EXHIBIT 10.5
SETTLEMENT AGREEMENT
Between and Among:
NORD RESOURCES CORPORATION, a body corporate. with offices in Dragoon,
Arizona ("NRC");
NORD PACIFIC LIMITED, a body corporate of the Province of New Brunswick,
Canada. with offices in Albuquerque, New Mexico ("NORD PACIFIC");
XXXX X. XXXXX. and individual residing in Albuquerque, New Mexico
("XXXXX");
XXXXXX X. XXXXX, an individual residing in Albuquerque. New Mexico;
XXXX XXXXXXX. an individual residing in St. Georges, South Australia
("XXXXXXX");
XXXXXXX XXXXXXX. an individual residing in Albuquerque, New Mexico
("LANSING");
XXXX XXXXXXXX. as trustee for the Retirement Trust of Xxxx X. Xxxxx and
Xxxxxx X. Xxxxx;
XXXXXX X. XXXXXX an individual residing in Laguna Beach, California
("XXXXXX");
XXXXXX XXXXXXXX an individual residing in Oro Valley, Arizona ("XXXXXXXX");
XXXXX XXXXXX an individual residing in Dragoon, Arizona ("XXXXXX"); and
XXXXXXX XXXXXXXX an individual residing in Xxxxxx, Arizona ("XXXXXXXX");
RECITALS:
WHEREAS:
X. Xxxx Resources Corporation commenced an action in the Court of Queen's
Bench of the Province of New Brunswick. Canada, Trial Division Judicial
District of Saint Xxxx, Court File No: S1MJ25103 (the "NB ACTION") against
Nord Pacific Limited, Xxxx X. Xxxxx, Xxxxxx X. Xxxxx, Xxxx Xxxxxxx, Xxxxxx
Xxxxxxx and Xxxx Xxxxxxxx as trustee for the Retirement Trust of Xxxx X.
Xxxxx and Xxxxxx Xxxxx (collectively, including Nord Pacific, the "NB
DEFENDANTS").
B. NRC and Xxxxxx commenced Action No. CV-2002 in the Second Judicial District
Court in the State of New Mexico (the "NEW MEXICO ACTION") against Nord
Pacific, Xxxxx,
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Lansing and Xxxxxxx (collectively the NEW MEXICO DEFENDANTS"), who filed
counterclaims (the "NEW MEXICO COUNTERCLAIMS") against NRC, Xxxxxx and Xxxx
Xxxxxxxxx (collectively the "NEW MEXICO COUNTER-DEFENDANTS").
X. Xxxx Pacific commenced Action No. CIV 03-0799 BB/ACT in the United States
District Court for the District of New Mexico (the "FEDERAL ACTION")
against NRC, Xxxxxx, Xxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxx and Xxxxxxxx
(collectively the "FEDERAL DEFENDANTS").
D. NRC and the NB Defendants, as well as their respective principals,
officers, directors, subsidiaries, associates. affiliates, agents,
predecessor and successor corporations, heirs, assigns and administrators,
as the case may be ("NB ASSOCIATED PARTIES"), wish to finally and
completely resolve any and all claims or counterclaims (including the New
Mexico Counterclaims) that were made. ought to have been made or could have
been made in the NB Action, including but not limited to any claim for
costs in the Action (the "NB CLAIMS"), and to that end acknowledge and
agree that the Recitals herein are true and that. they form part of the
terms of this Settlement Agreement.
X. Xxxx Pacific and the New Mexico Defendants and the New Mexico
Counter-Defendants other than Xxxx Xxxxxxxxx. as well as their respective
principals, officers, directors, subsidiaries, associates, affiliates,
agents, predecessor and, successor corporations, heirs, assigns and
administrators, as the case may be ("NEW MEXICO ASSOCIATED PARTIES"), wish
to finally and completely resolve any and all claims or counterclaims that
were made (including the New Mexico Counterclaims), ought to have been made
or could have been made in the New Mexico Action, including but not limited
to any claim for costs in the New Mexico Action and the New Mexico
Counterclaims (the "NEW MEXICO CLAIMS"), and to that end acknowledge and
agree that the Recitals herein are true and that they form part of the
terms of this Settlement Agreement.
X. Xxxx Pacific and the Federal Defendants other than Xxxx Xxxxxxxxx, as well
as their respective principals, officers, directors, subsidiaries,
associates, affiliates, agents, predecessor and, successor corporations,
heirs, assigns and administrators, as the case may be ("FEDERAL ASSOCIATED
PARTIES"), wish to finally and completely resolve any and all claims or
counterclaims that were made, ought to have been made or could have been
made in the Federal Action. including but not limited to any claim for
costs in the Federal Action (the "Federal Claims"), and to that end
acknowledge and agree that the Recitals herein are true and that the' form
part of the terms of this Settlement Agreement.
G. All the parties hereto acknowledge and agree that there is valid
consideration supporting this Settlement Agreement. including the
inducement to Allied Gold Limited ("ALLIED"):
(a) to enter into an arrangement agreement (the "ARRANGEMENT AGREEMENT")
under which Allied would exchange shares of Allied for all of the
shares of the Corporation and Nord Pacific shareholders and NRC would
be entitled to benefit therefrom as a shareholder, and
(b) to enter into a credit facility agreement (the "CREDIT AGREEMENT")
contemplating whereunder Allied would obtain notes of Nord Pacific
convertible into shares of
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Nord Pacific in exchange for certain advances to be made to Nord
Pacific to pay certain costs and expenses of Nord Pacific including
historic costs of Nord Pacific;
(collectively the Arrangement Agreement and the Credit Agreement are
hereinafter referred to as the "ALLIED AGREEMENTS");
NOW THEREFORE the parties hereto agree to the following TERMS:
1. The terms of this Settlement Agreement shall be disclosed by press release
mutually agreed by NRC and Nord Pacific and may be described in documents
required to be filed by Nord Pacific or which relate to e Arrangement
Agreement.
2. It is expressly acknowledged by etch of the parties hereto that there is no
admission of liability on the part of the NB Defendants for any of the NB
Claims and there is no admission liability on the part of the New Mexico
Defendants for the New Mexico Claims or the Federal Defendants for the
Federal Claims and in each case such liability is denied.
3. All parties acknowledge that the directors of Nord Pacific are Xxxxxxx,
Xxxxx and Lansing.
4. In order to allow the Board of Directors of Nord Pacific to immediately
approve and for Nord Pacific to enter into this Settlement Agreement and
the Allied Agreements, each of Hirsch, Anderson, Xxxxxx and Xxxxxxxx who
were purported to be elected on June 28, 2003 agree to resign effective
immediately from any position they may have on the Board of Directors of
Nord Pacific and from any office or employment they may have in Nord
Pacific and to release Nord Pacific from any claims in respect thereof. NRC
and Xxxxxx shall forthwith petition the Court of Queen's Bench of the
Province of New Brunswick, Canada, Trial Division Judicial District of
Saint Xxxx, to declare that the directors of Nord Pacific are Xxxxxxx.
Lansing and Xxxxx and that Xxxx Xxxxxxxxx is not a director thereof and
Nord Pacific shall support NRC in this regard.
5. NRC shall cause its counsel to take all action necessary to withdraw the NB
Action without costs. The NB Defendants hereby authorize the solicitors for
NRC to execute on their behalf and to file all documents necessary to
achieve the same and shall consent to any order of the New Brunswick Court:
(i) terminating the New Brunswick court's interim order; and (ii) declaring
that the existing directors of Nord Pacific are Xxxxx, Lansing and Xxxxxxx
and that Xxxx Xxxxxxxxx is not a director thereof;
6. NRC represents and warrants that it has delivered to PGM Ventures
Corporation ("PGM") an executed copy of a release and withdrawal of the
letter of October 9, 2003 in a form which has been agreed upon between NRC
and PGM.
7. Upon the Board of Directors of Nord Pacific approving and ratifying this
Settlement Agreement and the entry into of the Allied Agreements:
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(a) Each of Nord Pacific and NRC shall provide to each other corporate
resolutions evidencing that this Settlement Agreement has been
approved and shall immediately use their best efforts to complete
documentation of the matters set forth herein.
(b) Nord Pacific shall cause its counsel to promptly file with the Second
Judicial District Court in the State of New Mexico an order dismissing
the New Mexico Action and the New Mexico Counterclaims without costs
and to promptly file with the United States District Court for the
District of New Mexico an order dismissing the Federal Actions without
costs. The New Mexico Defendants hereby authorize the solicitors for
Nord Pacific to execute on their behalf and to file all documents
necessary to achieve the same.
(c) The parties hereby agree:
(i) The 4,000,000 shares in Nord Pacific Limited issued to Xxxx
Xxxxxxxx in trust for Xxxx X. Xxxxx ("XXXXX") and Xxxxxx X. Xxxxx
in satisfaction of the debt of an amount U.S.$517,311.40 by
resolution of the Board of Directors of Nord Pacific dated March
31, 2003 are accepted as having been validly issued;
(ii) The 400,000 shares issued to Xxxxx by resolutions of the Board of
Directors of Nord Pacific dated February 25, 2002 and December
16, 2002 are accepted as having been validly issued;
(iii) The 400,000 shares issued to Lansing by resolutions of the Board
of Directors of Nord Pacific dated February 25, 2002 and December
16, 2002 are accepted as having been validly issued;
(iv) The 400,000 shares issued to Xxxxxxx by resolutions of the Board
of Directors of Nord Pacific dated February 25, 2002 and December
16, 2002 are accepted as having been validly issued;
(v) Nord Pacific shall acknowledge its indebtedness to Nord Resources
Corporation, which indebtedness shall be subordinated to all
other creditors pursuant to a Subordination Agreement (in
substantially the form of Subordination Agreement set forth as a
Schedule to the Credit Facility Agreement), in an amount of
Australian $280,000 upon the NB Action being withdrawn or
dismissed without costs and the interim order of the court
therein dated June 26, 2003 being terminated, and the Board of
Nord Pacific thereby warrants that it shall pass a resolution to
authorize such indebtedness and the Arrangement Agreement shall
contemplate that the arrangement thereunder shall convert such
indebtedness at a rate of Australian $0.20 per share into
1,400,000 shares of Allied;
(vi) NRC and its NB Associated Parties, on the one hand, and the NB
Defendants and their NB Associated Parties, on the other hand,
hereby release and forever discharge each other from any and all
actions, causes
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of action, claims and demands for damages, loss or injury,
howsoever arising and in any way relating to the NB Action,
including the NB Claims;
(vii) Nord Pacific and its New Mexico Associated Parties, on the one
hand, and the New Mexico Defendants, other than Xxxx Xxxxxxxxx,
and their New Mexico Associated Parties, on the other hand,
hereby release and forever discharge each other from any and all
actions, causes of action, claims and demands for damages, loss
or injury, howsoever arising and in any way relating to the New
Mexico Action or the New Mexico Counterclaims, including the New
Mexico Claims;
(viii) Nord Pacific and its Federal Associated Parties, on the one
hand, and the Federal Defendants, other than Xxxx Xxxxxxxxx, and
their Federal Associated Parties, on the other hand, hereby
release and forever discharge each other from any and all
actions, causes of action, claims and demands for damages, loss
or injury, howsoever arising and in any way relating to the
Federal Action, including the Federal Claims;
(ix) All agree not to make any claim or take any proceedings against
any other person, corporation or entity who might claim
contribution or indemnity under the provisions of any
legislation, regulations or under law from any party to this
Settlement Agreement;
(x) Nord Pacific will re-convey to NRC the 20% carried interest held
by Nord Pacific in NRC's Xxxxxxx Camp copper property located
near Dragoon, Arizona and NRC shall assume any and all
obligations with respect to such property, past, present or
future and shall indemnify and save harmless Nord Pacific and its
subsidiaries, directors, officers and shareholders, past. present
or future in respect to any claims, obligations or liabilities in
respect of such property;
(xi) NRC and Nord Pacific release each other from any financial
obligations associated with the joint office cost sharing
agreement for the Albuquerque office at 000 Xxxxx Xxxxxx X.X.
Xxxxxxxxxxx, Xxx Xxxxxx;
(xii) NRC thereby agrees to accept that the balance of the shares
issued by resolutions of the Board of Directors of Nord Pacific
dated February 25, 2002 and December 16, 2002 being the 1.1
million Nord Pacific shares to certain Nord Pacific employees and
consultants (other than Xxxxx, Lansing and Xxxxxxx), the issuance
of 150,000 Nord Pacific shares to Warrama Consulting Pty. Ltd.
and Xxxxxxx Xxxxxx and the future issuance of an additional
1,431,482 Nord Pacific shares to Xxxxxx Xxxxxx and that NRC
releases the recipients of such shares and the NB Defendants from
any claim in respect thereof.
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(xiii) NRC will release all business records belonging to Nord Pacific
in its posession including those which are being held at Xxxxxxx
Camp.
(xiv) NRC will remove all information pertaining to Nord Pacific from
its website and shall not reintroduce such information in the
future.
8. It is further agreed that each of NRC and Nord Pacific will fully disclose
to each other all communications between themselves and Allied relating to
the Arrangement Agreement
9. This Agreement may be executed by facsimile in counterparts each of which
when executed and delivered shall together constitute one and the same
instrument.
10. This Agreement is governed by the law of the Province of New Brunswick,
Canada.
IN WITNESS WHEREOF we have hereunto set our hands this ___th day of December,
2003.
NORD RESOURCES CORPORATION NORD PACIFIC LIMITED
Per: /s/ Xxxxxx X. Xxxxxx Per: /s/ Xxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxxx Name: Xxxx X. Xxxxx
Title: Chairman & CEO Title: President & CEO
Per: /s/ Xxxxxx X. Xxxxxxxx Per: /s/ Xxxxxxxx Somad
-------------------------------- -----------------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxxxxxx Somad
Title: President Title: Secretary
/s/ Xxxx X. Xxxxx /s/ Witness
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Xxxx X. Xxxxx Witness
/s/ Xxxxxx X. Xxxxx /s/ Witness
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Xxxxxx X. Xxxxx Witness
/s/ Xxxx Xxxxxxx /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx Witness
/s/ Xxxxxx Xxxxxxx /s/ Xxxxxx X. Xxxxxx
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Xxxxxx Xxxxxxx Witness
/s/ Xxxx Xxxxxxxx /s/ Witness
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Xxxx Xxxxxxxx, Witness
as trustee for the Retirement Trust
of Xxxx X. Xxxxx and Xxxxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxxx /s/ Witness
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Xxxxxx X. Xxxxxx Witness
/s/ Xxxxxx X. Xxxxxxxx /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx Witness
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Xxxxx Xxxxxx Witness
/s/ Xxxxxxx Xxxxxxxx /s/ Xxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx Witness
PROMISSORY NOTE
Australian $280,000 Dated: December 20, 2003
Pursuant to the Settlement Agreement dated December 19, 2003, (the
"SETTLEMENT AGREEMENT") between Nord Pacific Limited (the "BORROWER"), Nord
Resources Corporation, Xxxx X. Xxxxx, Xxxxxx X. Xxxxx. Xxxx Xxxxxxx, Xxxxxxx
Xxxxxxx, Xxxx Xxxxxxxx as trustee for the Retirement Trust of Xxxx X. Xxxxx and
Xxxxxx X. Xxxxx; Xxxxxx X. Xxxxxx, Xxxxxx Xxxxxxxx, Xxxxx Xxxxxx and Xxxxxxx
Xxxxxxxx, the Borrower hereby provides evidence of the recognition of
indebtedness to be provided pursuant to the Settlement Agreement, as follows.
FOR VALUE RECEIVED, the Borrower, having its principal office and place of
business at 0000 Xxx Xxxxx, XX. Xxxxx 000, Xxxxxxxxxxx, XX 00000, Albuquerque,
New Mexico promises to pay to or to the order of Nord Resources Corporation (the
"LENDER") prior to the distribution of any assets of the Borrower to its
shareholders (which shall include any return of capital, dividend or repurchase
of its own shares by the Borrower), or on such earlier date as the Borrower
shall by written notice to the Lender advise, the principal sum of Two Hundred
Eighty Thousand Australian Dollars (A$280,000) in lawful money of Australia with
no interest thereon. This agreement is governed by the laws of New Brunswick.
NORD PACIFIC LIMITED
/s/ Witness By: /s/ Xxxx X. Xxxxx
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Witness: Xxxx X. Xxxxx, President
