ASSET PURCHASE AGREEMENT
made between
AMERICAN MINING CORPORATION
and
THRUST ENERGY CORP.
April 18, 2011
-19-
ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made as of the 18th day of April, 2011
BETWEEN:
AMERICAN MINING CORPORATION, a corporation existing under the laws of Nevada and
having a registered office at 0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxx,
Xxxxxx 00000 ("VENDOR")
AND
THRUST ENERGY CORP., a corporation existing under the laws of Nevada having a
registered office at 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxx 00000
("PURCHASER").
WHEREAS:
A. Vendor is in the business of mineral exploration, mine development and
the provision of milling services;
B. Purchaser is in the business of oil and gas exploration and wants to
expand its business operations to include mineral exploration, mine development
and the provision of milling services; and
C. Purchaser wants to acquire from Vendor, and Vendor wants to sell to
Purchaser, all of Vendor's interest in certain agreements, understandings and
arrangements, including all of Vendor's rights thereunder to certain milling
equipment.
NOW THEREFORE, THIS AGREEMENT WITNESSES THAT in consideration of the mutual
promises made herein, the receipt and sufficiency of which the parties
acknowledge, the parties agree as follows:
ARTICLE 1 - INTERPRETATION
1.1 DEFINED TERMS. All terms defined in this Agreement shall have the
defined meanings when used herein or in any agreement, note, certificate,
report, or other document made or delivered pursuant to this Agreement, unless
otherwise defined or the context otherwise requires. The following terms shall
have the following meanings:
"AGREEMENT" means this Asset Purchase Agreement, including the Schedules, as
from time to time supplemented or amended by one or more agreements entered into
pursuant to the applicable provisions of this Agreement;
"ASSETS" means, collectively, the Leasehold Property, the Technical Data, the
Equipment and the Contracts;
"ASSIGNMENT AND ASSUMPTION AGREEMENT" means the form of agreement attached
hereto as Schedule G, as described in Section 2.2;
"BUSINESS DAY" means any day, other than a Saturday, Sunday or statutory holiday
in Las Vegas, Nevada;
"CLOSE OF BUSINESS" means 5:00 p.m. in Las Vegas, Nevada;
"CLOSING" means the completion of the sale and purchase of the Assets on the
Closing Date pursuant to and in accordance with the terms and subject to the
conditions of this Agreement;
"CLOSING DATE" means (a) May 12, 2011 or, if the condition set out in Section
5.1(c) has not been satisfied, or waived by Purchaser, by such date, the date
that is two Business Days after the date such condition is satisfied or so
waived, or (b) such other date as is mutually agreed to by the parties.
"COMMON SHARES" means the common stock of Purchaser, par value $0.0001 per
share;
"CONTRACTS" means all of the Vendor's right, title and interest in and to those
agreements, understandings and arrangements, including letters of interest and
memorandums of understanding, listed in Schedule B;
"ENCUMBRANCES" means mortgages, charges, pledges, security interests, liens,
encumbrances, actions, claims, demands and equities of any nature whatsoever or
howsoever arising and any rights or privileges capable of becoming any of the
foregoing;
"EQUIPMENT" means all right, title and interest of the Vendor, beneficial or
otherwise, in and to the equipment set out and described in Schedule A;
"EXCHANGE" means the OTCQB operated by OTC Markets Group Inc.;
"EXECUTIVE EMPLOYMENT AGREEMENT" means the form of agreement attached hereto as
Schedule H, as described in Section 5.2(d).
"LEASEHOLD PROPERTY" means all right, title and interest of Vendor, beneficial
or otherwise, in and to the leasehold interest to the mineral property set out
and described in Exhibit "A" to that certain Exploration Agreement and Mill Site
Agreement dated September 23, 2010, between Vendor and Silver Peak Properties
LLC.
"PERMITTED ENCUMBRANCES" means:
(a) the reservations, limitations, exceptions, provisos and conditions
expressed in the Leasehold Property and the statutory exceptions to title of the
property that is the subject of the Leasehold Property;
(b) the royalties and other encumbrances described in, and the obligations
arising from, the Contracts;
(c) liens for property taxes, charges, duties, levies and assessments which
are not yet due;
(d) undetermined or inchoate liens, charges and encumbrances arising in or
incurred in the ordinary course of business consistent with past practice which
have not been filed or registered in accordance with applicable law or of which
written notice has not at the time been duly given in accordance with applicable
law in each case which relate to obligations not at the time due or delinquent;
and
(e) liens, charges and encumbrances which, in the aggregate, do not
materially detract from the value of the Assets or materially impair the use of
the Assets;
"PERSON" means an individual, corporation, body corporate, partnership, joint
venture, association, trust or unincorporated organization or a trustee,
executor, administrator or other legal representative;
"PURCHASE PRICE" means the price to be paid for the Assets, as set out in
Section 2.1;
"PURCHASER AUTHORIZATIONS" means the authorizations, approvals and consents
described in Schedule D, which are required by Purchaser in order for it to
acquire the Assets;
"RELATED PARTY" means a director, officer or shareholder;
"SECURITIES" means, collectively, the Common Shares.
"TECHNICAL DATA" means all of the technical data and correspondence that Vendor
has in respect of the Leasehold Property including, without limitation, reports,
drill core and logs, metallurgical samples and digital data files;
"VENDOR AUTHORIZATIONS" means the authorizations, approvals and consents
described in Schedule C, that are required by Vendor in order for it to validly
and effectively transfer the Assets to Purchaser; and
"U.S. SECURITIES ACT" means the United States Securities Act of 1933, as
amended.
1.1 HEADINGS AND ORGANIZATION. The division of this Agreement into
articles, sections, paragraphs, subparagraphs and clauses and the insertion of
headings are for convenience of reference only and shall not affect the
construction or interpretation of this agreement. Unless otherwise stated in
this Agreement, any reference herein to an article, section, paragraph,
subparagraph or clause refers to the corresponding article, section, paragraph,
subparagraph or paragraph hereof.
1.2 SCHEDULES. Any reference herein to a "Schedule" refers to those
schedules that are attached to this Agreement, all of which are incorporated
into this Agreement by reference and shall be deemed to be part hereof.
1.3 REFERENCE TO AGREEMENT. The terms "this Agreement", "hereof", "herein",
"hereunder" and similar expressions refer to this Agreement and the Schedules
hereto and not to any particular article, section, paragraph, subparagraph,
clause or other portion hereof and include any agreement or instrument
supplementary or ancillary hereto.
1.4 ACCOUNTING TERMS. An accounting term not otherwise defined herein has
the meaning assigned to it, and every calculation to be made hereunder is to be
made, in accordance with generally accepted accounting principles of the United
States of America, applied on a consistent basis;
1.5 STATUTORY REFERENCES. A reference to a statute in this Agreement
includes all regulations made thereunder, all amendments to the statute or
regulations made thereunder in force from time to time, and any statute or
regulation that supplements or supersedes such statute or regulations;
1.6 SUCCESSOR CORPORATIONS. A reference in this Agreement to a corporate
entity includes and is also a reference to any corporate entity that is a
successor to such entity;
1.7 INTERPRETATION NOT AFFECTED BY PARTY DRAFTING. Each party hereto
acknowledges that it and its legal counsel have reviewed and participated in
settling the terms of this Agreement, and the parties hereby agree that any rule
of construction to the effect that any ambiguity is to be resolved against the
drafting party shall not be applicable in the interpretation of this Agreement.
1.8 NUMBER AND GENDER. In this Agreement, unless there is something in the
subject matter or context inconsistent therewith,
(a) words in the singular number include the plural and such words shall be
construed as if the plural had been used,
(b) words in the plural include the singular and such words shall be
construed as if the singular had been used, and
(c) words importing the use of any gender shall include all genders where
the context or party referred to so requires, and the rest of the sentence shall
be construed as if the necessary grammatical and terminological changes had been
made.
1.9 TIME OF ESSENCE. Time shall be of the essence hereof.
1.10 BEST OF KNOWLEDGE. Any reference herein to "the best of the knowledge"
of the Vendor will be deemed to mean the actual knowledge of the Vendor, its
directors and executive officers and the knowledge they would have had if they
had conducted a diligent inquiry into the relevant subject matter.
1.11 CURRENCY. Unless otherwise indicated, all dollar amounts referred to
in this Agreement are in lawful money of the United States of America.
1.12 CHOICE OF LAW AND ATTORNMENT. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Nevada and the laws of
the United States applicable therein but the reference to such laws shall not,
by conflict of laws rules or otherwise, require the application of the law of
any jurisdiction other than the State of Nevada.
1.13 SCHEDULES. The following are the Schedules to this Agreement:
Schedule A - Equipment
Schedule B - Contracts
Schedule C - Authorizations and Consents Required by Vendor
Schedule D - Authorizations and Consents Required by Purchaser
Schedule E - Deliveries of Vendor at Closing
Schedule F - Deliveries of Purchaser at Closing
Schedule G - Assignment and Assumption Agreement
Schedule H - Executive Employment Agreement
Schedule I - Allocation of Purchase Price
ARTICLE 2 - PURCHASE OF ASSETS
2.1 Purchase. Relying upon the representations and warranties of Vendor set
forth herein, and subject to the conditions provided herein, at the Closing
Purchaser will purchase the Assets from Vendor and Vendor will transfer the
Assets to Purchaser free and clear of all Encumbrances other than Permitted
Encumbrances, for an aggregate purchase price payable to Vendor of 31,000,000
Common Shares (the "PURCHASE PRICE"). The Purchase Price shall be paid to
Vendor on the Closing Date by issuance of 31,000,000 Common Shares to Vendor, or
as may be otherwise directed by Vendor in writing, which Common Shares shall not
be subject to any contractual restriction on transfer. The Purchase Price will
be allocated among the Assets as described in Schedule I.
2.2 Assignment of Rights to the Assets. In consideration of the delivery of
the Purchase Price, Vendor and Purchaser will execute at Closing the Assignment
and Assumption Agreement under which Vendor shall assign, convey and transfer to
Purchaser all right, title and interest in and to the Assets and Purchaser
agrees to assume, pay, satisfy, discharge, perform and fulfill all obligations
of Vendor that arise after the Closing Date in respect of the Assets.
2.3 Fees and Taxes. Purchaser will be liable for and will pay all land and
mineral property registration fees, property transfer taxes, goods and services
tax and all other taxes (but excluding any income taxes or capital gains taxes
payable by Vendor), duties, transfer fees and other charges customarily payable
in connection with the conveyance and transfer of personal property.
2.4 Registration Rights. If Purchaser registers any of its Common Shares
under the U.S. Securities Act (other than by a registration on Form X-0, X-0,
F-4 or any successor similar forms or any other form not available for
registering "restricted securities" within the meaning of Rule 144 under the
U.S. Securities Act) for sale to the public, whether or not for sale for its own
account, it will each such time, at least twenty (20) days prior to filing the
registration statement, give written notice to Vendor of its intention to do so.
If Vendor or a Related Party of Vendor holds Common Shares that are either:
(a) "restricted securities" within the meaning of Rule 144 under the U.S.
Securities Act; or
(b) subject to transfer restrictions under Rule 144 due to such
shareholder's status as an "affiliate" of Purchaser as defined thereunder,
(such Common Shares being referred to herein as the "RESTRICTED SECURITIES")
Vendor or its Related Parties, as applicable, shall have the right, upon the
written request by it made within fifteen (15) days thereafter (which request
shall specify the Restricted Securities intended to be disposed of by Vendor or
its Related Parties, as applicable, and the intended method of disposition
thereof), to request Purchaser to register not more than THIRTY PERCENT (30%) of
its Restricted Securities. If so requested, Purchaser shall use its reasonable
best efforts to include in such registration under the U.S. Securities Act (if
it proceeds with such registration) all Restricted Securities which Purchaser
has been so requested to register. Purchaser may defer a registration of
Restricted Securities for a period of not more than 180 days, but only if (i)
Purchaser furnishes to Vendor or its Related Parties, as applicable, a
certificate signed by the President and Chief Executive Officer of Purchaser
stating that, in the good faith judgment of the board of directors of Purchaser,
effecting the requested registration would materially impede the ability of
Purchaser to consummate a significant transaction (the 180 day deferral period
beginning on the date that such certificate is sent to Vendor or its Related
Parties, as applicable), and (ii) Purchaser has not deferred a filing during the
previous 12 month period.
2.5 Securities Matters.
(a) Vendor acknowledges and agrees that, other than registrations pursuant
to Section 2.4, if any, the Common Shares issued pursuant to this Agreement will
not be registered under the U.S. Securities Act and that the Common Shares will
be issued to Vendor in a private placement transaction effected in reliance on
an exemption from the registration requirements of the U.S. Securities Act and
in reliance on exemptions from the qualification requirements of applicable
state securities laws.
(b) Vendor shall not make any disposition of all or any portion of the
Common Shares issued to it unless such transfer is pursuant to registration
under the U.S. Securities Act or pursuant to an available exemption from
registration thereunder.
(c) The certificates representing the Common Shares issued to Vendor
hereunder shall bear, in addition to any other legends required under applicable
state securities laws, a legend in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR UNDER ANY APPLICABLE STATE SECURITIES LAWS.
THESE SECURITIES MAY NOT BE SOLD, OFFERED, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM REGISTRATION. THE ISSUER OF THESE SECURITIES MAY
REQUIRE AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
THE ISSUER, TO THE EFFECT THAT ANY SALE OR TRANSFER OF THESE SECURITIES WILL BE
IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
(d) In order to prevent any transfer from taking place in violation of this
Agreement or any applicable law, Vendor acknowledges and agrees that Purchaser
may cause a stop transfer order to be placed with Purchaser's transfer agent
with respect to the Common Shares issued to Vendor. Purchaser will not be
required to transfer on its books any Common Shares that have been sold or
transferred in violation of any provision of this Agreement or applicable law.
ARTICLE 3 - REPRESENTATIONS, WARRANTIES AND COVENANTS OF VENDOR
3.1 Representations and Warranties of Vendor. Vendor represents and
warrants to Purchaser that:
(a) Vendor is a company incorporated, duly organized and validly existing
under the laws of the State of Nevada;
(b) Vendor is in good standing with respect to its filings required by
applicable law;
(c) Vendor is duly qualified to do business and is in good standing under
the laws of the State of Nevada and in each other jurisdiction where it carries
on business or holds assets to carry on that business, and hold those assets,
and has all corporate power and authority to carry on its business as presently
carried on;
(d) Vendor has the corporate power and authority to execute and deliver this
Agreement, to complete all of the transactions contemplated hereby and to duly
observe and perform all of its covenants and obligations herein set forth;
(e) this Agreement is, and the other documents and instruments required
hereby will be, when executed and delivered by Vendor, the valid and binding
obligations of Vendor, enforceable in accordance with their respective terms,
except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting the rights of
creditors generally and except as limited by the application of equitable
principles when equitable remedies are sought, and by the fact that rights to
indemnity, contribution and waiver, and the ability to sever unenforceable
terms, may be limited by applicable law;
(f) Vendor owns good and marketable title to the Equipment free and clear of
all Encumbrances, other than Permitted Encumbrances, and Vendor is in sole
possession of, and has sole control of (except as set forth in or pursuant to
the Contracts), the Assets;
(g) neither of the execution and delivery of this Agreement, the completion
of the transactions contemplated hereby, nor the observance and performance by
Vendor of its covenants and obligations herein set forth will:
(i) conflict with, or result in a breach of, or violate any of the terms,
conditions or provisions of its articles of incorporation or bylaws;
(ii) constitute or result in a breach or default under any agreement,
contract, lease, indenture, other instrument or commitment to which it is a
party, or is subject or derives benefit from, other than under such agreements,
contracts, leases, indentures, other instruments and commitments with respect to
Vendor Authorizations that are required, pursuant to the terms of this
Agreement, to be delivered to Purchaser on Closing;
(iii) will result in the creation of any Encumbrance of any kind or nature
against or with respect to the Assets (other than Encumbrances created pursuant
to this Agreement); or
(iv) require any permissions, approvals, waivers or consents of any third
Person, or any declarations, filing or registration with any court, governmental
body or agency or other public or private body, entity, or Person, save and
except for those comprised in Vendor Authorizations;
(h) to the Knowledge of Vendor, no authorization, approval, order, licence,
permit or consent of any governmental authority, regulatory body or court, of
Canada or the United States or any political subdivision thereof, and no
registration with, declaration or notice to or filing by it with any such
governmental authority, regulatory body or court is required in order for it to:
(i) incur the obligations expressed to be incurred by it in or pursuant to
this Agreement;
(ii) execute and deliver all other documents and instruments to be delivered
by it pursuant to this Agreement;
(iii) duly perform and observe the terms and provisions of this Agreement;
(iv) consummate the transactions contemplated by this Agreement; or
(v) render this Agreement legal, valid, binding and enforceable against
Vendor, save and except for those comprised in Vendor Authorizations;
(i) all corporate authorizations have been obtained for the execution of
this Agreement and for the performance of its obligations hereunder;
(j) with respect to the Contracts:
(i) each of them is in good standing and in full force and effect and is
binding upon Vendor;
(ii) except as disclosed in writing to Purchaser, each of the covenants and
conditions contained therein on the part of Vendor has been performed and
observed by Vendor in all material respects;
(iii) there is no outstanding material dispute related thereto;
(iv) to the Knowledge of Vendor, each other party to each of the Contracts
has performed each material term, covenant, and condition of each of the
Contracts which is to be performed by such other party at or before the date
hereof;
(v) on obtaining Vendor Authorizations, Vendor will have all necessary
approvals required for Vendor to lawfully assign the Contracts to Purchaser as
contemplated by this Agreement; and
(vi) Vendor is not to its Knowledge, in breach of or in default under any
term or condition of any of the Contracts, except for such breaches or defaults,
if any, of which Purchaser has been given notice and when taken together with
any similar breach or default, would not have a material adverse effect
singularly or in the aggregate on the ownership of the Contracts by Purchaser
following the Closing Date;
(k) to the Knowledge of Vendor, Vendor has not received notice of, or
otherwise become aware of, any action, suit, claim or other proceeding commenced
or pending before any court or governmental commission, department, board,
authority or other administrative agency or officer, that challenges Vendor's
rights to any or all of the Assets;
(l) the Contracts represent all of the material agreements, contracts,
leases, rights, other instruments or commitments which Vendor has entered into
in connection with the Assets that are currently in force; and
(m) except as provided herein, there is no written or oral agreement,
option, understanding or commitment, or any right or privilege (whether by law,
pre-emptive or contractual) capable of becoming an agreement, option or
commitment, for the purchase or other acquisition from the Vendor of any of the
Assets, or any rights or interest therein.
3.2 Covenants of Vendor.
(a) From the date hereof until the Closing occurs or this Agreement is
terminated in accordance with its terms, Vendor will not directly or indirectly,
through any director, officer, shareholder, employee, agent, partner, affiliate,
representative or otherwise: (a) solicit, initiate or encourage the submission
of any proposal or offer from any person or party relating to a sale of all or
any part of the Assets, (b) participate in any discussions or negotiations
regarding, assisting or participating in any effort or attempt by any person or
party to do or seek any transaction described in clause (a) of this Section 4.4,
or (c) enter into any agreement, agreement in principle or other commitment
(whether or not legally binding) relating to any transaction described in clause
(a) of this Section 3.2.
(b) From the date hereof until the Closing occurs or this Agreement is
terminated in accordance with its terms, Vendor shall not cause or permit any
Encumbrance to attach to any of the Assets.
(c) Vendor will maintain the confidentiality of the Technical Data for a
period of five years from the Closing Date.
(d) Vendor shall change its corporate name not later than two Business Days
following the Closing Date, and thereafter discontinue further use of the name
"American Mining". Vendor shall not use names similar to "American Mining"
after the Closing Date. If requested by Purchaser, Vendor shall also take such
action as may be necessary in order to assist Purchaser or any subsidiary or
parent thereof to change their corporate names to names including "American
Mining".
ARTICLE 4 - REPRESENTATIONS, WARRANTIES AND COVENANTS OF PURCHASER
4.1 Representations and Warranties of Purchaser. Purchaser represents and
warrants to Vendor that:
(a) Purchaser is a company incorporated, duly organized and validly existing
under the laws of its incorporating jurisdiction;
(b) Purchaser is in good standing with respect to its filings required by
applicable corporate legislation;
(c) Purchaser is duly qualified to do business and is in good standing under
the laws of the State of Nevada and in each other jurisdiction where it carries
on business or holds assets to carry on that business and hold those assets and
has all corporate power and authority to carry on its business as presently
carried on;
(d) Purchaser has the corporate power and authority to execute and deliver
this Agreement, to complete all of the transactions contemplated hereby and to
duly observe and perform all of its covenants and obligations herein set forth;
(e) this Agreement is, and the other documents and instruments required
hereby will be, when executed and delivered by Purchaser, the valid and binding
obligations of Purchaser, enforceable in accordance with their respective terms,
except as enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or affecting the rights of
creditors generally and except as limited by the application of equitable
principles when equitable remedies are sought, and by the fact that rights to
indemnity, contribution and waiver, and the ability to sever unenforceable
terms, may be limited by applicable law;
(f) none of the execution and delivery of this Agreement, the completion of
the transactions contemplated hereby or the observance and performance by
Purchaser of its covenants and obligations herein set forth will:
(i) conflict with, or result in a breach of, or violate any of the terms,
conditions or provisions of its constating documents; or
(ii) constitute or result in a breach or default under any agreement,
contract, lease, indenture, other instrument or commitment to which it is a
party, or is subject or derives benefit from, other than under such agreements,
contracts, leases, indentures, other instruments and commitments with respect to
Purchaser Authorizations which are required, pursuant to the terms of this
Agreement, to be delivered to Vendor on Closing;
(g) no authorization, approval, order, licence, permit or consent of any
governmental authority, regulatory body or court, of Canada or the United States
or any political subdivision thereof, and no registration with, declaration or
notice to or filing by Purchaser with any such governmental authority,
regulatory body or court is required in order for it to;
(i) incur the obligations expressed to be incurred by it in or pursuant to
this Agreement;
(ii) execute and deliver all other documents and instruments to be delivered
by it pursuant to this Agreement;
(iii) duly perform and observe the terms and provisions of this Agreement,
or
(iv) render this Agreement legal, valid, binding and enforceable against
Purchaser,
save and except for those comprised in Purchaser Authorizations;
(h) all corporate authorizations have been obtained for the execution of
this Agreement and for the performance of its obligations hereunder;
(i) Purchaser is purchasing the Assets and title thereto in the condition in
which they are in at the time of the due diligence investigations of Purchaser,
subject only to Vendor's representations and warranties contained in this
Agreement;
(j) Purchaser is not relying on any calculations, forecasts, projections or
estimates made by Vendor in relation to the Assets;
(k) Purchaser is a reporting issuer under Section 12(g) of the U.S.
Securities Exchange Act of 1934, as amended, and the Common Shares are quoted on
the Exchange;
(l) Purchaser has obtained all necessary consents and approvals of the
Exchange to the execution and delivery of this Agreement, the completion of the
transactions, including the issuances of Common Shares, contemplated hereby and
the quotation of such Common Shares on the Exchange, and has provided a copy of
all correspondence, consents and approvals to, from or of the Exchange in
respect thereof to Vendor;
(m) Purchaser is not in default of any material requirement of any
applicable securities laws and, to the knowledge of Purchaser, neither the
United States Securities and Exchange Commission nor the Exchange, nor any other
regulatory authority having jurisdiction, has issued any order preventing or
suspending trading of any securities of Purchaser and Purchaser is entitled to
avail itself of the applicable exemption requirements from registration
available under applicable securities laws in respect of the issuance of the
Common Shares contemplated in this Agreement;
(n) the authorized capital of Purchaser consists of 900,000,000 Common
Shares of Common Stock and 100,000,000 Common Shares of Preferred Stock, of
which 680,202 Common Shares of Common Stock and no Common Shares of Preferred
Stock are issued and outstanding as at the date of this Agreement;
(o) since January 1, 2006, Purchaser has filed all forms, reports, documents
and information required to be filed by it, whether pursuant to applicable
securities laws or otherwise, with the United States Securities and Exchange
Commission and the Exchange or the applicable regulatory authorities, and no
material change has occurred in relation to Purchaser which has not been
publicly disclosed. As of the time of each of such forms, reports, documents
and information: (i) each complied in all material respects with the
requirements of the applicable securities laws; and (ii) none of them contained
any material misrepresentation (as defined in applicable securities laws); and
(p) since January 1, 2006, Purchaser has filed all financial statements it
is required to file pursuant to the applicable securities laws and said
financial statements present in all material respects the consolidated financial
position and the consolidated results of operations and cash flows of Purchaser
as of the dates or for the periods presented therein and no adverse material
changes have occurred since date of Purchaser's most recently filed audited
financial statements.
4.2 Covenants of Purchaser.
(a) Purchaser agrees that all of the information it obtains in respect of
the Assets up to Closing, including reports, maps, sections, drill logs, assay
results, studies and all other technical, accounting and financial records or
data (in paper, physical or electronic form), that has not been publicly
disclosed shall be confidential information and may not be disclosed by
Purchaser or its directors, officers, employees, consultants or agents
(collectively, the "RECEIVING PARTY") to any other person except (i) where
required in accordance with applicable law; (ii) where such information becomes
generally available to the public other than as a result of a disclosure or
other act by the Receiving Party; or (iii) where such information becomes
available to the Receiving Party on a non-confidential basis from a source other
than Vendor, provided that such source is not bound by a confidentiality
agreement with Vendor. If the Closing of the purchase of the Assets is not
completed for any reason, Purchaser will return to Vendor all documents
delivered to Purchaser by Vendor in contemplation of the completion of the
purchase of the Assets by Purchaser or certify that destruction of all such
documents has occurred in form and substance satisfactory to Vendor, acting
reasonably.
ARTICLE 5 - CONDITIONS TO CLOSING
5.1 Conditions to Purchaser's Obligations to Close. The obligation of
Purchaser to complete the purchase of the Assets on the Closing Date under this
Agreement will be subject to the satisfaction of the following conditions:
(a) The Vendor's representations and warranties contained in this agreement
and in any certificate or document delivered under this agreement or in
connection with the transactions contemplated by this agreement will be true at
and as of closing as if such representations and warranties were made at and as
of such time.
(b) Vendor will have in all material respects performed and complied with
all agreements, covenants and conditions required by this agreement to be
performed or complied with by it before or at the Closing Date.
(c) Purchaser shall have received the Vendor Authorizations, each in a form
reasonably satisfactory to Purchaser.
5.2 Conditions to Vendor's Obligation to Close. The obligation of Vendor to
complete the sale of the Assets on the Closing Date under this Agreement will be
subject to the satisfaction of the following conditions:
(a) The representations and warranties made by Purchaser in Sections 4.1(a)
through (e) of this Agreement shall be true and correct as of the date hereof
and on the Closing Date. All other representations and warranties made by
Purchaser in this Agreement that (a) are not qualified by materiality shall be
true and correct in all material respects when made and as of the Closing Date
and (b) that are qualified by materiality shall be true and correct when made
and as of the Closing Date, in each case as though such representations and
warranties were made or given on and as of the Closing Date.
(b) Purchaser shall have in all material respects performed and complied
with all of its agreements and obligations under this Agreement which are to be
performed or complied with prior to the Closing Date.
(c) Vendor shall have received the Purchaser Authorizations, each in a form
reasonably satisfactory to Vendor.
(d) The Chief Executive Officer of Vendor will have accepted a position of
employment with Purchaser as its Chief Executive Officer on the terms and
subject to the conditions of the Executive Employment Agreement.
ARTICLE 6 - TERMINATION
6.1 This Agreement and the transactions contemplated hereby may be
terminated at any time prior to Closing only as follows and in no other manner:
(a) By mutual written consent of the parties;
(b) By written notice from Purchaser to Vendor if:
(i) there has been a material misrepresentation or breach by Vendor in its
representations, warranties, agreements or covenants set forth herein
(disregarding any materiality qualifiers set forth therein); or
(ii) the Closing has not occurred by the Closing Date for reasons other than
Purchaser's failure to perform its obligations hereunder;
(c) By written notice from Vendor to Purchaser if:
(i) there has been a material misrepresentation or breach by Purchaser in
the representations, warranties, agreements or covenants of Purchaser set forth
herein (disregarding any materiality qualifiers set forth therein); or
(ii) the Closing has not occurred by the Closing Date for reasons other than
Vendor's failure to perform its obligations hereunder.
ARTICLE 7 - FURTHER ASSURANCES AND ASSISTANCE
7.1 Further Assurances. Vendor will from time to time after the Closing
execute and deliver to Purchaser all such conveyances, transfers, assignments
and other instruments in writing and further assurances as Purchaser may
reasonably require from Vendor and Purchaser will execute and deliver to Vendor
all such agreements of assumption and other instruments in writing and further
assurances as Vendor may reasonably require from Purchaser, in order to give
effect to the provisions hereof.
7.2 Mutual Assistance. In connection with Vendor Authorizations required to
be obtained hereunder by Vendor, Purchaser will, at Purchasers own expense, take
such action as may be reasonably necessary to assist Vendor and will provide
such information as may be reasonably requested concerning Purchaser by the
Persons from whom Vendor Authorizations are required. Vendor will, at Vendor's
own expense, take such action as is reasonably necessary to assist Purchaser and
will provide such information as may be reasonably requested by the Persons from
whom approval is required for Purchaser Authorizations.
ARTICLE 8 - ACCESS TO RECORDS AND CONFIDENTIALITY
8.1 After the signing of this agreement, Vendor shall afford Purchaser and
Purchaser's professional advisers, access to the books and records of Vendor
related to the Assets. Each of Vendor and Purchaser, and their respective
servants and professional advisers, are to keep confidential the terms of this
agreement, and the books and records of Vendor. This agreement of
confidentiality shall remain binding on the aforesaid parties, whether or not
this transaction is consummated. Each party shall be responsible for its own
professional fees and other expenses arising in connection with this letter of
intent, any approvals, consents or investigations in connection herewith, and
the negotiation and completion of this transaction.
ARTICLE 9 - CLOSING
9.1 Vendor's Closing Deliveries. At Closing, Vendor shall deliver or cause
to be delivered, as the case may be, to Purchaser, in a form satisfactory to
Purchaser, all of the following documents, each properly executed, dated as of
the Closing Date by the appropriate parties thereto:
(a) the documents listed in Schedule E;
(b) a good standing certificate for Vendor from the State of Nevada;
(c) Vendor Authorizations; and
(d) such other documents and instruments as may be reasonably requested by
Purchaser, each in form and substance acceptable to Purchaser and its legal
counsel, necessary to consummate the transaction contemplated herein.
9.2 Purchaser's Closing Deliveries. In addition to the Purchase Price
payable pursuant to Section 2.1, at Closing, Purchaser shall deliver to Vendor,
as applicable, all of the following documents, each properly executed, dated as
of the Closing Date by the appropriate parties thereto:
(a) the documents and other items described in Schedule F;
(b) a good standing certificate for Purchaser from the State of Nevada;
(c) Purchaser Authorizations; and
(d) such other documents and instruments as may be reasonably requested by
Vendor, each in form and substance acceptable to Vendor and its legal counsel,
necessary to consummate the transaction contemplated herein.
ARTICLE 10 - CLOSING AND CLOSING DATE
10.1 Closing. Closing will take place at 10:00 a.m. (Las Vegas time) on the
Closing Date at the offices of Vendor in Nevada or such other place as the
parties may agree.
10.2 Concurrent Requirements. At Closing each of the parties hereto will
deliver to the other such documents and make such payments of money as are
required by the terms of this Agreement to be delivered or paid at the time of
Closing and all matters of delivery of documents by the parties hereto pursuant
to this Agreement and the registration of all appropriate documents in all
appropriate public offices of registration will be deemed to be concurrent
requirements such that nothing is deemed to be completed until everything has
been paid, delivered and registered with respect to the purchase and sale
contemplated herein.
ARTICLE 11 - INDEMNIFICATION
11.1 Indemnification of Purchaser by Vendor. Vendor shall, jointly and
severally, indemnify Purchaser, its directors, officers, employees, agents and
shareholders, harmless from and against and shall defend promptly Purchaser from
and reimburse Purchaser for all losses, damages, costs, expenses, liabilities,
obligations, actions, demands, judgments, interest or claims of any kind,
including without limitation, reasonable attorney's fees, costs of investigation
and remediation, punitive damages, consequential damages or other special
damages that Purchaser may at any time suffer or incur, or become subject to, as
a result of or in connection with:
(a) any breach or inaccuracy of any of the representations and warranties
made by Vendor in or pursuant to this Agreement;
(b) any failure or breach by either Vendor to carry out, perform, satisfy,
and discharge any of its covenants, agreements, undertakings, liabilities, or
obligations under this Agreement; or
(c) any suit, action or other proceeding brought by any Person arising out
of any of the matters referred to in this Section 11.1.
11.2 Indemnification of Vendor. Purchaser shall indemnify and hold Vendor,
its directors, officers, employees, agents and shareholders, harmless from and
against, and shall defend promptly Vendor from and reimburse them for, any and
all losses, damages, costs, expenses, liabilities, obligations, actions,
demands, judgments, interest or claims of any kind, including without
limitation, reasonable attorney's fees, costs of investigation and remediation,
punitive damages, consequential damages or other special damages that Vendor may
at any time suffer or incur, or become subject to, as a result of or in
connection with:
(a) any breach or inaccuracy of any of the representations and warranties
made by Purchaser in or pursuant to this Agreement;
(b) any failure or breach by Purchaser to carry out, perform, satisfy, and
discharge any of its covenants, agreements, undertakings, liabilities, or
obligations under this Agreement; and
(c) any suit, action, or other proceeding brought by any Person arising out
of any of the matters referred to in this Section 11.2.
11.3 Notice; Third Party Claims.
(a) For purposes of this Section 11.3, "Indemnified Party" and "Indemnifying
Party" shall refer either to Purchaser or to Vendor, as applicable. The
Indemnified Party shall notify the Indemnifying Party in writing of any claim,
demand, action or proceeding for which indemnification will be sought under
Section 11.1 or Section 11.2, and if such claim, demand, action or proceeding is
a third party claim, demand, action or proceeding, the Indemnifying Party will
have the right at its expense to assume the defense thereof using counsel
reasonably acceptable to the Indemnified Party. The Indemnified Party shall
have the right: (i) to participate, at its own expense, with respect to any
such third party claim, demand, action or proceeding that is being diligently
defended by the Indemnifying Party, and (ii) to assume the defense of such third
party claim, demand, action or proceeding, at the cost and expense of the
Indemnifying Party, if the Indemnifying Party fails or ceases to defend the
same. The assumption of the defense by the Indemnifying Party shall constitute
an admission that such third party claim, demand, action or proceeding is
indemnifiable pursuant to Section 11.1 or Section 11.2. The failure to assume
the defense shall in no way affect the Indemnifying Party's indemnification
obligations pursuant to Section 11.1 or Section 11.2.
(b) Each party defending a claim shall keep the other party informed of the
progress of such claim and shall comply with all reasonable requests for copies
of documents related to the claim and provide to the other party an opportunity,
from time to time, to consult with counsel defending the claim. In connection
with any such third party claim, demand, action or proceeding, the parties shall
cooperate with each other and provide each other with access to relevant books
and records in their possession.
(c) If a firm written offer is made to settle any such third party claim,
demand, action or proceeding solely in exchange for monetary sums to be paid by
the Indemnifying Party and the Indemnifying Party proposes to accept such
settlement and the Indemnified Party refuses to consent to such settlement,
then: (i) the Indemnifying Party shall be excused from, and the Indemnified
Party shall be solely responsible for, all further defense of such third party
claim, demand, action or proceeding; (ii) the maximum liability of the
Indemnifying Party relating to such third party claim, demand, action or
proceeding shall be the amount of the proposed settlement if the amount
thereafter recovered from the Indemnified Party on such third party claim,
demand, action or proceeding is greater than the amount of the proposed
settlement; and (iii) the Indemnified Party shall pay all attorneys' fees and
legal costs and expenses incurred after rejection of such settlement by the
Indemnified Party, but if the amount thereafter recovered by such third party
from the Indemnified Party is less than the amount of the proposed settlement,
the Indemnified Party shall be reimbursed by the Indemnifying Party for such
attorneys' fees and legal costs and expenses up to a maximum amount equal to the
difference between the amount recovered by such third party and the amount of
the proposed settlement.
ARTICLE 12 - GENERAL
12.1 Survival of Representations and Warranties. All representations and
warranties of the parties contained in this Agreement or made pursuant to this
Agreement shall survive the Closing Date and the consummation of the
transactions contemplated by this Agreement for a period of two (2) years
following the Closing Date, except for the representations and warranties set
forth in Section 3.1(a) through to Section 3.1(f) and Section 4.1(a) through to
Section 4.1(e), all of which shall survive indefinitely.
12.2 Risk of Loss. Risk of loss with respect to the Assets will remain with
and on Vendor until the Close of Business on the Closing Date.
12.3 Waiver by Purchaser. Purchaser may, at its option, waive in whole or
in part any or all of the provisions herein for the benefit of Purchaser.
12.4 Waiver by Vendor. Vendor may, at its option, waive in whole or in part
any or all of the provisions herein for the benefit of Vendor.
12.5 Limitation of Waiver. No waiver pursuant to Section 12.3 or Section
12.4 of the whole or any part of any provision will operate as a waiver of any
other part thereof or as a waiver of any other provision.
12.6 Notice. Any notice or other communication required or permitted to be
given hereunder or for the purposes hereof will be sufficiently given if
delivered to the party to whom it is given or sent by means of electronic
transmission addressed to such party:
(a) in the case of a notice or other communication to Purchaser at:
Thrust Energy Corp.
0000-0000 Xxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxx Xxxxx
Fax: (000) 000-0000
(b) in the case of a notice or other communication to Vendor at:
American Mining Corporation
16:1 Mill Site
X.X. Xxx 00
Xxxxxx Xxxx, Xxxxxx 00000
Attention: Xxxx XxxXxxxxx
Fax: (000) 000-0000
or at such other address or number as the party to whom such notice or other
communication is to be given has last notified the party giving the same in the
manner provided in this Section 12.6. Any notice or other communication which
is delivered or sent by means of electronic transmission will be deemed to have
been given and received on the day after it is delivered or transmitted,
provided that if such day is not a Business Day, the notice or other
communication will be deemed to have been given and received on the next
Business Day following such day.
12.7 Inurement. All the terms and provisions of this Agreement will be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
12.8 Entire Agreement. This Agreement and the Schedules attached hereto set
forth the entire agreement and understanding of the parties in respect of the
transactions contemplated hereby and supersede all previous agreements and
understandings, oral or written, among the parties or their respective
representatives with respect to the matters herein and will not be modified or
amended except by written agreement signed by the parties to be bound thereby.
IN WITNESS WHEREOF the parties have duly executed these presents as of the day
and year first above written.
AMERICAN MINING CORPORATION
By: /s/ Xxxx XxxXxxxxx
Xxxx XxxXxxxxx
President
THRUST ENERGY CORP.
By: /s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
President
SCHEDULE A
EQUIPMENT
1. FIFTY PER CENT (50%) ownership interest in the permitted, operating mill
facility, together with equipment and supplies for concentrating molybdenum
sulphide, collectively referred to as the "Ashdown Mill" and more particularly
described in that certain Letter of Intent dated March 22, 2011, between Vendor
and Win-Eldrich Gold Inc.
2. ONE HUNDRED PER CENT (100%) ownership interest in and to the milling
equipment outlined on Schedules A & B to that certain Binding Letter of Intent
and Term Sheet dated March 21, 2011 between Vendor and NJB Mining Inc.
3. ONE HUNDRED PER CENT (100%) ownership interest in and to the following
equipment:
a. ONE (1) Plasma (Pillar) Tilt Furnace 750 kg capacity, with skidding
and platforms, cooler unit, environmental water bath and fume
management, miscellaneous pumps, electrical MCC unit and miscellaneous
lab;
b. ONE (1) Xxxxxxxx 800 mm filter press;
c. ONE (1) 12-pack 10" Xxxxx hydrocylone;
d. ONE (1) 80 ton fine ore bin; and
e. Miscellaneous equipment, including spare plate, frames, four (4)
pumps, ancillary spare parts, filter press and dual tire stack frame.
SCHEDULE B
AGREEMENTS
1. Exploration Agreement and Mill Site Agreement between Vendor and Silver
Peak Properties LLC, dated September 23, 2010, relating to the leasing of 27.5
contiguous acres of land known as 16:1 Mine Site, located within Xxxxxxxxx
County, Nevada, and appurtenances thereto.
2. Letter of Intent between Vendor and Win-Eldrich Gold Inc., dated March
22, 2011, and the Binding Memorandum of Understanding attached thereto as
Schedule C, all of which relate to the acquisition by Vendor of a 50% interest
in a permitted, operating mill facility, together with equipment and supplies
for concentrating molybdenum sulphide.
3. Memorandum of Understanding between Vendor and Crown Gold Corporation,
dated November 16, 2010, relating to ore processing.
4. Binding Letter of Intent and Term Sheet dated March 21, 2011, between
Vendor and NJB Mining Inc. relating to the acquisition by Vendor of milling
equipment.
SCHEDULE C
AUTHORIZATIONS AND CONSENTS REQUIRED BY THE VENDORS
1. Consent of Silver Peak Properties LLC required for the assignment of all
Vendor's rights under the Exploration Agreement and Mill Site Agreement dated
September 23, 2010, between Vendor and Silver Peak Properties LLC.
2. Consent of Win-Eldrich Gold Inc. to the assignment of all Vendor's rights
under the Letter of Intent dated March 22, 2011 between Vendor and Win-Eldrich
Gold Inc., and the Binding Memorandum of Understanding attached thereto as
Schedule C.
3. Consent of Crown Gold Corporation to the assignment of all Vendor's
rights under the Memorandum of Understanding dated November 16, 2010, between
Vendor and Crown Gold Corporation.
4. Consent of NJB Mining Inc. to the assignment of all Vendor's rights under
the Binding Letter of Intent and Term Sheet dated March 21, 2011 between Vendor
and NJB Mining Inc.
SCHEDULE D
AUTHORIZATIONS AND CONSENTS REQUIRED BY THE PURCHASER
1. Consent of Xxxx XxxXxxxxx to the purchase and sale of the Assets under
the provisions of that certain General Security Agreement dated May 1, 2007,
between Vendor and Xxxx XxxXxxxxx.
SCHEDULE E
DELIVERIES OF THE VENDORS AT CLOSING
1. Duly executed Incumbency Certificate for Vendor.
2. A certified copy of a resolution of Vendor's directors authorizing the
entering into of this agreement and the sale of the Assets provided for in this
agreement.
3. A certified copy of a resolution of Vendor's shareholders the sale of the
Assets provided for in this agreement.
4. A certificate executed by an officer of Vendor as to the accuracy of
Vendor's representations and warranties as of the Closing Date and as to the
compliance with and performance of its covenants and obligations to be performed
or complied with at or before the Closing.
5. Duly executed Assignment and Assumption Agreement.
6. A copy of each of the Contracts, each certified as a true copy thereof by
an officer of Vendor.
7. A copy of that certain General Security Agreement dated May 1, 2007,
between Vendor and Xxxx XxxXxxxxx, certified as a true copy thereof by an
officer of Vendor.
8. The Technical Data.
SCHEDULE F
DELIVERIES OF THE PURCHASER AT CLOSING
1. Duly executed Incumbency Certificate for Purchaser.
2. A certified copy of a resolution of Purchaser's directors authorizing the
entering into of this Agreement and the purchase of the Assets provided for in
this Agreement.
3. A certificate executed by an officer of Purchaser as to the accuracy of
Purchaser's representations and warranties as of the Closing date and as to the
compliance with and performance of its covenants and obligations to be performed
or complied with at or before the Closing.
4. Duly executed Executive Employment Agreement.
SCHEDULE G
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS AGREEMENT is made as of the ____ day of April, 2011,
BETWEEN:
AMERICAN MINING CORPORATION, a corporation existing under the laws of Nevada and
having a registered office at 0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxx,
Xxxxxx 00000 ("Vendor"),
AND
THRUST ENERGY CORP., a corporation existing under the laws of Nevada having a
registered office at 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxx 00000
("Purchaser").
WHEREAS by an Asset Purchase Agreement dated April 18, 2011 (the "Purchase
Agreement") made between Vendor and Purchaser, the Vendor agreed to transfer to
Purchaser and Purchaser agreed to purchase, the Assets and Purchaser agreed to
assume all obligations of the Vendor that arise after the Closing Date in
respect of the Contracts.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual
covenants herein contained and other good and valuable consideration (the
receipt and sufficiency of which is hereby acknowledged by each of the parties)
the parties hereto covenant and agree as follows:
1. DEFINITIONS. All terms that are defined in the Purchase Agreement that
are used and capitalized in this Agreement shall have the respective meanings
specified in the Purchase Agreement except as otherwise defined herein.
2. ASSIGNMENT. The Vendor hereby absolutely assigns, conveys, transfers and
sets over unto the Purchaser,
(a) all of Vendor's right, title and interest in and to the Leasehold
Property;
(b) all of Vendor's right, title and interest in and to the Technical Data;
(c) all of Vendor's right, title and interest in and to the Equipment;
(d) all of Vendor's right, title and interest in and to the Contracts;
(e) any and all payments due or accruing due or at any time after the
Closing Date to become due to Vendor under the Contracts; and
(f) the benefit of all guarantees, warranties, indemnities and covenants
made or given by the parties to the Contracts other than Vendor,
with full power and authority to xxx for damages for breach of any warranty or
covenant or for specific performance of covenants in the name of Vendor.
3. ASSUMPTION BY THE PURCHASER. As of the Closing Date, Purchaser does
hereby assume those obligations and liabilities of Vendor under the Contracts
that are to be paid, satisfied, discharged, performed or fulfilled after the
Closing Date and that did not arise directly or indirectly as a result of a
default occurring prior to the Closing Date (which obligations and liabilities
are herein called the "Assumed Obligations") and covenants and agrees with
Vendor that from the Closing Date Purchaser will pay, satisfy, discharge,
perform and fulfil all the Assumed Obligations.
4. VENDOR TO HOLD PROPERTY INTERESTS IN TRUST. Should any property or right
intended to be transferred hereunder not be transferred to Purchaser at the
Closing, Vendor will hold such property or right as bare trustee in trust for
and at the sole cost (without any premium) of Purchaser from the Closing Date
until such property or right is effectually transferred.
5. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada and of Canada applicable to the
State of Nevada.
6. FURTHER ASSURANCES. Each of the parties shall at all times hereafter
execute and deliver all such further documents and instruments and shall do such
further acts and things as may be reasonably required to give full effect to
this Agreement.
7. INUREMENT. This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and assigns.
8. COUNTERPARTS. This Agreement may be executed in counterparts and when
each party has executed a counterpart each of such counterparts shall be deemed
to be an original and all of such counterparts when taken together shall
constitute one and the same agreement.
9. EXECUTION. This Agreement may be executed and delivered by facsimile.
IN WITNESS WHEREOF this Agreement has been executed as of the day and year first
above written.
AMERICAN MINING CORPORATION
By:
Xxxx XxxXxxxxx
President
THRUST ENERGY CORP.
By:
Xxxxxx Xxxxx
President
SCHEDULE H
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of the ____ day of May, 2011,
BETWEEN
AMERICAN MINING CORPORATION, a corporation incorporated under the laws of the
State of Nevada, having a registered office located at 0000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxx Xxxx, Xxxxxx 00000 (the "Corporation"),
AND
XXXX XXXXXXXXX, of Oceanside, California (the "Executive").
WHEREAS,
A. the Corporation has acquired substantial assets from a company founded by
the Executive for the purpose of expanding the business of the Corporation (the
"Acquisition");
B. it was a condition to the completion of the Acquisition that the
Executive accept an offer of employment from the Corporation in the form of this
agreement to provide the services described herein;
C. the Corporation recognizes that the Executive has special skills relating
to and extensive familiarity with the assets acquired through the Acquisition
and the expanded business of the Corporation;
D. the Executive has expressed concern to the Corporation that the
Executive's employment could be terminated before the Retirement Date without
cause or adversely modified; and
E. the board of directors of the Corporation has determined that it would be
in the best interests of the Corporation to induce the Executive to remain in
the employ of the Corporation until the Retirement Date (as hereinafter defined)
and that provisions of this agreement are fair and reasonable and in the best
interests of the Corporation.
NOW THEREFORE in consideration of the premises hereof and of the mutual
covenants and agreements hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties, the parties agree as follows:
1. INTERPRETATION
1.1 The headings of the Articles, sections, subsections and clauses herein
are inserted for convenience of reference only and shall not affect the meaning
or construction hereof.
1.2 This agreement shall be construed and interpreted in accordance with the
laws of the State of Nevada and the federal laws of the United States of America
applicable therein. Each of the parties hereby irrevocably attorns to the
jurisdiction of the courts of the State of Nevada with respect to any matters
arising out of this agreement.
1.3 If any provision of this agreement is determined to be void or
unenforceable in whole or in part, it shall not be deemed to affect or impair
the validity of any other provision herein and each such provision is deemed to
be separate, distinct and severable.
1.4 For the purposes of this agreement, the following terms shall have the
following meanings, respectively:
(a) "ANNUAL SALARY" means the sum of:
(i) the aggregate of the annual salaries of the Executive, payable to the
Executive by the Corporation and its subsidiaries as at the end of the month
immediately preceding the month in which the Executive's employment is
terminated; and
(ii) an amount equal to the greater of:
(1) the aggregate amount of all remuneration, salaries, bonuses and benefits
(including the present cash value of any non-cash remuneration, bonuses or
benefits) not included in clause 1.4(a)(i) above that the board of directors of
the Corporation in its absolute discretion estimates would be payable to the
Executive during the fiscal year of the Corporation in which the Executive's
employment is terminated by the Corporation and its subsidiaries, assuming: (1)
the employment of the Executive was not terminated during such year; and (2) the
Executive benefits from and participates in such remuneration, salaries, bonuses
and benefits on a basis consistent with the Corporation's established practices
in effect for senior executives of the Corporation and its subsidiaries
immediately prior to the Termination Date; and
(2) one-half of the aggregate amount of all remuneration, salaries, bonuses
(including the present cash value of any non-cash remuneration, bonuses or
benefits) not included in clause 1.4(a)(i) above paid or payable to the
Executive by the Corporation and its subsidiaries during the 24 calendar months
immediately preceding the Termination Date;
(b) "BOARD" means the board of directors of the Corporation.
(d) "EFFECTIVE DATE" means May 16, 2011.
(e) "GOOD REASON" means the occurrence of any of the following without the
Executive's written consent, except in connection with the termination of the
employment of the Executive for Just Cause, Death or Disability:
(i) a change (other than those that are clearly consistent with a promotion)
in the Executive's position or duties (including any position or duties as a
director of the Corporation), responsibilities, title or office, which includes
any removal of the Executive from or any failure to re-elect or re-appoint the
Executive to any such positions or offices;
(ii) a reduction by the Corporation or any of its subsidiaries of the
Executive's salary, benefits or any other form of remuneration or any change in
the basis upon which the Executive's salary, benefits or any other form of
remuneration payable by the Corporation or its subsidiaries is determined or any
failure by the Corporation to increase the Executive's salary, benefits or any
other forms of remuneration payable by the Corporation or its subsidiaries in a
manner consistent (both as to frequency and percentage increase) with the
Corporation's established practices with respect to the senior executives of the
Corporation and its subsidiaries;
(iii) any failure by the Corporation or its subsidiaries to continue in
effect any benefit, bonus, profit sharing, incentive, remuneration or
compensation plan, stock ownership or purchase plan, pension plan or retirement
plan in which the Executive is participating or entitled to participate, or the
Corporation or its subsidiaries taking any action or failing to take any action
that would adversely affect the Executive's participation in or reduce his
rights or benefits under or pursuant to any such plan, or the Corporation or its
subsidiaries failing to increase or improve such rights or benefits on a basis
consistent with the Corporation's established practices with respect to the
senior executives of the Corporation and its subsidiaries;
(iv) any failure by the Corporation or its subsidiaries to provide the
Executive with the number of paid vacation days to which he is entitled or the
Corporation or its subsidiaries failing to increase such paid vacation on a
basis consistent with the Corporation's established practices with respect to
the senior executives of the Corporation and its subsidiaries;
(v) the Corporation or its subsidiaries taking any action to deprive the
Executive of a material benefit under this agreement, or the Corporation or its
subsidiaries failing to increase or improve such material benefit on a basis
consistent with the Corporation's established practices with respect to the
senior executives of the Corporation and its subsidiaries;
(vi) any breach by the Corporation of any provision of this agreement;
(vii) the good faith determination by the Executive that the Executive's
status or responsibility in the Corporation or its subsidiaries have been
diminished or the Executive is being effectively prevented from carrying out his
duties and responsibilities; or
(viii) the failure by the Corporation to obtain, in a form satisfactory to
the Executive, an effective assumption of its obligations hereunder by any
successor to the Corporation, including a successor to a material portion of its
business.
(k) "JUST CAUSE" means the causes that are sufficient under the common law
to justify dismissal from a position of employment and includes, without
limiting the generality of the foregoing, the occurrence of any of the
following:
(i) a repeated and demonstrated failure on the part of the Executive to
perform the material duties of the Executive's position in a competent manner,
and which the Executive fails to substantially remedy within a reasonable period
of time after receiving written notice thereof from the Corporation;
(ii) failure by the Executive to honor his fiduciary duties to the
Corporation, including the duty to act in the best interests of the Corporation;
(iii) the Executive or any member of his family making a personal profit
arising out of or in connection with a transaction to which the Corporation is a
party or with which it is associated without making disclosure to and obtaining
the prior written consent of the Corporation;
(iv) failure or refusal by the Executive to obey reasonable instructions
given in the course of employment by the Chairman or the Board which not
inconsistent with the Executive's management position and which are not remedied
by the Executive within a reasonable period of time after receiving written
notice of such failure or refusal;
(v) being found by a court of competent jurisdiction in a civil action or by
an administrative agency to have violated a federal or state securities or
commodities law, not subsequently reversed, suspended or vacated;
(vi) or becoming subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities;
(vii) committing an act of fraud or material dishonesty;
(viii) conviction in a criminal proceeding; or
(ix) engaging in conduct that is detrimental to the reputation of the
Corporation or any of its Affiliates in any material respect.
(l) "PROFIT SHARING POOL" means the percentage of pre-tax profit that is
determined by the Board to be available for distribution to the Corporation's
participating employees under any profit-sharing plan that may be established
and continued by the Corporation from time to time.
(m) "RETIREMENT DATE" means the date that is the TWENTIETH (20th)
ANNIVERSARY of the Effective Date.
(n) "RIGHTS" has the meaning ascribed thereto in paragraph 5.3(b).
(o) "TERMINATION DATE" means the date of termination of the Executive's
employment, whether by death of the Executive, by the Executive or by the
Corporation.
2. EMPLOYMENT
2.1 TERM. The Corporation shall employ the Executive for a period
commencing on the Effective Date and continuing until the Retirement Date,
unless such employment is terminated earlier as hereinafter provided.
2.2 DUTIES AND OBLIGATIONS. The Executive shall serve the Corporation and
any subsidiaries of the Corporation in such capacity or capacities and shall
perform such duties and exercise such powers pertaining to the management and
operation of the Corporation and any subsidiaries and associates of the
Corporation as may be determined from time to time by the board of directors of
the Corporation to be consistent with the office of the Executive and in
accordance with the bylaws of the Corporation. Without limitation of the
foregoing, the Executive shall occupy the office of President and Chief
Executive Officer of the Corporation. The Executive shall:
(a) devote his full time (which shall not be less than 35 hours per week)
and attention and his best efforts during normal business hours to the business
and affairs of the Corporation;
(b) perform those duties that may reasonably be assigned to the Executive
diligently and faithfully to the best of the Executive's abilities and in the
best interests of the Corporation; and
(c) use his best efforts to promote the interests and goodwill of the
Corporation.
2.3 REPORTING. The Executive shall report to the person holding the office
of Chairman of the Board. The Executive shall report fully on the management,
operations and business affairs of the Corporation and advise to the best of his
ability and in accordance with reasonable business standards on business matters
that may arise from time to time during the Term.
3. REMUNERATION
3.1 BASE SALARY. The annual base salary payable to the Executive for his
services hereunder for the first year of the term of this agreement shall be
$180,000 exclusive of bonuses, benefits and other compensation. The annual base
salary payable to the Executive for his services hereunder for each successive
year of employment hereunder, exclusive of bonuses, benefits and other
compensation, shall increase by FIVE PERCENT (5%) of the annual base salary for
the immediately preceding year. The annual base salary payable to the Executive
pursuant to the provisions of this paragraph shall be payable in equal
semi-monthly instalments in arrears on the 1st and 15th day of each month or in
such other manner as may be mutually agreed upon, less, in any case, any
deductions or withholdings required by law.
3.2 BENEFITS. The Corporation shall provide the Executive with employee
benefits comparable to those provided by the Corporation from time to time to
other senior executives of the Corporation.
3.3 STOCK PLANS. The Corporation shall permit the Executive to participate
in any share option plan, share purchase plan, retirement plan or similar plan
offered by the Corporation from time to time to its senior executives in the
manner and to the extent authorized by the Board.
3.4 BONUS. The Board of Directors may supplement the Executive's annual
salary with a bonus amount to be determined by the Board in its sole and
absolute discretion, payable from the Corporation's General Profit Sharing Pool
within three months of the end of each fiscal year end of the Corporation, but
which bonus may not be given at all in any year.
3.5 DEDUCTIONS. Salary and benefit payments under this agreement shall be
subject to such deductions as the Employer is from time to time required to make
pursuant to law, government regulations or by consent of the Employee.
3.6 VACATION. The Executive shall be entitled to FOUR WEEKS paid vacation
per fiscal year of the Corporation at a time approved in advance by the
Chairman, which approval shall not be unreasonably withheld but shall take into
account the staffing requirements of the Corporation and the need for the timely
performance of the Executive's responsibilities. In the event that the
Executive does not take all the vacation to which he is entitled in any fiscal
year, such vacation may be carried forward into the subsequent fiscal year.
3.7 EXPENSES. The Executive shall be reimbursed for all reasonable travel
and other out-of-pocket expenses actually and properly incurred by the Executive
from time to time in connection with carrying out his duties hereunder. For all
such expenses the Executive shall furnish to the Corporation originals of all
invoices or statements in respect of which the Executive seeks reimbursement.
4. TERMINATION
4.1 FOR JUST CAUSE. The Corporation may terminate the employment of the
Executive summarily for Just Cause without notice.
4.2 DUE TO DEATH. This agreement shall terminate without notice upon the
death of the Executive.
4.3 DUE TO DISABILITY. The Corporation may terminate the employment of the
Executive if the Executive becomes permanently disabled. The Executive shall be
deemed to have become permanently disabled if because of ill health, physical or
mental disability, or for other causes beyond the control of the Executive, the
Executive has been continuously unable or unwilling or has failed to perform the
Executive's duties for 120 consecutive days, or if, during any year of the
employment period, the Executive has been unable or unwilling or has failed to
perform his duties for a total of 180 days, consecutive or not. The term "any
year of the employment period" means any period of 12 consecutive months during
the employment period.
5. SEVERANCE
5.1 JUST CAUSE OR GOOD REASON. If the Executive's employment is terminated
by the Corporation for just cause, or is terminated by the Executive without
Good Reason, the Corporation shall pay to the Executive, if not theretofore
paid, the fraction of the Annual Salary earned by or payable to the Executive by
the Corporation and its subsidiaries during the then current fiscal year of the
Corporation for the period to and including the Termination Date, and neither
the Corporation nor its subsidiaries shall have any further obligation to the
Executive under this agreement.
5.2 DISABILITY. If the Executive's employment is terminated by reason of
permanent disability, the Executive shall be entitled thereafter to receive
reasonable termination and severance payments and allowances and disability and
other benefits in a manner consistent with and at least equal in amount to those
provided by the Corporation to disabled senior executives of the Corporation in
accordance with such plans, programs and policies relating to disability, if
any, as are in effect at the Termination Date.
5.3 NOT JUST CAUSE, GOOD REASON, DISABILITY OR DEATH. If the Executive's
employment is terminated by the Corporation other than for Just Cause,
disability or death or is terminated by the Executive for Good Reason:
(a) the Corporation shall pay to or to the order of the Executive by no more
than two lump sum payments in cash or certified check within ten days after the
Termination Date, the aggregate of the following amounts (less any deductions
required by law):
(i) if not theretofore paid, the Executive's Annual Salary for the then
current fiscal year of the Corporation for the period to and including the
Termination Date; and
(ii) as partial compensation for the Executive's loss of employment, an
amount equal to the result obtained when the Annual Salary is multiplied by a
fraction, the numerator of which is the number of days between the Termination
Date and the Retirement Date and the denominator of which is 365;
(b) if the Executive holds any options, rights, warrants or other
entitlements for the purchase or acquisition of shares in the capital of the
Corporation or any affiliate thereof (collectively, "RIGHTS"), regardless of
whether such Rights may then be exercised or if such Rights would have been
issued to the Executive had his employment not been terminated until the
Retirement Date, and had the Executive been granted such Rights on a basis
consistent with those extended to senior executives of the Corporation, all such
Rights shall then be deemed to be granted to the Executive and available for
exercise and, if the Executive so elects by notice in writing to the
Corporation, such Rights shall be deemed to have been exercised at the price
provided for in such Rights and the Executive shall be deemed to have
immediately sold the securities arising from such exercise to the Corporation
for the fair market value thereof (which in the event of dispute shall be
determined within 30 days of the delivery of such notice at the Corporation's
expense by a valuator satisfactory to both the Corporation and the Executive
using such assumptions or methods as such valuator may think in its absolute
discretion best reflect the intention of this clause 5.3(b), and such
determination shall be final and binding) and the Corporation shall pay to the
Executive, in the manner and at the time contemplated by clause 5.3(a), the
difference between the aggregate exercise price for such securities and their
deemed acquisition price to the Corporation;
(c) the Corporation shall pay, in the manner and at the time contemplated by
clause 5.3(a) above, an amount equal to the present value (as determined at the
Corporation's expense by an actuary acceptable to the Corporation and the
Executive, which determination shall be final and binding) of all pension
benefits as they existed at the date of the Control Change or the Termination
Date, whichever is more favorable to the Executive, and any employment and
pension benefits to which the Executive would have been entitled had his
employment continued until the Executive's Retirement Date and had his pension
benefits been increased in a manner consistent with that for senior executives
of the Corporation generally;
(d) the Corporation shall pay to the Executive all outstanding and accrued
regular and special vacation pay to the Termination Date.
5.4 NO PENALTY OR MITIGATION. Any payment to the Executive pursuant to
Section 5 hereof is not intended and will not be of the nature of a penalty and
shall be considered by the parties as liquidated damages. Notwithstanding
anything to the contrary contained in this agreement, there shall be no duty,
obligation or requirement on the Executive hereunder or otherwise to mitigate
the amount of any payment provided for in Section 5 hereof by seeking other
employment or otherwise, nor shall the amount of such payment be reduced by
reason of compensation or other income the Executive receives for services
rendered after the termination of the Executive's employment.
6. MISCELLANEOUS
6.1 NOTICE. Any notice required or permitted to be given under this
agreement shall be in writing and shall be properly given if delivered by hand
or mailed by prepaid registered mail addressed:
in the case of the Corporation, to:
American Mining Corporation
16:1 Mill Site
X.X. Xxx 00
Xxxxxx Xxxx, Xxxxxx 00000
Fax: (000) 000-0000
in the case of the Executive, to the last address of the Executive in the
records of the Corporation and its subsidiaries;
or to such other address as the parties may from time to time specify by notice
given in accordance herewith. Any notice so given shall be conclusively deemed
to have been given or made on the day of delivery, if delivered, or if mailed by
registered mail, upon the date shown on the postal return receipt as the date
upon which the envelope containing such notice was actually received by the
addressee.
6.2 PRIVACY. By accepting employment with the Corporation, the Executive
consents to the Corporation collecting, using and disclosing his personal
information for purposes relating to the maintenance of the employment
relationship. The purposes of the Corporation's collection, use and disclosure
include, but are not limited to:
(a) ensuring that the Executive is properly remunerated for his services to
the Corporation which shall include disclosure to third party payroll providers;
(b) administering and/or facilitating the provision of any benefits to which
the Executive is or may become entitled, including bonuses, benefits, pensions,
registered retirement savings plans, short, medium and long-term incentive
plans, including disclosure of the Executive's personal information to the
Corporation's third party service providers and administrators;
(c) ensuring that the Corporation is able to comply with any regulatory,
reporting and withholding requirements relating to the Executive's employment;
(d) performance and promotion;
(e) complying with the Corporation's obligations to report improper or
illegal conduct by any director, officer, employee or agent of the Corporation
under any applicable securities, criminal or other law;
(f) allowing a potential purchase of the shares or assets of the Corporation
to conduct due diligence with respect to employment obligations of the
Corporation, subject to compliance with the treatment of such information as
required by applicable legislation respective privacy; and
(g) any other purpose for which the Executive is given notice and which is
reasonably related to the maintenance of the Executive's employment
relationship.
6.3 NO PRIOR AGREEMENTS. There are no statements or representations, oral
or otherwise, express or implied, with respect to the employment opportunity
offered to the Executive that form part of this agreement, other than those that
are set forth expressly in this agreement. This agreement supersedes any prior
representations, statements or agreements with respect to the subject-matter
hereof and the employment opportunity offered to the Executive. The parties
agree that any such prior representations, statements or agreements, if made,
were not material to the execution of this agreement, or to the decision of
either party to enter into this agreement.
6.4 DISCLOSURE. During the employment period, the Executive shall promptly
disclose to the Chairman full information concerning any interest, direct or
indirect, of the Executive (as owner, shareholder, partner, lender or other
investor, director, officer, employee, consultant or otherwise) or any member of
his family in any business that is reasonably known to the Executive to purchase
or otherwise obtain services or products from, or to sell or otherwise provide
services or products to the Corporation or to any of its suppliers or customers.
6.5 RETURN OF MATERIALS. All files, forms, brochures, books, materials,
written correspondence, memoranda, documents, manuals, computer disks, software
products and lists (including lists of customers, suppliers, products and
prices) pertaining to the business of the Corporation or any of its subsidiaries
or Affiliates that may come into the possession or control of the Executive
shall at all times remain the property of the Corporation or such subsidiary or
Affiliate, as the case may be. On termination of the Executive's employment for
any reason, the Executive shall deliver promptly to the Corporation all such
property of the Corporation that is in the possession of the Executive or is
directly or indirectly under the control of the Executive. The Executive shall
not make reproductions or copies of any such property or other property of the
Corporation for his personal use or that of any other party.
6.6 LEGAL EXPENSES. The Corporation hall pay, without requiring the
Executive first to pay such fees and expenses, all legal fees and expenses that
the Executive, the Executive's legal representatives or the Executive's family
may reasonably incur or face arising out of or in connection with this agreement
(but this agreement only), including any litigation concerning the validity or
enforceability of, or liability under, any provision of this agreement or any
action by the Executive, the Executive's legal representatives or the
Executive's family to enforce his or their rights under this agreement (but this
agreement only), regardless of the outcome of such litigation, and the
Corporation agrees to pay interest, compounded quarterly, on the total unpaid
amount payable under this agreement, such interest to be calculated at a rate
equal to TWO PERCENT (2%) in excess of the prime commercial annual lending rate
for Canadian dollar demand loans announced from time to time by THE ROYAL BANK
OF CANADA during the period of such nonpayment.
6.7 NO ASSIGNMENT. This agreement is not assignable by either party without
the consent in writing of the other party, which consent may be unreasonably
withheld; provided that, the Corporation may assign this agreement without the
Executive's consent to an Affiliate of the Corporation if the Affiliate offers
comparable employment and no material prejudice to the Executive, including
diminution of responsibilities, results from such assignment.
6.8 SUCCESSORS. This agreement shall be binding on and inure to the benefit
of the successors and assigns of the Corporation and the heirs, executors,
personal legal representatives and permitted assigns of the Executive. Without
limiting the generality of the foregoing, the Corporation shall require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business or assets of the
Corporation, to expressly assume and agree to perform the obligations under this
agreement in the same manner and to the same extent that the Corporation would
be required to perform if no such succession had taken place.
6.9 AMENDMENT. This agreement may be amended only by an instrument in
writing signed by both parties.
6.10 WAIVER. No amendments to this agreement shall be valid or binding
unless set forth in writing and duly executed by both of the parties hereto. No
waiver of any breach of any term or provision of this agreement shall be
effective or binding unless made in writing and signed by the party purporting
to give the same and, unless otherwise provided in the written waiver, shall be
limited to the specific breach waived.
6.11 LEGAL ADVICE. The Executive hereby represents and warrants to the
Corporation and acknowledges and agrees that:
(a) he has read and understands this agreement;
(b) he had the opportunity to seek and was not prevented nor discouraged by
the Corporation from seeking independent legal advice prior to the execution and
delivery of this agreement, and that in the event that he did not avail himself
of that opportunity prior to signing this agreement, he did so voluntarily
without any undue pressure; and
(c) the failure by the Executive to obtain independent legal advice shall
not be used by him as a defense to the enforcement of his obligations under this
agreement.
IN WITNESS WHEREOF the parties hereto have executed this agreement as of the
date first above written.
AMERICAN MINING CORPORATION
By:
Xxxxxx Xxxxx
President
XXXX XXXXXXXXX
SCHEDULE I
ALLOCATION OF PURCHASE PRICE
ASSET PERCENTAGE OF PURCHASE PRICE ALLOCATED
Assignment of Exploration Agreement and Mill Site Agreement between Vendor and
Silver Peak Properties LLC, dated September 31, 2010, relating to the leasing of
27.5 contiguous acres of land known as 16:1 Mine Site, located within Xxxxxxxxx
County, Nevada, and appurtenances thereto 42.5%
Assignment of Letter of Intent between Vendor and Win-Eldrich Gold Inc., dated
March 22, 2011, and the Binding Memorandum of Understanding attached thereto as
Schedule C, all of which relate to the acquisition by Vendor of a 50% interest
in a permitted, operating mill facility, together with equipment and supplies
for concentrating molybdenum sulphide 32.2%
Assignment of Memorandum of Understanding between Vendor and Crown Gold
Corporation, dated November 17, 2010, relating to ore processing
0.1%
Assignment of Binding Letter of Intent and Term Sheet dated March 21, 2011,
between Vendor and NJB Mining Inc. relating to the acquisition by Vendor of
milling equipment 7.8%
1 Plasma (Pillar) Tilt Furnace 750 kg capacity, with skidding and platforms,
cooler unit, environmental water bath and fume management, miscellaneous pumps,
electrical MCC unit and miscellaneous lab; 1 Xxxxxxxx 800 mm filter press; 1
12-pack 10" Xxxxx hydrocylone; 1 80-ton fine ore bin; and Miscellaneous
equipment, including spare plate, frames, four (4) pumps, ancillary spare parts,
filter press and dual tire stack frame. 17.4%
