungsten of the nature of such contemplated action.
5. ROYALTY
a. Upon commencement of "Commercial Production" the Property will be subject to
a Net Smelter Returns (NSR) royalty of 3.00% as further defined on Exhibit B
attached hereto. "Commercial Production" means the operation of the Property or
any portion thereof as a producing mine and the production of minerals products
therefrom (excluding bulk sampling, pilot plant, initial tune-up or test
operations).
b. At anytime after the execution of this Agreement, Nevada Tungsten can acquire
one percent (1.00%) of the NSR royalty from Vendor for $500,000. Thereafter,
Nevada Tungsten can acquire another one percent (1.00%) of the NSR royalty from
Vendor $1,000,000.
6. SHARE MATTERS
Vendor represents and warrants to Nevada Tungsten that it is an "accredited"
investor as that term is defined in Rule 501 of Regulation D promulgated under
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the United States Securities Act of 1933, as amended, and acknowledges and
agrees that the Shares will be issued in accordance with all applicable
securities laws and will be subject to hold periods and restrictions on resale
in accordance with applicable securities laws and it is Vendor's responsibility
to determine what those hold periods and restrictions are before selling or
otherwise transferring any Shares.
7. 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 addresses specified above. Either
party may, by notice to the other given as aforesaid, change its mailing address
for future notices.
8. CONFIDENTIALITY
Each of the parties agrees that all information obtained under the terms of this
Agreement will not be publicly disclosed or used other than for the activities
contemplated hereunder except as required by law or by the rules and regulations
of any regulatory authority or stock exchange having jurisdiction or with prior
written consent of the other party, such consent not to be unreasonably
withheld.
9. 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
Lincoln County, Nevada.
10. CONSTRUCTION
a. GOVERNING LAW - This Agreement shall be construed by the internal laws but
not the laws of conflict of the State of Nevada.
b. ENTIRE AGREEMENT - All of the agreements and understandings of the parties
with reference to the Property are embodied in this Agreement, and this
Agreement supersedes all prior agreements or understandings between the parties.
c. NO IMPLIED COVENANTS - It is expressly agreed that no implied covenant or
condition whatsoever shall be read into this Agreement relating to any time
frame as the measure of diligence for any operations of Nevada Tungsten
hereunder.
11. FURTHER ASSURANCES
The parties agree to perform all acts and execute all documents that may be
necessary to carry out the spirit and intent of this Agreement.
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SIGNED, effective as of the date recited above.
Nevada Tungsten Holdings Ltd.
Per:
--------------------------------------------
Authorized Signatory
Vendor
Per:
--------------------------------------------
Authorized Signatory
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EXHIBIT A
(THE "PROPERTY" DEFINED)
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EXHIBIT B
DEFINITION OF NET SMELTER RETURNS
1. For the purposes of this Agreement, the term "Net Smelter Returns" shall mean
the net proceeds actually paid to Nevada Tungsten from the sale by Nevada
Tungsten of minerals mined and removed from the Property, after deduction of the
following:
(a) smelting costs, treatment charges and penalties including, but not being
limited to, metal losses, penalties for impurities and charges for refining,
selling and handling by the smelter, refinery or other purchaser; provided,
however, in the case of leaching operations or other solution mining or
beneficiation techniques, where the metal being treated is precipitated or
otherwise directly derived from such xxxxx solution, all processing and recovery
costs incurred by Nevada Tungsten, beyond the point at which the metal being
treated is in solution, shall be considered as treatment charges;
(b) costs of handling, transporting and insuring ores, minerals and other
materials or concentrates from the Property or from a concentrator, whether
situated on or off the Property, to a smelter, refinery or other place of
treatment; and
(c) ad valorem taxes and taxes based upon production, but not income taxes.
2. In the event Nevada Tungsten commingles minerals from the Property with
minerals from other properties, Nevada Tungsten shall establish procedures, in
accordance with sound mining and metallurgical techniques, for determining the
proportional amount of the total recoverable metal content in the commingled
minerals attributable to the input from each of the properties by calculating
the same on a metallurgical basis, in accordance with sampling schedules and
mining efficiency experience, so that production royalties applicable to
minerals produced from the Property may reasonably be determined
