JOINT VENTURE AGREEMENT
This
joint venture agreement (“Agreement”) is made and
entered into effective 19 October 2009 (the “Effective Date”) in Carson
City, Nevada by and between TRINITY ALPS RESOURCES, INC., a Nevada domestic
corporation, c/o Rutledge Law Center Ltd., 000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000,
Xxxxxx Xxxx, Xxxxxx 00000 (“Trinity Alps”), and AMERICAN
SIERRA GOLD CORP., a Nevada domestic corporation, c/o Nevada Agency and Transfer
Company, 00 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxx, Xxxxxx 00000 (“American
Sierra”). Trinity Alps and American Sierra are the only
parties to this Agreement and are at times referred to herein singly as a “Party” and collectively as the
“Parties.”
RECITALS
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A.
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Trinity
Alps owns the mining claims more-precisely described in this Agreement’s
Exhibit A
(the “Claims”).
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B.
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American
Sierra desires to develop the mine underlying the Claims (the “Mine”) with the intent
to ultimately own and control an undivided interest in the Claims of as
much as 75%.
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C.
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Trinity
Alps is willing to allow American Sierra to purchase an interest in the
Claims as provided for herein.
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In
consideration of this Agreement’s covenants and undertakings, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:
1. CONSIDERATION.
1.1 Signing Fee. Within
two (2) business days after the later of the two Parties executes this
Agreement, American Sierra shall pay Trinity Alps twenty five thousand dollars
($25,000 USD) in immediately-available funds (“Signing Fee”). The
Signing Fee is non-refundable, non-contingent, and is due in addition to the one
hundred thousand dollars ($100,000 USD) paid by American Sierra to Trinity Alps
prior hereto to acquire the exclusive option provided for in the Parties’
earlier letter agreement (the “LOI Option Fee”), and all
other amounts due to Trinity Alps from American Sierra hereunder. The
Signing Fee and the LOI Option Fee, together totaling one hundred twenty five
thousand dollars ($125,000 USD), shall be credited toward the $2,000,000
contribution requirement provided for below in Section 1.4.3 for the 75%
Ownership Option set forth in Section 2 hereof.
1.2 Stock. In addition
to the Signing Fee and all other payments contemplated and/or provided for
herein, as a condition to Closing, American Sierra shall, for the adequate
consideration recited herein and hereby acknowledged as received by American
Sierra hereunder, irrevocably assign to Trinity Alps two million shares
(2,000,000) of authorized common stock in American Sierra (“Stock”) in such name(s) as
then-designated by Trinity Alps. American Sierra shall, at and as
part of Closing, deliver the Stock to the Trust Account Administrator for
forwarding and delivery to Trinity Alps’ or its designee, assignee or successor
as follows:
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| 1.2.1 | 500,000 shares of the Stock on 15 January 2010; | |
| 1.2.2 | 500,000 shares of the Stock exactly six (6) months after Closing; | |
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1.2.3
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500,000
shares of the Stock exactly nine (9) months after Closing;
and
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1.2.4
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500,000
shares of the Stock exactly twelve (12) months after
Closing.
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Trinity
Alps’ rights, title and interest in and to the Stock fully vest as irrevocable
at Closing and remain as such despite any post-Closing breach or default by
American Sierra; provided, however, that any resale of Trinity Alps’ Stock shall
be restricted to the extent required by the Securities Act of 1933, as amended
(the “Securities Act”)
and shall, to the extent required by the Securities Act and regulations
promulgated thereunder, bear a legend detailing said resale
restrictions. The foregoing notwithstanding, upon Trinity Alps’
request, American Sierra shall promptly remove such restrictive legend and
reissue said Stock to Trinity Alps on legend-free certificates at such time as
the time-based sale restrictions have lapsed and all other requirements of Rule
144, as promulgated under the Securities Act, as may be applicable, have been
met. To the maximum extent permitted by law, including applicable
federal and state securities and blue sky regulations, the holding period
underlying said resale restriction shall begin upon issuance of the Stock at
Closing, as delivered to the Trust Account Administrator hereunder.
1.3 Warrants. In
addition to the Signing Fee, the Stock, and all other payments contemplated
and/or provided for herein, as a condition to Closing, American Sierra shall
irrevocably and in writing give to Trinity Alps warrants to purchase two million
(2,000,000) shares of already-approved-and-issued-but-not-outstanding common
stock in American Sierra at any time within five (5) years from Closing at one
dollar and twenty five cents ($1.25) per share (“Warrants”). The
Warrants shall be issued by American Sierra to Trinity Alps in such name(s) as
then-designated by Trinity Alps. Although Trinity Alps’ rights, title
and interest in and to the Warrants fully vest as irrevocable at Closing, and
remain as such despite any post-Closing breach or default by American Sierra,
the Warrants shall be issued and delivered at and as part of Closing to the
Trust Account Administrator for forwarding and delivery to Trinity Alps’ or its
designee, assignee or successor as follows:
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1.3.1
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500,000
of the Warrants on 15 January 2010;
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1.3.2
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500,000
of the Warrants exactly six (6) months after
Closing;
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1.3.3
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500,000
of the Warrants exactly nine (9) months after Closing;
and
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1.3.4
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500,000
of the Warrants exactly twelve (12) months after
Closing.
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Trinity
Alps’ sale of the Warrants and/or the securities issued upon exercise of the
Warrants will be restricted to the extent required by the Securities Act and
shall, to the extent required by the Securities Act and regulations promulgated
thereunder, and shall bear a legend detailing said resale
restrictions. The foregoing notwithstanding, upon Trinity Alps’
request, American Sierra shall promptly remove such restrictive legends and
reissue said Warrants and securities issued upon the exercise of the Warrants to
Trinity Alps in legend-free form at such time as the time-based sale
restrictions have lapsed and all other requirements of Rule 144, as promulgated
under the Securities Act, as may be applicable, have been met. To the
maximum extent permitted by law, including applicable federal and state
securities and blue sky regulations, the holding period underlying said resale
restriction, assuming the cashless exercise of the Warrants in the case of the
securities underlying the Warrants, shall begin upon issuance of the Warrants at
Closing, as delivered to the Trust Account Administrator hereunder.
1.4 American
Sierra must pay the following consideration to exercise the 75% Ownership Option
provided for in Section 2 below:
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1.4.1
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At
and as part of Closing, American Sierra must pay one hundred fifty
thousand dollars ($150,000 USD) in immediately-available funds (the “Closing Payment”) into
the Trust Account (as defined herein). Another one hundred
fifty thousand dollars ($150,000 USD) in immediately-available funds must
be paid into the Trust Account within three (3) months after
Closing. Collectively, the Closing Payment and the second
$150,000 payment are hereby defined in aggregate as the “First Semester
Payment”. Any funds paid into the Trust Account during
the six (6) months following Closing that exceed the First Semester
Payment shall be credited toward the $2,000,000.00 contemplated in Section
1.4.3 below (but not toward the Second Semester Payment (as defined
below)). The Trust Account Administrator shall only release
funds from the First Semester Payment to the Operating Entity or Holding
Company, as the case may be, upon presentment of an invoice for an
expenditure provided for in the approved year one work plan attached
hereto as Exhibit B (the
“Year One Work
Plan”). The Year One Work Plan will include, but not be
limited to, all costs and expenses relating to and/or resulting from the
Claims and/or the Mine’s development and/or operation, including taxes,
Bureau of Land Management fees and costs, insurance, Claims-related fees,
security and other deposits, reclamation and/or performance bonds,
employee and/or contractor salaries, costs of forming and maintaining the
Operating Entity, Holding Company, and other statutory business entities
formed hereunder, plus all attorneys’, legal and accounting fees related
to the negotiation, adoption and implementation of the Year One Work
Plan. The Year One Work Plan shall not be modified or in any
way altered or deviated from without the express, written consent of both
Parties.
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1.4.2
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No
more than 6 months after Closing, American Sierra must pay an additional
three hundred thousand dollars ($300,000.00 USD) in immediately-available
funds into the Trust Account (the “Second Semester
Payment”). Any funds paid into the Trust Account in
excess of the Second Semester Payment shall be credited toward the
$2,000,000.00 contemplated in Section 1.4.3 below. The Trust
Account Administrator shall only release funds from the Second Semester
Payment to the Operating Entity or Holding Company, as the case may be,
upon presentment of an invoice for an expenditure provided for in the Year
One Work Plan or Year Two Work Plan (as defined
below).
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1.4.3
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In
the two (2) years immediately following Closing, American Sierra must pay
$2,000,000.00 USD into the Trust Account for release by the Trust Account
Administrator upon presentment of an invoice for expenditures provided for
in the Year One Work Plan and/or the year-two work plan to be prepared and
approved by Trinity Alps and American Sierra for the Operating Entity and
submitted to the Trust Account Administrator within ten (10) months from
Closing (the “Year Two
Work Plan”). The Year Two Work Plan will
include, but not be limited to, all costs and expenses relating to and/or
resulting from the Claims and/or the Mine’s development and/or operation,
including taxes, Bureau of Land Management fees and costs, insurance,
Claims-related fees, security and other deposits, reclamation and/or
performance bonds, employee and/or contractor salaries, costs of
maintaining the Operating Entity, Holding Company, and any other statutory
business entities formed hereunder, plus all attorneys’, legal and
accounting fees related to the negotiation, adoption and implementation of
the Year One Work Plan. This $2,000,000.00 USD contribution
requirement includes all amounts paid to Trinity Alps or paid into the
Trust Account under Sections 1.1, 1.4.1, 1.4.2, 1.7 and/or
9. The Year Two Work Plan shall not be modified or in any way
altered or deviated from without the express, written consent of both
Parties.
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1.5 Trinity
Alps may, in its sole discretion, but need not, pay one or more of the costs
and/or expenses included in the Year One Work Plan and/or Year Two Work Plan
(the “Operating Costs”),
but any and every such payment shall only be an advance on the Operating
Entity’s behalf — and Trinity Alps shall be reimbursed therefor within ten (10)
business days after delivery to the Operating Entity of every such
invoice. The amount of every such invoice for which Trinity Alps is
not fully-reimbursed within the mandated 10-day period shall automatically and
immediately increase by a late fee equal to ten percent (10%)
thereof. Additionally, that aggregated amount shall further increase
by three percent (3%) for each month or portion thereof that Trinity Alps
remains unreimbursed for the entire amount then-due.
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1.6 At
Closing, every cost and/or expense related to the Claims and/or the Mine that
was paid by Trinity Alps for a benefit that lasts past 19 August 2009 shall be
reimbursed to Trinity Alps by American Sierra on a pro-rated
basis. Additionally, every cost and/or expense related to the Claims
and/or the Mine that was paid by Trinity Alps on or after 19 August 2009 but
prior to Closing shall, at Closing, be reimbursed to Trinity Alps by American
Sierra. After Closing and during the Term, every cost and/or expense
related to the Claims and/or the Mine that, after Closing, accrues and/or is
received by Trinity Alps or the Operating Entity or Holding Company, shall be
promptly paid by the Trust Account Administrator from funds paid into the Trust
Account hereunder. All such costs and expenses are itemized on the
attached Exhibit
D and shall be credited toward the First Semester Payment.
1.7 Trinity
Alps shall, prior to Closing, form the Operating Entity and Holding Company, and
purchase company record books for same, with the costs of the foregoing being
promptly reimbursed by American Sierra (such reimbursement amount expressly
including the attorneys’, legal, filing, formation and accounting fees incident
to the foregoing). All other costs related to the Claims and/or the
Mines shall be due from and paid by American Sierra through the Operating Entity
or, to the extent such expenses are related to the Claims and/or the Mines but
do not concern the Mine’s operating, through the Holding Entity, as part of the
Year One Work Plan, Year Two Work Plan, and/or such other work plan as may
hereafter be approved by the Parties and submitted to the Trust Account
Administrator for administration hereunder, respectively (collectively, the
“Plans”), with said
expenditures credited toward American Sierra’s $2,000,000.00 USD contribution
requirement under Section 1.4 above.
2. 75% OWNERSHIP
OPTION. So long as American Sierra: has paid the $2,000,000
within two (2) years from Closing, with such funds hereby irrevocably designated
and committed for expenditure under the Year One Work Plan, Year Two Work Plan,
and/or such other work plans as may be hereafter approved by both Parties in
writing, and as otherwise provided for in Section 1.4.3 above; has not failed to
cure a breach hereof or default hereunder within forty five (45) calendar days’
notice thereof; and is not then in breach of or default hereunder (each a “Condition Precedent”), then
“Vesting” will have
automatically occurred and the Holding Company and Operating Entity shall each
promptly thereafter issue American Sierra an equity interest in the Holding
Company and Operating Entity, respectively, equal to a 75% ownership interest
therein (“75% Ownership
Option”).
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3. INTERMEDIATE AND IMMEDIATE OWNERSHIP
INTEREST. In exchange for the Signing Fee, the LOI Option Fee,
and the Closing Payment, American Sierra shall as part of Closing receive a
seven percent (7%) founding-member membership interest in the Operating Entity
and Holding Company (“Immediate
Ownership Interest”) with Trinity Alps holding all other founding-member
membership interest in said statutory business entities. Thereafter
and until American Sierra satisfies every Condition Precedent detailed above in
Section 2 (and therefore deemed to have exercised the 75% Ownership Option),
American Sierra’s ownership interest in the Operating Entity and Holding Company
shall increase by one percentage point (1%) for each additional forty thousand
dollars ($40,000 USD) paid into the Trust Account hereunder for expenditure
under the Year One Work Plan, Year Two Work Plan, or such other work plan as may
hereafter be approved by the Parties — with such membership units being issued
in certificate form and dispatched by the Operating Entity and Holding Company
within thirty (30) calendar days after the end of the calendar quarter in which
the Trust Administrator releases each such $40,000-block of funds for
expenditure under the Year One Work Plan, Year Two Work Plan, or such other work
plan as may hereafter be approved by the Parties and submitted to Escrow Holder
for administration hereunder (“Intermediate Ownership
Interest”). To the extent the Operating Entity and/or Holding
Company is not controlled by American Sierra pursuant to the Voting Agreement
attached hereto as Exhibit C, the
Operating Entity’s and/or Holding Company’s failure to issue said membership
units as the case may be, shall constitute a material breach hereof and default
hereunder — subject to a ten (10) business day cure period. The
foregoing notwithstanding, and subject only to exercise of its 75% Ownership
Option, American Sierra’s Intermediate Ownership Interest shall not hereunder
exceed a forty percent (40%) ownership interest in either the Holding Company or
Operating Entity.
4. DEAL STRUCTURE.
4.1 Operating
Entity. Prior to Closing, the Parties will agree upon at least
two acceptable entity names and Trinity Alps shall select a name from those two
names and shall form a California domestic limited-liability company to act as
the Mine’s operator (“Operating
Entity”). Initially, the Operating Entity shall be seven
percent (7%) owned by American Sierra and ninety three percent (93%) owned by
Trinity Alps; however, the Operating Entity shall issue membership units to
American Sierra as provided for in Section 3 above in contemplation of American
Sierra’s exercise of the 75% Ownership Option or the resulting Intermediate
Ownership Interest. Before the Operating Entity is formed and, in any
event, prior to Closing, the Operating Entity’s operating agreement, and the
contemplated post-formation minutes and/or actions by unanimous written consent
must be approved by the Parties in writing.
4.2 Holding
Company. Prior to Closing, the Parties will agree upon at
least two acceptable entity names and Trinity Alps shall select a name from
those two names and shall form a California domestic limited-liability company
to receive and own the Claims (“Holding
Company”). Initially, the Holding Company shall be seven
percent (7%) owned by American Sierra and ninety three percent (93%) owned by
Trinity Alps; however, the Holding Company shall issue membership units to
American Sierra as provided for in Section 3 above in contemplation of American
Sierra’s exercise of the 75% Ownership Option or the resulting Intermediate
Ownership Interest. After the Holding Company is formed and after the
Holding Company’s operating agreement, and post-formation minutes and/or actions
by unanimous written consent are formally approved and adopted (all of which
must be previously approved in writing by the Parties and completed prior to
Closing), Trinity Alps shall promptly transfer the Claims to the Holding Company
by quitclaim deed. Thereafter, the Holding Company shall promptly
issue unit certificates to its members — with American Sierra receiving one or
more certificates that, in aggregate, represent a one percent (1%) ownership and
equity interest in the Holding Company for each $40,000 USD expended (as
provided for above in Section 3). In recognition of monies paid
hereunder at and/or prior to Closing, Trinity Alps hereby recognizes and
acknowledges that American Sierra shall, at the Holding Company’s formation, own
a seven percent (7%) ownership and equity interest in the Holding
Company. This process will repeat with each $40,000 USD-expenditure
from the Trust Account — until American Sierra’s ownership and equity interest
in the Holding Company is accurate (subject to the 40% equity cap set forth in
Section 3).
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4.3 Operating
Agreements. The Parties shall agree upon and execute an
operating agreement for each of the Holding Company and Operating Entity prior
to Closing and prior to transfer of the Claims into the Holding
Company.
4.4 Management
Control. By way of the voting agreement attached as Exhibit C (“Voting Agreement”), American
Sierra shall, from the date of Closing until the Voting Agreement’s expiration,
enjoy the exclusive, unfettered and unobstructed right to vote all of Trinity
Alps’ membership units in the Operating Entity and Holding Company (such that
American Sierra shall enjoy full management control of the Operating Entity and
Holding Company). The foregoing notwithstanding, Trinity Alps must
approve and consent to the contemplated articles of organization and an
operating agreement for the Operating Entity and Holding Company, respectively,
prior to the filing and/or adoption of same, respectively.
4.5 American Sierra Board of Directors
Seats. From the Effective Date until termination of this
Agreement or the Term’s end, as applicable, Trinity Alps shall appoint one third
(1/3) of the directors on American’s Sierra’s Board of Directors (the “Board”), to the maximum extent
permitted by Nevada law and American Sierra’s articles of
incorporation. To the extent that this power of appointment displaces
certain existing directors from their seats, American Sierra may increase the
number of Board seats to avoid such displacement. However, in no
event shall Trinity Alps’ appointees occupy less than one third of all such
seats / directorships.
Notwithstanding
the foregoing, at the Term’s end, Trinity Alps shall thereafter, on a
going-forward basis, only have the right to appoint one fifth (1/5) of the
directors on the Board. To the extent that this power of appointment
displaces certain existing directors from their seats, American Sierra may
increase the number of Board seats to avoid such
displacement. However, in no event shall Trinity Alps’ appointees
occupy less than one fifth of all such seats / directorships.
Upon
termination hereof by either Party, Trinity Alps shall thereafter no longer have
the right to appoint any directors to the Board.
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5. ESCROW TRUST ACCOUNT;
CLOSING.
5.1 Trust
Account. Within three (3) business days from the Effective
Date, Trinity Alps shall open an escrow account (“Trust Account”) with an
attorney-at-law or other trust account administrator to be selected by American
Sierra after the Effective Date and approved by Trinity Alps in its sole but
reasonable discretion prior to Closing (“Trust Account
Administrator”). The Trust Account Administrator shall
establish and administer the Trust Account according to this Agreement’s terms
and conditions (the “Escrow
Instructions”). The cost of the Trust Account and its
administration, including Trust Account Administrator’s fees, shall be paid for
by American Sierra and credited toward the contemplated $2,000,000 contribution
described above in Section 1.4.
5.2 Closing. “Closing” means consummation of
the underlying transaction as memorialized herein, including, but not limited
to, the complete satisfaction of all Closing conditions set forth herein and the
timely and complete performance of all Closing obligations. Closing
must occur on or before 23 October 2009 (unless hereafter extended by the
Parties by signed, written amendment hereof). Despite the fact that
time is of the essence, Closing shall only occur, if ever, after both Parties
are satisfied in their respective, sole and absolute determinations that, among
other things: all regulatory approvals required to consummate the Agreement’s
underlying transaction are obtainable; both Party’s boards of directors have
approved in a satisfactory manner the Agreement’s underlying transactions; all
required third-party consents have been received and/or are readily obtainable;
all due diligence investigations by a Party of the other Party and/or otherwise
concerning the contemplated transaction are acceptable to the investigating
Party; and all representations and warranties or other promises or guarantees
made by the other Party are complete and accurate as of Closing.
6. YEAR ONE WORK PLAN; YEAR TWO WORK
PLAN.
6.1 Year One Work
Plan. A plan for the Mine’s operation, exploration and
development for the twelve (12) months immediately following Closing is attached
hereto as Exhibit
B. As noted above, that plan has been defined herein as the
Year One Work Plan.
The
Parties have each reviewed and approved the Year One Work Plan, and hereby so
direct the Trust Account Administrator to abide by and honor same.
6.2 Year Two Work
Plan. A plan for the Mine’s operation, exploration and
development for the thirteenth (13th)
through twenty fourth (24th) months
following Closing (already defined herein as the Year Two Work Plan) shall be
prepared by the Operating Company and submitted to American Sierra and Trinity
Alps for approval within ten (10) months from Closing. Neither
American Sierra nor Trinity Alps shall unreasonably withhold its approval of and
consent to the Year Two Work Plan, and no such refusal to approve of and consent
to same shall be lodged without an itemized, detail explanation and a suggested,
alternative Year Two Work Plan for consideration.
7. TERM & TERMINATION. This Agreement
begins on the Effective Date and automatically and immediately expires three (3)
years thereafter (the “Term”). This
Agreement may be terminated prior to the end of the Term by mutual written
consent of the Parties or by either Party if the other Party does not timely and
fully cure a material breach hereof or default hereunder as provided for
herein.
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Specifically,
if a material breach hereof or default hereunder by either Party is not cured
within forty five (45) calendar days after the breaching or defaulting Party is
notified of same, the non-breaching and/or non-defaulting Party may, in its sole
and arbitrary discretion, immediately terminate this Agreement and retain any
money already paid hereunder. After such termination, all
then-prospective, then-executory obligations hereunder shall be null and void
(except as otherwise expressly provided for herein). Despite anything
to the contrary herein, however, so long as Trinity Alps has fully and timely
cured any breach hereof or default hereunder, Trinity Alps shall nevertheless
receive and irrevocably and permanently retain the Signing Fee, the LOI Option
Fee, and all Stock and Warrants, regardless of any expiration or termination
hereof.
8. REPRESENTATIONS,
WARRANTIES AND COVENANTS.
8.1 By Trinity Alps. On
the Effective Date and as of Closing, Trinity Alps hereby represents, warrants
and covenants to American Sierra that, except as was already disclosed to
American Sierra in the title report and/or via overnight mail on Thursday, 2
July 2009 or otherwise, all of which are attached hereto as Exhibit
E:
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8.1.1
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its
entry into this Agreement does not violate any agreement with, or rights
of, any other party;
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8.1.2
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it
shall honor and timely, properly and completely fulfill every obligation
imposed upon it herein;
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8.1.3
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it
holds any and all rights necessary to perform its obligations under this
Agreement; and
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8.1.4
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with
respect to Claims, and subject to the paramount title of the United
States, to the best of Trinity Alps’ knowledge: (i) the Claims were
properly laid out and monumented; (ii) all required location and
validation work was properly performed; (iii) location notices and
certificates were properly recorded and filed with appropriate
governmental agencies; (iv) all assessment work required to hold the
unpatented mining claims has been performed and all governmental fees have
been paid as necessary to maintain the Claims through the assessment year
ending September 1, 2010; (v) all affidavits of assessment work,
evidence of payment of governmental fees, and other filings required to
maintain the claims in good standing have been properly and timely
recorded or filed with appropriate governmental agencies; (vi) the
claims are free and clear of encumbrances or defects in title; (vii) the
conditions existing on or with respect to the Claims and its ownership and
operation of the Claims are not in violation of any laws (including
without limitation applicable environmental laws) nor causing or
permitting any damage (including Environmental Damage, as defined below)
nor are they the subject of any pending or threatened litigation; (viii)
there have been no past violations by it or by any of its predecessors in
title of any environmental laws or other laws continuing to affect the
Claims, nor any past creation of damage or threatened damage to the air,
soil, surface waters, groundwater, flora, fauna, or other natural
resources on, about or in the general vicinity of the Claims
(“Environmental Damage”); and (ix) there are no directly conflicting
mining claims. Nothing in this subsection, however, shall be
deemed to be a representation or a warranty that any of the unpatented
mining claims contains a valuable mineral
deposit.
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8.2 By American
Sierra. American Sierra hereby represents, warrants and
covenants to Trinity Alps that, on the Effective Date and as of
Closing:
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8.2.1
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its
entry into this Agreement does not violate any agreement with, or rights
of, any other party;
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8.2.2
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it
shall honor and timely, properly and completely fulfill every obligation
imposed upon it herein; and
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8.2.3
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it
holds any and all rights necessary to perform its obligations under this
Agreement.
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8.2.4
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Trinity
Alps shall enjoy the unfettered right to participate in each and every
future offering of shares, regardless of class, in American
Sierra.
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8.2.5
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If
Trinity Alps’ equity stake in American Sierra is to be diluted by twenty
percent (20%) or more because of any stock issuance or aggregation of
stock issuances by American Sierra, then, in addition to all other rights
and remedies afforded Trinity Alps hereunder, American Sierra shall,
free-of-charge and at Trinity Alps’ discretion and direction, immediately
issue Trinity Alps an additional five hundred thousand (500,000) shares of
Stock and an additional five hundred thousand (500,000)
Warrants.
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8.2.6
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it
has and, at Closing, will have, only one (1) class of stock;
and
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8.2.7
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it
is a “reporting issuer” with the United States Securities and Exchange
Commission.
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8.3 Nothing
More. Neither Party makes any representation, warranty,
covenant or guarantee to the other Party not expressly set forth
herein.
9. XXXXX
RETENTION. American Sierra shall, prior to Closing, enter into
a written independent contractor agreement with Xxxxxxx X. Xxxxx, whereby, for
one (1) year from Closing, American Sierra shall pay him on a monthly basis and
in advance $7,500 per month to lead operation of the Mine. This
agreement shall automatically renew and extend for an additional one-year term,
also at $7,500 per month, unless Xx. Xxxxx receives a written “notice of
non-renewal” no less than forty five (45) days’ prior to the initial, one-year
term’s expiration. The foregoing notwithstanding, the independent
contractor agreement shall have a 30-day termination-for-cause
provision. All money paid to Xxxxxxx X. Xxxxx under such independent
contractor agreement shall be credited toward the contemplated $2,000,000
contribution described above in Section 1.4.3.
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The Parties hereby recognize that this
requirement has been requested by Trinity Alps with the intention that Xx.
Xxxxx’x expressly contracted involvement establishes a continuity of operations
and therefore benefits both Parties.
10. DOCUMENT PREPARATION
COSTS. Although the Parties each recognize and acknowledge
that this Agreement was prepared by Trinity Alps’ legal counsel for Trinity
Alps’ sole benefit, American Sierra has been represented by legal counsel
through this entire matter’s history, and this Agreement is therefore the result
of the arms length negotiation of two sophisticated, represented
parties. Accordingly, this Agreement shall be construed fairly with
no inference drawn against the drafting Party — and American Sierra shall, at
and as part of Closing, reimburse Trinity Alps for fifty percent (50%) of
the amount due from Trinity Alps to its legal counsel, Xxxxxxxx Law
Center Ltd., to negotiate, draft and revise this Agreement. Money
reimbursed under this Section 10 shall not be credited toward the contemplated
$2,000,000 contribution described above in Section 1.4.3.
11. ARBITRATION. With
the exception of equitable relief granted under Section 12.9 hereof, all claims,
disputes and other matters in question arising out of or relating to this
Agreement or the breach or interpretation thereof, will be resolved by binding
arbitration before a sole arbitrator, selected by the mutual agreement of the
Parties, to be conducted in Carson City, Nevada. The arbitration will
be administered by the American Arbitration Association under its Commercial
Arbitration Rules. Any award or decision obtained from any such
arbitration proceeding will be final and binding on the Parties, and judgment
upon any award thus obtained may be entered in any court having jurisdiction
thereof. As provided for in the introductory clause to this Section
11, nothing herein contained will bar the right of a Party to seek to obtain
judicial injunctive relief or other judicial provisional remedies against
threatened or actual conduct that will cause loss or damages under the usual
equity rules, including the applicable rules for obtaining preliminary
injunctions and other provisional remedies.
12. GENERAL
PROVISIONS
12.1 Miscellaneous. The
exhibits referenced in this Agreement are hereby incorporated herein as though
expressly set forth. When used herein, the terms defined when
initially capitalized have the ascribed meanings. This Agreement may
be executed in counterparts, with each deemed an original but all constituting
one instrument. Facsimile and photocopied signatures bind the
Parties. Either Party’s nonperformance shall be excused to the extent
rendered impossible by: strike; fire; flood; governmental acts, orders or
restrictions; and/or any other similar reason where failure to perform is beyond
the control and not caused intentionally or negligently by the nonperforming
Party. No Party is an agent or partner with the other, and no Party
has the authority to assume or create any obligation for or on behalf of the
other. This Agreement’s title and headings are for reference only and
do not define or limit this Agreement’s scope. All decisions to be
made by a Party hereunder shall be at such Party’s sole and arbitrary
discretion, except as otherwise provided for herein. Any provision
herein that may reasonably be interpreted as being intended to survive this
Agreement’s termination or expiration shall do so. All payments
required herein are due in United States Dollars from an immediately available
source. This Agreement’s time periods shall be computed by excluding
the first day and including the last. Except if otherwise
specifically noted, time is of the essence and all periods referencing days
shall be measured by calendar days, and, if the last day in a given period falls
on a weekend or legal holiday, then the last day thereof shall be the next
business day thereafter. Except as may otherwise be specified herein, no action
by a Party against another for breach hereof is limited to breach of contract
remedies.
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12.2 Governing Law; Jurisdiction /
Venue. This Agreement will be exclusively interpreted and
enforced in a state court in Carson City, Nevada under Nevada law (without
reference to its choice of law rules). The
Parties hereby consent to such venue, governing law, and the jurisdiction of
such court.
12.3 Confidentiality. This
Agreement’s terms and any information marked confidential or proprietary that is
afforded by one Party to the other shall not be disclosed by the receiving Party
(“Receiving Party”) to
any other person or entity, except as required: by court order, by any
governmental authority, by law or any other legal process; or for the legitimate
conduct of the Receiving Party’s business (such as a disclosure to the Party’s
attorney or accountant), but only as necessary for the foregoing
purpose. The Receiving Party shall take reasonable precautions to
prevent any further disclosure of the protected information by those to whom
disclosure is herein permitted. Nothing herein shall limit or be read
or construed to imply that the consent or permission of the other Party is
required for a Party to issue, publish and/or disseminate truthful, accurate and
complete information regarding the underlying relationship — so long as same is
done in the releasing Party’s ordinary course of business and conduct, including
by way of press release or conference.
12.4 Entire
Agreement. This Agreement sets forth the Parties’ entire
agreement and understandings relating to the subject matter herein and merges
and supersedes all prior agreements, writings and
understandings. This Agreement (and any waiver of any rights
herefrom) shall not be amended or modified unless in a writing signed by the
Parties, and is intended by the Parties to be read in concert with the
contemplated operating agreements for the Operating Entity and Holding
Company. To the extent that this Agreement and either or both of such
operating agreements conflict, this Agreement shall govern.
12.5 Legal Expenses. The
prevailing Party in any legal action brought against the other Party (and
relating hereto) shall be entitled, to, inter alia, reimbursement for
its expenses, including court costs and reasonable attorneys’ and expert witness
fees and expenses.
12.6 Benefit. This
Agreement binds (and inures to the benefit of) the Parties, and the Parties’
respective heirs, assigns, successors and legal representatives, subject to any
and all assignment restrictions set forth herein. However, this Agreement is not a
third party beneficiary contract (and no third party shall have any claim or
right of action hereunder).
12.7 Severability /
Waiver. If a term hereof is held by a court of competent
jurisdiction to be invalid or unenforceable, then all of this Agreement’s
remaining terms shall, in sum, remain effective as if the objectionable term was
not included (and the invalid or unenforceable term shall be judicially modified
and read by the court to be enforceable to the maximum extent possible, if at
all). No delay, omission or failure to exercise any right or remedy
provided for herein shall be deemed a waiver thereof or an acceptance of the
event giving rise to such remedy. Rather, every such right or remedy
hereunder may be used as the Party exercising it deems
expedient.
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12.8 Assignment. Neither
this Agreement nor the rights and obligations hereunder shall be assigned or
transferred by either Party, or to or by any third party (including by court
order, operation of law, merger, statute, regulation, ordinance or otherwise)
without the other Party’s prior express written consent. Any attempt
to otherwise assign this Agreement will be ineffective.
12.9 Injunctive
Relief. The Parties acknowledge that monetary damages are an
inadequate remedy for the breach of certain provisions
hereof. Accordingly, if either Party breaches (or threatens to
breach) any of his/her obligations hereunder, the other Party shall be entitled,
without proving actual damage sustained, to a stipulated temporary restraining
order, and shall thereafter be entitled to apply for a preliminary injunction,
permanent injunction and/or order compelling specific performance, to prevent
that continued or threatened breach. Additionally, either Party may
pursue other remedies available to it, including the recovery of
damages.
12.10 Notice. Any notice
given hereunder shall be in writing and effective upon confirmed delivery to the
appropriate Party by personal delivery, recognized overnight delivery service,
or five (5) business days after being sent via first class mail postage prepaid
at/to the respective Party’s address set forth at the beginning of this
Agreement (or at/to such other address as a Party may provide by written notice
to the other Party from time to time).
12.11 Independent
Investigation. Each
Party has: independently evaluated the desirability of entering into this
Agreement and is not relying on any representation, guarantee or statement not
set forth herein; and has been afforded the opportunity to seek legal counsel
with regards to its rights and obligations and has consulted or refused such
counsel, and accordingly negotiated this Agreement.
12.12 Execution. The
Parties have executed this Agreement personally or by duly authorized
representative and acknowledge that they understand and agree to be bound by
it.
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TRINITY ALPS RESOURCES,
INC.
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A
Nevada Domestic Corporation
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A
Nevada Domestic Corporation
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By: Xxxxxxx
X. Xxxxx, President
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By: Xxxxxxxx
Xxxxxxxx, Chief Financial Officer
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/s/ Xxxxxxx X. Xxxxx
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/s/ Xxxxxxxx
Xxxxxxxx
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