Exhibit 10.12
AGREEMENT OF SALE AND PURCHASE
This Agreement of Sale and Purchase ("Agreement") is entered into on
August 1, 1996, between Southwestern Refining Corporation, a California
Corporation (hereinafter referred to as "Seller") and Golden Queen Mining
Co., Inc., a California Corporation, ("Buyer").
RECITALS
A. Seller is the owner of and desires to sell to Buyer certain real
property consisting of approximately 29.18 acres, including real
property consisting of accumulated mounds of tailings from prior mining
operations, together with all buildings, storage facilities, dwellings,
window coverings, carpet, and permanent fixtures (collectively referred
to as: "Property"), all situated in Xxxx County, California, and all as
more particularly described in the legal description attached to and
forming a part of the Deed of Trust attached hereto as Exhibit "A" and
incorporated by reference. All such Property is accepted by Buyer in
"as is" condition, subject to the representations contained in Paragraph
5 hereof.
B. Seller desires to sell to Buyer and Buyer desires to purchase from
Seller the "Property" on the terms and conditions provided in this
Agreement.
In consideration of the mutual covenants and conditions contained
herein, Seller and Buyer agree as follows:
1. SALE AND PURCHASE. Seller sells to Buyer and Buyer purchases from
Seller the Property, on the terms and conditions set forth herein.
2. PURCHASE PRICE. The principal purchase price, exclusive of interest, for
the Property shall be Nine Hundred Fifty Thousand ($950,000.00) Dollars.
3. PAYMENT OF TOTAL PURCHASE PRICE. The total Purchase Price shall be
payable by Buyer to Seller as follows:
(a) Upon the opening of Escrow, Buyer shall deposit with Escrow
Holder the sum of One Hundred Thousand Dollars ($100,000) (the
"Deposit"). The Deposit shall be deposited by Escrow Holder in an
insured interest-bearing account determined by Buyer. Interest
accruing on such amounts, if any, shall be held for the benefit of
Buyer and shall apply toward the payment of the Purchase Price.
The Deposit shall be disbursed by Escrow Holder to Seller at close
of Escrow and credited against the Purchase Price.
(b) On or prior to the Close of Escrow, Buyer shall deposit with
Escrow Holder a Secured Promissory Note, identical to Exhibit "B"
attached hereto and incorporated herein by reference (the "Note"),
in the original principal amount of Eight Hundred Fifty Thousand
Dollars ($850,000.00), which Note shall be secured by a Deed of
Trust and Assignment of Rents ("Deed of Trust") identical to
Exhibit "A," attached hereto and incorporated herein by reference.
The Deed of Trust shall be filed for record at Close of Escrow.
(c) Seller's Liquidated Damages. In the event Escrow fails to
close by reason of Buyer's default, Seller and Buyer agree that,
based on the circumstances now existing, known or unknown, it would
be excessively costly and impracticable to establish Seller's
damages by reason of such default by Buyer, and it would be
reasonable to award Seller liquidated damages in the amount of the
Deposit. By their respective initials set forth below, Seller and
Buyer acknowledge and agree such sum is reasonable as liquidated
damages and shall be in lieu of any other relief, right or remedy,
at law or in equity, to which Seller might otherwise be entitled by
reason of Buyer's default.
s/ R W G s/ M J B
---------- ----------
Buyer's Initials Seller's Initials
(d) The remaining principal balance of Eight Hundred Fifty
Thousand ($850,000) shall be loaned by Seller to Buyer, for fifteen
(15) years, at an interest rate of two percent (2%) above the Prime
Rate, as determined by the base rate on corporate loans as
published in the Wall Street Journal on August 1, 1996 and
thenceforth on each anniversary date hereof [8-1-96, 8-1-97, 8-1-
98, etc.]. Whenever any August 1st pertinent to this agreement
falls on a day when the Wall Street Journal is not published, the
next published issue of the Wall Street Journal shall be used for
the purposes of this agreement. Said rate shall apply
prospectively throughout each year until the next anniversary date.
(e) Principal and interest shall be payable by Borrower to Lender
in monthly installments of Nine Thousand Two Hundred Seventy Five
Dollars ($9,275.00), commencing on the date which is the first day
of the first calendar month after the date of the Close of Escrow,
and for the calendar year thereafter. Each year thereafter, the
amount of the monthly payments shall be adjusted in accord with
Subparagraph 3(d) above and with sound accounting principles
designed to amortize the entire obligation of Buyer hereunder, both
principal and interest, over the One Hundred Eighty (180)
consecutive months commencing with the first calendar month after
Close of Escrow.
(f) A balloon payment of all remaining and unpaid principal, if
any, and accrued but unpaid interest, if any, shall be due on
September 1, 2011.
4. A Deed of Trust with Assignment of Rents and a Secured Promissory Note
identical to Exhibits "A" and "B", respectively, shall be executed by
the parties prior to the close of Escrow. Escrow holder shall cause
such documents to be recorded appropriately. Any discrepancy between
Exhibits "A" and "B", on the one hand, and this Agreement, on the other,
shall be reconciled by adherence to the terms of this Agreement; this
Agreement shall be the controlling document.
5. REPRESENTATIONS OF SELLER. In addition to all other representations and
warranties under this Agreement, Seller represents that it is lawfully
seized of the indefeasible estate of the Property and that the property
is presently free and clear of any liens of any nature; that, to the
best of Seller's knowledge, no suit, action or other proceeding is
pending or threatened before any court or governmental entity and no
cause of action exists that relates to the Property; that Seller has
received no notice of violation of any local, state or federal law,
regulation, rule, ordinance or order or of any permit, license, consent
or authorization; and that, to the best of Seller's knowledge, no
condition exists on the Property which would result in any action under
the Comprehensive Environmental Response, Compensation and Liability Act
(Superfund) 42 U.S.C. 9601-9657, as amended, nor any other federal,
state or local environmental or other law, regulation, rule, ordinance
or order.
6. ESCROW. An escrow shall be opened to consummate the sale and purchase
of the Property pursuant to this Agreement at the office of Chicago
Title (Escrow Holder) in Bakersfield, California within five (5) days
from the date of execution hereof. Such escrow shall close as soon
after August 1, 1996, as reasonably possible. This Agreement shall
serve as Escrow Instructions to such Escrow; to the extent that
supplemental instructions are deemed necessary by Escrow Holder, the
parties shall cooperate in executing such orders.
7. CONDITIONS OF ESCROW. The close of such escrow and Buyer's obligation to
purchase the Property are conditioned on:
(a) The conveyance to Buyer of good and marketable title to the
Property, as evidenced by a standard form title insurance policy, in the
full amount of the principal purchase price (excluding interest), issued
by Chicago Title Company, which policy shall be subject only to such
liens, encumbrances or clouds as may be approved in writing by Buyer.
(b) Seller shall deliver possession of the Property to Buyer immediately
on close of escrow, free and clear of all uses and occupancies. Buyer
shall have access to all portions of the Property (excepting the
interior of buildings) upon making the Deposit into Escrow. Seller
shall have reasonable access to the Property for a period of 30 days
after close of Escrow.
8. FAILURE OF CONDITIONS. Should any of the conditions specified in
paragraphs 5, 6 and 7 of this Agreement fail to occur by close of escrow
as herein provided, Buyer shall have the power, exercisable by the
giving of written notice by Buyer to the escrow holder and to Seller, to
cancel such escrow, terminate this Agreement and recover any amounts
paid by Buyer to Seller or to the escrow holder on account of the
purchase price of the Property. The exercise of such power by Buyer
shall not, however, constitute a waiver by Buyer of any other rights
which Buyer may have against Seller for breach of this Agreement.
9. PRORATIONS. The following item shall be prorated between Seller and
Buyer on the basis of thirty (30) day months as of 12:00 midnight
Pacific Standard Time on the date of close of escrow as herein provided:
(a) Real property taxes levied or assessed against the Property as
shown on the latest available tax bills.
10. INDEMNITY. Buyer agrees to hold harmless, indemnify and defend Seller
from any and all claims by any and all entities not party to this
agreement that may result from any actions, inaction, negligence or
other alleged wrongdoing of Buyer arising from or in connection with
Buyer's use of Property. Further, Buyer agrees to post and maintain any
necessary or required financial guarantee and/or bond(s) [hereinafter
"Bond(s)"] with the appropriate governmental agencies to provide for
environmental remediation in the event that Buyer is either unable or
unwilling to undertake and complete any required remedial action, should
such become necessary. Buyer shall provide to Seller documentary
evidence of such bonds simultaneously with the provision of such
evidence to the involved governmental agencies. Buyer will maintain
such Bond(s) in place until such time as the appropriate governmental
agencies have determined that all environmental requirements have been
met and that the bond(s) are no longer required. Buyer will cause the
referenced bond(s) to operate to protect Seller as nearly as possible
to the extent that the bond(s) protect Buyer.
Additionally, Buyer agrees to procure and maintain a comprehensive
general liability policy issued by an insurance carrier admitted in
California, protecting both Buyer and Seller (as an additional named
insured) against liability, with limits not less than $5,000,000. Buyer
will cause the insurer to issue an endorsement naming Seller as an
additional named insured and will provide Seller with documentation, at
intervals of no more than 6 months, showing the continuing existence of
such liability coverage. Buyer will maintain workers compensation
insurance and provide evidence thereof to Seller at intervals of no more
than six months. (In addition to Seller, Xxxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxx Xxx Xxxxxx [Xxxxxxx] and Xxxxxx Xxxxxxxx Xxxxxx shall each be
listed as additional individual named insureds in the above mentioned
liability policy(ies) of insurance.) Upon mutual agreement in writing,
the parties may reduce the liability policy limits.
11. BONDS AND ASSESSMENTS. Any bonds or improvement assessments which are a
lien on the Property shall have been paid by Seller as of close of
escrow.
12. EXPENSES OF ESCROW. The expenses of the escrow herein provided shall be
paid in the following manner:
(a) All costs of obtaining the title insurance policy referred to in
subparagraph 7(a) hereof shall be divided equally between the parties.
(b) The cost of preparing, executing and acknowledging any deed or other
instruments required to convey title to Buyer in the manner referred to
in subparagraph 7(a) hereof shall be divided equally between the
parties.
(c) The cost of recording a grant deed required to convey title to the
Property to Buyer as described in subparagraph 6.(a) hereof shall be
paid by Buyer.
(d) Any tax imposed on the conveyance of title to the Property to Buyer
under the Documentary Transfer Tax Act shall be paid by Buyer.
(e) Any escrow fee charged by the escrow holder, in addition to the cost
of the title insurance policy required by this Agreement, shall be paid
by the Buyer.
13. DESTRUCTION OF IMPROVEMENTS. If any improvements on the Property of a
value over $25,000 are destroyed or substantially damaged during the
Escrow as herein provided and such loss is uninsured, Buyer shall have
the power, exercisable by the giving of written notice by Buyer to the
Escrow Holder and to Seller, to cancel such Escrow, terminate this
Agreement and recover any and all amounts paid to Seller or the Escrow
Holder on account of the Purchase price of the Property.
Notwithstanding the foregoing, in the event Buyer does not terminate
this Agreement pursuant to this paragraph or any other paragraph of this
Agreement, and subject to the representations and warranties of Seller
contained in this Agreement, Buyer shall accept the Property in "As Is"
condition as to the physical condition of the improvements located on
the Property, it being acknowledged and agreed that Seller makes no
representation or warranty, except as expressly set forth herein, as to
the physical condition of the improvements located on the Property.
14. NOTICES. Any and all notices or other communications required or
permitted by this Agreement or by law to be served on or given to Seller
or Buyer by the other party hereto, shall be in writing and shall be
deemed duly served and given when personally delivered to Seller or
Buyer or, in lieu of such personal service, sent by United States mail,
postage prepaid, certified mail, return receipt requested, or by
professional overnight delivery service, such as, by way of example and
not as a limitation, Federal Express, and actually received by or
rejected by the party to whom it is addressed. All such notices shall
be addressed to Seller or Buyer at the addresses shown below.
Seller: Southwestern Refining Corporation
Xxx. Xxxx X. Xxxxxx
0000 Xxxxxx Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
AND
Southwestern Refining Corporation
Agency Xxxxxx
000 Xxxxxx Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Buyer: Golden Queen Mining Co., Inc.
Xxxxxx Xxxxxx, Xxx. 0
Xxx 000
Xxxxxxxx, XX 00000-0000
Either party may change its address for notice by giving notice to the
other party in the manner set forth above.
15. DEFAULT ON PAYMENTS: Should Buyer fail to make any of the payments
required hereunder within 15 days of each respective due date, Seller
shall be entitled to a late payment charge of $500.00 as to each such
late payment. Should an amount equal to two monthly payments be due and
payable, Buyer shall be in breach hereof and Seller may institute any
remedies available, including foreclosure.
16. ATTORNEYS' FEES. In the event of any controversy, claim, or dispute
between Seller or Buyer, arising out of or relating to this Agreement or
any breach thereof, the prevailing party shall be entitled to recover
from the losing party reasonable expenses, attorneys' fees and costs.
17. SEVERABILITY. In the event that any provision contained with this
Agreement is found by a court of competent jurisdiction to be void,
invalid or unenforceable, Seller and Buyer agree that such invalidity or
unenforceability shall, to the extent feasible, have no effect on the
balance of the Agreement.
18. HEIRS, SUCCESSORS AND ASSIGNS. All terms of this Agreement shall be
binding upon and shall inure to the benefit of and be enforceable by the
respective heirs, successors and assigns of Seller and Buyer.
19. COUNTERPARTS. This Agreement may be executed and delivered in any number
of counterparts, each of which, when executed and delivered, will be an
original, but all of which together constitute one and the same
agreement.
20. ENTIRE AGREEMENT. This Agreement contains the entire agreement between
Seller and Buyer respecting the Property, and any agreement or
representation respecting the Property or the duties or either Seller or
Buyer in relation thereto not expressly set forth in the Agreement is
null and void.
SELLER BUYER
SOUTHWESTERN REFINING GOLDEN QUEEN MINING CO., INC.
CORPORATION
By: s/ Xxxx X. Xxxxxx By: R. W. Graeme
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Its: President Its: Vice-President
Taxpayer I.D. #00-0000000
