RESTRUCTURING AGREEMENT
EXHIBIT
10.52
This
Restructuring Agreement
(the “Agreement”) is executed to this 25th day of
September, 2008, by and among AMERALIA, INC., a Utah
corporation (“AmerAlia”), NATURAL SODA HOLDINGS, INC., a
Colorado corporation (“Holdings”), NATURAL SODA, INC., a Colorado
corporation (“Soda”), XXXX X.
XXXX (“Xxxx”), XXXXXX
XXX XXXXXX (“xxx Xxxxxx”), SENTIENT USA RESOURCES
FUND, L.P., a Delaware limited partnership (“Sentient I”), SENTIENT USA RESOURCES FUND II,
L.P., a Delaware limited partnership (“Sentient II”) and SENTIENT GLOBAL RESOURCES FUND III,
L.P., a Cayman Islands limited partnership (“Sentient III”).
WHEREAS, AmerAlia owns (i)
$4,375,000 principal amount of the Series A Debentures, plus interest accruing
thereon from and after Xxxxx 00, 0000, (xx) 51,000 shares of Holdings Common
Stock, (iii) $12,000,000 principal amount of Series C Debentures, plus interest
thereon, and (iv) 4,949 shares of Holdings Series A Preferred
Stock;
WHEREAS, Holdings owns 1,242
shares of common stock, no par value per share, of Soda;
WHEREAS, Sentient I owns (i)
$11,300,000 principal amount of the Series B1 Debentures, plus interest thereon,
(ii) $5,750,000 principal amount of the Series A Debentures, plus interest
accruing thereon from and after Xxxxx 00, 0000, (xxx) 1,428 shares of common
stock, no par value per share, of Soda; (iv) the AmerAlia $465,000 Note, plus
interest thereon, and (v) one share of Holdings Common Stock;
WHEREAS, Sentient II owns (i)
7,929,820 shares of AmerAlia Common Stock, (ii) the AmerAlia $350,000 Note, plus
interest thereon, (iii) rights under the following agreements with AmerAlia: a
Third Amended and Restated Guaranty Agreement, a Fourth Amended and Restated
Guaranty Agreement, and an Addendum to the Third And Fourth Amended and Restated
Guaranty Agreements, which are secured by a Series C Debenture Pledge Agreement
concerning $9,921,583 principal amount of Series C Debentures, plus interest
accruing thereon, (iv) the AmerAlia Interest Notes, plus interest thereon, and
(vi) the AmerAlia Residual Note, plus interest thereon;
WHEREAS, Sentient III owns (i)
the AmerAlia $300,000 Note, plus interest thereon; (ii) rights to $3,483,209 of
interest payable on the Series A Debentures, plus interest thereon, and (iii)
the HPD Note, plus any interest thereon; and
WHEREAS, with the consent of
AmerAlia, Holdings and Soda, Sentient II and Sentient III have agreed to convey
the investments described in the two preceding recitals to Sentient I in
exchange for limited partnership interests in Sentient I;
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WHEREAS, the parties hereto
have agreed to the provisions contained herein in connection with restructuring
their relationships;
NOW, THEREFORE, in
consideration of the foregoing recitals, the agreements contained herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. Definitions. The
following terms when used herein shall have the meaning set forth
below:
a.
“AmerAlia” shall mean
AmerAlia, Inc., a Utah corporation.
b.
“AmerAlia $465,000
Note” means the convertible Promissory Note dated May 25, 2008, from
AmerAlia payable to the order of Sentient I in the principal amount of $465,000
due on September 30, 2008, plus any interest thereon.
c.
“AmerAlia $350,000
Note” means the convertible Promissory Note dated August 24, 2007, from
AmerAlia payable to the order of Sentient II in the principal amount of $350,000
due on September 30, 2008, plus any interest thereon.
d.
“AmerAlia $300,000
Note” means the Promissory Note dated June 24, 2008, from AmerAlia
payable to the order of Sentient III in the principal amount of $300,000 due on
September 30, 2008, plus any interest thereon. Not all amounts may have been
advanced as contemplated by the AmerAlia $300,000 Note.
e.
“AmerAlia Common
Stock” means the $.01 par value per share common stock of
AmerAlia.
f.
“AmerAlia Interest
Notes” means the promissory notes from AmerAlia with an aggregate
principal amount of approximately $1,966,931 as of June 30, 2008, which were originally
payable to the Xxxxxxxxxx Badgers Mars Trust and all of which are now owned by
Sentient II as set forth in the Supplemental Disclosure Letter, plus any
interest thereon.
g.
“AmerAlia Residual
Note” means a Promissory Note
in the principal amount of $469,628 due December 31, 2005 originally payable to
the Xxxxxxxxxx Badgers Mars Trust and now owned by Sentient II, plus any
interest thereon.
h.
“AmerAlia Release
Parties” means AmerAlia, Holdings, Soda, Xxxx X. Xxxx, and Xxxxxx xxx
Xxxxxx.
i.
“AmerAlia Stock
Options” means the authorized, issued and outstanding stock options of
AmerAlia as set forth in the Supplemental Disclosure Letter.
j.
“Associated Parties”
means and includes: (i) the named party’s predecessors, successors,
executors, administrators, heirs and estates; (ii) the named party’s past,
present and future assigns, shareholders, partners, investors, direct and
indirect parents, subsidiaries and affiliates, and all of their officers,
directors, attorneys or legal representatives, agents and other representatives;
(iii) each entity that the named party has the power to bind (by the named
party’s acts or signature) or over which the named party directly or indirectly
exercises control; and (iv) each entity of which the named party owns, directly
or indirectly, at least 50% of the outstanding equity, beneficial, proprietary,
ownership or voting interests.
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k.
“Claims” means and
includes all past, present and future disputes, claims, controversies, demands,
rights, rights to appeal, liens, allegations, obligations, liabilities, actions
and causes of action of every kind and nature (whether in law or equity),
including: (i) any unknown, unsuspected or undisclosed claim; (ii) any claim or
right that may be asserted or exercised by a person providing a release whether
in its individual capacity or in its capacity as a stockholder, director,
officer, borrower, employee or in any other capacity; and (iii) any claim,
counterclaim, right or cause of action based upon any breach of any express,
implied, oral or written contract or agreement.
l.
“Closing” shall have
the meaning set forth in Section 5.
m.
“Employee Benefit
Plan” means any employee benefit plan, as defined in Section 3(3) of
ERISA, which is, previously has been, or will be established or maintained by
any member of a controlled group.
n.
“Environmental Laws”
means all federal, state, or local laws, ordinances, rules, regulations,
interpretations and orders of courts or administrative agencies or authorities
relating to pollution or protection of the environment (including, without
limitation, ambient air, surface water, ground water, land surface, and
subsurface strata), and other laws relating to (a) Polluting Substances or (b)
the manufacture, processing, distribution, use, treatment, handling, storage,
disposal, or transportation of Polluting Substances.
o.
“GAAP” means generally
accepted accounting principles, applied on a consistent basis, as set forth in
Opinions of the Accounting Principles Board of the American Institute of
Certified Public Accountants and/or in statements of the Financial Accounting
Standards Board and/or their respective successors and which are applicable in
the circumstances as of the date in question.
p. “Governmental Body”
means any: (a) nation, state, county, city, town, village, district, or other
jurisdiction of any nature; (b) federal, state, local, municipal, foreign, or
other government; (c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branc h, department, official, or
entity and any court or other tribunal); (d) multi-national organization or
body; or (e) body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing authority or
power of any nature.
q.
“Holdings”
means Natural Soda Holdings, Inc., a Colorado corporation.
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r.
“Holdings Common
Stock” means the $.01 par value per share, common stock of
Holdings.
s.
“Holdings Series A Preferred
Stock” means the shares of Series A Preferred Stock of
Holdings.
t.
“HPD Note” means a
promissory note in the principal amount of $1,200,000 due December 31, 2005 from
AmerAlia payable to the order of US Filter Wastewater Group, Inc., now owned by
Sentient III.
u.
“Lien” means any lien,
claim, mortgage, security interest, tax lien, pledge, encumbrance, financing
statement, or conditional sale or title retention agreement, or any other
interest in property designed to secure the repayment of indebtedness or any
other obligation, whether arising by agreement, operation of law, or otherwise,
and including claims of a right to a security interest and encumbrances whether
properly attached, perfected, or recorded.
v.
“Material Adverse
Effect” means (a) a material adverse effect on the business, operations,
properties, assets or condition (financial or otherwise) individually or taken
as a whole or (b) the impairment of the ability of any party to perform its
obligations under this Agreement or any of other agreements to which it is a
party.
w.
“Polluting Substance”
means all pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes and shall include, without limitation, any flammable
explosives, radioactive materials, oil, hazardous materials, hazardous or solid
wastes, hazardous or toxic substances or related materials defined in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
the Superfund Amendments and Reauthorization Act of 1986, the Resource
Conservation and Recovery Act of 1976, the Hazardous and Solid Waste Amendments
of 1984, and the Hazardous Materials Transportation Act, as any of the same are
hereafter amended, and in the regulations adopted and publications promulgated
thereto; provided, in the event any of the foregoing Environmental Laws is
amended so as to broaden the meaning of any term defined thereby, such broader
meaning shall apply subsequent to the effective date of such amendment and,
provided, further, to the
extent that the applicable laws of any state establish a meaning for “hazardous
substance,” “hazardous waste,” “hazardous material,” “solid waste,” or “toxic
substance” which is broader than that specified in any of the foregoing
Environmental Laws, such broader meaning shall apply.
x.
“Released Claims”
means and includes each and every Claim that (i) releasing party or any person
under the direct or indirect control of the releasing party may have had in the
past, may now have or may have in the future against any of the released parties
or any Associated Party of the released parties, and (ii) has arisen or arises
directly or indirectly out of, or relates directly or indirectly to, any
circumstance, agreement, activity, action, omission, event or matter occurring
or existing on or prior to the date of the release.
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y.
“SEC” means the United
States Securities and Exchange Commission.
z.
“Sentient I” means
Sentient USA Resources Fund, L.P., a Delaware limited partnership.
aa.
“Sentient II” means
Sentient USA Resources Fund II, L.P., a Delaware limited
partnership.
bb.
“Sentient III” means
Sentient Global Resources Fund III, L.P., a Cayman Islands limited
partnership.
cc.
“Sentient Entities”
means Sentient I, Sentient II and Sentient III.
dd.
“Series A Debentures”
means the Secured Series A 10% Debentures Due September 30, 2005 issued by
Holdings in a total principal amount of approximately $10,125,000, owned by
Sentient I ($5,750,000, plus interest accruing after March 31, 2008 thereon),
AmerAlia ($4,375,000, plus interest accruing after March 31, 2008 thereon), and
Sentient III (interest accruing prior to March 31, 2008 on all Series A
Debentures, plus any interest accruing thereon).
ee.
“Series B1 Debentures”
means the Secured Subordinated Series B1 Debentures Due February 19, 2008
issued by Holdings in a total principal amount of $11,300,000, plus interest
thereon, owned by Sentient I.
ff.
“Series C
Debentures” means the Unsecured Subordinated Series C Debentures Due
February 19, 2008 issued by Holdings in a total principal amount of $12,000,000,
plus interest thereon, owned by AmerAlia.
gg.
“Soda” means Natural
Soda, Inc., a Colorado corporation.
hh.
“Soda Common Stock”
means the no par value per share common stock of Soda.
ii.
“Warrants” means
warrants to purchase 600,000 shares of AmerAlia Common Stock.
2. Conveyances to Sentient
I. Immediately prior to
Closing, Sentient II and Sentient III will contribute the following assets to
Sentient I in exchange for partnership interests in Sentient I:
a.
From Sentient II.
Sentient II will contribute to Sentient I:
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i.
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7,929,820
shares of AmerAlia Common Stock,
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ii.
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The
AmerAlia $350,000 Note,
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iii.
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Rights
under the following agreements with AmerAlia: a Third Amended and Restated
Guaranty Agreement, a Fourth Amended and Restated Guaranty Agreement, and
an Addendum to the Third And Fourth Amended and Restated Guaranty
Agreements, which are secured by a Series C Debenture Pledge Agreement
concerning $9,921,583 principal amount of Series C Debentures, plus
interest accruing thereon,
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iv.
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AmerAlia
Interest Notes,
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v.
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The
AmerAlia Residual Note; and
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vi.
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Any
rights, claims or other assets owned by Sentient II and related to
AmerAlia, Holdings, Soda or their respective
operations.
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b. From Sentient III.
Sentient III will contribute to Sentient I:
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i.
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AmerAlia
$300,000 Note;
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ii.
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Rights
to $3,483,209 of interest payable on the Series A Debentures, or so much
of that interest as is owned by Sentient
III,
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iii.
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The
HPD Note, and
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iv.
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Any
rights, claims or other assets owned by Sentient III and related to
AmerAlia, Holdings, Soda or their respective
operations.
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c.
Consent to
Conveyance. AmerAlia, Holdings and Soda each consent to the
foregoing contributions and agree that from and after the effective date of each
such contribution (as reflected in Sentient I’s notice to AmerAlia of the
contributions) Sentient I shall be the registered owner of each asset so
contributed.
a.
Purchase of AmerAlia Common
Stock. At the Closing, Sentient I shall purchase 33,000,000
shares of AmerAlia Common Stock at a purchase price of $ 0.36 per share for a
total purchase price of $11,880,000. The foregoing shall be reduced, dollar for
dollar by the amount of any Series A Promissory Notes issued by AmerAlia and
secured by a pledge of some Series A Debentures, that are converted into
AmerAlia Common Stock. The proceeds from this subscription shall be
used in the following priority: (i) to pay the obligations described in Section
9.a.i that are not converted into AmerAlia Common Stock, (ii) to pay any amounts
that must be paid as a condition of closing, (iii) as a reserve to be used to
solely fund AmerAlia's share of anticipated capital calls of Holdings (in the
amount of $2,880,000), (iv) as working capital reserve for AmerAlia of
$1,000,000, and (v) as additional working capital for AmerAlia (including the
payment of any remaining obligations under Section 9a). Any deviation
from these priorities will require the prior written consent of Sentient, which
may be withheld by it in its sole discretion. Upon delivery of the purchase
price to AmerAlia such shares shall be issued to Sentient I and shall be fully
paid and non-assessable. In addition, at any time, and from time to time, during
the thirty-six (36) months following Closing, Sentient I shall have the right to
purchase up to a total of 5,500,000 additional shares of
AmerAlia Common Stock at a price of $.36 per share. AmerAlia will not have the
right to force Sentient to purchase all or any part of this amount. This
right is only to be exercised to resolve obligations of AmerAlia that exist at
Closing and are not discharged as of Closing, and then only if the holders
of such unpaid obligations pursue or, by written demand from counsel or a
collector, threaten to pursue claims against AmerAlia (or its affiliates). Prior
to exercising this option Sentient I will provide AmerAlia with ten days'
prior written notice of its intent to exercise this right to purchase stock, if
AmerAlia doesn't either pay off the obligation or enter into some other
arrangement with the creditor protecting AmerAlia from claims from that creditor
for at least 24 months. If exercised, the proceeds from the purchase are to be
used solely to pay the obligation to the creditor named in the notice (or the
holder of the obligation referenced).
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b.
Exchange of Shares for
Obligations. At the Closing, AmerAlia will issue shares of AmerAlia
Common Stock to Sentient I and Sentient I shall deliver to AmerAlia the
following, free and clear of all liens, claims and encumbrances of any person
claiming rights by, through or under the Sentient Entities:
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i.
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The
AmerAlia $465,000 Note,
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ii.
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The
AmerAlia $350,000 Note,
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iii.
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The
AmerAlia $300,000 Note,
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iv.
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The
HPD Note,
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v.
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Rights
under a Third Amended and Restated Guaranty Agreement, a Fourth Amended
and Restated Guaranty Agreement, and an Addendum to the Third And Fourth
Amended and Restated Guaranty Agreements, which are secured by a Series C
Debenture Pledge Agreement concerning $9,921,583 principal amount of
Series C Debentures, plus any accrued interest
thereon,
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vi.
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AmerAlia
Interest Notes, and
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vii.
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The
AmerAlia Residual Note.
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Upon
receipt, AmerAlia will cancel each of the forgoing. In exchange for the
obligations described in items i., ii, iii, and iv , Sentient will receive
shares of AmerAlia Common Stock at the rate of $0.36 per share of AmerAlia
Common Stock for each $1 of principal and accrued interest due on each of the
obligations, provided, however that the obligation describe in item iv will
valued at $1,200,000 (the price paid to HPD for that obligation), plus interest
at 6% per annum from and after June 20, 2008 for the purpose of calculating the
number of shares of AmerAlia Common Stock to be issued. In exchange for the
rights described in items v, vi, and vii above, Sentient I will receive
5,977,800 shares of AmerAlia Common Stock.
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4.
Transfers to
Holdings. At the Closing, AmerAlia and Sentient I will transfer the
following to Holdings, free and clear of liens, claims and encumbrances, solely
in exchange for shares of Holdings Common Stock, intending to qualify such
transfers under Section 351 of the Internal Revenue Code of 1986, as
amended:
a.
AmerAlia. At the
Closing, AmerAlia will deliver to Holdings, free and clear of all liens, claims
and encumbrances:
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i.
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4,949
shares of Holdings Series A Preferred
Stock,
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ii.
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All
of the Series A Debentures issued to AmerAlia ($4,375,000) plus interest
accruing after March 31, 2008
thereon,
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iii.
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All
of the Series C Debentures, plus accrued interest thereon, and issued to
AmerAlia,
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iv.
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The
inter-company amounts owed by Holdings to AmerAlia will be extinguished,
and
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v.
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Any
other equity in or rights under any obligations of Holdings or Soda and
issued to or owned by AmerAlia, including, but not limited to any
inter-company receivables.
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In
exchange for the foregoing, Holdings will issue to AmerAlia, 129,000 shares of
Holdings Common Stock. Upon receipt of the Series A and C Debentures
from AmerAlia, the debentures and other obligations will be cancelled and the
Holdings Preferred Stock shall be retired.
b. Sentient I. At the
Closing, Sentient I shall deliver to Holdings, free and clear of all liens,
claims and encumbrances of any person claiming rights by, through or under the
Sentient Entities:
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i.
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The
$5,750,000 principal amount of Series A Debentures (plus interest accruing
after March 31, 2008 thereon),
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ii.
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The
$11,300,000 principal amount of Series B1 Debentures (plus accrued
interest thereon),
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iii.
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The
1,428 shares of Soda Common
Stock,
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iv.
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One
share of Holdings Common Stock, and
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v.
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Rights
to $3,483,209 of interest payable on the Series A Debentures, plus any
interest thereon.
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In
exchange for the foregoing, Holdings will issue to Sentient I, 820,000 shares of
Holdings Common Stock. Upon receipt of the foregoing from
Sentient I, the Series A Debentures, Series B Debentures, Series C Debentures,
and the shares of Holdings Common Stock will be cancelled.
5.
Closing. The Closing will occur on October 27,
2008, at the offices of Holland & Xxxx, LLP, 0000 X. Xxxxxxxx Xxxxxxx, Xxxxx
000, Xxxxxxxxx Xxxxxxx, XX 00000, or at such other time and place as the parties
may agree. At the Closing, the steps described in Section 3 and 4 will occur.
All transactions occurring at the Closing will be deemed to have taken
place simultaneously as part of a single transaction and no transaction
will be deemed to have been completed and no document, certificate, or
instrument deemed to have been delivered until all transactions have been
completed and all documents, instruments, and certificates have been
delivered. The transfers that take place at Closing will be deemed to
be effective as of the opening of business on the Closing
6.
Conditions. The obligations of
Sentient I to close the transactions contemplated by this Agreement shall be
subject to the following conditions precedent, any one or more of which may be
waived by Sentient I in its unfettered discretion.
a.
Amended Articles of
Incorporation of Holdings. At the Closing, the authorized capital of
Holdings shall be 2,000,000 shares of common stock, $0.01 par value per
share.
b.
Filings. AmerAlia
shall have filed its quarterly reports for the 2008 fiscal year with the
SEC.
c.
Shareholders
Meeting. Any shareholders meetings of AmerAlia, Holdings, and
Soda that are required in order to effect the transactions described in this
Agreement shall have been duly called and held and appropriate resolutions shall
have been approved by the vote required.
d.
Due
Diligence. Sentient I shall be satisfied, in its unfettered
discretion, with the results of all investigations related to AmerAlia,
Holdings, and Soda, their respective businesses and assets, including, but not
limited to a review of the corporate record books of AmerAlia and Holdings,
accurate and complete copies of which have been delivered to
Sentient.
e.
Opinion of Counsel to
AmerAlia. AmerAlia shall have delivered to Sentient I the opinion of
counsel to AmerAlia, Holdings and Soda reasonably acceptable to Sentient
I.
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f.
Payment of Taxes. All
taxes, penalties and interest owed by AmerAlia and Holdings shall have been paid
or will be paid by the Closing disbursements, except as disclosed in the
Supplemental Disclosure Letter.
g.
Shareholder
Agreement. AmerAlia, Holdings and Sentient I shall have executed and
delivered a Shareholder Agreement in the form attached hereto as Exhibit
6.g.
h. Releases. At
the Closing, AmerAlia shall deliver to Sentient I releases in a form reasonably
acceptable to it and dated as of the Closing, signed by van Mourik, Gunn,
AmerAlia, and Holdings in the form attached hereto as Exhibit 6.h.
i.
Payment of Royalties to
BLM. All past due royalties owed to the United States Bureau of Land
Management shall have been paid or will be paid by the Closing
disbursements.
j.
Consent to
Termination of Guarantees and Liens. All guarantees and security
interests securing the Series A Debentures and Series B1 Debentures shall be
terminated and released and AmerAlia will deliver the consent of all
beneficiaries of the collateral documents and subordinate creditors that might
be adversely affected.
x.
Xxxx Searches and Title
Insurance. Sentient I shall have received assurances from
AmerAlia satisfactory to Sentient I that there are no liens, claims or
encumbrances affecting the title to any real or personal property of AmerAlia,
Holdings or Soda (except for the security interest of Xxxxx Fargo securing a
$2,500,000 facility provided to Soda).
l.
Forbearance
Agreements. AmerAlia will deliver Forbearance Agreements in a form
acceptable to Sentient I, signed by each of its officers and directors and their
respective affiliates that or who are owed money by AmerAlia that will not be
paid at closing or converted into stock of AmerAlia at or prior to Closing.
m.
Cancellation of
Inter-Company Receivables and Payables. Any obligations from Soda to
AmerAlia or from Holdings to AmerAlia that are not conveyed to Holdings pursuant
to Section 4.a. above will be terminated effective as of Closing.
n.
Completion of Stock Purchase
Transactions. AmerAlia shall have completed the sale of 1,402,200 shares
of AmerAlia Common Stock to Xxxxx X.
Xxxxxxx Trust dated April 23, 1984 and Restated October 13, 1990, Xxxxx X.
Xxxxxxx, trustee, the Xxxxxxx X. X’Xxxxxx III Trust U/A dated February 2, 1996,
Xxxxxxx X. X’Xxxxxx, trustee and Xxxxxxx X. X’Xxxxxx III in exchange for
$2,417,692 of indebtedness (plus interest) owed by such individuals or trusts to
AmerAlia (which indebtedness will be terminated by AmerAlia upon
receipt).
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o.
SEC
Reports. No less than 5 days prior to the Closing, AmerAlia
shall have delivered to Sentient I true, correct and complete copies of
AmerAlia’s annual reports on Form 10-KSB for the years ended June 30, 2006 and
2007 and the quarterly report on Form 10-QSB for September 30, 2007
(collectively, the “SEC Reports”) and copies of AmerAlia’s quarterly reports on
Form 10-QSB for the quarters ended on December 31, 2007 and March 31, 2008 (the
“New SEC Reports”).
p.
XX Xxxxxx
Obligations. Obligations to XX Xxxxxx Co. that have accrued
prior to the Closing shall have been satisfied by payment, conversion into
AmerAlia Common Stock, or a combination of payment and conversion.
7.
Representations and Warranties of
AmerAlia, Holdings, Xxxx and van Mourik. AmerAlia, Holdings,
Xxxx and xxx Xxxxxx (except van Mourik makes no representation or warranty
pursuant to subsection 7.n) represent and warrant to Sentient I, Sentient II,
and Sentient III as of the date of this Agreement as follows:
a.
Corporate Existence,
Authority. AmerAlia is a corporation organized, validly
existing, and in good standing under the laws of Utah. Soda is a corporation
organized, validly existing, and in good standing under the laws of Colorado.
Holdings is a corporation organized, validly existing, and in good standing
under the laws of Colorado. Each of AmerAlia, Holdings and Soda (i) has all
requisite corporate power and authority to own its assets and carry on its
business as now conducted, (ii) is qualified to do business in all jurisdictions
in which the nature of its business makes such qualification necessary and where
failure to so qualify would have a Material Adverse Effect, and (iii) has the
corporate power and authority to execute, deliver, and perform its obligations
under this Agreement.
b.
Enforceability; No
Conflict. This Agreement constitutes the legal, valid and
binding obligation of AmerAlia, Holdings, Soda van Mourik, and Xxxx, enforceable
against them in accordance with its terms. Neither the execution and delivery of
this Agreement, nor the consummation of the transactions contemplated hereby
will contravene, conflict with, or result in the violation of, default under, or
give any person the right to declare a default or to exercise any remedy under:
(A) any provision of AmerAlia’s, Holdings’ or Soda’s organizational documents,
or (B) any lease, license, permit or agreement to which AmerAlia, Holdings and
Soda is a party or by which it or any of its properties is subject or
bound.
c.
Financial Statements and
Reports.
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i.
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As
of the date of their respective filings, none of the SEC Reports or other
filed reports contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.
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ii.
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Each
of the financial statements of AmerAlia included or incorporated by
reference in the SEC Reports was prepared in accordance with GAAP applied
on a consistent basis (except as otherwise stated in such financial
statements or, in the case of audited statements, the related report
thereon of independent certified public accounts), and present fairly the
financial position and results of operations, cash flows and of changes in
stockholders’ equity of AmerAlia and its consolidated subsidiaries as of
the dates and for the periods indicated, subject, in the case of unaudited
interim financial statements, to normal year-end audit adjustments, which
taken together are not material in amount (with materiality defined as
$10,000 individually or in the aggregate), and except that the unaudited
interim financial statements do not contain all of the disclosures
required by GAAP.
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d.
Books and
Records. The books of account, minute books, stock record
books, and other records of AmerAlia, Holdings and Soda, all of which have been
made available to the Sentient Entities, are complete and correct. The minute
books of AmerAlia, Holdings and Soda contain accurate and complete records of
all meetings held of, and corporate action taken by, the stockholders, the
Boards of Directors, and committees of the Boards of Directors of AmerAlia,
Holdings and Soda, and no meeting of any such stockholders, Board of Directors,
or committee has been held for which minutes have not been prepared and are not
contained in such minute books.
e.
Intentionally
omitted.
f.
Capitalization. Except
as set forth in subsections 7.g, h and i, there are no agreements relating to
the issuance, sale, or transfer of any equity securities or other securities of
AmerAlia, Holdings or Soda.
g.
Capitalization of
AmerAlia. The equity capitalization of AmerAlia
is:
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i.
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Preferred
stock: $0.05 par value per share; 1,000,000 authorized; 82 issued and
outstanding. These shares have no rights except a liquidation
preference of $82,000 and the right to received dividends as declared by
the board of directors of AmerAlia (as of closing, no dividends have been
or will have been declared by the board of directors of
AmerAlia).
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ii.
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Common
stock: $0.01 par value per share; 100,000,000 authorized; 17,298,507 shares issued and
outstanding.
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iii.
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The
AmerAlia Stock Options;
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iv.
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The
Warrants;
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12
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v.
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The
AmerAlia $350,000 Note and the AmerAlia $465,000 Note; the principal
and interest of which are convertible into shares of AmerAlia at $0.36 per
share;
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h.
Capitalization of
Holdings. The equity capitalization of Holdings
is:
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i.
|
Preferred
stock: $0.01 par value per share; 100,000 authorized; 4,949 issued to
AmerAlia and outstanding, having a $1,000 liquidation value per
share. There are no other
preferences.
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ii.
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Common
stock: $0.01 par value per share; 100,000 authorized; 51,001 shares issued
and outstanding.
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i.
Capitalization of
Soda. The equity capitalization of Soda is:
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i.
|
Preferred
stock: no par value per share; 5,000 authorized; no shares issued and
outstanding; and
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ii.
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Common
stock: no par value per share; 5,000 authorized; 2,670 shares issued and
outstanding.
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j. No Violation of Preemptive
Rights. No violation of any preemptive rights of shareholders
of AmerAlia or Holdings has occurred by virtue of the transactions contemplated
by this Agreement.
k. Indebtedness. Except
as shown in the SEC Reports, there is no indebtedness, liability, or other
material obligation of AmerAlia, Holdings or Soda. After the consummation of the
transactions contemplated by this Agreement there will be no indebtedness of
AmerAlia, Holdings or Soda except:
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i.
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AmerAlia: Trade
creditors, debt, obligations, accrued expenses and provisions no greater
in aggregate than $2,000,000 as described in the written information
provided to Sentient.
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ii.
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Holdings: None.
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l.
No
Default. AmerAlia, Holdings, and Soda are not in default under
and there is no circumstance which with the giving of notice, the lapse of time,
or both, would constitute a default under, any loan agreement, indenture,
mortgage, security agreement, lease, franchise, permit, license or other
agreement or obligation to which it is a party or by which any of its properties
may be bound which default could be reasonably expected to cause a Material
Adverse Effect.
m. Authorization of
Securities. (i) The shares of Holdings Common Stock to be
issued to Sentient I and AmerAlia, and (ii) the shares of AmerAlia Common
Stock, to be issued to Sentient I, against payment therefore will be fully paid
and non-assessable, with no liability attached to the ownership thereof, free of
restrictions on transfer other than under restrictions related to applicable
federal and state securities laws and as may be set forth in a Shareholders
Agreement signed by Sentient I.
13
n.
Environmental Condition of
the Property.
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i.
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To
the knowledge of AmerAlia, Holdings, and Xxxx, the location, construction,
occupancy, operation and use of AmerAlia’s, Holdings’ and Soda’s
properties do not violate any applicable permit, law, statute, ordinance,
rule, regulation, order or determination of any governmental authority or
other body exercising similar functions, or any restrictive covenant or
deed or lease restriction (recorded or otherwise) affecting such
properties, including, without limitation, all applicable zoning
ordinances and building codes, flood disaster, occupational health and
safety laws and Environmental Laws and regulations (as referred to in this
Section collectively “applicable laws”) where such violation could
reasonably be expected to cause a Material Adverse
Effect;
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ii.
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To
the knowledge of AmerAlia, Holdings, and Xxxx, AmerAlia, Holdings, and
Soda and each of their properties are not subject to any existing or
threatened investigation or inquiry by any governmental authority or
subject to any remedial obligations due to violations of applicable
laws;
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iii.
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To
the knowledge of AmerAlia, Holdings, and Xxxx, AmerAlia, Holdings and Soda
are not subject to any liability or obligation relating to (i) the
environmental conditions on, under or about such properties, including,
without limitation, the soil and ground water conditions at such
properties, or (ii) the use, management, handling, transport,
treatment, generation, storage, disposal, release or discharge of any
Polluting Substance which could reasonably be expected to cause a Material
Adverse Effect;
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iv.
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To
AmerAlia’s, Holdings’, and Xxxx’x knowledge, there is no Polluting
Substance or other substance on, under or about any property owned, leased
or otherwise used by AmerAlia, Holdings or Soda that may pose any material
risk to safety, health or the environment and that could reasonably be
expected to cause a Material Adverse
Effect;
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v.
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To
the knowledge of AmerAlia, Holdings, and Xxxx, no Polluting Substances
(for the purposes of this Subsection 7.n Polluting Substances shall not
include sodium bicarbonate) have been disposed of or otherwise released
on, onto, into, or from their properties by AmerAlia, Holdings Soda, or
any third parties in violation of any permit, law, statute, ordinance,
rule, regulation, order or determination of any governmental authority or
other body exercising similar functions where such disposal or release
could reasonably be expected to have a Material Adverse Effect and the use
which AmerAlia, Holdings and/or Soda makes and intends to make of such
properties does not and will not result in the disposal or other release
of any Polluting Substances on, onto, into or from such properties in
violation of any permit, law, statute, ordinance, rule, regulation, order
or determination of any governmental authority or other body exercising
similar functions where non-compliance could reasonably be expected to
have a Material Adverse Effect;
and
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14
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vi.
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To
the knowledge of AmerAlia, Holdings, and Xxxx, AmerAlia, Holdings, and
Soda, whichever is applicable, have been issued all required federal,
state and local licenses, certificates or permits relating to, and their
properties, AmerAlia, Holdings, Soda and AmerAlia’s, Holdings’ and Soda’s
facilities, business, assets, leaseholds and equipment are all in
compliance in all material respects with all applicable federal, state and
local laws, rules and regulations relating to, air emissions, water
discharge, noise emissions, solid or liquid waste disposal, Polluting
Substances, or other environmental, health or safety matters where
non-compliance could reasonably be expected to have a Material Adverse
Effect.
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o.
Litigation and
Judgments. There is no suit, action, proceeding or
investigation pending or, after reasonable inquiry, to the best of his or its
knowledge, threatened against or affecting AmerAlia, Holdings or Soda, that has
not been disclosed in writing to the Sentient Entities or that the outcome of
which could reasonably be expected to have a Material Adverse
Effect.
p.
Rights in Properties;
Liens. AmerAlia, Holdings, and Soda have good and marketable
title to all properties and assets reflected on their balance sheets, and as of
the Closing none of such properties or assets of AmerAlia, Holdings or Soda will
be subject to any Liens except for the security interest of Xxxxx Fargo securing
a $2,500,000 facility provided to Soda. AmerAlia, Soda, and Holdings
enjoy peaceful and undisturbed possession under all leases necessary for the
operation of their other properties, assets, and businesses and all such leases
are valid and subsisting and are in full force and effect. There
exists no default under any provision of any lease which would permit the lessor
thereunder to terminate any such lease or to exercise any rights under such
lease which, individually or together with all other such defaults, could have a
Material Adverse Effect. AmerAlia, Holdings, and Soda have the
exclusive right to use all property necessary to their business as presently
conducted, to the best of his or its knowledge, and AmerAlia’s, Holdings’ and
Soda’s use of its property does not infringe on the rights of any other Person
where such nonexclusively or infringement would have a Material Adverse
Effect. To the best of his or its knowledge, no other Person is
infringing the rights of AmerAlia or Holdings in any of the intellectual
property owned, licensed or used by it. AmerAlia, Holdings, and Soda
do not owe any royalties, honoraria or fees to any person, except royalties not
yet payable to the United States Bureau of Land Management and to XX
Xxxxxx.
15
q.
Taxes. Except
as has been disclosed in the supplemental disclosure letter, AmerAlia, Holdings,
and Soda have filed or caused to be filed all tax returns (federal, state, and
local) required to be filed, including, without limitation, all income,
franchise, employment, property, and sales taxes, and have paid or at closing
will pay all of their tax liabilities, other than immaterial amounts and taxes
that are being contested by AmerAlia, Holdings, or Soda in good faith by
appropriate actions or proceedings diligently pursued, and for which adequate
reserves in conformity with GAAP with respect thereto have been established and
as to which full written disclosure is contained on an Exhibit to this
Agreement. To the best of his or its knowledge, there is no pending
investigation of AmerAlia, Holdings, or Soda by any taxing authority or pending
but unassessed tax liability of AmerAlia, Holdings, or
Soda. AmerAlia, Holdings, and Soda have made no presently effective
waiver or extension of any applicable statute of limitations or request for an
extension of time to file a tax return, and AmerAlia, Holdings, or Soda is not a
party to any tax-sharing agreement.
r.
ERISA. AmerAlia,
Holdings and Soda have complied with all applicable minimum funding requirements
and all other applicable and material requirements of ERISA and the Internal
Revenue Code, applicable to the Employee Benefit Plans it or they sponsor or
maintain, and there are no existing conditions that would give rise to material
liability thereunder. With respect to any Employee Benefit Plan,
AmerAlia, Holdings and Soda have made all contributions or payments to or under
each Employee Benefit Plan required by law, by the terms of such Employee
Benefit Plan or the terms of any contract or agreement. No
Termination Event has occurred in connection with any Pension Plan, and there
are no unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA,
with respect to any pension plan which poses a risk of causing a Lien to be
created on the assets of AmerAlia, Holdings or Soda or which will result in the
occurrence of a Reportable Event. AmerAlia, Holdings or Soda have not
been required to contribute to a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, since September 2, 1974. No material liability
to the Pension Benefit Guaranty Corporation has been, or is expected to be,
incurred by AmerAlia, Holdings or Soda. The term “liability,” as
referred to in this Section, includes any joint and several
liability. No prohibited transaction under ERISA or the Code has
occurred with respect to any Employee Benefit Plan which could have a Material
Adverse Effect or a material adverse effect on the condition, financial or
otherwise, of an Employee Benefit Plan.
s.
Disclosure. No
representation, warranty or statement made by AmerAlia, Holdings, van Mourik or
Xxxx in this Agreement or in any of the documents, instruments, exhibits or
Schedules attached to such agreements or delivered in connection herewith or
therewith, contains or will contain any untrue statement of a material fact or
omits or will omit to state any material fact necessary to make any statements
made herein or therein not misleading. There is no fact that does, or
with the passage of time, could reasonably be expected to materially and
adversely affect the condition (financial or otherwise), results of operations,
business, properties, or prospects of AmerAlia, Holdings, or Soda that has not
been disclosed in the documents described herein and provided to the Sentient
Entities.
16
t.
Subsidiaries.
Holdings has no wholly or partially owned subsidiaries, other than
Soda. AmerAlia has no wholly or partially owned subsidiaries other
than Holdings. All the issued and outstanding shares of capital stock
of AmerAlia and Holdings are duly authorized, validly issued, fully paid and
nonassessable.
u.
Government
Approval. No approval or action by, and no notice to or
filings with any Governmental Body or person (other than those that have been or
on the Closing will be, duly obtained or made and which are, or as of the
Closing will be, in full force and effect) is required for the due execution,
delivery or performance by AmerAlia, Holdings or Soda.
v.
Securities
Laws. AmerAlia and Holdings have each complied with or is
exempt from the registration and/or qualification requirements of all federal
and state securities or blue sky laws applicable to the issuance or sale of the
Common Stock contemplated by this Agreement, including any shares of AmerAlia
common stock offered or issued to any creditor of AmerAlia or of Holdings. All
disclosures made by or on behalf of AmerAlia to any person or entity offered or
sold stock of AmerAlia were true, accurate and complete at the time of the
transaction (including the offer and sale to the Sentient Entities hereunder)
and did not and do not violate the provisions of Rule 10b-5 or similar
provisions of any state or foreign law, rule or regulation.
w.
No Labor
Disputes. None of AmerAlia, Holdings or Soda is involved in
any labor dispute. None of AmerAlia, Holdings, or Soda is a party to
any collective bargaining agreement, and there are no strikes or walkouts or
union organization of any of AmerAlia’s, Holdings’ or Soda’s employees
threatened or in existence and no labor contract is scheduled to expire during
the term of this Agreement.
x.
Brokers. None
of AmerAlia, Holdings, or Soda nor any of its directors or shareholders has
dealt with any broker, finder, commission agent or other Person in connection
with the transactions referenced in or contemplated by this Agreement, nor is
AmerAlia, Holdings, Soda, or any of their directors or shareholders under any
obligation to pay any broker’s fee or commission in connection with such
transactions.
y.
Insurance. The
amount and types of insurance carried by AmerAlia, Holdings and Soda, and the
terms and conditions thereof, are substantially similar to the coverage
maintained by companies in the same or similar business as AmerAlia, Holdings
and Soda and similarly situated companies.
z.
Long Term
Agreements. Except as described in AmerAlia’s Supplemental
Disclosure Letter, neither AmerAlia nor Holdings is subject to any long
term agreements not terminable by it on less than ninety (90) days prior written
notice without a monetary penalty.
aa. Royalties. Except for
royalties payable to (i) the United States of America, and (ii) XX Xxxxxx, none
of the interests in real property owned by AmerAlia, Holdings, or Soda is
subject to any minimum royalty, advance royalty, production royalty, net smelter
return obligation, net profit payment or any similar
arrangement.
17
bb. No Material Adverse
Change. Since June 30, 2007, there has not been any event,
change or circumstance applicable to AmerAlia, Holdings or Soda that could
reasonably be expected to have a Materially Adverse Effect on either of them or
on all of them taken as a whole.
8. Representations of Sentient
I. Sentient I represents and warrants to Holdings and AmerAlia
that:
a.
The AmerAlia Common Stock and the Holdings
Common Stock are being acquired for investment purposes only and not with a view
toward the resale or distribution thereof. Such shares may only be sold or
transferred by Sentient I if such sale or transfer is registered or exempt from
registration under the Securities Act of 1933, as amended and any similar
provisions of state law. Such exemption must be established to the reasonable
satisfaction of the issuer of the shares. Notwithstanding the foregoing,
AmerAlia and Holdings each consent to the transfer of its common stock from
Sentient I to Sentient II and/or Sentient III (and their owners and the
investors in the owners of any of the Sentient Entities) at any time following
the Closing.
b.
Sentient I is a limited partnership organized,
validly existing, and in good standing under the laws of
Delaware. Sentient I has all requisite limited partnership power and
authority to own its assets and carry on its business as now conducted, and has
the limited partnership power and authority to execute, deliver, and perform its
obligations under this Agreement.
c.
This Agreement constitutes the legal,
valid and binding obligation of Sentient I, enforceable against it in accordance
with its terms. Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will contravene, conflict
with, or result in the violation of, default under, or give any person the right
to declare a default or to exercise any remedy under any provision of Sentient
I’s organizational documents.
9. Covenants.
a.
Solicitation of
Creditors. Commencing within ten (10) days after the date of this
Agreement and ending within twenty (20) days, after the date of this Agreement,
AmerAlia will use commercially reasonable efforts to cause: (i) the holders of
any obligations secured by a pledge or security interest in any equity or debt
issued by Holdings, (ii) any officer or director or any affiliate of any officer
or director of AmerAlia, Holdings or Soda holding any secured or unsecured claim
against AmerAlia, Holdings, or Soda, (iii) the holders of shares of AmerAlia
preferred stock, (iv) XX Xxxxxx Co., and (v) any other creditors of AmerAlia or
Holdings, to convert such obligations into shares of common stock of AmerAlia at
$.36 per share. In doing so, AmerAlia will prepare and use a written disclosure
document that materially complies with the disclosure requirements of federal
and applicable state securities laws. Any obligations described in clauses (i)
and (iv) not so converted shall be paid off with the proceeds of the
subscription described in Section 3.a.
18
c.
Directors and
Officers. The Holdings board of directors will consist of five
(5) directors, initially Xxxxx Xxxxxxx, Xxxxxxx Xxxx, Xxxxxxx Xxxxx, Xxxx
Xxxxxxx, and Xxxx X. Xxxx will be elected to serve as directors.
d.
AmerAlia Shareholder
Meeting. AmerAlia will use commercially reasonable efforts to
hold a shareholders meeting on or before December 1, 2008 and to propose for
approval by its shareholders:
|
i.
|
that
its Articles of Incorporation be amended to increase the number of shares
of AmerAlia Common Stock to
350,000,000;
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|
ii.
|
That
the provisions of section 2.3 of the Shareholders Agreement (in the form
attached hereto as Exhibit 6.g, including any changes to that form that
are approved by the parties thereto) be approved and ratified by the
shareholders; and
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|
iii.
|
That
Xxxxx Xxxxxxx, and up to three additional persons named by Sentient I be
elected as directors of AmerAlia (the “Sentient Nominee(s)”). Sentient I
shall provide the Secretary of AmerAlia within 10 days after AmerAlia
notifies Sentient I that AmerAlia is preparing its proxy statement with
(i) the required background information required under Regulation 14A
of the Securities Exchange Act of 1934 or the rules of any security
exchange that the AmerAlia Common Stock is then listed, and (ii) such
other information regarding such individual and their affiliations and
background as AmerAlia may reasonably request. Each Sentient Nominee shall
be an individual that shall have such business or technical experience,
stature and character as is commensurate with service on the board of
directors of a public company and that shall be reasonably acceptable to
AmerAlia, it being agreed that Xxxxx Xxxxxxx is an acceptable
nominee. It is understood that any individual will be required
to make disclosure under Item 401(f) of Regulation S-K in connection with
AmerAlia’s proxy statement under Regulation 14A of the Securities Exchange
Act of 1934, and any individual that refuses shall not be an acceptable
nominee. Sentient I shall not designate any individual as a Sentient
Nominee if such individual is then an officer, director, employee,
consultant or stockholder (then holding more than 1% percent of any
company’s issued and outstanding capital stock or other equity interests)
of any business that is a competitor of
AmerAlia.
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19
e.
Insurance. AmerAlia
will use commercially reasonable efforts to obtain errors and omissions coverage
for its directors.
f.
Efforts to Close.
Each of AmerAlia and Sentient I will use commercially reasonable efforts to
consummate the transactions contemplated by this Agreement including, without
limitation, commercially reasonable efforts to remove all conditions precedent
to the other party’s obligation to close.
g.
Certificate. At
the Closing, AmerAlia, Holdings, van Mourik and Xxxx shall deliver to the
Sentient Entities a certificate certifying the following:
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i.
|
the
representations and warranties each of them made in this Agreement and in
the Supplemental Disclosure Letter remain true, accurate and complete in
all material respects at and as of the
Closing.
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ii.
|
all
reports required to be filed with the SEC for AmerAlia’s 2008 Fiscal Year
and the 2009 Fiscal Year up to the date of Closing have been filed with
the SEC;
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iii.
|
as
of the date of their respective filings, none of the New SEC Reports or
other filed reports (including, but not limited to the annual report for
2008 on form 10-KSB) contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not
misleading;
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|
iv.
|
Each
of the financial statements of AmerAlia included or incorporated by
reference in the New SEC Reports was prepared in accordance with GAAP
applied on a consistent basis (except as otherwise stated in such
financial statements or, in the case of audited statements, the related
report thereon of independent certified public accounts), and present
fairly the financial position and results of operations, cash flows and of
changes in stockholders’ equity of AmerAlia and its consolidated
subsidiaries as of the dates and for the periods indicated, subject, in
the case of unaudited interim financial statements, to normal year-end
audit adjustments, which taken together are not material in amount (with
materiality defined as $10,000 individually or in the aggregate), and
except that the unaudited interim financial statements do not contain all
of the disclosures required by
GAAP;
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v.
|
Since
March 31, 2008, there has been no change in any of the significant
accounting (including tax accounting) policies, practices, or procedures
of AmerAlia or any of its consolidated subsidiaries except as disclosed in
the New SEC Reports; and
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20
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vi.
|
Neither
Soda nor Holdings has any outstanding options, warrants or any other
contractual right to acquire (whether by purchase, exchange or any other
method) any shares of any class of capital stock and AmerAlia does not
have any outstanding options, warrants or any other contractual right to
acquire (whether by purchase, exchange or any other method) any shares of
any class of capital stock except for the AmerAlia Stock
Options.
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vii.
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All
of the books and records of AmerAlia, Holdings and Soda are in the
possession or control of the AmerAlia, Holdings and
Soda.
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h.
Waiver of
Claims. Van Mourik and Xxxx are and will be making
representations and warranties to the Sentient Entities in connection with the
transactions described in this Agreement. To the extent that either or both of
them incurs any liability with respect to any such representation or warranty,
van Mourik and Xxxx each waive and release any Claims to contribution,
reimbursement, indemnification (whether contractual, statutory, pursuant to
bylaw, or otherwise), subrogation or otherwise from AmerAlia, Holdings, and
Soda, regardless of whether any asserted right now exists or is created in the
future unless the instrument creating any such right specifically mentions this
waiver and release.
i.
Termination of
Securityholder Agreement. Effective as of the Closing, the ongoing
obligations under the Securityholder Agreement dated March 19, 2004 shall be
terminated.
a.
Effective as of the date of this Agreement, the AmerAlia Release
Parties for themselves and each person under AmerAlia Release Parties’ direct or
indirect control, hereby generally, irrevocably, unconditionally and completely
release and forever discharge each of the Sentient Entities and each of the
Sentient Entities’ Associated Parties from, and the AmerAlia Release Parties for
themselves and each person under AmerAlia Release Parties’ direct or indirect
control, hereby irrevocably, unconditionally and completely waives and
relinquishes, each of the Released Claims.
b.
In addition, the parties have agreed to limit van
Mourik’s and Xxxx’x personal liability resulting from any representation or
warranty made by either in their personal capacity under Section 7, or the
closing certificate described in Section 9.g to the extent such certificate
updates such representations and warranties, to claims for which Sentient I
delivers a written notice to the party against whom such liability is asserted
on or before the second anniversary of the Closing. Any personal liability
resulting from any representation or warranty made in his personal capacity
under Section 7 or the closing certificate described in Section 9.g to the
extent such certificate updates such representations and warranties, shall be
limited to $500,000 for each of van Mourik and Xxxx. The limitations set forth
in this Section 10.b. shall only apply to the representations made by van Mourik
and Xxxx in their personal capacities that are contained in Section 7 or the
closing certificate described in Section 9.g to the extent such certificate
updates such representations and warranties.
21
a.
Termination by Lapse of
Time. Either Sentient I or AmerAlia shall have the right (but
not the obligation) to terminate this Agreement if the Closing Date has not
occurred ninety (90) days from the date hereof (the “Outside Date”);
provided that, such termination right shall not be available to any party whose
breach of a representation, warranty, covenant or agreement, or failure to
satisfy a condition precedent under this Agreement caused the failure of the
Closing to occur by the Outside Date. The Outside Date may be
extended only by the written agreement of Sentient I and AmerAlia.
b.
Termination for Failure to
Cure. In the event that either party fails to cure a breach of
such party’s obligations or duties under this Agreement for a period of more
than fifteen (15) days, the non-breaching party shall have the right (but not
the obligation) to terminate this Agreement.
c.
Any termination of this
Agreement shall not affect the release described in Section 10.a, nor
shall it affect any rights or remedies resulting from the breach of any
agreement contained herein.
12. Miscellaneous.
a.
Currency. All amounts
are in US dollars unless otherwise indicated.
b.
Remedies. Any
Person having any rights under any provision of this Agreement will be entitled
to enforce such rights specifically, to recover damages by reason of any breach
of any provision of this Agreement, and to exercise all other rights granted by
law, which rights may be exercised cumulatively and not
alternatively.
c.
Course of Dealing Not an
Amendment. No course of dealing between any two or more of the
parties or any delay in exercising any rights will operate as a waiver of any
rights of the Sentient Entities.
d.
Survival of Representations
and Warranties. All representations and warranties contained
herein or made in writing by any party in connection herewith will survive the
execution and delivery of this Agreement for a period of three (3) years after
the Closing. Any due diligence investigation by the Sentient Entities
shall not limit the representations and warranties given by AmerAlia, Holdings,
van Mourik or Xxxx.
e.
Successors and
Assigns. Except as otherwise expressly provided herein, all
covenants and agreements contained in this Agreement by or on behalf of any of
the parties hereto shall bind and inure to the benefit of the respective
successors and assigns of the parties hereto whether so expressed or
not.
22
f.
Severability. Each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
is held to be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of this Agreement.
g.
Counterparts. This
Agreement may be executed in two or more counterparts, any one of which need not
contain the signatures of more than one party, but all such counterparts when
taken together shall constitute one and the same Agreement.
h.
Descriptive
Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this
Agreement.
i.
Notices. Except
as otherwise expressly provided herein, all communications provided for
hereunder shall be in writing and delivered by Federal Express or other
overnight international commercial courier service, (a) if to the Sentient
Entities, addressed to the respective Sentient Entity at the address specified
below, or to such other address as such Sentient Entity may in writing
designate, or (b) if to Holdings, AmerAlia, or Soda, addressed to the
address set forth below or to such other address as any of them in writing may
designate. Notices shall be deemed to have been validly served, given
or delivered (and “the date” of such notice or words of similar effect shall
mean the date) one day after deposit with Federal Express or other overnight
international commercial courier service, with all charges for next business day
delivery prepaid, or upon actual receipt thereof (whether by noncertified mail,
telecopy, telegram, facsimile, or otherwise), whichever is
earlier.
23
If
to Holdings, AmerAlia
|
c/o
AmerAlia, Inc.
|
or
Soda:
|
Attn: Chairman
|
0000
Xxxx Xxxxxxx Xx., Xxxxx 000
|
|
Xxxx
Xxxx, XX 00000
|
|
Tel: 000-000-0000
|
|
Fax:
000-000-0000
|
|
With
a Copy to:
|
Xxxxxx
xxx Xxxxxx
|
XX
Xxx 000
|
|
Xxxxxxx XXX 0000
|
|
Xxxxxxxxx
|
|
Tel: x000-0000-0000
|
|
Fax: x000-0000-0000
|
|
Holland
& Xxxx, LLP
|
|
0000
X. Xxxxxxxx Xxxxxxx
|
|
Xxxxx
000
|
|
Xxxxxxxxx
Xxxxxxx, XX 00000
|
|
Attn: Xxxxxxx
Xxxxxx, Esq.
|
|
Tel: 000-000-0000
|
|
Fax:
000-000-0000
|
|
If
to the Sentient Entities
|
Sentient
USA Resources Fund, L.P.
|
(or
either of them):
|
Sentient
USA Resources Fund II, L.P.
|
Third
Floor, Harbour Centre
|
|
PO
Box 10795APO
|
|
Xxxxxx
Town, Grand Cayman
|
|
Cayman
Islands
|
|
Attn: Xxxxxxx
Xxxxxxxxxx
|
|
Tel: (000)
000 0000
|
|
Fax:
(000) 000 0000
|
|
With a copy (which does not
constitute notice) to:
|
|
Sentient
USA Resources Fund, L.P.
|
|
Sentient
USA Resources Xxxx XX, X.X.
|
|
Xxxxx
0000, Xxxxx 00, Xxxxxxxxx Square Xxxxx
|
|
000Xxxxxx
Xxxxxx, Xxxxxx XXX 0000, Xxxxxxxxx
|
|
Attn: Xxxxx
Xxxxxxx, Director
|
|
Tel: (000)
0000-0000
|
|
Fax:
(000) 0000-0000
|
|
Xxxxx
& Xxxxxx LLP
|
|
0000
Xx. Xxxxxxx Xxxxx, Xxxxx 000
|
|
Xxxxxxxxx,
XX 00000
|
|
Attn: Xxxxxxx
X. Xxxxx, Esq.
|
|
Tel: (000)
000-0000
|
|
Fax:
(000) 000-0000
|
24
j.
Governing
Law. The validity, meaning and effect of this Agreement shall
be determined in accordance with the laws of Colorado applicable to contracts
made and to be performed entirely in Colorado as if by and between Colorado
residents. Venue for any dispute arising under this Agreement will be
in Arapahoe County, Colorado.
k.
Schedules and
Exhibits. All schedules and exhibits are an integral part of
this Agreement.
l.
Litigation
Costs. If any legal action, arbitration or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged dispute,
breach, default, or misrepresentation in connection with any of the provisions
of this Agreement, the successful or prevailing party or parties therein shall
be entitled to recover reasonable attorneys’ fees and other costs incurred in
that action or proceeding, in addition to any other relief to which it or they
may be entitled.
m. Final
Agreement. This Agreement and the exhibits and schedules
attached hereto constitute the only agreement of the parties concerning the
matters herein, and supersedes, merges and renders void all prior written/oral,
and/or contemporaneous discussions, agreements and understandings related
thereto. The parties acknowledge that there have been discussions about
converting all of the Sentient Entities’ ownership in Holdings into shares of
AmerAlia Common Stock. The parties agree that there is no obligation or
agreement to accomplish that conversion.
n.
Representation by
Counsel. AmerAlia, Holdings and Soda have been represented by
Holland and Xxxx, LLP in connection with the negotiation, execution and delivery
of this Agreement. The Sentient entities have been represented by Xxxxx &
Xxxxxx, LLP in connection with the negotiation, execution and delivery of
this Agreement.
o.
Public
Disclosure. Except as may be required to comply with
applicable law, no party shall make or cause to be made any press release or
similar public announcement. The parties acknowledge that AmerAlia
and the Sentient Entities must make appropriate announcements and filings to
comply with obligations under the Securities Exchange Act. Each party
agrees that it will provide the other with a copy of any proposed announcement
or filing relating to the subject matter of this Agreement prior to the planned
release or filing of such announcement, and that the releasing or filing party
agrees to endeavor to conform the announcement to the other’s reasonable
comments, provided that the announcing or filing party can do so and still
provide the information to the public that, in filing or announcing party’s
reasonable opinion, is required by law or regulation. Notwithstanding the
foregoing, the party not making the filing or announcement shall not assume any
responsibility for the announcement or filing by providing or not providing any
comments.
25
p.
Dispute
Resolution. Any dispute, claim or controversy arising out of
or relating to this Agreement or the breach, termination, enforcement,
interpretation or validity thereof, including the determination of the scope or
applicability of this agreement to arbitrate, shall be determined by arbitration
in Xxxxxxx County, Colorado, before three arbitrators. The arbitration shall be
administered by JAMS pursuant to its Comprehensive Arbitration Rules and
Procedures. Judgment on the Award may be entered in any court having
jurisdiction. This clause shall not preclude parties from seeking provisional
remedies in aid of arbitration from a court of appropriate
jurisdiction. The arbitrator shall, in the Award, allocate all or
part of the costs of the arbitration, including the fees of the arbitrator and
the reasonable attorneys’ fees of the prevailing party.
The
parties agree that any and all disputes, claims or controversies arising
out of or relating to this Agreement shall be submitted to JAMS, or its
successor, for mediation, and if the matter is not resolved through mediation,
then it shall be submitted to JAMS, or its successor, for final and binding
arbitration pursuant to the arbitration clause set forth above. Either party may
commence mediation by providing to JAMS and the other party a written request
for mediation, setting forth the subject of the dispute and the relief
requested. The parties will cooperate with JAMS and with one another in
selecting a mediator from JAMS panel of neutrals, and in scheduling the
mediation proceedings. The parties covenant that they will participate in the
mediation in good faith, and that they will share equally in its costs. All
offers, promises, conduct and statements, whether oral or written, made in the
course of the mediation by any of the parties, their agents, employees, experts
and attorneys, and by the mediator or any JAMS employees, are confidential,
privileged and inadmissible for any purpose, including impeachment, in any
arbitration or other proceeding involving the parties, provided that evidence
that is otherwise admissible or discoverable shall not be rendered inadmissible
or non-discoverable as a result of its use in the mediation. Either party may
initiate arbitration with respect to the matters submitted to mediation by
filing a written demand for arbitration at any time following the initial
mediation session or 45 days after the date of filing the written request for
mediation, whichever occurs first. The mediation may continue after the
commencement of arbitration if the parties so desire. Unless otherwise
agreed by the parties, the mediator shall be disqualified from serving as
arbitrator in the case. The provisions of this Clause may be enforced by any
Court of competent jurisdiction, and the party seeking enforcement shall be
entitled to an award of all costs, fees and expenses, including attorneys’ fees,
to be paid by the party against whom enforcement is ordered.
[SIGNATURE
PAGE FOLLOWS]
26
AMERALIA,
INC
|
NATURAL
SODA HOLDINGS, INC.
|
|||
By:
|
/s/ Xxxx X. Xxxx
|
By:
|
/s/ Xxxx X. Xxxx
|
|
Name:
|
Xxxx X. Xxxx
|
Name:
|
Xxxx X. Xxxx
|
|
Title:
|
President
|
Title:
|
President
|
|
NATURAL
SODA, INC.
|
||||
By:
|
/s/
Xxxx X. Xxxx
|
|||
Name:
|
Xxxx X. Xxxx
|
|||
Title:
|
President
|
|||
VAN
XXXXXX
|
XXXX
|
|||
/s/
Xxxxxx xxx Xxxxxx
|
/s/
Xxxx X. Xxxx
|
|||
Xxxxxx
xxx Xxxxxx, individually
|
Xxxx
X. Xxxx, individually
|
|||
SENTIENT
USA RESOURCES FUND, L.P.
|
SENTIENT
USA RESOURCES FUND II, L.P.
|
|||
By:
|
Sentient
Executive MLP 1, Limited, General Partner
|
By:
|
Sentient
Executive MLP 1, Limited, General Partner
|
|
By:
|
/s/
Xxxxx Xxxxxxx
|
By:
|
/s/
Xxxxx Xxxxxxx
|
|
Name:
|
Xxxxx Xxxxx Xxxxxxx
|
Name:
|
Xxxxx Xxxxx Xxxxxxx
|
|
Title:
|
Director
|
Title:
|
Director
|
|
SENTIENT
GLOBAL RESOURCES FUND III, LP
|
||||
By:
|
Sentient
GP III, L.P., General Partner
|
|||
By:
Sentient Executive GP III,
|
||||
Limited, General Partner
|
||||
By:
|
/s/
Xxxxx Xxxxxxx
|
|||
Name:
|
Xxxxx Xxxxx Xxxxxxx
|
|||
Title:
|
Director
|
27
Exhibit
6.g
|
Form
of Shareholders Agreement
|
Exhibit
6.h
|
Form
of Release
|
28
Exhibit
6.g
SHAREHOLDERS
AGREEMENT
This
Agreement is made and entered into to be effective as of the _____ day of , 2008 by and
between Natural Soda Holdings, Inc., a Colorado corporation (“Holdings”),
AmerAlia, Inc., a Utah corporation (AmerAlia”), Sentient USA Resources Fund,
L.P., a Delaware limited partnership (“Sentient”), and any persons who hereafter
own shares of Holdings which are subject to this Agreement, all of whom shall be
referred to collectively as the “Shareholders” and individually as a
“Shareholder.”
R
E C I T A L S
WHEREAS, the Shareholders are
the owners of all the issued and outstanding shares of capital stock of Holdings
with each Shareholder (as of the date set forth in the introductory paragraph of
this Agreement), owning the number and percentage shown below:
Shareholder
|
Number
of Shares Owned
|
Percentage
of Total Shares Owned
|
||||||
AmerAlia
|
180,000 | 18 | % | |||||
Sentient
|
820,000 | 82 | % | |||||
1,000,000 | 100 | % |
WHEREAS, the Shareholders
believe it to be in their best interests and in the best interests of Holdings
to document their arrangements and understandings with respect to the
disposition of shares of Holdings, now owned or hereafter acquired by the
Shareholders (collectively referred to as the “Shares”).
NOW, THEREFORE, in
consideration of the foregoing premises and the mutual representations,
warranties, covenants and conditions contained herein, the parties hereto agree
as follows:
ARTICLE
1
Restriction
on Transfer of Shares By AmerAlia
1.1 Restriction on Transfer
. A Shareholder shall not transfer any right, title or
interest in all or any part of its Shares, whether now owned or hereafter
acquired, except in compliance with the terms, covenants, and conditions of this
Agreement. For purposes of this Agreement, the term “transfer” shall
include any sale, assignment, transfer, pledge, conveyance, encumbrance, gift,
hypothecation or any other disposition of any Share or Shares of
Holdings.
29
1.2 Certificates. The
certificates representing shares that are issued and outstanding as of the date
of this Agreement shall be surrendered to Holdings for the purpose of endorsing,
and any certificates representing shares newly issued by Holdings shall be
endorsed, with a legend as follows:
“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO
SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF
1933.”
In
addition, the shares represented by this certificate are transferable only upon
compliance with the provisions of a Shareholder Agreement dated , 2008, a copy
of which is on file with the Secretary of Holdings.
After
endorsement, the certificates shall be returned or delivered to the registered
owner, which shall be entitled to exercise all rights of ownership therein,
except as limited by this Agreement. All certificates issued after
the date of this Agreement, which represent Shares subject to this Agreement
(including any shares that are permitted to be transferred after compliance with
the terms of this Agreement), shall be endorsed as set forth above.
1.3 Capital
Adjustments. In the event that during the term of this
Agreement any share dividend or other distribution is made with respect to all
or any of the Shares (payable in securities of Holdings), or any
reclassification, readjustment, split, reverse split or other change is declared
or made in the capital structure of Holdings, all new, substitute or additional
shares or other securities issued by reason of such change shall be held by the
registered owner and any permitted successor or assign of the registered owner
under and restricted by the terms of this Agreement and certificates
representing such shares shall bear the foregoing legend.
ARTICLE
2
Transfers
2.1 Right of First
Refusal. Upon receipt by AmerAlia (including any successor or
assign of AmerAlia) of a bona fide offer for the purchase of any or all its
Shares of Holdings which such Shareholder desires to accept, AmerAlia (including
any successor or assign of AmerAlia) (“Offering Shareholder”) shall offer to
sell such Shares (the “Offered Shares”) to Holdings and Sentient, as
follows:
30
2.1.1 Notice. The
Offering Shareholder shall deliver a written notice to Holdings and Sentient
(the “Notice”). The Notice shall state that the Offering Shareholder
offers to sell the Offered Shares to Holdings and/or Sentient for the same price
and upon the same terms and conditions offered by the bona fide prospective
purchaser. Such prospective purchaser’s offer shall include a xxxx xxxxxxx money
deposit of at least 10% of the proposed purchase price to be held in trust by
Holdings pursuant to the terms of this Section. The xxxxxxx money deposit must
be delivered to the Treasurer of Holdings contemporaneous with the transmission
of the Notice to Sentient. Included in the Notice shall be a statement of the
Offering Shareholder’s agreement to transfer to the prospective purchaser if the
Notice is not accepted, the name and address of the prospective transferee, the
number of Shares involved in the proposed transfer, and the price, terms and
conditions of the proposed transfer. The Offering Shareholder shall
transmit the Notice to the Secretary of Holdings and Sentient by certified mail
or personal delivery, furnishing a copy of the aforesaid written offer to
purchase from the prospective purchaser together with proof the xxxxxxx money
deposit has been made. If the proposed purchase is to be on terms
other than cash and/or deferred payments, and the parties cannot agree on a
“cash equivalent” value, the certified public accountant of Holdings will
determine the “cash equivalent” value of the offer, which determination shall be
controlling for the purposes of this Agreement.
2.1.2 Exercise of Right of First
Refusal. Within twenty (20) days after the Secretary of
Holdings receives the Notice together with the cash deposit, Holdings may elect
to purchase all or part of the Offered Shares by delivering to the Shareholders
a written notice of its election to purchase all or part of the Offered
Shares. If Holdings does not purchase all or part of the Offered
Shares, within thirty (30) days thereafter (50 days after receipt by the
Secretary of Holdings of the Notice), Sentient may elect to purchase the
remaining Offered Shares by providing the Offering Shareholder a written
notice of its election to purchase. Neither Holdings nor Sentient
exercising the right of first refusal shall be bound to perform any non-monetary
terms contained in the prospective purchaser’s offer which cannot reasonably be
performed by it.
2.1.3 Closing. Closing
of the sale of any Shares for the prices and under the terms and conditions
described in this Section shall be held in the principal office of Holdings at
10:00 A.M., Mountain Time on the later of the closing date described in the bona
fide offer, or the date following receipt by Holdings of the Notice by sixty
(60) days.
2.1.4 Sale to Third
Party. If neither Sentient nor Holdings exercises its right of
first refusal within the prescribed time, the Offering Shareholder shall make a
bona fide transfer in strict accordance with the terms and conditions stated in
the Notice; and the person acquiring such Shares shall be a “Shareholder”
subject to all the terms and covenants of this Agreement. In such
case, the Offering Shareholder shall not be obligated to transfer any of the
Offered Shares to Holdings or any of the Shareholders, since their right to
purchase is dependent upon the Offering Shareholder receiving notice of
intent to purchase all of the Offered Shares. However, if the
Offering Shareholder shall fail to make such transfer within thirty (30) days
following the expiration of the time period given to Holdings and Sentient to
exercise their respective rights of first refusal, the Offering Shareholder
shall repeat the procedure in the foregoing paragraphs before transferring any
Shares in Holdings.
31
2.2 Optional Right to Purchase
Shares by Corporation. Holdings may purchase all Shares of
AmerAlia (also herein referred to as the “Sale Shares”) for the Purchase Price
(established pursuant to Section 2.5) and under the terms and conditions set
forth in this Section if:
2.2.1 Unauthorized
Transfer. AmerAlia (including any successor or assign of
AmerAlia) transfers or attempts to transfer any of his, her or its shares
without compliance with the terms of this Agreement, after ten (10) days’
written notice of such noncompliance is given by Holdings or AmerAlia (including
any successor or assign of AmerAlia) and such noncompliance is not remedied
within such ten (10) day period;
2.2.2 Levy or
Execution. Any levy or execution is made on any Shares of
AmerAlia (including any successor or assign of AmerAlia),
2.2.3 Bankruptcy. AmerAlia
(including any successor or assign of AmerAlia) makes an assignment for the
benefit of creditors, files for protection from creditors pursuant to the United
States Bankruptcy Code or any similar state or federal law, or fails to obtain
the discharge of any involuntary filing under any bankruptcy or similar law
within 30 days after such filing; or
2.2.4 Breach of Contract.
AmerAlia (including any successor or assign of AmerAlia) materially breaches any
written agreement among Shareholders, including but not limited to this
Agreement, and fails to remedy such breach within the remedy period
provided by such agreement. Holdings may exercise its right to
purchase Sale Shares under this Section by delivery to AmerAlia (including any
successor or assign of AmerAlia), and any other appropriate party, of a
notice of election to purchase within thirty (30) days after it first is
entitled to exercise its rights under this Section, and Holdings shall become
obligated to purchase such Shares upon delivery of the notice of
election. The purchase price and other terms of the sale shall be
established by the provisions of Section 2.5 of this
Agreement.
2.3 Drag-Along
Right. Subject to the receipt of any required approval by the
shareholders of AmerAlia, Inc., if Sentient receives an offer to purchase all of
its shares and it elects to accept the offer as to all of its Shares, then
Sentient have the right to require AmerAlia and any successor or assign of
AmerAlia (a “Dragged Seller”) sell all of its Shares on the same terms and
conditions (on a per share basis) as the third party is purchasing the shares of
Sentient.
32
2.4 Tag-Along
Right. If Sentient desire to sell or otherwise dispose of all
of its Shares pursuant to an offer from a third party, then Sentient shall
provide AmerAlia with a notice of the proposed sale, describing in detail the
terms and conditions of the proposed sale. AmerAlia shall have the
right, exercisable for a period of fifteen (15) days after receipt of the notice
of proposed sale, to require the third party purchaser to purchase all of the
Shares owned by AmerAlia on the same terms and conditions as the Shares being
purchased from Sentient. If the third party purchaser refuses to purchase all of
the Shares of AmerAlia on the same terms and conditions, then Sentient may not
sell any of its shares to such purchaser. If AmerAlia fails to exercise the
rights described in this Section within fifteen days after receipt of the notice
from Sentient, then Sentient may transfer its Shares to the purchaser on the
same terms and conditions as set forth in the notice of proposed sale and the
Tag-Along rights described in this section shall terminate and shall no longer
be enforceable. If the shareholders of AmerAlia have not approved of the
Drag-Along rights described in Section 2.3 on or before December 31, 2008, then
this Tag-Along right shall terminate and shall not be enforceable.
2.5 Valuation. The
purchase price of any Share sold pursuant to this Agreement, except as provided
with respect to the right of first refusal or drag along rights shall be
determined in the following manner:
2.5.1 By
Agreement. The fair market value of the Shares will be that
price that is mutually agreed upon by the seller and the purchaser. If seller
and the purchaser are unable to agree mutually on the fair market value of the
Shares within ten (10) days from the date of the deemed offer, the fair market
value of the Shares will be determined by one (1) or more Qualified Appraisers,
selected under the procedures in this Section.
2.5.2 By
Appraisal. If the fair market value of the Shares is to be
determined by Qualified Appraisers, the seller and purchaser will each have the
opportunity to appoint, at his, her, or its own expense, a Qualified Appraiser,
within five (5) days following the expiration of the ten (10)-day period within
which the Seller and purchaser could not mutually agree on the fair market
value. If either party shall fail to appoint a Qualified Appraiser within this
five (5)-day period, the other Qualified Appraiser shall unilaterally establish
the fair market value of the Shares by a written opinion. If both
parties appoint Qualified Appraisers within this five (5)-day period, these two
(2) Qualified Appraisers shall establish the fair market value of the Shares in
a single written opinion agreed to by both of them. If these two (2)
Qualified Appraisers cannot agree on the fair market value of the Shares within
ten (10) days of the appointment of the latter of them, these two (2) appointed
Qualified Appraisers shall together appoint a third Qualified Appraiser whose
sole written opinion shall establish the fair market value of the
Shares. Any action to be taken by Holdings under this section shall
be taken by Holdings’ Board of Directors, except that the Seller shall not vote,
either as a director or Stockholder, and either directly or through an agent or
subordinate, with respect to such actions. The fees and reimbursed expenses
charged by the Qualified Appraisers in the valuation under this section shall be
borne solely equally by the purchaser and seller. Holdings will provide such
data as any Qualified Appraiser deems necessary or useful to make such
determination of the fair market value of the Shares. The parties agree that the
Shares owned by AmerAlia (or any of its successors or assigns) shall be subject
to any minority interest discount as may be deemed appropriate by the
Appraiser.
33
2.5.3 Definition of a Qualified
Appraiser. A “Qualified Appraiser” is a professional appraiser
or independent certified public accountant who is qualified by experience and
ability to appraise the Shares. The appointment of a Qualified Appraiser shall
be made by a written instrument delivered to each of the other parties to the
purchase and Holdings.
2.6 Closing. Except
as expressly provided to the contrary herein, a closing of the purchase and sale
of any Shares subject to transfer pursuant to the provisions of this Article
shall be held within thirty (30) days after notice of exercise has been given
(the “Closing”). If the parties cannot mutually agree on a Closing
date, time and place, the Closing shall be held on the thirtieth (30th) day
following notice of exercise or on the next business day that is not a bank
holiday in Denver, Colorado immediately following the thirtieth (30th)
day. Absent an agreement to the contrary, the Closing shall occur at
10:00 o’clock A.M., Mountain Time, at the principal offices of
Holdings.
2.7 Payment
Provisions. The purchase price under this Agreement shall be
paid in cash, except as may otherwise be provided in the provisions of the offer
subject to the right of first refusal.
2.8 Cooperation. If
Holdings does not have sufficient surplus or other authority to permit it to
lawfully purchase all of the Shares it has the right to purchase pursuant to
this Article, all the Shareholders hereby agree to promptly take such measures
to vote their respective Shares to reduce the capital of Holdings or to take
such other steps as may be appropriate or necessary to enable Holdings to
purchase and pay for all of the Shares to be purchased. If Holdings
shall, nevertheless, be unable to or refuse to purchase all of the Shares it has
agreed to purchase, then, with respect to the Shares which Holdings shall be
unable to or shall refuse to purchase, the remaining Shareholder(s) may purchase
such Shares ratably in accordance with their then respective holdings in
Holdings in accordance with the provisions of this Article as though such
Shareholders were named instead of Holdings.
2.9 Duty to
Sell. In the event either Holdings or a Shareholder becomes
obligated to purchase shares pursuant to this Agreement, AmerAlia (including any
successor or assign of AmerAlia), or any heir, assign, transferee,
successor-in-interest, trustee or personal representative of AmerAlia (including
any successor or assign of AmerAlia), shall sell the Shares for the purchase
price under the terms and conditions set forth in this
Agreement.
34
ARTICLE
3
Other
Terms
3.1 Additional Funding
Requirements. The Shareholders have discussed the potential
capital requirements of Holdings and its wholly owned subsidiary, Natural Soda,
Inc. If the Board of Directors of Holdings determines that additional capital is
appropriate for Holdings (including capital needed to fund its subsidiary,
Natural Soda, Inc.), each of the Shareholders shall have the right for a period
of no less than thirty days to contribute its pro rata share of any additional
such additional capital. AmerAlia agrees that Sentient shall have no
obligations to make any capital contributions to AmerAlia, whether to fund such
capital needs or otherwise. If AmerAlia is unable to or elects not to timely
fund its pro rata share of any such additional capital, Sentient may fund more
than its pro rata share with the result being that AmerAlia’s percentage
interest in Holdings will be reduced as a result. AmerAlia for itself and its
shareholders waives any claims against Sentient (including any of its successors
and assigns) resulting from (i) any inability of AmerAlia to raise additional
capital or to be able to make any contributions to the capital of Holdings, or
(ii) any contributions to Holdings made by Sentient which result in a reduction
in AmerAlia’s percentage ownership of Holdings because AmerAlia was unable to or
elects not to make its pro rata share of the contribution within thirty days
after receiving the notice described above.
ARTICLE
4
Termination
of Agreement
4.1 Termination of
Agreement. This Agreement shall terminate upon the occurrence
of any of the following events:
4.1.1
By
Agreement. By written agreement to terminate this Agreement
signed by all the Shareholders of Holdings;
4.1.2
Ownership by a Sole
Shareholder. If any one shareholder acquires all of the shares
of capital stock of Holdings; or
4.1.3
Liquidation or
Dissolution. The liquidation or dissolution of
Holdings.
ARTICLE
5
Miscellaneous
5.1 Notices. Any
and all offers, notices, designations, consents, acceptances, or other
communications provided for in this Agreement (collectively the “Notices”),
shall be given in writing by registered or certified mail. Notices to
Holdings shall be addressed to the Secretary of Holdings at its principal
business office, with a copy to the other shareholders. Notices to
any Shareholder shall be addressed to his, her or its address appearing on the
books of Holdings. Each such notice shall be deemed given and
delivered at the time it is personally delivered or properly addressed and
mailed with sufficient postage prepaid in any post office or branch post office
regularly maintained by the United States Government. If not provided
in accordance with the provisions of this Section, a notice shall be ineffective
for all purposes under this Agreement, even if actually
received.
35
5.2 Execution of
Documents. Each Shareholder hereby agrees for himself, herself
or itself, and his, her or its successors and assigns, to execute and deliver
any and all documents or legal instruments which may be necessary or proper to
carry out the provisions of this Agreement.
5.3 Damages. The
Shareholders hereby declare that it is impossible to measure in money the
damages which will accrue to any Shareholder by reason of Holdings’ or any
Shareholder’s failure to perform any of the obligations under this
Agreement. Therefore, if any Shareholder shall institute any action
or proceeding to enforce the provisions herein, any person (including Holdings)
against whom such action or proceeding is brought hereby waives the claim or
defense therein that such Shareholder has an adequate remedy at law, and such
person shall not urge in any such action or proceeding the claim or defense that
such remedy at law exists. Each of the parties hereto expressly
agrees that the equitable remedy of specific performance is the appropriate
remedy in addition to any monetary damages or other remedies that may be
awarded.
5.4 Invalidity. The
invalidity or inability to enforce of any provision or provisions of this
Agreement shall not affect the other provisions of this Agreement, and this
Agreement shall be construed in all respects as if any invalid or unenforceable
provisions were omitted.
5.5 Amendment of
Agreement. No change, termination, or modification of this
Agreement shall be valid unless the same be in writing and executed by all the
parties hereto.
5.6 Parties Bound by
Agreement. This Agreement shall be binding upon Holdings and
the Shareholders and their respective heirs, personal representatives,
successors and assigns. This Agreement shall be construed in
accordance with Colorado law.
5.7 Execution. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original and all of which shall constitute one and the same
agreement.
5.8 Integration. This
Agreement contains the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior or contemporaneous
discussions, negotiations and agreements, whether written or oral.
5.9 Attorneys’ Fees and
Costs. In the event of any litigation to enforce any
provision of this Agreement, the prevailing party shall be entitled to recovery
attorneys’ fees and costs incurred in such litigation in addition to any other
damages awarded or other determinations made.
36
5.10 Independent
Covenants. Each of the agreements or covenants contained in
this Agreement shall be deemed to be independent of each of the others and to be
supported by good and adequate consideration.
5.11 Time of the
Essence. Time shall be of the essence in performing the
obligations contained in this Agreement.
5.12 Dispute
Resolution. Any dispute, claim or controversy arising out of
or relating to this Agreement or the breach, termination, enforcement,
interpretation or validity thereof, including the determination of the scope or
applicability of this agreement to arbitrate, shall be determined by arbitration
in Xxxxxxx County, Colorado, before three arbitrators. The arbitration shall be
administered by JAMS pursuant to its Comprehensive Arbitration Rules and
Procedures. Judgment on the Award may be entered in any court having
jurisdiction. This clause shall not preclude parties from seeking provisional
remedies in aid of arbitration from a court of appropriate
jurisdiction. The arbitrator shall, in the Award, allocate all or
part of the costs of the arbitration, including the fees of the arbitrator and
the reasonable attorneys’ fees of the prevailing party.
The
parties agree that any and all disputes, claims or controversies arising
out of or relating to this Agreement shall be submitted to JAMS, or its
successor, for mediation, and if the matter is not resolved through mediation,
then it shall be submitted to JAMS, or its successor, for final and binding
arbitration pursuant to the arbitration clause set forth above. Either party may
commence mediation by providing to JAMS and the other party a written request
for mediation, setting forth the subject of the dispute and the relief
requested. The parties will cooperate with JAMS and with one another in
selecting a mediator from JAMS panel of neutrals, and in scheduling the
mediation proceedings. The parties covenant that they will participate in the
mediation in good faith, and that they will share equally in its costs. All
offers, promises, conduct and statements, whether oral or written, made in the
course of the mediation by any of the parties, their agents, employees, experts
and attorneys, and by the mediator or any JAMS employees, are confidential,
privileged and inadmissible for any purpose, including impeachment, in any
arbitration or other proceeding involving the parties, provided that evidence
that is otherwise admissible or discoverable shall not be rendered inadmissible
or non-discoverable as a result of its use in the mediation. Either party may
initiate arbitration with respect to the matters submitted to mediation by
filing a written demand for arbitration at any time following the initial
mediation session or 45 days after the date of filing the written request for
mediation, whichever occurs first. The mediation may continue after the
commencement of arbitration if the parties so desire. Unless otherwise
agreed by the parties, the mediator shall be disqualified from serving as
arbitrator in the case. The provisions of this Clause may be enforced by any
Court of competent jurisdiction, and the party seeking enforcement shall be
entitled to an award of all costs, fees and expenses, including attorneys’ fees,
to be paid by the party against whom enforcement is ordered.
[Signature
Page Follows]
37
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement to be effective as of the date set
forth in the initial paragraph hereof, notwithstanding the actual date of
execution.
NATURAL
SODA HOLDINGS, INC.
|
AMERALIA,
INC.
|
|||
By:
|
By:
|
|||
Name:
|
Name:
|
|||
Title:
|
Title:
|
|||
SENTIENT
USA RESOURCES FUND, L.P.
|
||||
By:
|
Sentient
Executive MLP 1, Limited, General Partner
|
|||
By:
|
||||
Name:
|
||||
Title:
|
38
Exhibit
6.h
This General Release (“General
Release”) is being executed and delivered on October __, 2008, by and among
AmerAlia, Inc., a Utah corporation (“AmerAlia”), Natural Soda Holdings, Inc., a
Colorado corporation (“NSHI”), Natural Soda, Inc., a Colorado corporation
(“NSI”), Xxxxxx xxx Xxxxxx (“van Mourik”), and Xxxx X. Xxxx (“Xxxx”)(AmerAlia,
NSHI, NSI, van Mourik and Xxxx are referred to herein as the “AmerAlia Parties”)
and is for the benefit of Sentient USA Resources Fund, L.P. (“Sentient LP ”),
Sentient USA Resources Fund II, L.P. (“Sentient II LP”), Sentient Global
Resources Fund III, LP (“Fund III”) and each of their Associated Parties
(Sentient LP, Sentient II LP and Fund III are referred to herein as
the “Sentient Parties”).
WHEREAS, the AmerAlia Parties
and the Sentient Parties have entered into a Restructuring Agreement dated
September ___, 2008 (the “Restructuring Agreement”);
WHEREAS, each of the AmerAlia
Parties represents and warrants that he or it will receive direct and indirect
benefits as a result of closing of the Restructuring Agreement and the
transactions described therein and in order to induce the Sentient Parties to
close those transactions, the AmerAlia Parties have agreed to provide this
Release;
WHEREAS, the AmerAlia Parties
are delivering this Release pursuant to the Restructuring
Agreement;
WHEREAS, the AmerAlia Parties
intend to waive and release all claims they or any of them has against the
Sentient Parties and each of the other AmerAlia Parties; and
WHEREAS, notwithstanding the
provisions of the preceding Recital, the parties to this General Release do not
intend to release any of the Retained Rights (defined below).
In
consideration of the recitals, the covenants contained herein and in the
Restructuring Agreement, and for other valuable consideration (the receipt and
sufficiency of which are hereby acknowledged by the parties), the parties hereby
covenant and agree as follows:
1.
Releases; Retained
Rights.
(a) Except
for the Retained Rights, each of the AmerAlia Parties for themselves and each
person under any of the AmerAlia Parties’ direct or indirect control, hereby
generally, irrevocably, unconditionally and completely release and forever
discharge each of the Sentient Parties and each of their Associated Parties
(specifically including, but not limited to, Xxxxx Xxxxxxx, Xxxx Xxxxxxx,
Sentient Resources USA, Inc., and Sentient Asset Management USA, Inc.) from, and
each of the AmerAlia Parties hereby irrevocably, unconditionally and completely
waives and relinquishes, each of the Released Claims.
(b) In
addition, except for the Retained Rights, van Mourik and Xxxx for themselves and
each person or entity under the each of their direct or indirect control, hereby
generally, irrevocably, unconditionally and completely release and forever
discharge each of AmerAlia, NSHI and NSI and each of their Associated Parties
from, and van Mourik and Xxxx hereby irrevocably, unconditionally and completely
waives and relinquishes, each of the Released Claims.
39
(c) Each
of the AmerAlia Parties generally, irrevocably, unconditionally and completely
release, waive, and relinquish any and all rights of contribution, exoneration
or any other similar right or claim to cause any of the other AmerAlia Parties
to pay or reimburse any amounts owed as a result of this Release.
(d) Nothing
in this General Release, including the releases set forth in Sections 1(a), 1(b)
and 1(c) above, is intended to or shall be construed as a release, acquittal,
discharge, covenant not to xxx or indemnity of any and all claims related to or
arising from the Retained Rights.
2.
Definitions.
(a) The
term “Associated Parties” when used herein shall mean and
include: (i) the named party’s predecessors, successors, executors,
administrators, heirs and estate; (ii) the named party’s past, present and
future assigns, shareholders, partners, owners of partners, investors, direct
and indirect parents, subsidiaries and affiliates, and all of their officers,
directors, attorneys or legal representatives, agents and representatives; (iii)
each entity that the named party has the power to bind (by the named party’s
acts or signature) or over which the named party directly or indirectly
exercises control; and (iv) each entity of which the named party owns, directly
or indirectly, at least 50% of the outstanding
equity, beneficial, proprietary, ownership or voting interests.
(b) The
term “Claims” shall mean and include all past, present and future disputes,
claims, controversies, demands, rights, rights to appeal, liens, allegations,
obligations, liabilities, actions and causes of action of every kind and nature
(whether in law or equity), including: (i) any unknown, unsuspected or
undisclosed claim; (ii) any claim or right that may be asserted or exercised by
a Releasor in Releasor’s capacity as a stockholder, director, officer or
employee or in any other capacity; and (iii) any claim, counterclaim, right or
cause of action based upon any breach of any express, implied, oral or written
contract or agreement.
(c) The
term “Releasee” means each party named in Section 1 as being generally,
irrevocably, unconditionally and completely released and forever
discharged.
(d) The
term “Released Claims” shall mean and include each and every Claim that (i)
Releasor or any person under the direct or indirect control of the Releasor may
have had in the past, may now have or may have in the future against any of the
Releasees or any Associated Party of the Releasee, and (ii) has arisen or arises
directly or indirectly out of, or relates directly or indirectly to, any
circumstance, agreement, activity, action, omission, event or matter occurring
or existing on or prior to the date of this General Release. Notwithstanding the
breadth of the definition of Claims and Released Claims, the parties do not
intend to include any of the Retained Rights as part of the Released
Claims.
(e) The
term “Releasor” means each party named in Section 1 as generally, irrevocably,
unconditionally and completely releasing and forever discharging one or more
Releasees.
(f)
The term “Retained Rights” shall mean
and include: (i) any rights or obligations arising under this General Release,
(ii) any rights or obligations arising under the Restructuring Agreement, (iii)
rights under the Shareholders Agreement (iv) rights of indemnification under
AmerAlia’s, NSHI’s and NSI’s charter documents, and (v) rights under the stock
options and written obligations reflected on the financial statements of
AmerAlia, NSHI and NSI which have been delivered to the Sentient Parties prior
to the execution and delivery of this Release (e.g., rights as holders of
debentures, notes, stock options and accrued but unpaid
compensation).
3.
Representations and
Warranties. Each Releasor represents and warrants
that:
40
(a) No
promise, representation, inducement, or agreement that is not expressed in this
General Release has been made to any of the Releasors; none of the Releasors is
relying on any promise, representation, inducement, or agreement in entering
into this General Release except as expressly set forth in this General Release;
and each of the Releasors has consulted with counsel of its own choosing prior
to entering into this General Release and knowingly and freely enters this
General Release without duress;
(b) Releasor
has not assigned, transferred, conveyed or otherwise disposed of any of its
Released Claims against any of the Releasees, or any direct or indirect interest
in any such Released Claims, in whole or in part;
(c) to
the best of the Releasor’s knowledge, no other person or entity has any interest
in any of its Released Claims;
(d) no
person under the direct or indirect control of Releasor has or had any Claim
against any of its Releasees or their Associated Parties;
(e) no
person under the direct or indirect control of Releasor will in the future have
any Claim against its Releasees or their Associated Parties that arises directly
or indirectly from or relates directly or indirectly to any circumstance,
agreement, activity, action, omission, event or matter occurring or existing on
or before the date of this General Release;
(f) this
General Release has been duly and validly executed and delivered by
Releasor;
(g) this
General Release is a valid and binding obligation of the Releasor and persons
under its direct or indirect control, and is enforceable against Releasor and
each person under the Releasor’s control in accordance with its
terms;
(h) there
is no action, suit, proceeding, dispute, litigation, claim, complaint or
investigation by or before any court, tribunal, governmental body, governmental
agency or arbitrator pending or, to the best of the knowledge of Releasor,
threatened against Releasor or any person under Releasor’s direct or indirect
control that challenges or would challenge the execution and delivery of this
General Release or the taking of any of the actions required to be taken by
Releasor under this General Release;
(i) neither
the execution and delivery of this General Release nor the performance hereof
will (i) result in any violation or breach of any agreement or other instrument
to which Releasor or any person under Releasor’s direct or indirect control is a
party or by which Releasor or any person under Releasor’s direct or indirect
control is bound, or (ii) result in a violation or any law, rule, regulation,
treaty, ruling, directive, order, arbitration award, judgment or decree to which
Releasor or any person under Releasor’s direct or indirect control is subject;
and
(j) the
persons executing this General Release on behalf of the Releasors have full and
complete authority to do so, and to make and give the promises, releases and
covenants set forth in this General Release and no authorization, instruction,
consent or approval of any person or entity is required to be obtained by
Releasor or any person under Releasor’s direct or indirect control in connection
with the execution and delivery of this General Release or the performance
hereof.
4.
Indemnification. Without
in any way limiting any of the rights or remedies otherwise available to any
Releasee, each Releasor, severally, shall indemnify and hold harmless each
Releasee against and from any loss, damage, injury, harm, detriment, lost
opportunity, liability, exposure, claim, demand, settlement, judgment, award,
fine, penalty, tax, fee, charge or expense (including attorneys’ fees) that is
directly or indirectly suffered or incurred at any time by such Releasee, or to
which such Releasee otherwise becomes subject at any time, and that arises
directly or indirectly out of or by virtue of, or relates directly or indirectly
to, (a) any failure on the part of Releasor to observe, perform or abide by, or
any other breach of, any restriction, covenant, obligation, representation,
warranty or other provision contained herein, or (b) the assertion or purported
assertion of any of the Released Claims by Releasor or any of Releasor’s
Associated Parties.
41
5.
Miscellaneous.
(a) This
General Release sets forth the entire understanding of the parties relating to
the subject matter hereof and supersedes all prior agreements and understandings
among or between the Releasor and any of the Releasees relating to the subject
matter hereof. No modification of this General Release shall be
binding, unless evidenced in writing and signed by an authorized representative
of the person against which such modification is being asserted. No
breach of any provision of this General Release can be waived except in
writing. Waiver of any one breach shall not be deemed to be a waiver
of any other breach of the same or any other provisions hereof.
(b) If
any provision of this General Release or any part of any such provision is held
under any circumstances to be invalid or unenforceable in any jurisdiction, then
(i) such provision or part thereof shall, with respect to such circumstances and
in such jurisdiction, be deemed amended to conform to applicable laws so as to
be valid and enforceable to the fullest possible extent, (ii) the invalidity or
unenforceability of such provision or part thereof under such circumstances and
in such jurisdiction shall not affect the validity or enforceability of such
provision or part thereof under any other circumstances or in any other
jurisdiction, and (iii) such invalidity or enforceability of such provision or
part thereof shall not affect the validity or enforceability of the remainder of
such provision or the validity or enforceability of any other provision of this
General Release. Each provision of this General Release is separable
from every other provision of this General Release, and each part of each
provision of this General Release is separable from every other part of such
provision.
(c) This
General Release shall be construed in accordance with, and governed in all
respects by, the laws of the State of Colorado (without giving effect to
principles of conflicts of laws).
(d) Any
dispute, controversy, or claim arising under this General Release, including
alleged breaches hereof and defaults hereunder, shall be resolved by arbitration
in accordance with the comprehensive arbitration rules and procedures of JAMS
then in effect. Arbitration proceedings shall be held in Denver,
Colorado, or some other mutually acceptable location, and arbitration awards may
be enforced in any court of competent jurisdiction. Arbitration shall
be conducted by a single arbitrator selected by the parties who shall be
qualified by training and experience to pass upon the matter of the dispute and
shall not have to power to add to, ignore or modify any term or condition of
this Agreement. In the event the parties are unable to agree upon a
single arbitrator within a thirty (30) day period, the arbitrator shall be
selected by JAMS. The arbitration decision shall not go beyond what is necessary
for the interpretation and application of this Agreement and shall be in writing
and shall set forth findings of fact and conclusions of law, as appropriate,
supported by a reasoned opinion. The cost of such arbitration shall
be borne as determined by the arbitrator; provided however, each party shall
bear the costs of preparing and presenting its own case.
42
(e) This
General Release may be executed in several counterparts, each of which shall
constitute an original and all of which, when taken together, shall constitute
one agreement.
(f) Releasor
shall execute and/or cause to be delivered to each Releasee such instruments and
other documents, and shall take such other actions, as such Releasee may
reasonably request for the purpose of carrying out or evidencing any of the
actions contemplated by this General Release.
(g) If
any legal action or other legal proceeding relating to this General Release or
the enforcement of any provision hereof is brought by Releasor or any Releasee,
the prevailing party shall be entitled to recover reasonable attorneys’ fees,
costs and disbursements to the extent actually incurred (in addition to any
other relief to which the prevailing party may be entitled).
(h) This
General Release shall inure to the benefit of the Releasees and their Associated
Parties, their successors, representatives, agents, officers, directors,
employees and assigns and shall be effective with respect to, and binding upon
and enforceable against the Releasors and their Associated Parties.
(i) Whenever
required by the context, the singular number shall include the plural, and vice
versa; the masculine gender shall include the feminine and neuter genders; and
the neuter gender shall include the masculine and feminine genders.
(j) Any
rule of construction to the effect that ambiguities are to be resolved against
the drafting party shall not be applied in the construction or interpretation of
this General Release.
(k) As
used in this General Release, the words “include” and “including” and variations
thereof, shall not be deemed to be terms of limitation, and shall be deemed to
be followed by the words “without limitation.”
[SIGNATURE
PAGE FOLLOWS]
43
In Witness Whereof, the
parties have caused this General Release to be executed as of the date first
above written.
AMERALIA,
INC
|
NATURAL
SODA HOLDINGS, INC.
|
|||
By:
|
By:
|
|||
Name:
|
Name:
|
|||
Title:
|
Title:
|
|||
NATURAL
SODA, INC.
|
||||
By:
|
||||
Name:
|
||||
Title:
|
||||
Xxxxxx
xxx Xxxxxx, individually
|
Xxxx
X. Xxxx, individually
|
44