Contract
WHEREAS,
CONSOLIDATION SERVICES, INC., of 0000 X. Xxxxx Xxxxxx Xxxxxxx, Xxxxxxxxx, Xxxxxx
00000, (hereafter referred to as the “First Party”) is purchasing nine (9)
certain tracts or parcels of land lying and being on Cow Creek, Xxxxxx County,
Kentucky, and which are more fully described in Exhibit “A” which is attached
hereto and incorporated herein by reference (hereafter referred to as the
“Property”); and
WHEREAS,
AMS DEVELOPMENT, INC., of 000 Xxxxxxxxxxxx Xxxx, Xxxxxx, Xxxxxxxx 00000,
(hereafter referred to as the “Second Party”) is a Kentucky limited liability
corporation which is in the business of providing engineering, consulting and
administrative services necessary to developing real property for the mining and
removal of coal; and
WHEREAS,
First Party desires to employ Second Party to provide engineering, consulting
and administrative services in the development of the Property;
NOW,
THEREFORE, this agreement is entered into by and between First Party and Second
Party on this 26th day of August, 2008, pursuant to the following terms and
conditions:
1. Second
Party agrees that it will provide engineering, consulting and administrative
services necessary to develop the Property so that coal mining operations will
be conducted to recover the mineable and merchantable coal reserves which are
located on and under the Property. While the parties agree that
surface mining operations are preferred, Second Party shall provide services for
auger and/or highwall mining operations when these methods are more practicable
to enhance the recovery of the mineable and merchantable coal
reserves.
2. Second
Party agrees that the mining and reclamation plan will be structured to provide
for and enhance long term organic farming, with particular attention directed to
cattle farming, once the mining operations and reclamation has been complete on
the Property. Examples of enhancement techniques include seeding
mixtures, permanent pond construction, access road construction and leaving a
gentle contour to slopes to the extent practical.
3. Second
Party understands and agrees that a fair economic balance of coal recovery and
long term use of organic farming will be a primary concern in any and all mining
and reclamation planning.
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4. Second
Party understands and agrees that a primary consideration in developing the coal
recovery plan will be to maximize to the extent possible the area available for
cattle farming during the coal removal operation.
5. Second
Party shall prepare and submit, or cause to be submitted any and all information
and documents required by all regulatory and administrative agencies which
oversee coal mining and reclamation. Such submissions include, but
are not limited to, the following: coal mining permit applications with mining
and reclamation operation plans, mine license applications, applicable Division
of Water permit applications, applicable permit applications required by the
U.S. Army Corps of Engineers, mining plans required by the U.S. Mine Safety and
Health Administration, and any and all other required submissions.
6. The
Parties understand and agree that the project development plan includes the goal
of commencing mining within six months of the date of this agreement, and pledge
and agree to use their reasonable best efforts to accomplish this
goal.
7. The
consideration which First Party shall provide to this agreement for
the services to be provided by Second Party is as follows: the sum of
$100,000.00 which has heretofore been paid, convey one-half of the coal rights
to the property unto Second Party, and pay the sum of $400,000.00 by the
issuance of 200,000 shares of unregistered common stock of Consolidation
Services, Inc, valued at $2.00 per share (hereafter referred to as the
“Shares”). The Shares shall be issued as follows: Xxx Xxxxxxxx
Enterprises, Inc. - 45,000 shares, Xxxxx Xxxxx Xxxxxxx - 45,000 shares, Sitter
Drilling, LLC - 37,500 shares, AMS Development, LLC - 72,500
shares. The Shares shall issued subject to the conditions set forth
hereafter.
a. The
issue of the Shares shall be within seven days of the closing for the purchase
of the Property. The shares shall be issued in four certificates as
specified above. All entities taking title to the Shares shall
collectively and individually be legally obligated to abide by the lock up/leak
out terms specified in subsequent paragraphs. First Party agrees to
include the Shares in the first registration statement which First Party files
with the Securities and Exchange Commission, where said shares can be legally
included. It is First Party’s intent to file a registration statement
with these shares as soon as possible.
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b. The
Shares shall be sold subject to a lock up agreement (hereafter referred to as
the “Lock Up”), as specified in item paragraph d., and the $400,000.00 value of
the Shares shall be guaranteed (hereafter referred to as the “Guarantee”) as
specified in paragraph f. below.
c. The
Lock Up shall permit the four share owners combined to sell 4,000 shares per
week (the “Weekly Quota”) commencing on the date the proposed registration
statement is declared effective by the SEC and ending fifty weeks
later. Share owners may elect to not sell the Weekly
Quota.
d. Any
shares not sold on schedule will not be eligible for sale until after the Lock
Up period. After the Lock Up period, any weekly quota not sold on
schedule will be eligible for sale as the holder of said shares deems
desirable. There shall be no volume limitations on the sale of said
shares. The Guarantee will not apply to the shares and the surplus
payable to First Party will also be null and void for said
shares. Share owners shall be deemed to be a speculator on said
shares.
e. First
Party shall Guarantee the $400,000.00 value of the Shares as long as the Shares
are sold in compliance with the Lock Up. Share owners shall submit
copies of all sales transactions of the Shares to First Party in order to allow
determination of money owed by First Party to share owners in the event of a
deficit. Share owners shall submit said copies of sales transactions
to First Party on a monthly basis, by the 10th day of each month for the
preceding month’s sales transactions. At the end of the Lock Up First
Party and share owners shall calculate the total amount received through the
sale of the Shares. In the event the sales of the Shares averages
less than the market price used to calculate the number of shares issued ($2.00
per share), First Party shall pay share owners an amount sufficient to bring the
average sales price for the entire Lock Up period to $2.00 per
share. In the event share owners sell more shares than permitted at
any time during the Lock Up, the Guarantee shall be null and void for all sales
of Shares, provided however, any surplus shall be payable to First
Party.
f. In
the event share owners sell shares at a price that is greater than $5.00 per
share, share owners shall pay First Party any surplus. Said surplus
shall be determined and payable as with the deficit payment described in the
preceding paragraph.
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WITNESSETH,
the signatures of the parties hereto on the day and date set forth
hereinabove.
FIRST
PARTY: CONSOLIDATION
SERVICES, INC.
By:_/s/ Xxxxxx X.
Xxxxxx
XXXXXX X.
XXXXXX, PRESIDENT
ATTEST
Xxxxx X.
Xxxxxx
SECRETARY
SECOND
PARTY:
AMS DEVELOPMENT, INC.
By:_/s/ Xxxxx Xxxxx
Xxxxxxx
XXXXX
XXXXX XXXXXXX,
MANAGING
MEMBER
STATE OF
NEVADA
COUNTY OF
______________________
Subscribed
and sworn to before me by XXXXXX X. XXXXXX, President of CONSOLIDATION SERVICES,
INC., a Delaware corporation, Grantor, for and on behalf of said corporation by
him as its President, and attested by ___________________________,
Secretary, on this _____ day of _____________, 2008.
___________________________
NOTARY
PUBLIC
My
commission expires ________________________
(SEAL)
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STATE OF
KENTUCKY
COUNTY OF
Laurel
Subscribed
and sworn to before me by XXXXX XXXXX XXXXXXX, Managing Member of AMS
DEVELOPMENT, LLC., for and on behalf of said corporation by him as its Managing
Member, on this 26th day of August, 2008.
__/s/______________________
NOTARY
PUBLIC
My
commission expires 12
July 2012
This
Instrument Prepared By
Xxxxxxx
X. Xxxxxx
Attorney
at Law
Jackson,
Kentucky 41339
__________________________________
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