Exhibit 10.19
AGREEMENT EFFECTIVE AS OF THE 31ST DAY OF DECEMBER, 1999
RESCISSION AND RELEASE AGREEMENT
BETWEEN:
NOBLE METAL GROUP INCORPORATED, a British Columbia Corporation having its
principal place of business at 000-000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxx Xxxxxxxx, X0X 0X0 (herein "Noble")
AND:
NAPTAU GOLD CORPORATION, a Delaware Corporation, having its registered
offices at 11th Floor, Xxxxxx Square North, 11th and Market Streets,
Wilmington, New Castle County, Delaware 19801 (herein "NAPTAU")
WITNESS THAT
WHEREAS
X. Xxxxx and Maritime Transport & Technology Ltd., a New York Corporation,
entered into an agreement on the 6th day of June, 1995 providing for the
acquisition by Naptau of certain assets of Noble, consisting of placer mining
leases in the Cariboo Mining Division of British Columbia in the area of Likely,
British Columbia, Canada bearing placer lease numbers 29, 1159, 1850 and 2093
(collectively the "Placer Leases") (the said agreement being hereinafter
referred to as the "Exchange Agreement");
B. On the same date, Naptau entered into an agreement with Noble for the
operation by Noble of the Placer Leases on behalf of Naptau (the "Operating
Agreement");
C. Under the terms of the Exchange Agreement, Noble received as partial
consideration for the transfer of assets consisting of the Placer Leases, the
delivery of 4 million shares of Naptau, and Naptau was obligated to pay Noble
USD$1,000,000 by September 3,1995 for the entering into of the Operating
Agreement, and was obligated to pay a further USD$1,000,000 by October 3,1995
for the funding of the 1995 mining operations on the Placer Mining Leases;
D. Naptau paid to Noble a total of USD$45,500 by December 31, 1995 for the
operating expenses relating to the 1995 mining operations on the Placer Leases;
E. Naptau was unable to pay the balance of the sums due and owing under the
Exchange Agreement and Operating Agreement until such time as the company had
been granted approval for its Registration Statement filed with the United
States Security and Exchange Commission on August 9,1995, and was also granted a
listing on the NASDAQ Small Cap Market as soon as the listing requirements were
met;
F. Both Noble and Naptau wished to have fulfilled the obligations of the
Exchange Agreement and Operating Agreement as soon as Naptau was in a position
to complete;
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G. By an agreement dated September 1, 1995, Naptau was granted an extension of
the time for performance of its obligations under the Exchange Agreement and
Operating Agreement to December31, 1995 (the "Extension Agreement);
H. By a second extension agreement dated April 30, 1996, Naptau was granted a
further extension for performance of its obligations under the Exchange
Agreement and Operating Agreement to June 30, 1996 (the "Second Extension
Agreement");
I. By a third extension and modification agreement dated July 26, 1996, there
was a conversion of USD$1,000,000 debt to 3,241 ounces of raw gold at a deemed
price of USD$380 per ounce with a schedule for payments as set out in that
agreement with the balance of USD$954,500 owing under the terms of the Exchange
Agreement and the Operating Agreement for the deemed expenses of the 1995 mining
operations to be paid by June 30,1997 (the "Third Extension Agreement");
J. A further modification and extension agreement was entered into as of
December 31st, 1997 (the "Fourth Extension Agreement"). It was a term of that
agreement that Xxxxx xxxxx to Naptau a further extension of time until December
31, 1998, in which to pay the balance of USD$954,500 due and owing under the
terms of the Exchange Agreement and the Operating Agreement for the deemed
expenses of the 1995 mining operations on the Placer Leases. Compounded interest
was payable and calculated semi-annually on the above amount at the rate of 10%
per annum to June 30, 1997 and at the rate of 12% per annum thereafter. (The
principal and interest together referred to as the "Debt")
K. The Placer Leases were on October 14, 1998 combined into a Lease of Placer
Minerals along with Placer Lease #1160 for a term of ten years bearing Mineral
Tenure #365488 out of the Cariboo Mining Division of British Columbia (the
"Mineral Tenure Lease"). The Mineral Tenure Lease is in the joint names of Noble
and Xxxxxxx Xxxxxx.
L. Naptau acquired Placer Lease #1160 in an Exchange Agreement with Xxxxxxx
Xxxxxx which was entered into on October 12,1995 ("the PL1160 Agreement"). Under
the terms of that agreement Naptau was obligated to pay Xxxxxxx Xxxxxx
US$200,000 for the acquisition of the said Placer Lease. There have been various
extension agreements to the PL1160 Agreement, but Naptau remains obligated to
pay Xxxxxxx Xxxxxx the principal amount of US$200,000. With the consent of
Xxxxxxx Xxxxxx and in order to enjoy the full benefit of the Mineral Tenure
Lease to itself, Noble has agreed that it will assume the obligations of Naptau
to pay the said sum of US$200,000 to Xxxxxx.
M. A fifth modification and extension agreement was entered into on March 9,1999
which provided for a further extension of time to Naptau to pay the Debt owing
by it to Noble by December 31st, 2001 and which provided for the deemed
conversion at U.S.$2.00 per share of 1,000,000 common shares of Naptau presently
held by Noble into 8695 ounces of raw gold which was to be paid and delivered in
accordance with the schedule therein (the "Fifth Extension Agreement").
N. Naptau with the concurrence of Noble obtained a listing on the NASDAQ
Electronic
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Bulletin Board. Since then, the management of Naptau experienced significant
changes and as of June 1999 has chosen to concentrate its business activities
and future growth in areas relating to e-commerce on the Internet. Naptau has
been unsuccessful in raising any funds that could be used to pay any of its debt
obligations to Noble.
0. Naptau was unable in 1999 to come up with any funds to pay to Noble for the
operating expenses on the placer leases, which combined with poor weather
conditions has resulted in no operating activity on the Placer Leases during
this year.
P. By a prior agreement between the parties, made in September 1999, Noble
agreed to an intercompany transfer of debts owing by Naptau to Xxxxxxx Xxxxxx of
the sum of US$51,637.50 as the value of conversion of ounces of raw gold payable
to Xxxxxxx Xxxxxx for the various extension agreements to the PL1160 Agreement;
and of the sum of US$9,382.86 for loans made by Xxxxxxx Xxxxxx to Naptau. Naptau
is obligated to repay these sums to Noble.
Q. Naptau has at the site of the Placer Leases and Placer Mining Claims hard
assets including but not limited to an interest in the production plant, pumps,
motors and a gold separation table, (all of which assets are collectively
referred to as the "Mining Equipment") all of which were purchased by Noble and
for which Naptau has yet to repay the same.
R. Neither of the parties has any present confidence in Naptau being in a
position to fulfill its contractual obligations to Noble in 2000 and to repay
any of the debts owing by Naptau to Noble.
S. There has been a recovery in the international price of gold which makes it
desirable for Noble to recover the property rights over the Placer Leases as
well as other placer leases in the area staked on behalf of Naptau and known as
the Xxx I and Xxx 2 Placer Mining Claims.
X. Xxxxx does not wish to be in a position of control or deemed control of
Naptau through the ownership either directly or indirectly of shares of the
latter company.
U. The parties wish to sever their relationship on terms that will allow them to
carry on their separate business endeavours without any further recourse of one
against the other relating to any of the foregoing recitals.
IT IS NOW AGREED that in consideration of the payment of TEN DOLLARS ($10) by
Naptau to Noble, the receipt and sufficiency of which is hereby acknowledged,
and the further mutual covenants and agreements following, that:
1. Naptau hereby reconveys to Noble the Placer Leases, as now combined in the
Mineral Tenure Lease including all attached rights to benefit from the
development and extraction of all minerals, precious stones and nuggets there
from and hereby agrees to assign, transfer and deliver to Noble all documents of
title relating to the Mineral Tenure Lease.
2. Naptau hereby conveys to Noble all possessory and proprietary rights to the
placer
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properties in the Cariboo Mining Division of British Columbia known as the Xxx 1
and Xxx 2 Placer Mining Claims and agrees to deliver any documents of title that
may be necessary to effect this purpose.
3. Naptau agrees that if it is the holder of any other placer leases or has any
beneficial interest in any other Placer Mining Claims in the Cariboo Mining
Division of British Columbia which may be adjacent to or nearby the Placer
Leases, and for which any prior owner does not make any claim to return of the
same to their possession within 90 days of entering into this Agreement that it
does hereby, for the consideration aforesaid convey those other placer leases
and any beneficial interest in any other Placer Mining Claims to Noble and will
deliver all documents of title to Noble that may be necessary to effect this
purpose.
4. Naptau hereby conveys to Noble all possessory and proprietary rights to the
Mining Equipment located at the site of the Placer Leases and Placer Mining
Claims in the Cariboo Mining Division of British Columbia and agrees to deliver
any documents of title that may be necessary to effect this purpose.
5. Naptau agrees to transfer to Noble all exploration expenditures account
balances for Canadian tax purposes relating to the operation by Noble of the
Placer Leases since June 6,1995 for which Noble has received no reimbursement by
Naptau. In order to give full effect to this transfer Naptau and Noble agree to
jointly elect pursuant to subsection 66.7(7) of the Income Tax Act of Canada the
transfer of the exploration expenditure account balances using the Revenue
Canada prescribed Form (T2010) in the specified time, i.e. 180 days from the
companies' fiscal year in which the transfer took place. Naptau further agrees
that it will execute any other forms and elections which may be required under
the Income Tax Act of Canada for this purpose.
6. Noble hereby cancels all debt obligations due to it from Naptau, including
for delivery of raw gold, reimbursement of operating expenses, re-payment for
the Mining Equipment, interest charges and payment for the original transfer of
the Placer Leases as calculated by the various agreements referred to in the
above recitals including reimbursement for the transfer of the debt obligations
owing to Xxxxxxx Xxxxxx by Naptau.
7. Noble agrees to assume the liability of Naptau under the PL1160 Agreement to
Xxxxxxx Xxxxxx for US$200,000 and agrees to the release by Xxxxxxx Xxxxxx of
Naptau from that debt obligation.
8. Noble hereby agrees to divest itself within 60 days of up to 735,000 shares
of Naptau either by way of cancellation, donation or transfer of same to third
parties.
9. Naptau agrees that with the divestiture of the above shares that in its
opinion Noble is not either in fact or in law in any control position with
respect to the operations of Naptau or the acts of its Board of Directors and
that none of the Directors of Noble is in any way an affiliate of Naptau within
the meaning of the U.S. Securities legislation and Regulations. In accord with
this acknowledgment, Naptau further agrees to deliver any letters or
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documents necessary to have removed any legend on the transfer of any share
certificate of Naptau which may be held by Noble or the Directors of Noble.
10. It is agreed that Noble is entitled to remain the registered shareholder of
the balance of its shareholding in Naptau and to do with the same whatever it
sees fit.
11. Noble hereby agrees to release and forever discharge Naptau from all claims
arising out of or in any way connected with the failure of Naptau to meet the
terms and obligations of the prior agreements entered into between the parties
and referred to in the recitals.
12. Naptau hereby agrees to release and forever discharge Noble from all claims
that the former may have against Noble arising out of any failure on the part of
Noble to operate the Placer Leases in accordance with the expectation of the
parties and further hereby releases Noble from any other claim that it may have,
whether known or unknown including any other business opportunities anticipated,
proposed or discussed between the parties.
13. Both parties hereby agree that they may pursue any business opportunity
available to them without any recourse of the one against the other as a result
of the exclusion of the other party from any such opportunity.
14. This Agreement shall be construed in accordance with the laws of the
Province of British Columbia, Canada.
This Agreement may be executed in counterpart and by faxed signature and the
parties agree to deliver executed copies of the original document.
IN WITNESS WHEREOF THE PARTIES HERETO, CORPORATE PARTIES HAVING BEEN DULY
AUTHORIZED BY THEIR RESPECTIVE BOARDS OF DIRECTORS, HAVE SET THEIR HANDS AND
SEALS EFFECTIVE AS OF THE DAY FIRST ABOVE WRITTEN.
NOBLE METAL GROUP INCORPORATED
/S/ Xxxxxxx Xxxxxx /S/ Xxxxxxx X. Xxxxxxx
BY: XXXXXXX XXXXXX, PRES. BY: XXXXXXX X. XXXXXXX, DIRECTOR
/S/ Xxxxx Xxxxx
BY: XXXXX XXXXX, DIRECTOR
NAPTAU GOLD CORPORATION
/S/ Xxxxxx X. Xxxxx /S/ Xxxxx Xxxx
BY: XXXXXX X. XXXXX, PRES. BY: XXXXX XXXX, DIRECTOR
/S/ Xxxxx Fix
BY: XXXXX FIX, DIRECTOR
