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: S/M/25/03 (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, 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"). |
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| 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"). |
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| 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. |
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| 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. |
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| 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 they form part of the terms of this Settlement Agreement. |
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| 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"): |
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(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 |
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| (b) |
to enter into a credit facility agreement (the "Credit Agreement") contemplating whereunder Allied would obtain notes of Nord Pacific convertible into shares of 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 the Arrangement Agreement. |
| 2. |
It is expressly acknowledged by each 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 has passed 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 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;
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(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.
(xiii) NRC will release all business records belonging to Nord Pacific in its posession including those which are being held at Xxxxxxx Camp.
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(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.
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Nord Resources Corporation |
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Per: |
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Name: |
Name: |
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Per: |
Per: |
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Name: |
Name: |
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Xxxx X. Xxxxx |
Witness |
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Xxxxxx X. Xxxxx |
Witness |
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Xxxx Xxxxxxx |
Witness |
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Xxxxxx Xxxxxxx |
Witness |
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Xxxx Xxxxxxxx, |
Witness |
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Xxxxxx X. Xxxxxx |
Witness |
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Xxxxxx Xxxxxxxx |
Witness |
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Xxxxx Xxxxxx |
Witness |
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Xxxxxxx Xxxxxxxx |
Witness |
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