Filed by Avantafile.com - i-Minerals Inc. - Exhibit 10.12
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT
THIS GLOBAL SETTLEMENT
AND
ABSOLUTE RELEASE AGREEMENT (the
“Agreement”) is dated for reference as of October 29, 2015 and entered into by
and between the following parties:
_____________________________
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Plaintiffs: HOODOO RESOURCES, LLC, an Idaho limited liability company (“Hoodoo”), ROBERT LEMKE, an individual and the sole member of Hoodoo (“Lemke”), THE BRENT THOMSON FAMILY TRUST (the “Thomson Trust”), BRENT THOMSON, an individual and authorized trustee of the Thomson Trust (“Thomson”), and IDAHO INDUSTRIAL MINERALS, LLC, an Idaho limited liability company “IIM”). Hoodoo, Lemke, the Thomson Trust, Thomson, IIM, and the ESTATE OF PHILIP NISBET (“Nisbet Estate”) are sometimes collectively referred to herein as the “Plaintiffs”; and |
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The Ball Entities: BALL VENTURES, LLC, an Idaho limited liability company (“BV”), BV NATURAL RESOURCES, LLC, an Idaho limited liability company (“BVNR”), THE ALLEN BALL AND CONNIE BALL FAMILY TRUST (“Ball Trust”), and ALLEN BALL, an individual and authorized trustee of The Allen Ball and Connie Ball Family Trust (“Ball”), BV, BVNR, Ball Trust and Ball are sometimes collectively referred to herein as the “Ball Entities”; and |
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Defendants: I-MINERALS, INC., a Canadian federal corporation (“I-Minerals”), and I- MINERALS USA, INC., an Idaho corporation (I-Minerals USA”). I-Minerals and I- Minerals USA are sometimes collectively referred to herein as the “Defendants.” |
Plaintiffs, the Ball Entities and the Defendants are sometimes
referred to herein collectively as the “Parties” or
singularly as a “Party,” as
the context so provides.
The
purpose of this Agreement is for the
Parties to settle and release one another from all
demands, damages, actions, claims,
and causes of action of any kind or nature whatsoever, whether
known or unknown, either in law or in equity, which the Parties ever had or may now have arising
out of, resulting from, relating to, or in any
manner connected with the facts and circumstances underlying the following lawsuits, and the claims brought or which could have been brought
therein:
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Ada County Lawsuit: BV Natural Resources, LLC, v. Brent Thomson, trustee for The Brent Thomson Family Trust, et al., in the District Court of the Fourth Judicial District of the State of Idaho, in and for the County of Ada, Case No. CV OC 1401549 14 (the “Ada Lawsuit”); and |
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 1
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Latah County Lawsuit: Hoodoo Resources, LLC, and Brent Thomson, as trustee of the Brent Thomson Family Trust, independently and derivatively for Idaho Industrial Minerals, LLC, v. I-Minerals, Inc., et al., in the District Court of the Second Judicial District of the State of Idaho, in and for the County of Latah, Case No. CV-2014-1306 (the “Latah Lawsuit”); and |
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Nez Perce County Lawsuit: BV Natural Resources, LLC, derivatively for Idaho Industrial Minerals, LLC, v. Brent Thomson, trustee for The Brent Thomson Family Trust, et al., in the District Court of the Second Judicial District of the State of Idaho, in and for the County of Nez Perce, Case No. CV 14 02312 (the “Nez Perce Lawsuit”). |
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Federal Lawsuit: Hoodoo Resources, LLC, et al., v. I-Minerals, Inc., et al., in the United States District Court for the District of Idaho, Case No. 1:14-CV-78 (the “Federal Lawsuit”). |
The
four above-referenced lawsuits
are
sometimes collectively
referred to
herein as the “Lawsuits.”
R E C I T A L S:
WHEREAS, on or about August 10, 2002, I-Minerals (f/k/a Alchemy Ventures, Ltd.)
entered into that certain Assignment Agreement with Contingent Right of Reverter with IIM and Northwest Kaolin, Inc. (“NWK”). A true and correct copy of the Assignment Agreement with Contingent Right of Reverter is attached hereto as Exhibit “A” and incorporated herein by this
reference (the “Assignment Agreement”); and
WHEREAS, the Assignment Agreement
was amended several times, with the last amendment being dated effective January 21, 2010. True and correct copies of the amendments to the Assignment Agreement are
attached hereto as Exhibit “B” and incorporated herein by this reference (the term “Assignment Agreement” shall refer to the original Assignment Agreement dated August 10, 2002, as amended and modified by those amendments attached hereto as Exhibit “B”);
and
WHEREAS, Section 1.1 of the Assignment Agreement generally
provided that IIM and
NWK would transfer certain mineral “Lease Applications,” as defined in the Assignment
Agreement (hereinafter “mineral Leases”), to I-Minerals in exchange for I-Minerals transferring 1,800,000 common shares of I-Minerals to IIM and other valuable consideration outlined in Section 2 of
the Assignment
Agreement; and
WHEREAS, the Lawsuits were filed in which the following general allegations, among others, were made: (1) Plaintiffs alleged in the Ada County Lawsuit and the Latah County Lawsuit that Defendants breached the Assignment
Agreement and
the Ball Entities conspired therein, that the
Ball Entities breached their fiduciary duties to the Plaintiffs, and that the mineral Leases should
revert to IIM; (2) Defendants asserted in the Ada County Lawsuit and the Latah County Lawsuit
that I-Minerals had fully complied with the terms of the Assignment Agreement, that I-Minerals
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 2
is the sole owner of the mineral Leases subject to the Assignment Agreement, and asserted
counterclaims alleging
Plaintiffs engaged in tortious interference with prospective economic
advantage and tortiously
interfered with contract; and (3) the Ball Entities alleged in the Ada County Lawsuit and the Nez Perce Lawsuit,
for themselves and derivatively for IIM, that the Plaintiffs breached their fiduciary duties to the Ball Entities and IIM, that the Plaintiffs engaged in tortious interference with contract, and that IIM
should be dissolved;
and
WHEREAS, on or about May 28, 2015, the Parties participated in court-ordered mediation to resolve all pending,
potential, and outstanding claims
in the Lawsuits;
and
WHEREAS, the Parties reached a mutually
acceptable agreement to settle all claims and causes of action asserted against one another
in the Lawsuits and entered into a Binding Settlement
Term Sheet (the “Term Sheet”), a copy of which is attached hereto as “Exhibit C” solely for
information purposes (and not being incorporated into
or forming a part
of this
Agreement);
and
WHEREAS, the purpose of this Agreement is to document the settlement reached at
mediation in which the Parties desire and agree to settle and release one another from all claims and causes of action, whether known or unknown,
either in law or in equity, which the Parties ever
had
or may now have arising out of, resulting from, or in any manner connected with the facts and
circumstances
underlying the Lawsuits;
and
NOW, THEREFORE, in consideration of the amounts to be paid hereunder and mutual promises and covenants herein set forth, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties
AGREE as follows:
1.
Releases.
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a. By Plaintiffs. The Plaintiffs, including the Nisbet Estate, for themselves and on behalf of their past, present and future companies, subsidiaries, parent companies, divisions, affiliates (including NWK), members (including the interest of IIM owned by the Nisbet Estate), partners, beneficiaries, employees, officers, directors, attorneys, agents, trustees and co-trustees, heirs, executors, administrators, successors, and assigns, and any of their legal representatives, RELEASE, ACQUIT, AND FOREVER DISCHARGE the Ball Entities and the Defendants, including the Ball Entities’ and the Defendants’ past, present and future companies, subsidiaries, parent companies, divisions, affiliates, members, partners, beneficiaries, employees, officers, directors, attorneys, agents, trustees and co-trustees, heirs, executors, administrators, successors, and assigns, and any of their legal representatives or any and all other entities and person(s) in privity with them, from any and all rights, obligations, costs, expenses, damages, losses, claims, demands, debts, liabilities, suits, and causes of action, known or unknown, asserted or unasserted, past or present, of whatever character in law or in equity, arising out of, resulting from, relating to, or in any manner connected with the facts and circumstances underlying, involving, relating to or that were brought or could have been brought by Plaintiffs in the Federal Lawsuit, the Ada Lawsuit, the Nez Perce Lawsuit, or the Latah Lawsuit or under the terms |
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 3
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and conditions of the Assignment Agreement or relating in any way to the Ball Entities involvement in IIM. Plaintiffs, including the Nisbet Estate, specifically acknowledge and agree that this shall be the broadest release allowed by the law. Plaintiffs, including the Nisbet Estate, for themselves and on behalf of their past, present and future companies, subsidiaries, parent companies, divisions, affiliates (including NWK), members (including the interest of IIM owned by the Nisbet Estate), partners, beneficiaries, employees, officers, directors, attorneys, agents, trustees and co-trustees, heirs, executors, administrators, successors, and assigns, and any of their legal representatives, further acknowledge and agree that upon execution of this Agreement, I-Minerals shall be the sole owner of the mineral Leases subject to the Assignment Agreement and I-Minerals shall own such mineral Leases free and clear of all claims, rights or demands by or on behalf of the Plaintiffs. |
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b. By the Ball Entities. The Ball Entities, for themselves and on behalf of their past, present and future companies, subsidiaries, parent companies, divisions, affiliates, members, partners, beneficiaries, employees, officers, directors, attorneys, agents, trustees and co-trustees, heirs, executors, administrators, successors, and assigns, and any of their legal representatives, RELEASE, ACQUIT, AND FOREVER DISCHARGE the Plaintiffs and Defendants, including the Plaintiffs’ and Defendants’ past, present and future companies, subsidiaries, parent companies, divisions, affiliates, members, partners, beneficiaries, employees, officers, directors, attorneys, agents, trustees and co-trustees, heirs, executors, administrators, successors, and assigns, and any of their legal representatives or any and all other entities and person(s) in privity with them, from any and all rights, obligations, costs, expenses, damages, losses, claims, demands, debts, liabilities, suits, and causes of action, known or unknown, asserted or unasserted, past or present, of whatever character in law or in equity, arising out of, resulting from, relating to, or in any manner connected with the facts and circumstances underlying, involving, relating to or that were brought or could have been brought by the Ball Entities in, the Federal Lawsuit, the Ada Lawsuit, the Nez Perce Lawsuit, or the Latah Lawsuit. The Ball Entities specifically acknowledge and agree that this shall be the broadest release allowed by the law. |
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c. By Defendants. The Defendants, for themselves and on behalf of their past, present and future companies, subsidiaries, parent companies, divisions, affiliates, members, partners, beneficiaries, employees, officers, directors, attorneys, agents, trustees and co-trustees, heirs, executors, administrators, successors, and assigns, and any of their legal representatives, RELEASE, ACQUIT, AND FOREVER DISCHARGE the Plaintiffs and the Ball Entities, including the Plaintiffs’ and the Ball Entities’ past, present and future companies, subsidiaries, parent companies, divisions, affiliates, members, partners, beneficiaries, employees, officers, directors, attorneys, agents, trustees and co-trustees, heirs, executors, administrators, successors, and assigns, and any of their legal representatives or any and all other entities and person(s) in privity with them, from any and all rights, obligations, costs, expenses, damages, losses, claims, demands, debts, liabilities, suits, and causes of action, known or unknown, asserted or unasserted, past or present, of whatever character in law or in equity, arising out of, resulting from, relating to, or in any manner connected with the facts and circumstances underlying, involving, |
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 4
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relating to or that were brought or could have been brought by Defendants in, the Federal Lawsuit, the Ada Lawsuit, the Nez Perce Lawsuit, or the Latah Lawsuit or under the terms and conditions of the Assignment Agreement. Defendants specifically acknowledge and agree that this shall be the broadest release allowed by the law. |
2.
Payment. The payments set forth in this paragraph shall be the only payments
made under the terms of this Agreement. The remaining
consideration under this Agreement shall be the Releases set forth in the preceding
paragraph together with the other mutual promises and
covenants herein set forth. The Payments to be made hereunder shall be made from the following Parties to
the denoted Party:
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a. Payment from I-Minerals to IIM. Within fourteen (14) days after the Effective Date of this Agreement, as defined in Paragraph 3 below, I-Minerals shall pay to IIM the amount of ONE HUNDRED THOUSAND DOLLARS AND 00/100 CENTS ($100,000.00) in United States currency (the “I-Minerals Payment”). |
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b. Payment from the Ball Entities to IIM – Stock Option Agreement.
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i.
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Stock Option Grant. On the Effective Date, BVNR will grant to IIM five (5) yearly options (each a “Yearly Option” and collectively, the “Yearly Options”), with each Yearly Option entitling IIM to purchase up to THREE HUNDRED SIXTY THOUSAND (360,000) I-Minerals common shares (the “Option Shares”) at an exercise price of ZERO AND 23.5/100 DOLLARS ($0.235) per share in United States currency (the “Option Price”). Each Yearly Option will vest and become exercisable, and will terminate and cease to be exercisable, according to the schedule set forth in this Section 2.b.i. No Yearly Option may be exercised unless and until that Yearly Option has vested. The vesting of all Yearly Options shall be cumulative.
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Yearly Option
Vesting Schedule
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Number of
Shares
Subject to
Yearly
Option
|
Yearly
Option
Vesting
Date
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Yearly Option
Expiration Date
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First
Yearly
Option
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360,000
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Effective Date + 30
Days
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Feasibility Study
Filing Date +
730
Days
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Second Yearly
Option
|
360,000
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Effective Date + 365
Days
|
Feasibility Study
Filing Date +
730
Days
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GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 5
Third Yearly
Option
|
360,000
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Effective Date + 730
Days
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Effective Date +
1095
Days
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Fourth Yearly
Option
|
360,000
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Effective Date + 1095
Days
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Effective Date +
1460
Days
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Fifth
Yearly
Option
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360,000
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Effective Date + 1460
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Effective Date +
1825
Days
|
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1,800,000
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Total Number of Option Shares
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ii.
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Feasibility Study Filing Date. The “Feasibility Study Filing Date” shall mean the date that I-Minerals files a technical report in accordance with the requirements of Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) disclosing the results of that feasibility study that is currently being undertaken by GBM Minerals Engineering Consultants Limited for I-Minerals, which technical report shall be approved by I-Minerals in its sole discretion and shall be filed by I-Minerals on SEDAR in accordance with the Applicable Canadian Securities Laws (as that term is defined in Section 3.a.ii.)
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iii.
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Cashless Exercise Right. In lieu of exercising a Yearly Option for cash, IIM may elect to exercise all or any portion of a Yearly Option by means of a cashless exercise (the “Cashless Exercise Right”). Upon exercise of the Cashless Exercise Right, IIM shall (1) surrender its right to that portion of the Yearly Option so exercised by means of the Cashless Exercise Right; and (2) be entitled to receive from BVNR that number of Option Shares that is equal to the number obtained by the following formula:
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( X - Y )Z
X
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X = the market price, on a per share basis, of I-Minerals’ common shares (the “Market Price”), calculated based on (a) if the common shares are then traded on the TSX Venture Exchange or the Toronto Stock Exchange, the average closing price of I-Minerals’ common shares as quoted by the TSX Venture Exchange or the Toronto Stock Exchange for the 5 trading days immediately preceding the date the Notice of Exercise is delivered to BVNR indicating IIM’s election to exercise the BVNR Options by means of the Cashless Exercise |
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 6
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Right (the “Exercise Date”), converted into USD based on the Bank of Canada noon rate for the trading day immediately preceding the Exercise Date, (b) if the common shares are not traded on the TSX Venture Exchange or the Toronto Stock Exchange but are traded on another securities exchange or active public market, the average closing price of I-Minerals’ common shares as quoted by that other securities exchange or active public market for the 5 trading days immediately preceding the Exercise Date,or (c) if there is no active public market for I-Minerals’ common shares, the value thereof as of the Exercise Date, as determined in good faith by the Board of Directors of the Company, taking into account any illiquidity and lack of marketability of the common shares. |
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Z = the number of Option Shares that IIM would otherwise have been entitled to receive upon exercise of the Yearly Option had IIM elected to pay the Option Price in cash. |
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iv.
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Cash Settlement of Options in Certain Circumstances. If, upon an Exercise Date, (a) there is not an effective Registration Statement with respect to the Yearly Options, Option Shares and Bonus Shares as contemplated in Section 3.c and (b) BVNR is unable or elects not to provide a legal opinion as set forth in Section 3.a.i(B)(1) or 3.a.i(B)(2), BVNR shall pay a cash settlement to IIM in lieu of the transfer of the applicable Option Shares subject to the Yearly Options exercised by IIM (a “Cash Settlement”). BVNR shall exercise the Cash Settlement by providing written notice to IIM within 10 calendar days after receipt of IIM’s notice of exercise of the applicable Yearly Option. Upon exercise of the Cash Settlement, BVNR shall pay to IIM, within 20 days of BVNR’s receipt of IIM’s notice of exercise, an amount equal to the number obtained by the following formula:
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( X - Y )Z
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Z = the number of Option Shares that IIM would otherwise have been entitled to receive upon exercise of the Yearly Option had IIM paid the Option Price in cash. |
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 7
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Upon such payment, BVNR shall have no further obligation to IIM or the other Plaintiffs with respect to the Option Shares otherwise transferrable upon exercise of the applicable Yearly Option. |
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v.
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Yearly Options Non-Transferrable. Except as expressly set forth in this Section 2.b.v., the Yearly Options shall not be divisible, transferrable or assignable to any other person. Notwithstanding the forgoing, IIM may transfer, divide and assign each Yearly Option to the members or shareholders of IIM in proportion to their respective ownership interests in IIM, subject to the following:
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(A)
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No portion of a Yearly Option shall be transferred or assigned to any of the Ball Entities in their capacity as a member or shareholder of IIM, and the proportionate ownership interest of the remaining members or shareholders of IIM shall be calculated without reference to any member interests or shares of IIM held by any of the Ball Entities.
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(B)
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No transfer, assignment or division of a Yearly Option may result in an option to purchase a fractional Option Share.
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(C)
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Any proposed transfer, assignment or division of a Yearly Option is subject to the availability of an applicable exemption from the registration and prospectus requirements of the Applicable Securities Laws (as that term is defined in Section 3.a.i).
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(D)
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The rights of any transferee or assignee to exercise all or any portion of a Yearly Option shall be subject to the same terms and conditions as if IIM continued to be the optionee.
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vi.
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Change of Control. Immediately prior to any Change in Control Transaction, and subject to closing of such Change in Control Transaction, any Yearly Options that have not yet vested shall vest and become exercisable. Any Yearly Options that are not exercised immediately prior to a Change in Control Transaction shall terminate immediately upon the closing of such Change in Control Transaction. For purposes of this Section 2.b.vi, “Change in Control Transaction” shall mean:
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(A)
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Any sale of all or substantially all of the assets of I-Minerals or any liquidation or dissolution of I-Minerals; or
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(B)
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Any transaction in which, immediately after the completion of such transaction, the shareholders of I-Minerals immediately
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GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 8
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prior to completion of the transaction will beneficially own (within the meaning of Rule 13d-3 of the United States Securities Exchange Act of 1934, as amended, and the rules and regulation promulgated thereunder (the “1934 Act”) less than 50% of the outstanding voting securities of I-Minerals or any surviving entity resulting from such transaction. |
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vii.
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Bonus Shares. Upon the full exercise of each Yearly Option, whether for cash, by Cashless Exercise Right or by Cash Settlement, BVNR shall, subject to the other terms of this Section 2.b.vii, transfer to IIM an additional ONE HUNDRED THOUSAND (100,000) I-Minerals common shares (the “Bonus Shares”) for no additional consideration. If the Yearly Option to which the Bonus Shares relates was transferred or assigned to the members or shareholders of IIM pursuant to Section 2.b.iv, BVNR shall, subject to compliance with Applicable Securities Laws, transfer the Bonus Shares to the members or shareholders of IIM to whom such Yearly Option was transferred in proportion to that portion of the Yearly Option transferred to each member or shareholder of IIM, provided that any fractional shares that would otherwise be required to be transferred pursuant to this Section 2.b.vii. shall be rounded to the nearest whole share. If, at the time IIM becomes entitled to the Bonus Shares, (a) there is not an effective Registration Statement with respect to the Yearly Options, Option Shares and Bonus Shares as contemplated in Section 3.c, and (b) BVNR is unable or elects not to provide a legal opinion as set forth in Section 3.a.i(B)(1) or 3.a.i(B)(2), BVNR shall pay a cash settlement to IIM or the members of IIM, as applicable, in lieu of the transfer of the applicable Bonus Shares (a “Cash Bonus Share Settlement”). BVNR shall exercise the Cash Bonus Share Settlement by providing written notice to IIM, on behalf of itself and its members, within 10 calendar days after receipt of IIM’s notice of exercise of the applicable Yearly Option triggering payment of the Bonus Shares. Upon exercise of the Cash Bonus Share Settlement, BVNR shall pay to IIM, on behalf of itself and its members (as applicable) and within 20 days of BVNR’s receipt of IIM’s notice of exercise of the applicable Yearly Option, an amount equal to (a) the product of (i) the Market Price multiplied by (ii) the number of Bonus Shares that IIM would otherwise have been entitled to had BVNR not paid the Cash Bonus Share Settlement in lieu of the transfer to IIM and its members, as applicable, of the Bonus Shares. Upon such payment, BVNR shall have no further obligation to IIM or the other Plaintiffs with respect to the Bonus Shares otherwise transferrable upon exercise of the applicable Yearly Option
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viii.
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Mechanics of Exercise. The Yearly Options shall be exercisable by delivery to BVNR, with a copy to I-Minerals, of a duly completed and duly executed notice of exercise in the form attached as Schedule A to
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GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 9
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this Agreement (the “Notice of Exercise”) together with payment in full of the Option Price payable therefor by certified check, bank draft or wire transfer to the accounts indicated by BVNR in writing (if payment is to be made other than by means of the Cashless Exercise Right). Subject to exercise by BVNR of the applicable Cash Settlement and/or Cash Bonus Share Settlement, BVNR shall have 10 calendar days after receipt of both the Notice of Exercise and payment in full of the Option Price (if the Yearly Option is exercised on a cash basis) to deliver, by physical delivery to the address specified in the Notice of Exercise, a certificate, registered in the name of IIM (or the particular member or shareholder of IIM in the case of a Yearly Option transferred or assigned pursuant to Section 2.b.v) representing the Option Shares transferrable upon such exercise. |
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ix.
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Adjustments for Recapitalizations. If at any time prior to the applicable expiration date of a Yearly Option, (a) I-Minerals: (i) pays a stock dividend or otherwise makes a distribution or distributions on its common shares, (ii) subdivides its outstanding common shares into a larger number of shares, or (iii) combines (including by way of reverse stock split) outstanding common shares into a smaller number of shares or (b) the IIM common shares shall be changed into the same or a different number of shares of any class or classes of stock of I-Minerals, whether by capital reorganization, reclassification or otherwise,, then in each case the Option Price and the number and class of Option Shares shall be proportionately and appropriately adjusted (provided that the aggregate Option Price, as so adjusted, of the Yearly Options shall remain unchanged) and the number of Bonus Shares to be transferred upon the full exercise of each Yearly Option shall likewise be proportionately and appropriately adjusted.
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x.
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Option Shares and Bonus Shares to be Fully Paid. Upon exercise of the Yearly Options for cash or by Cashless Exercise Right, and subject to Section 3, the Option Shares and the Bonus Shares to be transferred by BVNR to IIM, or the members or shareholders of IIM as the case may be, shall be, when transferred, validly issued, unrestricted, marketable, fully paid and non-assessable common shares of I- Minerals free and clear of any and all mortgages, liens, pledges, charges, security interests. Nothing in this Section 2.b.x shall modify BVNR’s right to pay the Cash Settlement or the Cash Bonus Share Settlement in lieu of transferring the Options Shares or the Bonus Shares to IIM as set forth in Sections 2.b.iv and 2.b.vii.
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xi.
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Waiver by Ball Entities of Rights to Option Shares or Bonus Shares. Upon the exercise of any of the Yearly Options, the Ball Entities, solely in their capacity as members or shareholders of IIM, agree to waive (A) any rights they may have to the Option Shares or the Bonus
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GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 10
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Shares transferred to IIM upon such exercise (or cash in lieu thereof pursuant to exercise of the Cash Settlement or Cash Bonus Share Settlement), and (B) any rights they may have to any proceeds or distributions from or on the Option Shares or the Bonus Shares or the Cash Settlement or the Cash Bonus Share Settlement. |
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xii.
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Ball Entities Payment. The Yearly Options and the Bonus Share rights granted pursuant to this Section 2.b. are hereinafter collectively referred to as the “Ball Entities Payment”.
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c. I-Minerals Payment and Ball Entities Payment Separate. It is recognized and agreed that the I-Minerals Payment and the Ball Entities Payment are separate and apart from one another. In the event either I-Minerals or the Ball Entities fails to make their respective payments to IIM, then IIM’s and/or Plaintiffs’ sole recourse for recovery of such failed payment shall be against the Party that failed to make its respective payment. For example, if I-Minerals makes the I-Minerals Payment, but the Ball Entities fail to comply with the terms of the Ball Entities Payment, IIM and/or Plaintiffs may not seek to recover the Ball Entities Payment (or any damages related thereto) from I-Minerals and vice versa. Additionally, once I-Minerals or the Ball Entities make their respective payments, the Party making such payment shall be deemed to have fully complied with that Party’s monetary obligations due under this Agreement. |
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d. Acknowledgement that Registration Rights Agreement Does Not Affect Release of Defendants. In a good faith effort to facilitate the transfer of Option Shares and Bonus Shares from BVNR to IIM without restrictions pursuant to Section 2(b)(x) of this Agreement, I-Minerals has agreed to enter into a Registration Rights Agreement as set forth in Section 3.d of this Agreement, pursuant to which, and subject to the terms and conditions thereof, I-Minerals will agree to file a Registration Statement with respect to the resale of the Option Shares and the Bonus Shares subject to the Yearly Options. The Parties hereby expressly acknowledge and agree that the execution and performance by I-Minerals of its obligations as set forth in the Registration Rights Agreement and Section 3.d of this Agreement do not constitute any part of the I-Minerals Payment and that the performance by I-Minerals of its obligations, or any failure by I-Minerals to perform its obligations, under the Registration Rights Agreement or Section 3.d of this Agreement shall have no bearing or effect on the obligations of the Plaintiffs (including the Nisbet Estate) or the Ball Entities under this Agreement, including, but not limited to, their respective obligations under Sections 1, 7, 8, 9, 10 or 11 of this Agreement. Any obligations of I- Minerals under the terms of the Registration Rights Agreement shall be determined solely under the provisions thereof and under no circumstances shall any breach or alleged breach by I-Minerals of the Registration Rights Agreement be considered to be a breach of this Agreement. For greater clarity, once the I-Minerals Payment has been made, the Defendants obligations under this Agreement shall be deemed to have been fulfilled with the exception of any ongoing obligations the Defendants may have pursuant to Sections 1,7, 8, 9, 10 or 11 of this Agreement. |
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 11
3. Securities
Matters.
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a. Limitations on Transfer of I-Minerals Securities. Notwithstanding any other provision of this Agreement, the Plaintiffs and the Ball Entities acknowledge and agree that no offer, sale, trade, transfer or assignment of any securities of I-Minerals may be made by the Ball Entities to the Plaintiffs as set forth in this Agreement, including, without limitation, upon the exercise of any of the Yearly Options and the transfer of any of the Option Shares or Bonus Shares, unless: |
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(A)
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there is an effective registration statement with respect to such offer, sale, trade, transfer or assignment under the United States Securities Act of 1933, as amended, and the rules and regulation promulgated thereunder (the “1933 Act”), or
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(B)
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prior to such sale, trade, transfer or assignment I-Minerals is provided with an opinion of legal counsel (which opinion and legal counsel shall be reasonably satisfactory to I-Minerals) to the effect that such offer, sale, trade, transfer or assignment:
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(1)
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is made in compliance with the exemption from the registration requirements of the 1933 Act provided by Rule 144 promulgated thereunder, or
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(2)
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is otherwise made in compliance with an applicable exemption from the registration requirements of the 1933 Act and the securities laws of any applicable state within the United States of America (collectively, together with the 1934 Act, the “Applicable United States Securities Laws”) and that after such sale, trade, transfer or assignment such securities of I-Minerals will not be “restricted securities” (as defined in Rule 144) and that such Plaintiff transferees may reoffer, resell or retransfer such securities of I-Minerals without transfer restrictions under the Applicable United States Securities Laws; and
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ii.
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There is an available exemption from the prospectus requirements of the securities laws of any applicable Province of Canada (the “Applicable Canadian Securities Laws” and, together with the Applicable United States Securities Laws, collectively the “Applicable Securities Laws”).
|
| |
b. Transfers Not Made In Accordance with Forgoing. The Plaintiffs and the Ball Entities acknowledge and agree that I-Minerals may refuse to register any transfer or sale of any securities of I-Minerals by the Ball Entities to the Plaintiffs made pursuant to |
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 12
| |
the Yearly Options or otherwise pursuant to this Agreement unless such transfer or sale is made in accordance with Section 3.a. |
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c. Registration Statement. Upon the execution of this Agreement, the Ball Entities and I-Minerals agree to enter into a registration rights agreement (the “Registration Rights Agreement”) setting forth the terms and conditions under which I-Minerals will agree to prepare and file a registration statement with the United States Securities and Exchange Commission (the “SEC”) relating to the resale of the Option Shares and the Bonus Shares by BVNR upon exercise of the Yearly Options (the “Registration Statement”). The Plaintiffs and the Ball Entities agree that any obligations of I-Minerals under the terms of the Registration Rights Agreement shall be determined solely under the provisions of the Registration Rights Agreement and not this Agreement, and shall not constitute any part of the I-Minerals Payment. |
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d. Amendments to Yearly Options after Filing of Registration Statement. The Plaintiffs and the Ball Entities agree that, during the period beginning on the filing of the Registration Statement by I-Minerals with the SEC and (without limiting any of I- Minerals’ obligations to maintain the effectiveness of a registration statement under the Registration Rights Agreement) ending on the earlier of the date the registration statement is withdrawn by I-Minerals and the filing by I-Minerals of a post-effective amendment to de-register the resale of any unsold securities under the registration statement (in each case, in accordance with the terms of the Registration Rights Agreement), except with the prior written consent of I-Minerals: |
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i.
|
No amendments will be made to the terms and conditions of the Yearly Options; and
|
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ii.
|
No changes will be made to the optionees or the optionors of the Yearly Options other than as permitted pursuant to the terms of this Agreement.
|
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e. Furnishing of Information about Plaintiffs and Joinder to Registration Rights Agreement in Certain Circumstances. If, after the filing of a Registration Statement by I-Minerals pursuant to the Registration Rights Agreement, the SEC requests or orders that either (or both) (i) the Registration Statement be amended or re-filed to cover the resale by any of the Plaintiffs of Option Shares or Bonus Shares received or to be received upon the exercise of a Yearly Option, or (ii) I-Minerals otherwise provide or disclose information regarding any of the Plaintiffs (whether in the Registration Statement or otherwise), the Plaintiffs shall, acting reasonably and in good faith: |
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i.
|
Furnish to I-Minerals such information regarding themselves, the Option Shares and Bonus Shares held by them or acquirable by them upon exercise of the Yearly Options, and the intended method of disposition of such securities as shall be required to effect the registration of those securities or otherwise to provide or disclose such information as may be requested or ordered by the SEC; and
|
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 13
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ii.
|
If the SEC requests additional information than that requested in Section 3(e)(i), Plaintiffs will reasonably and in good faith cooperate with I- Minerals in making available such information to effectuate the SEC’s acceptance of registration.
|
| |
f. Compliance with NI 45-102. The Ball Entities agree to use commercially reasonable efforts to comply with the provisions of Section 2.8 of Canadian National Instrument 45-102 Resale of Securities (“NI 45-102”) with respect to the transfer or sale of the Option Shares and the Bonus Shares pursuant to the Yearly Options. |
4.
Dismissal. Within five (5) days of the Parties executing this Agreement,
the Parties
authorize and instruct their respective attorneys to file a Stipulation of Dismissal with Prejudice in the Ada Lawsuit,
the Nez Perce Lawsuit, and the Latah Lawsuit, with each Party
to bear its own costs and attorneys’ fees in each such lawsuit, except as provided in paragraph 5 below.
The Parties acknowledge and agree that due
to the derivative nature
of some of the claims, the Parties
may
be required to obtain Court approval to dismiss the Lawsuits. The Parties agree in good faith
to cooperate with one another in the submission of necessary
documentation to support the dismissal of the various Lawsuits.
The “Effective Date” of this Agreement shall be
the date that the final Lawsuit is dismissed with
prejudice. In the event all applicable Courts do
not
approve the settlement
of all claims set forth
in the Lawsuits, then this Agreement shall be null and void.
5.
Attorneys’ Fees
Incurred
by the
Parties. In prosecuting and
defending the Lawsuits, the Parties have incurred attorneys’ fees and costs. The Parties agree that in no event shall any of the Parties be required
to pay any of the attorneys’
fees
or costs due to
or incurred by any other Party related to the Lawsuits. Notwithstanding the forgoing, pursuant to I.C. §30-6-906,
IIM Members
may
be responsible
for attorney fees owed
to Arkoosh Law Offices
for prosecuting
a derivative lawsuit on behalf of IIM.
It is understood and agreed by the Plaintiffs and the Ball Entities that, while BVNR is a member of IIM, it has been an adverse party throughout this
litigation and is therefore exempt from any responsibility for paying fees due or owing to Arkoosh
Law
Offices by IIM.
6.
No Admission. The Parties expressly recognize that any payments or agreements made herein shall not be considered admission of any liability or responsibility for, or of the correctness of,
any of the
claims that were or may have been asserted by the Parties,
but are made solely for purposes
of avoiding the costs and/or risks of further litigation.
7. No Further Actions.
| |
a. Against Defendants. Except as compelled by legal process, after receipt of the I-Minerals Payment, Plaintiffs, including the Nisbet Estate, for themselves and on behalf of their past, present and future companies, subsidiaries, parent companies, divisions, affiliates (including NWK), members (including the interest of IIM owned by the Nisbet Estate), partners, beneficiaries, employees, officers, directors, attorneys, agents, trustees and co-trustees, heirs, executors, administrators, successors, and assigns, and any of their legal representatives, agree never to commence, join, encourage, aid, assert, |
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 14
| |
prosecute or cause to be prosecuted against the Defendants any complaint, suit or proceedings based on the negotiation, execution or performance of the Assignment Agreement and/or any amendments thereto. Plaintiffs, for themselves and on behalf of their past, present and future companies, subsidiaries, parent companies, divisions, affiliates (including NWK), members (including the interest of IIM owned by the Estate of Philip Nisbet), partners, beneficiaries, employees, officers, directors, attorneys, agents, trustees and co-trustees, heirs, executors, administrators, successors, and assigns, and any of their legal representatives, also agree never to commence, join, encourage, aid, assert, prosecute or cause to be prosecuted against the Defendants any complaint, suit or proceedings based on or arising out of, resulting from, relating to, or in any manner connected with the facts and circumstances underlying, involving, relating to or that were brought or could have been brought in the Lawsuits. |
| |
b. Against the Ball Entities. After receipt of the Ball Entities Payment, Plaintiffs, including the Nisbet Estate, for themselves and on behalf of their past, present and future companies, subsidiaries, parent companies, divisions, affiliates (including NWK), members (including the interest of IIM owned by the Nisbet Estate), partners, beneficiaries, employees, officers, directors, attorneys, agents, trustees and co-trustees, heirs, executors, administrators, successors, and assigns, and any of their legal representatives, agree never to commence, join, encourage, aid, assert, prosecute or cause to be prosecuted against the Ball Entities any complaint, suit or proceedings based on or arising out of, resulting from, relating to, or in any manner connected with the facts and circumstances underlying, involving, relating to or that were brought or could have been brought in the Lawsuits. |
| |
c. Against Plaintiffs. Except as compelled by legal process, after the Effective Date, Defendants and the Ball Entities, for themselves and on behalf of their past, present and future companies, subsidiaries, parent companies, divisions, affiliates, members, partners, beneficiaries, employees, officers, directors, attorneys, agents, trustees and co- trustees, heirs, executors, administrators, successors, and assigns, and any of their legal representatives, agree never to commence, join, encourage, aid, assert, prosecute or cause to be prosecuted against the Plaintiffs any complaint, suit or proceedings based on the negotiation, execution or performance of the Assignment Agreement and/or any amendments thereto. Further, Defendants and the Ball Entities, for themselves and on behalf of their past, present and future companies, subsidiaries, parent companies, divisions, affiliates, members, partners, beneficiaries, employees, officers, directors, attorneys, agents, trustees and co-trustees, heirs, executors, administrators, successors, and assigns, and any of their legal representatives, also agree never to commence, join, encourage, aid, assert, prosecute or cause to be prosecuted against the Plaintiffs any complaint, suit or proceedings based on or arising out of, resulting from, relating to, or in any manner connected with the facts and circumstances underlying, involving, relating to or that were brought or could have been brought in the Lawsuits, or the negotiation, execution, or performance of the Assignment Agreement and/or any amendment thereto. Nothing herein shall limit or prevent Defendants from taking any and all action necessary to effectuate Defendants’ ownership of the mineral Leases or to secure title to the mineral Leases in the name of the Defendants. |
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 15
8. Non -Disparagement. The Parties, for themselves, their attorneys, agents (including specifically Thomas Gray), members, owners, officers, directors, employees, affiliates and representatives, agree that they will not defame or disparage each other and will not, directly or indirectly, say or take any action that damages or impairs the business organization, goodwill, and reputation of any other Party or any other Party’s agents, affiliates or related entities, except as compelled by judicial or executive process. Should a Party or its representative breach this provision, the disparaging Party agrees to pay the disparaged Party for any actual damages sustained as a result of the disparagement.
9.
Confidentiality of this
Agreement.
The Parties, for
themselves, their agents,
members, owners, officers,
directors, employees affiliates and representatives,
agree not to
divulge, reveal to or discuss with anyone or provide any materials or documents concerning any of the terms of this Agreement or the content of the discussions and negotiations leading
to the execution of this Agreement, except as follows: (i) upon receipt of a valid court order, (ii) as
reasonably necessary to their respective attorneys, lenders, accountants, tax advisors,
financial planners, and financial managers, and then only
if such persons are expressly made aware of this
confidentiality provision and agree to be bound hereby, (iii) to each Party’s respective owners, members, employees, officers, directors,
and/or family members, and then only if such persons are
expressly
made
aware of this confidentiality
provision and agree to be bound hereby, or (iv) as otherwise required by
law.
Without limiting the foregoing in any way, the Parties acknowledge
and
agree that I-Minerals, as a publicly traded company, may
be required to disclose
certain provisions of this Agreement to current, future and potential investors and lenders, in public filings, and/or in corporate disclosures (“I-Minerals’ Required Disclosures”). The Parties hereto agree
that this confidentiality
provision will not apply
to I-Minerals’ Required Disclosures; provided,
however, that I-Minerals first has the I-Minerals’ Required Disclosures vetted
and approved by
I- Minerals’ own securities’
counsel.
10. No Hostile Selling of I-Minerals Shares by Hoodoo, Thomson and the Thomson Trust. Each of Hoodoo, Lemke, the Thomson Trust and Thomson agree, for themselves, their agents, members, owners, officers, directors, employees, affiliates and representatives that they will not engage in any hostile selling of I-Minerals’ shares that they now own or that they acquire in the future.
11.
I -Minerals Owns The
Mineral Leases.
Upon receipt of the I-Minerals Payment, IIM and NWK shall recognize that I-Minerals has fulfilled all of the duties and obligations I-
Minerals owed under the terms of the Assignment Agreement and that I-Minerals owns the Mineral
Leases free and clear of any claims by IIM, NWK, or any other person or entity that may have a
claim to the Mineral Leases by or through IIM or NWK or under the terms of the Assignment Agreement.
Also upon receipt of the I-Minerals Payment, IIM and NWK agree that the right of reverter in the Assignment Agreement is null and void and of no further force or effect. IIM and NWK
specifically acknowledge and agree that
upon receipt of
the I-Minerals’ Payment all claims that
IIM and NWK now have or may have under the terms of the Assignment Agreement are being fully and forever released and extinguished.
In the event I-Minerals requests a signed document or
instrument to effectuate the terms of this Paragraph, IIM and NWK shall provide such signed
document or instrument in
the
manner of a quit claim deed as
soon as reasonably practical.
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 16
12. Dissociation of Ball Entities from IIM.
| |
a. Within thirty (30) days after the Effective Date, 1,300,000 common shares issued by I-Minerals to IIM on or about January 21, 2013 under the terms of the Assignment Agreement, which shares are currently registered in the name of IIM and represented by share certificate no. 00100100ZQ (the “Assignment Agreement Shares”) shall be transferred to BVNR, Hoodoo, the Thomson Trust and the Nisbet Estate pursuant to their respective interests in IIM, notwithstanding any other written agreement between the parties. |
| |
b. IIM and Plaintiffs hereby irrevocably grant to Michael McNicols such stock power of attorney as may be required to submit, or cause IIM to submit, to the Transfer Agent the Assignment Agreement Shares together with said stock powers or other documentation as may be requested by the Transfer Agent to effect the transfer set forth in Section 12.a. |
| |
c. Upon completion of the transfer set forth in Section 12.a., the Ball Entities and the Plaintiffs agree that the Ball Entities shall forthwith voluntarily dissociate from IIM in accordance with the terms and conditions set forth in the limited liability company agreement for IIM and the provisions of the Idaho Uniform Limited Liability Company Act, as applicable. Additionally, by voluntarily dissociating, Ball Entities waives any participation in or rights it may have had in any future dissolution of IIM. Further, this Agreement acts as written consent by all Members of IIM for the voluntary dissociation of Ball Entities. Should these provisions contradict any provision or requirement contained in the limited liability company agreement of IIM, then the Members of IIM hereby amend the IIM limited liability company agreement according to the terms allowing for the same. All other provisions of the IIM limited liability company agreement shall remain in full force and effect. |
13.
Careful Review of
Agreement and Understanding Thereof.
The Parties
represent and warrant to one another
that each Party has CAREFULLY read this Agreement and understands its terms and conditions without
reservation. The Parties acknowledge that they have had ample opportunity to consult with their own legal counsel and have not relied on any
representations or statements of the other
Parties hereto or the other Parties’ counsel with respect to the
subject matter of this Agreement.
The Parties further understand that this is a FULL, COMPLETE, AND FINAL settlement of all claims that were raised or could have been raised in
the Lawsuits, and that the Parties (including NWK and the Nisbet Estate) are forever relinquishing and releasing any
and
all claims they have or may
have against each other.
The
Parties acknowledge that they
understand the terms and provisions of this Agreement, and that this
Agreement contains the entire
agreement between the Parties and supersedes any and all prior agreements, arrangements or understandings between the Parties relating to the subject matter hereof, including, but not limited to, the Term Sheet. The Parties (including NWK and the Nisbet Estate) further represent and acknowledge that they have taken into account not only
the known and anticipated claims and defenses, but also unknown and unanticipated claims and defenses that they hereby recognize and agree are covered by this Agreement and the releases contained herein.
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 17
The Parties represent to the other Parties that they have not engaged in coercion, tortious duress, fraud
or any other illegal or
improper means to procure this agreement.
14.
Severability.
If any portion
or portions of this Agreement may be held by a Court
of competent jurisdiction to conflict with any federal, state or local law, and as a result such portion
or portions are declared to be invalid
and of no force or effect in such jurisdiction, all remaining
provisions of this Agreement shall otherwise remain in full force and
effect and be construed as
if such invalid portion or portions has not been included herein.
15.
Governing
Law. This Agreement shall be governed and construed
by
the laws of
the State of Idaho.
Any dispute
concerning this Agreement
shall be arbitrated before Michael
McNichols. If Mr. McNichols is unable to serve in this capacity, the Parties agree that a Party may seek to enforce the terms of this agreement in any
court in Idaho that has jurisdiction and venue over
the
Parties.
16.
Counterparts. This Agreement may be executed in counterparts, each of which
shall constitute an original, but taken together shall constitute one and the same document,
binding on all of the Parties hereto. The undersigned Parties have agreed to permit the use of digital electronic
signatures, intend to be bound by their respective digital electronic signatures, are aware that
others will rely on digital electronic signatures, and acknowledge such reliance and waive any defenses to the enforcement of this document based on the fact that any signature is sent digitally
or electronically. As used herein, the term “digital electronic signature”
shall include any
electronic signature sent via electronic
mail, portable document format (“.pdf”), tagged image file
format (“.tiff”),
facsimile or other
digital
or electronic format.
17.
Binding Effect/Authority to Bind. This Agreement shall be binding upon and
shall inure to the benefit of the
Parties, their respective heirs, beneficiaries, personal representatives, successors, attorneys and assigns. The Parties represent and warrant to each other
that: (i) any person signing on each Party’s behalf has full authority to enter into this Agreement and that each respective Party did in fact authorize the signors to execute the same; (ii) upon execution of this Agreement, this Agreement shall be binding
and
enforceable against the Parties
in accordance with its terms; and (iii)
the execution and the delivery of this Agreement is not
subject to any
requirement that the Parties obtain any consent, approval or authorization of, or
make any declaration or filing with any governmental authority or third party that has not been
obtained or made or that, in any case or in the aggregate, if not obtained or made would render the
execution, delivery or consummation of this Agreement
illegal or invalid, or would otherwise
constitute a default under the terms
of this Agreement.
18.
Amendments. This Agreement and all documents and instruments executed in connection herewith or in furtherance hereof may not be amended, modified or supplemented, except
by
an instrument in writing signed
by
all Parties
hereto.
19.
Attorneys’ Fees. If any action or proceeding is instituted to enforce or construe
any provision of this Agreement, the prevailing Party in such action or proceeding shall be entitled
to recover from any Party or Parties against whom a judgment is entered, all reasonable attorney
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 18
fees, paralegal fees and costs incurred by the prevailing Party in connection with such action or
proceeding in
addition to such other relief to which such
prevailing Party is entitled.
20.
Documents Shared Pursuant to Confidentiality
Agreement. The Parties hereby
covenant and agree that any and all documents produced in the Lawsuits pursuant to a
confidentiality agreement or otherwise designated as “confidential” shall be destroyed by each
reviewing Party’s counsel.
21.
Headings. The headings
of the various Paragraphs herein are for reference only
and are not to be used
for the purpose of construing the provisions
herein.
22. Incorporation of
Recitals
and
Exhibits. The Recitals
and
Exhibits to this Agreement are incorporated into this Agreement by this
reference as
if fully set forth
herein.
23.
Further Assurances. Each Party agrees to their best efforts to expeditiously
execute any document contemplated by this Agreement and all further and additional documents,
instruments, and writing that may
be necessary, proper, required, desirable or convenient for the
purpose of fully effectuating the
terms and provisions of this Agreement.
24.
Joint Preparation of Agreement.
This Agreement shall not be construed against the
Party preparing it, but shall be construed as if it were prepared jointly by Plaintiffs, the Ball
Entities, and the Defendants, and any
uncertainty or ambiguity, or both, shall not be interpreted
against any Party,
person or entity.
25.
Execution by IIM Members.
IIM represents and warrants that each and every member of IIM is executing this Agreement, all of whom are executing this Agreement in their capacity as members
and
approve of the content
and terms of this Agreement.
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 19
26. Notices. Any and all notices or other communications or deliveries required or
permitted to be provided
hereunder shall be in writing and shall be deemed given
and
effective on the
earliest of: (a) the date of
transmission, if such notice or communication is delivered via
facsimile or email at the facsimile number or email address set forth on the signature pages attached hereto at or prior to 5:30 PM (Mountain Time) on a Business
Day; (b) the next Business
Day after the date
of transmission
if such notice or
communication
is delivered via facsimile or email
at the
facsimile number
or email address set forth on the signature pages attached hereto on
a day that is
not a business day or later than 5:30 PM (Mountain Time); (c) the 2nd Business Day following the
date such notice or other communication is sent, if sent by an internationally recognized overnight
courier service
to the address set forth on the signature pages attached hereto; or (d) upon
actual receipt by the party to whom such notice is being given. For purposes of this Agreement “Business Day” shall mean any day except (1) any
Saturday, (2) any Sunday, (3) any day that is a legal holiday in the country, state or province set forth in the delivery address of the recipient of the notice set forth on the recipient’s signature page to this Agreement,
or (4) any day on which banking institutions are authorized or required by law or any other governmental action to close in the
country, state or province set forth in the delivery address of the recipient of the notice set forth on the recipient’s signature page to this Agreement.
Any Party may amend the email address,
facsimile number or delivery address for the delivery of notices under this Agreement
by the delivery of
written notice of such amendment to
each
of the other Parties
to this Agreement.
(End of Document. Signatures to Follow.)
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 20
| |
DATED this 22nd day of October, 2015. |
| |
HOODOO RESOURCES, LLC, an Idaho limited liability company, |
| |
By: W. Robert Lemke (printed name) |
| |
Its: Manager-Member (title) |
| |
Email Address for Delivery of Notice: |
| |
Facsimile No. for Delivery of Notice: |
| |
_____________________________ |
| |
Mailing/Delivery Address for Delivery of Notice: |
| |
SUBSCRIBED AND SWORN to before me this 22nd day of October, 2015. |
| |
Notary Public for the State of Montana |
| |
My Commission Expires: April 26, 2016
|
READ AND APPROVED:
/s/
C. Tom Arkoosh
C. Tom Arkoosh
Arkoosh Law
Office
Attorneys for Hoodoo Resources, LLC
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 21
| |
DATED this 22ndday of October, 2015. |
| |
Email Address for Delivery of Notice: |
| |
Facsimile No. for Delivery of Notice: |
| |
_____________________________ |
| |
Mailing/Delivery Address for Delivery of Notice: |
| |
SUBSCRIBED AND SWORN to before me this 22nd day of October, 2015. |
| |
Notary Public for the State of Montana |
| |
My Commission Expires: April 26, 2016
|
READ AND APPROVED:
/s/
C. Tom Arkoosh
C. Tom Arkoosh
Arkoosh Law
Office
Attorneys for Robert Lemke
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 22
| |
DATED this 21st day of October, 2015. |
| |
THE BRENT THOMSON FAMILY TRUST |
| |
Email Address for Delivery of Notice: |
| |
Facsimile No. for Delivery of Notice: |
| |
_____________________________ |
| |
Mailing/Delivery Address for Delivery of Notice: |
| |
588 Crestline Circle Drive |
| |
SUBSCRIBED AND SWORN to before me this 21st day of October, 2015. |
| |
Notary Public for the State of Idaho |
| |
My Commission Expires: 1/9/2021
|
READ AND APPROVED:
/s/
C. Tom Arkoosh
C. Tom Arkoosh
Arkoosh Law
Office
Attorneys for The Brent Thomson Family Trust
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 23
| |
DATED this 21st day of October, 2015. |
| |
Email Address for Delivery of Notice: |
| |
Facsimile No. for Delivery of Notice: |
| |
_____________________________ |
| |
Mailing/Delivery Address for Delivery of Notice: |
| |
588 Crestline Circle Drive |
| |
SUBSCRIBED AND SWORN to before me this 21st day of October, 2015. |
| |
Notary Public for the State of Idaho |
| |
My Commission Expires: 1/9/2021
|
READ AND APPROVED:
/s/
C. Tom Arkoosh
C. Tom Arkoosh
Arkoosh Law
Office
Attorneys for Brent Thomson
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 24
| |
DATED this 29th day of October, 2015. |
| |
THE ESTATE OF PHILIP NISBET |
| |
By: Aaron Nisbet (printed name)
|
| |
Its: Personal Representative |
| |
Email Address for Delivery of Notice: |
| |
_____________________________ |
| |
Facsimile No. for Delivery of Notice: |
| |
_____________________________ |
| |
Mailing/Delivery Address for Delivery of Notice: |
| |
SUBSCRIBED AND SWORN to before me this 29th day of October, 2015. |
| |
Notary Public for the State of Washington |
| |
My Commission Expires: 07-24-17
|
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 25
| |
DATED this _______ day of October, 2015. |
| |
BALL VENTURES, LLC, an Idaho limited liability company |
| |
By:
|
BV Management Services, Inc.,
an Idaho corporation, the Manager
|
| |
Cortney Liddiard, President |
| |
Email Address for Delivery of Notice: |
| |
flyfish@ballventures.com_ |
| |
Facsimile No. for Delivery of Notice: |
| |
Mailing/Delivery Address for Delivery of Notice: |
| |
SUBSCRIBED AND SWORN to before me this 26th day of October, 2015. |
| |
Notary Public for the State of Idaho |
| |
My Commission Expires: Aug 22, 2019
|
READ AND APPROVED:
/s/
Wade Woodard
Wade Woodard
Andersen Banducci,
PLLC
Attorneys for Ball Ventures, LLC
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 26
| |
DATED this ______ day of October, 2015. |
| |
BV NATURAL RESOURCES, LLC, an Idaho limited liability company |
| |
By:
|
Ball Ventures, LLC, an Idaho
limited liability company, the Member
|
| |
By:
|
BV Management Services, Inc., an
Idaho corporation, the Manager
|
| |
Cortney Liddiard, President |
| |
Email Address for Delivery of Notice: |
| |
flyfish@ballventures.com_ |
| |
Facsimile No. for Delivery of Notice: |
| |
Mailing/Delivery Address for Delivery of Notice: |
| |
SUBSCRIBED AND SWORN to before me this 26th day of October, 2015. |
| |
Notary Public for the State of Idaho |
| |
My Commission Expires: Aug 22, 2019
|
READ AND APPROVED:
/s/
Wade Woodard
Wade Woodard
Andersen Banducci,
PLLC
Attorneys for BV Natural
Resources, LLC
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 27
| |
DATED this ______ day of October, 2015. |
| |
Email Address for Delivery of Notice: |
| |
flyfish@ballventures.com_ |
| |
Facsimile No. for Delivery of Notice: |
| |
Mailing/Delivery Address for Delivery of Notice: |
| |
SUBSCRIBED AND SWORN to before me this 28th day of October, 2015. |
| |
Notary Public for the State of Idaho |
| |
My Commission Expires: 08-22-2019
|
READ AND APPROVED:
/s/
Wade Woodard
Wade Woodard
Andersen Banducci,
PLLC
Attorneys for Allen Ball
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 28
| |
DATED this ______ day of October, 2015. |
| |
THE ALLEN BALL AND CONNIE BALL
FAMILY TRUST |
| |
ALLEN BALL, Trustee of The Allen Ball and Connie Ball Family Trust, as reformed and restated on December 3, 2012 |
| |
CONNIE BALL, Trustee of The Allen Ball and Connie Ball Family Trust, as reformed and restated on December 3, 2012 |
| |
Email Address for Delivery of Notice: |
| |
flyfish@ballventures.com_ |
| |
Facsimile No. for Delivery of Notice: |
| |
Mailing/Delivery Address for Delivery of Notice: |
| |
SUBSCRIBED AND SWORN to before me this 28th day of October, 2015. |
| |
Notary Public for the State of Idaho |
| |
My Commission Expires: 08-22-2019
|
READ AND APPROVED:
/s/
Wade Woodard
Wade Woodard
Andersen Banducci,
PLLC
Attorneys for Allen Ball
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 29
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DATED this 26th day of October, 2015. |
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I-MINERALS, INC., a Canadian federal corporation |
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Email Address for Delivery of Notice: |
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Facsimile No. for Delivery of Notice: |
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Mailing/Delivery Address for Delivery of Notice: |
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SUBSCRIBED AND SWORN to before me this 26th day of October, 2015. |
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My Commission Expires: 5-8-19
|
READ AND APPROVED:
/s/
Corey J. Rippee
Corey J.
Rippee
Eberle, Berlin, Kading,
Turnbow
& McKlveen, Chtd.
Attorneys for I-Minerals, Inc.
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 30
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DATED this 26th day of October, 2015. |
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I-MINERALS USA, INC., an Idaho corporation, |
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Email Address for Delivery of Notice: |
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Facsimile No. for Delivery of Notice: |
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Mailing/Delivery Address for Delivery of Notice: |
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SUBSCRIBED AND SWORN to before me this 26th day of October, 2015. |
| |
My Commission Expires: 5-8-19
|
READ AND APPROVED:
/s/
Corey J. Rippee
Corey J.
Rippee
Eberle, Berlin, Kading,
Turnbow
& McKlveen, Chtd.
Attorneys for I-Minerals USA, Inc.
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 31
READ AND
APPROVED BY
NORTHWEST KAOLIN, INC.:
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DATED this 22nd day of October, 2015. |
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By: W. Robert Lemke (printed name)
|
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Email Address for Delivery of Notice: |
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Facsimile No. for Delivery of Notice: |
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_____________________________ |
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Mailing/Delivery Address for Delivery of Notice: |
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SUBSCRIBED AND SWORN to before me this 22nd day of October, 2015. |
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Notary Public for Missoula, Montana
|
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My Commission Expires: April 26, 2016
|
READ AND APPROVED:
/s/
C. Tom Arkoosh
C. Tom Arkoosh
Arkoosh Law
Office
Attorneys for Hoodoo Resources, LLC
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 32
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DATED this 22nd day of October, 2015. |
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IDAHO INDUSTRIAL MINERALS, LLC,
an Idaho limited liability company, |
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By: Robb Lemke, president of Hoodoo Resources, LLC. |
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Its: Hoodoo Resources, LLC is a Member of IIM |
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Email Address for Delivery of Notice: |
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Facsimile No. for Delivery of Notice: |
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_____________________________ |
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Mailing/Delivery Address for Delivery of Notice: |
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SUBSCRIBED AND SWORN to before me this 22nd day of October, 2015. |
| |
Notary Public for the State of Montana |
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My Commission Expires: April 26, 2016
|
READ AND APPROVED:
/s/
C. Tom Arkoosh
C. Tom Arkoosh
Arkoosh Law
Office
Attorneys for Hoodoo Resources, LLC
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 33
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DATED this 21st day of October, 2015. |
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IDAHO INDUSTRIAL MINERALS, LLC,
an Idaho limited liability company, |
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By:
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Brent Thomson, trustee for The Brent
Thomson Family Trust |
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Its:
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The Brent Thomson Family Trust Is a
Member of IIM.
|
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Email Address for Delivery of Notice: |
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Facsimile No. for Delivery of Notice: |
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_____________________________ |
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Mailing/Delivery Address for Delivery of Notice: |
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588 Crestline Circle Drive |
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SUBSCRIBED AND SWORN to before me this 21st day of October, 2015. |
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Notary Public for the State of Idaho |
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My Commission Expires: 6-29-17
|
READ AND APPROVED:
/s/
C. Tom Arkoosh
C. Tom Arkoosh
Arkoosh Law
Office
Attorneys for The Brent Thomson Family Trust
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 34
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DATED this 29th day of October, 2015. |
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IDAHO INDUSTRIAL MINERALS, LLC,
an Idaho limited liability company, |
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By:
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[insert] Nisbet, personal representative for The
Estate of Phillip Nisbet |
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Its:
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The Estate of Phillip Nisbet is a Member of
IIM
|
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Email Address for Delivery of Notice: |
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_____________________________ |
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Facsimile No. for Delivery of Notice: |
| |
_____________________________ |
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Mailing/Delivery Address for Delivery of Notice: |
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SUBSCRIBED AND SWORN to before me this 29th day of October, 2015. |
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Notary Public for the State of Washington |
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My Commission Expires: 07-24-17
|
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 35
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DATED this _______ day of October, 2015. |
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IDAHO INDUSTRIAL MINERALS, LLC,
an Idaho limited liability company, |
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By: ____________________________________(printed name)
|
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Its: BV Natural Resources, LLC is a Member of |
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Email Address for Delivery of Notice: |
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flyfish@ballventures.com_ |
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Facsimile No. for Delivery of Notice: |
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Mailing/Delivery Address for Delivery of Notice: |
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SUBSCRIBED AND SWORN to before me this 26th day of October, 2015. |
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Notary Public for the State of Idaho |
| |
My Commission Expires: Aug 22, 2019
|
READ AND APPROVED:
/s/
Wade Woodard
Wade Woodard
Andersen Banducci,
PLLC
Attorneys for BV Natural
Resources, LLC
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 36
NOTICE OF EXERCISE
FORM
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TO:
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BV NATURAL RESOURCES, LLC
An Idaho limited liability company (the “Company”)
|
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WITH A COPY TO:
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I-MINERALS INC. |
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A Canadian federal corporation |
Dear Sirs:
The undersigned (the “Optionee”) hereby exercises the right to purchase:
___________________________________________________________
(Insert No. of Shares)
common shares of I-MINERALS INC. (the “Option Shares”) from the Company pursuant to Section 2b. of that
Global Settlement and Absolute Release Agreement between the Hoodoo
Resources, LLC, Robert Lemke, The Brent Thomson
Family Trust, Brent Thomson,
Idaho Industrial Minerals,
LLC, the Estate of Philip Nisbet, Ball Ventures,
LLC, the Company,
The
Allen Ball and Connie Ball Family Trust, Allen Ball, I-Minerals Inc. and I-
Minerals USA, Inc. (the “Settlement Agreement”) and
(check one):
| |
[ ]
|
herewith makes payment by cash, certified check, bank draft or wire transfer to the account specified by the Company of the full Option Price for the Option Shares in accordance with the terms of the Yearly Options as set forth in the Settlement Agreement; or
|
| |
[ ]
|
hereby notifies the Company that it is exercising the Cashless Exercise Right provided in the Settlement Agreement. (NOTE: On exercise of the Cashless Exercise Right, the Optionee shall not be entitled to that number of Option Shares set out above, but shall instead be entitled to that number of Option Shares resulting from the formula set out in Section 2.b.iii. of the Settlement Agreement, with “Z” being the number of Option Shares set out above.)
|
Please deliver a certificate for the shares being purchased as follows in the name of the Optionee as follows:
| |
Delivery Address for Certificate |
|
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(if different than above): |
|
Exercise of the Yearly Options is expressly made subject to the terms and conditions
of the Settlement Agreement. The Optionee acknowledges the potential right of the Company to exercise the Cash Settlement
and/or the Cash Bonus Share Settlement in connection with this Notice of Exercise. Capitalized terms not
otherwise defined herein have the meaning set forth in the Settlement Agreement.
DATED this day of ,
.
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Name of Authorized Signatory (if any): |
|
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Title of Authorized Signatory: |
|
GLOBAL SETTLEMENT AND ABSOLUTE RELEASE AGREEMENT – PAGE 37
EXHIBIT
“A”
Assignment
Agreement
ASSIGNMENT
AGREEMENT WITH CONTINGENT RIGHT OF REVERTER
This Assignment Agreement with Contingent Right of Reverter (hereafter
the “Agreement”) is made effective as of August 10, 2002 (the “Effective Date”)
by and between Alchemy Ventures, Ltd., a British Columbia, Canada corporation
(“ALY”), and Idaho Industrial Minerals, LLC., and Idaho limited liability
company (“IIM”), Northwest Kaolin, Inc., an Idaho corporation (“NWK”).
(Collectively, referred to hereinafter as the “Parties.”)
RECITALS
Whereas, on November 1, 1999, Phillip C. Nisbet (“Nisbet”)
submitted fourteen lease applications, Nos. 9264-9269, 9272-9279 (the “Fourteen
Applications”), covering certain State of Idaho (“State”) lands in Latah
County, Idaho, to the Idaho Department of Lands (“IDL”) for processing into
State mineral leases are provided for under Idaho Code §47-704;
Whereas, on November 15, 1999, Nisbet and Northwest Kaolin
entered into an Agreement in Principle by which, for the consideration stated
therein, Nisbet agreed to sell his rights, title and Interest “in the
Helmar-Bovill properties located in Latah County, Idaho, comprising 7840 acres
of kaolin clay deposits” [actually, the Parties understand that it is
approximately 6,301 acres, more or less];
Whereas, on December 7, 1999, ALY entered into an Agreement with
Northwest Kaolin, Inc. (“NWK”) to purchase certain properties “comprised of approximately
seven (7) square miles of claims lawfully registered to [NWK] in the State of
Idaho for the purpose of gathering, processing and marketing the kaolin clay
deposits thereon” (hereafter “Agreement #1”);
Whereas, on December 11, 1999, Nisbet executed, under notary,
and assignment of leases to Northwest Kaolin; however, his spouse did not join
in the original execution;
Whereas, on June 15, 2000, Nisbet and NWK entered into a second
Agreement in Principle that replaced the previous Agreement in Principle and
required Nisbet to relinquish “all rights, title or interest held by [Nisbet]
in the Helmar-Bovill properties and the leases from the State of Idaho for said
properties...”
Whereas, on July 1, 2000, NWK submitted two lease applications,
Nos. 9292 and 9293 (the “Two Applications”) covering certain State lands in
Latah County, Idaho to the IDL for processing into state mineral leases as
provided for under Idaho Code §47-704;
Whereas, on August 24, 2000, NWK and ALY entered into an
Agreement that provided the option in ALY to acquire 51% of certain “Mineral
Claims”, as defined in the Agreement, from NWK upon completing certain
exploration expenditures, making payments and issuing shares within certain
time parameters, and further provided the option in Aly to enter in to 51/49
joint venture with NWK or to acquire the additional 49% within a set time
period (“Agreement #2”);
Whereas, disputes existed between ALY and NWK regarding their
respective rights and obligations under the various above-described Agreements,
and regarding the enforceability of said Agreements;
Whereas, on May 15, 2001, NWK submitted to the IDL the original
of the Assignment of Clay Lease Applications executed by Nisbet to NWK for
fourteen clay lease application along with a filing fee of $700;
1
Whereas, on May 25, 2001, Scott Nicols, Chief, Bureau of
Minerals, wrote to NWK, c/o Lois Van Hoover, regarding “State of Idaho Mineral
Lease Application Nos. 9264-69, 9272-9279” stating:
This
correspondence is notification we are unable to transfer the subject mineral
lease applications from Phil Nisbet to Northwest Kaolin at this time. In order
to assign the lease applications, Phil Nisbet’s wife, Marian Nisbet, must also
sign the assignment form, have her signature notarized, and submit the original
assignment document bearing her signature to this office. As we discussed,
since we have the assignment form with Mr. Nisbet’s signature on file, we will
accept a second assignment document with Mrs. Nisbet’s signature and the
completed notary statement.
Whereas, by Assignment of Mineral, Oil and Gas, and/or
Geothermal Resource Lease(s), dated July 9, 2001, Phillip and Marian Nisbet,
did “sell, assign and transfer unto Alchemy Kaolin Corporation …100% of our
rights, title and interest” in certain described lease applications;
Whereas, on July 17, 2001, Sharon A. Murray, Mineral Leasing
Specialist, Bureau of Minerals, returned the above-referenced assignment form
to Phillip C. Nisbet stating that the IDL:
will not take any
action to assign any of the 14 mineral lease applications held in your name, or
the two applications filed by Northwest Kaolin, until all issues regarding
community property laws in Idaho as they relate to said applications are
resolved…[and] until all issues as to who holds an interest in applications has
been resolved in writing between you, Northwest Kaolin, Inc., and Alchemy
Ventures, Ltd., and its subsidiaries;
Whereas, no additional documentation exists in the official IDL
files regarding a resolution of the assignment of fourteen clay lease
applications from Phil Nisbet to Northwest Kaolin, Inc.;
Whereas, a dispute existed between and/or among the Parties as
to their respective rights in and to lease applications Nos. 9264-9269,
9272-9279 and Nos. 9292, 9293, (hereafter collectively referred to as the
“Lease Applications”);
Whereas, NWK and certain individuals as principals of NWK or as
interested parties in association with NWK have resolved their disputes with
ALY and desire to transfer and assign any and all of their right, title and
interest that they possess in the Lease Applications to ALY and to forever
release and assign any claims they may have with respect to ownership of said
Lease Applications and the dispute(s) arising there form to ALY;
Whereas, by that certain “Contribution Agreement by and among
Idaho Industrial Minerals and Phillip C. Nisbet,” dated October 16, 2001,
Nisbet contributed, among other things, “all right title and interest in and
to…[certain] Applications for State of Idaho Mineral Leases” to IIM;
Whereas, ALY, IIM and Nisbet executed a Letter of Understanding,
dated January 23, 2002, that laid a foundation for resolving disputes between
the Parties and for a deal that would transfer the Properties to ALY
(hereafter “Agreement #3”);
Whereas, by that Conditional purchase and Sale Agreement, dated
March 18, 2002 (hereafter “Agreement #4”), ALY, IIM and Nisbet agreed to
certain terms to be incorporated into an “Agreement in Full” as the basis for
the transfer of the Lease Applications to ALY.
2
Whereas, ALY desires to acquire the Lease Applications from NWK
and certain individuals as principals of NWK or as interested parties in
association with NWK, and IIM, NWK and certain individuals as principals of NWK
or as interested parties in association with NWK, desire to convey the Lease
Applications to ALY subject to the terms and conditions set forth herein.
AGREEMENT
Now Therefore, in consideration of, and subject to, the
covenants, terms and conditions made herein, and intending to be legally bound,
the Parties hereto agree as follows:
DEFINITIONS
Definitions. For the purposes of this Agreement, the following
items shall have the meanings set forth below:
“Agreement” means this “Assignment Agreement
with Contingent Right of Reverter,” including all exhibits and schedules, all
of which are incorporated by this reference.
“ALY” shall have the meaning set forth in the
introduction to this Agreement and includes its U.S. subsidiary, AlchemyKaolin
Inc.
“Effective Date” shall have the meaning set
forth in the introduction to this Agreement.
“Feasibility Study” means a comprehensive
description of the construction, development, mining, processing, and marketing
plan for the commercial products produced from the Mineral(s) extracted from
the Properties. The Study must be in such form and substance as would
reasonably be required by an experienced investment banker in making an arms-length
investment decision to place such a mine into production. The Feasibility
Study shall include the confirmation of reserves based upon reasonable drilling
works, hydrological and geotechnical works, environmental studies, and, if
deemed necessary by ALY, the mining of one or more bulk samples of ore for
metallurgical studies which may require the construction of one or more shafts
or pits, the construction of an incline, or works associated with a trial
mine. The Feasibility Study shall contain estimates of both capital and
operating costs and shall analyze how to proceed with mining operations to
economically and commercially extract the target Mineral(s), identify the
optimum structure for the mining venture, and include reference to relevant marketing
and financial aspects.
“IIM” shall have the meaning set forth in the
introduction to this Agreement and includes, as appropriate for context, its
wholly owned subsidiary, Northwest Kaolin Inc., an Idaho corporation. (For
purposes of improving the clarity of the granting language, the first reference
to IIM and Northwest kaolin Inc. specifically identifies both companies,
instead just using the collective term “IIM” to describe both entities.)
“Lease Applications” shall mean the sixteen (16)
mineral lease applications in the Helmar-Bovill region of Latah County, Idaho
on file with the IDL in the names of Phillip C. Nisbet and Northwest Kaolin Inc
as more fully described in Exhibits A, parts 1 and 2.
“Lease” and “Leases”
shall mean the form of instrument issued by the IDL pursuant to a Lease
Application that provides for a vested right to mine the Minerals applied for
in the Lease Application and any intervening grant of right by the IDL that may
be less than a vested right to mine whether for all or part of the Properties.
3
“Mineral” means kaolinite,
clays of any type and all other minerals, including, without limitation,
feldspar, quartz, and micas, subject only to the limitations that may be
imposed by the State.
“Permitting Process” shall have
the meaning ascribed in subsection 2.1.3 herein.
“Person” means any legal
person, including, without limitation, an individual, a partnership, a joint
venture, a corporation, a trust, limited liability company, other business
entity, an unincorporated organization or a government or any department or
agency thereof.
“Production Plant” shall
mean any plant that is capable of producing Mineral products in commercial
quantities and quality.
“Properties” means those
lands covered by the Lease Applications (or Leases granted thereby).
SECTION 1
GRANT OF RIGHTS; TERM
1.1 Grant of Rights. Subject to the paramount title of
the State and the Contingent Right as Reverter as provided for in Section 3,
IIM and Northwest Kaolin Inc. hereby assign to ALY one Hundred Percent (100%)
of its undivided interest in the Lease Applications described in Parts 1 and 2
of Exhibit A and grants to ALY, without limitation, the following rights:
1.1.1 the
exclusive right to enter, take possession and use the Properties covered by the
Lease Applications;
1.1.2 the
exclusive right to convert the Lease Applications to a Lease(s); however, ALY
shall notify IIM promptly of any action by the State to issue a Lease. If
necessary, IIM shall cooperate with ALY in the process of converting the Lease
Applications to a Lease(s) subject to the terms and conditions provided herein.
1.2 Accord and Satisfaction. The parties agree that
with the issuance of a total of 1,750,000 common shares of ALY to IIM, IIM
releases any and all interest in the Lease Applications and that IIM
acknowledges that it has received full and final consideration of the transfer
of the rights to the Lease Applications to ALY.
1.3 Execution of Instruments. The Parties shall
execute such instruments and provide such correspondence as is reasonably
necessary to effect the assignment of the Lease Applications described in the
Paragraph 1.1; however, it is anticipated by the Parties that:
(1) the assignment
of the Fourteen Lease Applications will be effected in the IDL records by
resubmitted the State “Assignment of Mineral, Oil and Gas, And/Or Geothermal
Resources Lease(s),” executed by Phillip C. and Marian Nisbet, dated July 9,
2001 (Exhibit B); and
4
(2) the assignment
of the Two Lease Applications will be effected in the IDL records by NWK’s
execution, simultaneously with this Agreement, of the attached State
“Assignment of Mineral, Oil and Gas, And/Or Geothermal Resources lease(s)”
(Exhibit C) form for delivery by ALY to the IDL.
1.4 Term. The Term of this Agreement shall commence
on the Effective Date and shall continue for a period of three (3) years (the
“Term”), unless sooner terminated as provided in this Agreement.
1.5 Supercedes and Replaces. This Agreement
is the “Agreement in Full” contemplated by Agreement 4; however, this Agreement
supercedes and replaces all prior agreements between the Parties and their
predecessors in interest relating to the Lease Applications and Properties
including, but not limited to, the agreements in principle and Agreements #1,
2, 3 and 4, described in the Recitals.
1.6 IIM’s Representations Regarding the Lease Applications. IIM
makes no representations or warranties regarding the likelihood that all or any
of the Lease Applications will become Leases; however, during the Term of this
Agreement, IIM shall indemnify and holds harmless ALY from any claims, demands
and legal actions by Nisbet and/or NWK, any individuals as past or present
principals of NWK or as interested parties in association with NWK arising out
of or related to the Lease Applications or Properties. Both during and
subsequent to the Term of this Agreement, IIM shall cooperate with ALY in any
action of ALY in defense of any claims, demands and legal actions by Nisbet and
NWK and certain individuals as principals of NWK or as interested parties in
association with NWK arising out of or related to the Lease Applications or
Properties.
SECTION 2
ALY’S DELIVERABLES
2.1 Consideration. The purchase price (the “Purchase
Price”) for the assignment of Lease Applications shall be One Million Seven
Hundred Fifty Thousand (1,750,000) common shares of ALY, subject to such
timing, terms, conditions, and restrictions as may be imposed by the Canadian
Venture Exchange (“CDNX”), to be delivered by ALY to IIM on the following
schedule. Not later than thirty (30) calendar days after the occurrence of
each of the following described events, ALY shall deliver to IIM common shares
of ALY in the amounts specified below:
2.1.1 Upon Execution. Upon receipt of the assignment of
Lease Applications described in Paragraph 1.1, ALY shall deliver to IIM, One
Hundred Thousand (100,000) common shares of ALY.
2.1.2 Upon Completion of a Feasibility Study. Upon
completion of a Feasibility Study, ALY shall deliver to IIM, Four Hundred
Thousand (400,000) common shares of ALY.
2.1.3 Upon Lease Issuance. Upon the State of Idaho
issuing Leases to ALY for all acreage subject to the Lease Application, ALY
shall deliver to IIM, Three Hundred Fifty Thousand (350,000) common shares of
ALY. In the event that the State issues Leases on less than all of the Lease Applications,
then the number of shares issued shall be proportionate to the percent of the
acreage converted to Lease relative to the amount of acres covered by the Lease
Applications; the remaining shares of this 350,000 shall be paid upon the
occurrence of Paragraph 2.1.5 below, as additional shares to the 400,000 shares
already provided for in Paragraph 2.1.5. In the event that ALY, in its sole
discretion, voluntarily agrees to accept Leases from the State for less than
all of the acreage subject to the Lease Applications, then ALY shall either pay
the additional shares to IIM pursuant to this Paragraph 2.1.3 or ALY shall
reassign such Lease Applications per Paragraph 3.4 below.
5
2.1.4 Upon Completion of a Permitting Process. Upon
completion of the Permitting Process, ALY shall deliver to IIM, Five Hundred
Thousand (500,000) common shares of ALY. The “Permitting Process” means the
activities and time period required to obtain all federal, state or local
government permits, licenses or other approvals (including water rights)
necessary for ALY (or its subsidiaries or affiliates), to construct and operate
commercial mining and beneficiation facilities on the Properties, including, if
required, through the development of a Production Plant.
2.1.5 Upon Completion of a Production Plant and First Delivery
of Commercial Product. Upon completion of the first delivery of a
Commercial Product from a Production Plant, ALY shall deliver to IIM, Four
Hundred Thousand (400,000) common shares of ALY. The “first delivery of
Commercial Product” shall be when ALY sells the product from beneficiating
Mineral(s) in its Production Plant to a third-party end user or agent or broker
for end users in commercially reasonable quantities at a cash amount
representing the fair market value for the product so delivered.
2.2 Acceptance and Performance. By accepting the
shares when tendered by ALY, IIM unconditionally accepts that ALY has completed
the performance requirement associated with each block of shares being
delivered as provided in Section 2.1 above. IIM shall have fourteen (14)
calendar days from the delivery of the shares to provide Notice objecting to
the completion ALY’s deliverable and returning the tendered shares. If IIM has
not tendered a return of the shares within said fourteen (14) calendar days,
then the associated deliverable for ALY will be deemed accepted. In the event
of an alleged default by ALY, IIM shall describe with reasonable specificity
the alleged default in ALY’s performance that gives rise to any declaration of
nonperfomance, and the procedures described in Section 10 hereof shall be
applicable. Failure to declare a default at such time shall be deemed a waiver
of IIM’s rights to declare a default at a later date.
2.3 Verification of Authorization. With each
tendered delivery of shares as provided in Subsections 2.1.1 through 2.1.4, ALY
shall provide IIM with certified copies of the resolutions of ALY’s board of
directors and its shareholders, if applicable, authorizing the issuance of
common shares, subject to the parameters imposed by the CDNX. Similarly, with
each tendered delivery of shares as provided in Subsections 2.1.1 through
2.1.4, IIM shall provide ALY with certified copies of the resolutions of IIM’s
board of directors and IIM’s shareholders, if applicable, authorizing the
acceptance of common shares of ALY.
2.4 Other Items. ALY shall also deliver such other
documents as IIM may reasonable request in connection with the transaction
contemplated by this Agreement. IIM shall also deliver such other documents as
ALY shall reasonably request in connection with the transactions contemplated
by this Agreement.
2.5 Adjustments. The Purchase Price is for an
undivided One Hundred Percent (100%) interest in the Lease Applications,
subject to paramount title held by the State. In the event that there is an
outstanding right, title or interest including, without limitation, an
outstanding lien or encumbrance on the title, or if the IIM holds less than an
undivided One Hundred Percent (100%) interest in the Lease Applications,
subject to the paramount interest held by the State, then the purchase price
shall be adjusted in accordance with the provisions of Section 7.4 (Lesser
Interest). Such adjustment may be made by offset from future issues of ALY
common, if ALY so chooses.
6
SECTION 3
CONTINGENT RIGHT OF REVERTER
3.1 Retention of Revisionary Interest. By the
assignment and grant provided for in Paragraph 1.1, IIM reserves a right of
reverter of the Lease Applications (or leases acquired thereby), upon failure
of ALY to complete all of its deliverables described in Section 2 by the end of
the Term or upon ALY terminating work on development of the Properties. This
Contingent Right of Reverter may be enforced in equity; the Parties recognize
that an adequate remedy at law might not exist. The governing jurisdiction for
equitable and legal remedies shall be as provided in Paragraph 14.1.
3.2 Allegation of Failure to Complete Deliverables. ALY
shall have the entire Term to complete the deliverables provided for in
Paragraph 2.1, which may be extended by Force Majeure. If ALY has tendered all
of the common shares in association with the performance deliverables described
in Subparagraphs 2.1.1 through 2.1.4, then IIM must have rejected or
re-tendered, as provided for in Paragraph 2.2, at least one block of shares in
order to preserve a claim of default and its Contingent Right of Reverter.
3.3 Resolution of Contingent Right of Reverter. The
procedure for claiming a default, as provided in Section 10, shall govern the
initiation and enforcement of the Contingent Right of Reverter by IIM. If ALY
does not dispute the claim that it has failed to complete the deliverables
described in Paragraph 2.1 within the Term, or that it cannot so complete such
deliverables within the time period allowed under Subparagraph 10.1.2, then ALY
shall promptly reconvey to NWK or to IIM, as designated by IIM, the Lease
Applications covered thereby in a format recognizable and acceptable to the IDL
office. IF IIM has accepted all of the shares as provided for in Paragraph
2.2, then the Contingent Right of Reverter shall automatically expire upon the
expiration of the Term of this Agreement and shall not survive the expiration
of this Agreement.
3.4 Reassignment. It is agreed that if ALY should
choose to abandon any of the Lease Applications (or Leases derived from such
Lease Applications) listed on Exhibit A, then ALY shall provide IIM with Notice
of such intent, and IIM shall have the option for fourteen (14) days from
receipt of such Notice to cause ALY to execute a reassignment instrument. In
addition, ALY will execute an appropriate State assignment form, and shall
generally cooperate with IIM and the State to implement the intent of such
reassignment; however, ALY does not represent or warrant that the State will
accept such reassignment, nor shall ALY bear any of the costs associated with
reassignment.
3.5 Notice. In the event that the State of Idaho
provides notice to ALY that any Lease Application or Lease is deemed invalid,
out of compliance or otherwise subject to termination of rights, ALY shall
provide IIM with this is same information within 48 hours of ALY receiving
actual notice.
SECTION 4
RELEASE
4.1 Release of Claims. As of the Effective Date, each
party to this Agreement releases and discharges the other as well as any of its
officers, directors, shareholders, agents, employees, attorneys, successors,
heirs, devisees, assigns, affiliates, related organizations, if any, and any
other persons, firms or corporations in interest with them, or any of them, of
and from all contracts, agreements, understandings, claims, liabilities,
demands, liens, debts, loans, obligations, accounts, causes of action and/or
suit of any and every nature, known or unknown, for damages or otherwise, at
law or in equity (“Claims”), which each party may have or claim to have had
against the other including without limitation: Claims related to ownership of
the Lease Applications; Claims related to any previous agreements or alleged
agreements between or among any of the Parties hereto; Claims of breach of any
understanding or agreement related to the Lease Applications and the proposed
mining of Mineral(s) by predecessors in interest of the Parties, and Claims of
compensation owing or due in the form of fees, wages, royalties or and any
other obligation for sums due and owing from any of the Parties that arose from
or may arise from actions or omissions of the Parties or their predecessors in
interest prior to the Effective Date.
7
SECTION 5
Performance Obligations
5.1 Operational Performance of ALY. ALY shall conduct
all activities on the Properties in a good and workmanlike manner and in
compliance with all applicable laws and regulations and permits, including
those related to environment and reclamation. ALY shall promptly pay all
outstanding debts. ALY shall use its good faith effort to obtain all
governmental approvals required to exercise its rights granted hereunder;
however, and IIM agrees to cooperate with ALY in the Permitting Process,
including granting and documenting any required consent. ALY shall owe no
duties to IIM except as provided in this Agreement.
5.2. Obligation to Maintain the Lease Applications (or
Leases acquired thereby). ALY shall use its good faith efforts to cause
the Lease Applications to be converted to Leases and ALY shall seek to do so as
promptly as reasonably possible under the entirety of circumstances, and to
keep any Leases acquired in good standing under the laws of the State while
this Agreement is in effect, including the payment of fees and the filing of
necessary reports. The Parties recognize that converting the Lease
Applications to Leases potentially involves a discretionary decision by the
State; the Parties shall use their good faith efforts to obtain Leases for all
of the Lease Applications. It is understood by the Parties that if the State
fails to issue Leases covering sufficient lands to support ALY’s anticipated
production operations, this may be deemed Force Majeure pursuant to Section 6
hereunder, so long as the terms and conditions in Section 6 are satisfied.
5.3 Claims and Liens. ALY shall pay and satisfy all
claims and liens for materials, supplies and labor used in connection with
ALY’s operations on the Properties, and shall keep the Lease Application (or
Lease acquired thereby) free and clear from any and all liens and encumbrances,
except any such lien or encumbrance that may result from the actions of parties
other than ALY, its agents, employees, and contractors, and excepting any such
lien or encumbrance that is in good faith being subject to active challenge or
appeal during the pendency of such challenge or appeal.
5.4 Coordinating with the State. ALY shall maintain
close contact with the State at all reasonable times to keep the relevant
agencies informed of current and planned activities relating to the Properties
regardless of whether or not such communication may be required by law. ALY
shall provide IIM with copies of any correspondence sent to, or received from,
the State of Idaho and its various agencies.
5.5 Inspection. IIM, or IIM’s authorized
representative may at any reasonable time, inspect ALY’s activities, but such
representative shall do so at his or her own risk, and shall conduct such
inspections so as not to hinder unreasonably the activities of ALY. IIM and
its representatives, shall indemnify and hold ALY harmless from any costs,
loss, or damage by reason of injury to IIM, or its representative in making
such an inspection. ALY may refuse access to the Properties for all
representatives of IIM that refuse to execute a waiver of liability in the
favor of ALY before entering the Properties. IIM and/or IIM’s representative
shall not disclose any of the information collected under this Agreement,
except to ALY, nor shall IIM use such information to identify and/or capture
corporate opportunities of ALY, or in any way compete with ALY, unless and
until IIM and ALY enter into a commercially reasonable
confidentiality/nondisclosure agreement, which shall include an “area of
interest” clause that precludes IIM or owners of IIM from acquiring an interest
in mineral property within 25 miles of the Properties without promptly offering
any such interest to ALY at IIM’s cost.
8
SECTION 6
FORCE MAJEURE
6.1 Force Majeure.
6.1.1 Force
Majeure means any cause or condition beyond the reasonable control of, and
without the fault or negligence of, the party claiming Force Majeure which
causes the party to be unable to perform its obligations, which by exercise of
due foresight such party could not reasonably have been expected to avoid and
which the party is unable to overcome by the exercise of due diligence.
6.1.2 The
obligations of ALY under this Agreement shall be suspended if ALY is delayed or
interrupted in or prevented from conducting any operations on the Properties,
or significant portion thereof, as the result of an Act of God, fire,
earthquake, hurricane, unreasonably heavy precipitation or floods, shortage of
fuel supply, raw materials, or other supplies or equipment, changes in
governmental laws, rules, regulations or orders adversely affecting any
operations on part or all of the Properties; inability to obtain on reasonably
acceptable terms any public or private license, permit or other authorization
that may be required to conduct operations; any extraordinary restrictions
upon, unusual delays in receiving, or failures to receive any permits,
licenses, or approvals from any governmental agency; or any other cause beyond
ALY’s reasonable control.
6.1.3 In
such event ALY shall notify IIM in writing of the particulars of the delays or
interruptions and the term of this Agreement shall be extended for a period of
time equal to the period during which ALY operations are so delayed,
interrupted, or prevented
6.2 Adverse Claims. If at any time during the Term of
this Agreement it appears that one or more private third parties may have a
claim of economic interest or ownership in the Properties or the Lease
Applications (or Leases acquired thereby), ALY may claim Force Majeure for a
period of time equal to the time necessary to resolve such claim(s) of economic
interest or ownership in the Properties or the Lease Applications (or Leases
acquired thereby).
SECTION 7
IIM’S WARRANTIES, REPRESENTATIONS
& COVENANTS
7.1 IIM’s Warranties, Representations, and Covenants. Excepting only the paramount title of the State, its participating interest
and production royalties, if any, IIM represents and warrants to ALY that:
7.1.1 IIM and Nisbet own or
control the Lease Applications.
9
7.1.2 IIM
knows of no other person claiming any interest in the Lease Applications; and
the Lease Applications are free from all liens and encumbrances, except liens
for property taxes not yet due and payable.
7.1.3 No
royalties, fees or monies (or claims therefore) are payable or required to be
paid to any person having or claiming an interest in the Lease Applications
other than the State.
7.1.4 IIM
has full power and authority to execute this Agreement and this Agreement is
valid and binding upon it in accordance with its terms.
7.1.5 IIM
knows of no violation of any applicable law or regulation relating to land use,
environmental protection or otherwise with respect to the Lease Applications or
activities relating thereto; and IIM represents that there is no judgment
outstanding and no litigation, proceeding or governmental investigation pending
or threatened against the Lease Applications or IIM in connection with the
Lease Applications except as described below:
NONE
7.2 Defects In Title. In the event that any cloud or
defect may arise in IIM’s title to the Lease Applications (or Leases granted
thereby), except matters involving the title and rights of the State
(including, without limitation, discretionary lease issuance), then at ALY’s
request pursuant to Notice, IIM will take all action necessary, including
judicial proceedings, to remove any cloud from and cure any defect in ALY’s
title to the Lease Applications (or Lease granted thereby). If IIM fails or
refuses to take such action, ALY may take such action in IIM’s name. IIM shall
cooperate with ALY in any such action taken. ALY may recover from IIM, or from
any payments in stock thereafter to become due to IIM under this Agreement, all
costs and expenses, including reasonable attorney’s fees, incurred by ALY in
such action.
7.3 Challenge to Title by State If the State attacks
the validity of the Lease Applications for any reason, except ALY’s failure to
comply with its obligation to maintain the Lease Applications (or Leases
granted thereby) in good standing, ALY, in its sole discretion, may
prosecute/defend an action in mandamus to issue lease, damages, or such other
action as it may choose. However, in the event that ALY does not choose to
defend/prosecute such claim, then ALY, in its sole discretion, shall provide
Notice to IIM, who then may take such action in ALY’s name.
7.4 Lesser Interest. The total
number of common shares deliverable to IIM pursuant to the terms of this
Agreement are premised on the fact that ALY is acquiring an undivided One
Hundred Percent (100%) interest in the Lease Applications subject to the
paramount interest held by the State, and that ALY’s rights in the Properties
are as herein set forth and are subject to no covenants, conditions,
restrictions, or encumbrances other than those created by this Agreement. In
the event that at any time during the term of this Agreement there is any
outstanding right, title or interest in the Properties not created or caused by
ALY such that for any reason ALY is not possessed of the entire interest which
this Agreement purports to grant, then the number of shares deliverable to IIM
under this Agreement shall be reduced by the proportion which any outstanding
interest or encumbrance bears to the full unencumbered interest contracted for
by ALY hereunder.
10
SECTION 8
DAMAGES, INSURANCE & GAURANTEE
8.1 Damages. In no event shall any Party be liable to
the other Party for any consequential, special or incidental loss or damage.
8.2 Insurance. Within Ninety (90) days of the
Effective Date, ALY shall obtain and maintain such insurance coverage as
required by law, and such other insurance coverage as might be deemed
reasonable and prudent, including, but not limited to the following types of
insurance: (1) worker compensation; (2) general liability; (3) automobile; (4)
fire; and (5) directors and officers (however, if directors and officers
coverage cannot be obtained on commercially reasonable terms, as determined by
the Alchemy Board of Directors, then no such insurance will be required.
SECTION 9
TAXES
9.1 Payment Obligation. Except as hereinafter set
forth, ALY shall pay all taxes levied during the Term of this Agreement against
all improvements, structures, equipment, personal property, and fixtures placed
upon the Properties by ALY and all taxes levied against ALY as an employer of
labor. All taxes shall be paid before delinquent, but ALY shall be under no
obligation to pay any tax, so long as the tax is being contested in good faith
and by appropriate legal proceedings and the nonpayment thereof does not
adversely affect ALY’s right, title, or interest in or to the Premises.
SECTION 10
DEFAULT, TERMINATION &
SURRENDER
10.1 Default.
10.1.1 ALY
shall not be deemed to be in default hereunder until IIM shall first have given
to ALY written notice of the alleged default, specifying with particularity the
circumstances of the default and, if applicable, the amount of shares, which
IIM claims is due and payable by ALY.
10.1.2 Such
notice shall be given in accordance with Section 12 (NOTICES). ALY shall have
a period of sixty (60) days from and after receipt of such notice in which to
cure the default, or in the event that such default cannot be cured within
sixty (60) days to initiate and diligently pursue steps to correct the default,
failing which this Agreement shall terminate and all liabilities and
obligations of ALY, except those liabilities existing on the date of
termination, shall terminate. Any default claimed with respect to the issuance
of shares may be cured by the deposit in escrow of the number and class of
shares in controversy and the giving of notice of the deposit to IIM. The
amount to remain in escrow until the controversy is resolved or until there has
been a final disposition of the controversy by a court of competent
jurisdiction.
10.1.3 Should
ALY dispute the existence of the default, then this AGREEMENT shall not
terminate unless ALY does not initiate and diligently pursue steps to cure the
default within sixty (60) days after the default has been determined by a final
decision of a court of competent jurisdiction.
11
10.2 Early Termination.
10.2.1 ALY
may, at any time and from time to time, terminate this Agreement, as to all or
any portion of the Lease Applications (or Leases granted thereby) and
Properties, by notifying IIM of its intent to file for record in the IDL office
(with a copy to IIM) a good and sufficient surrender or notice of termination
of all or a portion of the Lease Applications (or Leases granted thereby).
Upon receipt of such notification of intent to surrender or terminate, IIM, or
its designated subsidiary, will have fourteen (14) calendar days to elect to
receive a reassignment of such Lease Applications (or Leases granted thereby)
from ALY free and clear of all liens and encumbrances or instruct ALY to
proceed with filing such notice of surrender with the IDL office. In the event
IIM elects to receive reassignment, ALY will execute an appropriate State
assignment form, and generally shall cooperate with IIM and the State to
implement the intent of such reassignment; however, ALY does not represent or
warrant that the State will accept such reassignment, nor shall ALY bear any of
the costs associated with reassignment. This Agreement shall terminate with
respect to that portion of the Properties described in the surrender or
termination notice to the IDL office, and all rights, liabilities and
obligations of ALY under this Agreement with respect to that portion of the
Properties described in such notice shall terminate on the date specified in
the notice, except those rights which survive termination and those liabilities
and obligations existing on the date of termination. If IIM elects not to
re-acquire the surrendered Lease Applications (or Leases granted thereby) and
Properties, then either IIM or ALY, or their subsidiaries, may apply to the IDL
office for the lease to such surrendered Properties at any time thereafter, and
such after-acquired Properties shall not be subject to the terms of this
Agreement.
10.2.2 In
the event of such termination, all equipment, machinery and supplies that have
been brought upon such portion of the Properties by ALY shall be removed by ALY
from the portion of the Properties so surrendered within twelve months of
providing such notice except such facilities on the Properties that IIM elects
to retain.
10.2.3 In
the event IIM does not make an election within said fourteen (14) days or
elects that ALY should surrender its interest, then ALY shall promptly file a
notice of termination of interest with the IDL for the portion of the
Properties so surrendered.
10.3 Continued Access. Subject to
the paramount title and authorities of the State, for as long as ALY requires
after termination of the Agreement, ALY shall have the right of continued
access to the Properties and across the Properties for purposes of reclamation
and remediation, if applicable. This grant of rights shall survive
termination of this Agreement.
SECTION 11
DATA
11.1 ALY’s Data. ALY shall upon termination of this
Agreement provide to IIM, upon IIM’s request, copies of all available
non-interpretative information relating to ALY’s activities on the Properties.
This information shall include copies of all ALY’s maps, drill logs and
reports, assays, surveys, reports of records submitted to governmental
agencies, and geological, geophysical, geochemical or similar data with respect
to the Properties, and shall be provided to IIM, or its designated subsidiary,
without any warranty or representation as to the accuracy, completeness,
reliability or usefulness thereof.
12
SECTION 12
NOTICES
12.1 All notices and other communications under this Agreement
(“Notices”) to the Parties shall be in writing, and shall be addressed
respectively as follows:
| |
ALY: |
Barry Girling
Malespina, Ltd.
900 – 580 Hornby Street
Vancouver, B.C. V6C 3B6
Ph: (877) 688-2321 |
| |
with a copy to: |
Baird Hanson Quinn, LLP
2117 Hillway Drive
Boise, Idaho 83702
Attn: Joe Baird
Ph: (208) 388-0110
Fax (208) 345-4930 |
| |
IIM: |
IDAHO INDUSTRIAL MINERALS, INC.
C/O Sacajawea Motor Inn
1874 Main Street
Lewiston, Idaho 83501
USA
Attn: Brent Thompson
Ph: (208) 746-1393
Fax (208) 743-3620 |
A Party may change its address by Notice to the other Party.
12.2 All Notices shall be given:
12.2.1 by personal delivery (including courier); or
12.2.2 by registered mail, charges prepaid; or
12.2.3 by
electronic facsimile communication, with a confirmation sent by registered mail
or courier.
12.3 All
Notices shall be effective and shall be deemed received:
12.3.1 if
by personal delivery or by registered mail, on the date of delivery if
delivered during normal business hours, and if not delivered during normal
business hours, on the next business day following delivery; or
12.3.2 if
by electronic communication, on the next business day following receipt of the
electronic communication.
13
SECTION 13
ASSIGNMENT
13.1 ALY
may not assign the Lease Applications (or Leases granted thereby) to a corporation
or other entity that is not a subsidiary or affiliated corporation of ALY
without the prior written approval of IIM
13.2 ALY
may, subject to any applicable law, assign this Agreement or ALY’s rights
hereunder or any portion thereof, or may otherwise convey, assign or transfer
its interest hereunder or in the Lease Applications or subsequent Leases, once
acquired from IIM, to a subsidiary or affiliated corporation of ALY, or to any
successor by way of a merger, consolidation or reorganization without prior
notice to IIM. The term “subsidiary or affiliated corporation” as used herein
means any corporation that directly or indirectly controls, is controlled by, or
is under common control with, ALY.
SECTION 14
MISCELLANEOUS PROVISIONS
14.1 Choice
of Law; Survival. The formation, interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
Idaho, USA; except that, if the primary dispute concerns a question of
securities law, then the interpretation and enforcement of this Agreement shall
be governed by the laws of British Columbia, Canada. Any terms or agreements
herein which by their nature may or must be performed or occur after
termination of this Agreement shall survive such termination.
14.3 Additional
Documents. IIM shall provide ALY with such additional documents as may be
necessary to carry out the purposes of this Agreement. If conditions change by
reason of acquisition, conveyances, assignments, or other matters relating to
the [unreadable] or description of the Properties, IIM and ALY shall execute
amendments of this Agreement and any other documents which may be necessary to
reflect such changed conditions.
14.4 Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed to be an original and all of which together shall constitute one and the
same instrument.
14.5 Finders
and Brokers. Each party represents to the other that it has not dealt with
anyone who is or may be entitled to a broker’s commission, finder’s fee or
other compensation for introducing the parties or for advising or assisting in
connection with this Agreement or the transactions contemplated by it. Each
party shall indemnify and hold the other harmless from any cost or expense,
including attorneys’ fees and court costs, arising out of such a claim by such
a person, including costs incurred in response to discovery and related
proceedings in connection with such a claim.
14.6 Inurement.
This Agreement shall be binding upon and inure to the benefit of the respective
successors and assigns of IIM and ALY.
14.7 Severability.
In the event any provision of this Agreement is held to be invalid or void, it
shall not affect the validity of the remaining provisions.
14
14.8 Waiver.
No waiver of any breach of this Agreement shall be deemed to be a waiver of any
other subsequent breach.
14.9 Headings.
Headings to the various Sections herein are for reference only and are not to
be used for the purpose of construing the provisions herein.
14.10 Entire
Agreement. Except as provided in Section 1.3, this Agreement constitutes
the entire agreement of the Parties. No modification, variation, or amendment
of this Agreement shall be effective unless it is in writing and signed by all
the Parties to this Agreement.
IN
WITNESS WHEREOF, this Agreement has been executed as of the day and year first
above written.
IIM: ALY:
IDAHO
INDUSTRIAL MINERALS LLC. ALCHEMY VENTURES, LTD.
By /s/ W. Robert Lemke By /s/
Barry Girling
8-12-2002 President 8-12-2002 Director & Secretary
NWK:
Northwest Kaolin, INC.
By /s/ W. Robert Lemke
8-12-2002 President
15
EXHIBIT
“B”
Amendments
to
Assignment
Agreement
AMENDMENT
AND RATIFICATION OF ASSIGNMENT
AGREEMENT WITH CONTINGENT RIGHT OF REVERTER
KNOW ALL
MEN BY THESE PRESENTS THAT:
WHEREAS, by
that certain Assignment
Agreement with Contingent Right of Reverter (hereafter the “Agreement”) made
effective as of August 10, 2002 (the “Effective Date”), i-minerals inc.
(formerly Alchemy Ventures, Ltd. “ALY”) a company incorporated pursuant to the
Canada Business Corporations Act (“IMA”), received certain state mineral lease
applications from Idaho Industrial Minerals, LLC., an Idaho limited liability
company (“IIM”) and Northwest Kaolin, Inc., an Idaho corporation (“NWK”),
collectively, referred to hereinafter as the “Parties”.
WHEREAS, a
Memorandum of Assignment Agreement with Contingent Right of Reverter was
recorded for notice purposes in the Latah County Recorder’s office at Moscow, ID covering the lease applications as more completely described on Exhibit A,
attached hereto and incorporated herein.
WHEREAS, ALY changed its name to i-minerals inc. and was
continued from the jurisdiction of the Company Act (British Columbia) to
the jurisdiction of the Canada Business Corporation Act on January 22, 2004 and
its wholly owned subsidiary, AlchemyKaolin, Inc., an Idaho incorporated
company, changed its name to i-minerals, USA inc. in February 2005. (“IMI”);
and
WHEREAS,
the undersigned desire to ratify the Agreement in all its terms except as
modified, amended and changed to the extent and in the manner hereinafter
provided.
NOW
THEREFORE, in consideration of the premises and the sum of Ten dollars ($10.00)
and other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, we, the undersigned, and each for itself, himself and
herself, as the case may be, do hereby:
1. Replace all references to Alchemy
Ventures, Ltd. (“ALY”) with i-minerals inc. (“IMA”), respectively, throughout
the Agreement, except as herein amended.
2. Replace in their entirety the sections of
the Agreement corresponding to the subsequent numbered sections such that the
wording at each such replaced section of the Agreement will read:
1.2 Accord and
Satisfaction. The Parties agree that with the issuance of a total of
1,750,000 common shares, plus such additional shares as represented by the
interest accumulation calculated pursuant to Section 2.6 (Additional
Consideration), of IMA to IIM, IIM releases any and all interest in the Lease
Applications, Leases and Properties, as those capitalized terms are defined in
the Agreement, and that IIM acknowledges that it has received full and final
consideration of the transfer of the rights to the Lease Applications to IMI.
1.4 Term.
The Term of this Agreement shall commence on the Effective Date and shall
continue for a period of six (6) years (the “Term”), unless
sooner terminated as provided in this Agreement.
2.1.2 Upon Completion of a Feasibility Study. Not later than
thirty (30) days after completion of a Feasibility Study, IMA shall deliver to
IIM, Four Hundred Thousand (400,000) common shares of IMA and such additional
shares as calculated according to Section 2.6 (Additional Consideration),
subject to any hold periods and all other restrictions as may be imposed by the
TSX Venture Exchange (the “TSX.V”).
2.1.4 Upon Completion of a Permitting Process. Not later than
thirty (30) days after completion of the Permitting Process, IMA shall deliver
to IIM, Five Hundred Thousand (500,000) common shares of IMA such additional
shares as calculated according to Section 2.6 (Additional Consideration)
subject to any hold periods and all other restrictions as may be imposed by the
TSX.V. The “Permitting Process” means the activities and time period required
to obtain all federal, state or local government permits, licenses or other
approvals (including water rights) necessary for IMI (or its successors,
subsidiaries or affiliates), to construct and operate commercial mining and
beneficiation facilities on the Properties, including, if required, through the
development of a Production Plant.
2.1.5 On
Completion of a Production Plant and First Delivery of Commercial Product.
Not later than thirty (30) days after completion of the first delivery of a
Commercial Product from a Production Plant, IMA shall deliver to IIM, Four
Hundred Thousand (400,000) common shares of IMA such additional shares as
calculated according to Section 2.6 (Additional Consideration) subject to any hold
periods and all other restrictions as may be imposed by the TSX.V. The “first
delivery of Commercial Product” shall be when IMI (or its successors,
subsidiaries or affiliates),sells the product from beneficiating Mineral(s) in
its Production Plant to a third-party end user or agent or broker for end users
in commercially reasonable quantities at a cash amount representing the fair
market value for the product so delivered.
3.
Add to the Agreement Section 2.6 Additional Consideration to read as
follows:
2.6 Additional
Consideration. IIM shall receive compensation for time delays in IMI (or
its successors, subsidiaries or affiliates) meeting the performance objectives
as described in the Agreement, independent of whether such delays are within or
outside of IMI’s control. Such compensation shall be calculated by attributing
interest to such delays based on an interest rate calculated by equal
weightings of the Prime Bank Lending Rate and the 10 year United States Treasury Bill as quoted daily in The Wall Street Journal as of the third
anniversary date of this Agreement (the “Interest Rate”). The Interest Rate
shall be applied against the value of the 1,300,000 un-issued shares (the
“Un-issued Shares”) as of the third anniversary date of this Agreement. The
Un-issued Shares shall each have a deemed value equal to the closing price of
IMA’s shares on the TSX Venture Exchange as of the third anniversary date of
this Agreement (the “Deemed Share Value”). The value of such interest
accumulation shall be calculated by multiplying the portion of the Un-issued
shares due on achievement of the milestone by the Deemed Share Value by the
Interest Rate by the period of time from the third anniversary of this
Agreement to the achievement of the milestone (the “Interest Accumulation”).
For purposes on an example only, if the Interest Rate is 6%, the Deemed Share
Value $0.25 and the 400,000 shares due on completion of a feasibility study
were delivered 15 months after the third anniversary of the agreement, the
related Interest Accumulation would be 400,000 * 0.25 *0.06 * 15/12 = $7,500.
The interest accumulation shall be paid to IIM in additional common shares of
IMA. The number of shares to be issued shall be determined by dividing the
Interest Accumulation by the market price of IMA shares as of the date IMA
declares the performance benchmark achieved where the market price is defined
by the policies of the TSX.V Upon each performance achievement date thereafter
the value of Interest Accumulation related to all remaining Un-issed Shares shall
be calculated and paid to IIM in the same manner; provided, the “Un-issued
Shares” and “Deemed Share Value” shall be recalculated and reset, respectively,
in similar manner at each subsequently achieved milestone.
4. Ratify, adopt and confirm the Agreement
in all its terms and provisions as modified, amended and changed herein, and do
hereby grant, convey and assign said Lease Applications, Leases and Properties,
as more fully described in Exhibit A attached hereto and incorporated by this
reference, which description supercedes and replaces all previous descriptions
of the Lease Applications, Leases and Properties, unto i-minerals, Inc., its
successors, subsidiaries, affiliates and assigns in interest, as fully and
completely as if it had originally been named as assignee in said Agreement.
5.
This Amendment and Ratification and all share issuances contemplated herein are
subject to the approval of the TSX Venture Exchange.
We, the
undersigned, hereby declare that said Assignment Agreement with Contingent
Right of Reverter in all its terms and provisions, as herein amended, is
binding on us and each of us and is a valid and subsisting Assignment Agreement
with Contingent Right of Reverter, which is binding, as amended, on the
respective heirs, executors, administrators, successors or assigns of the
undersigned.
IN WITNESS WHEREOF,
this Amendment and Ratification has been executed as of the day and year first
above written.
|
IIM: |
IMA: |
| IDAHO INDUSTRIAL MINERALS LLC. |
i-minerals,
Inc. |
| |
|
| |
|
| |
|
| By /s/ Robert Lemke |
By /s/
Roger Kauffman |
| _______ President |
_______ President |
| |
|
| |
|
| |
|
|
NWK: |
IMI: |
| Northwest Kaolin, Inc. |
i-minerals
USA, Inc. |
| |
|
| |
|
| |
|
| By /s/ Robert Lemke |
By /s/ Roger Kauffman |
| _______ President |
_______ President |
EXHIBIT A
TO THAT CERTAIN
AMENDMENT AND RATIFICATION OF
ASSIGNMENT AGREEMENT WITH CONTINGENT RIGHT OF REVERTER
Dated August 10, 2005
By and between i-minerals, Inc.
and Idaho Industrial Minerals, LLC
MINERAL
LEASES HELD BY I-MINERALS USA, INC.
AS
OF AUGUST 10, 2005
|
LEASE No. |
Township |
Range |
Section |
Legal Description |
Acres |
| 9266 |
41 North |
1 East |
18 |
Lot 2 (SW¼NW¼),
NE¼, E½NW¼, W½SE¼, W½SE¼SE¼ |
381 |
| 9267 |
41 North |
1 East |
17 |
NW¼, N½SW¼, S½SW¼SE¼, SE¼SE¼, W½NE¼,
W½NE¼NE¼ |
400 |
| 9268 |
40 North |
1 West |
6 |
Lot 9 (SW¼NW¼),
Lot 10 (NW¼SW¼),
Lot 11 (SW¼SW¼),
SE¼NW¼, E½SW¼, SE¼, SW¼NE¼ |
451 |
| 9269 |
40 North |
1 West |
8 |
S½, NE¼NE¼, S½NE¼ |
440 |
| 9272 |
41 North |
1 West |
23 |
Lot 1 (NE¼NE¼)
Lot 2 (NW¼NW¼)
Lot 3 (SW¼NW¼)
Lot 4 (SE¼NE¼)
Lot 5 (NE¼SE¼)
Lot 6 (NW¼SW¼)
Lot 7 (SW¼SW¼)
Lot 8 (SE¼SE¼)
E½SW¼, W½SE¼ |
485 |
| 9273 |
41 North |
1 West |
22
27 |
NE¼SW¼
Lot 1 (SE¼SE¼)
Lot 2 (SW¼SE¼)
Lot 3 (SE¼SW¼)
Lot 4 (SW¼SW¼)
W½NW¼, SE¼NW¼, S½NE¼, N½S½ |
556 |
| 9275 |
41 North |
1 West |
20
24
36 |
W½NE¼, NE¼NE¼, W½SE¼, SE¼SE¼
Lot 2 (NW¼NW¼),
Lot 3 (SW¼NW¼),
E½NW¼, NW¼NE¼
SW¼SE¼, E½SW¼ |
562 |
| 9276 |
41 North |
1 West |
21
22 |
N½
N½ |
640 |
| 9279 |
41 North |
1 West |
16 |
Lot 3 (SE¼SW¼),
Lot 4 (SW¼SW¼),
NW¼, N½SW¼, S½NE¼ |
414 |
| 9293 |
40 North |
1 West |
17 |
NW¼, N½NE¼, SE¼NE¼, NW¼SE¼ |
320 |
SECOND
AMENDMENT AND RATIFICATION OF ASSIGNMENT
AGREEMENT
WITH CONTINGENT RIGHT OF REVERTER
Effective
August 10, 2005
KNOWN ALL MEN BY
THESE PRESENTS THAT:
WHEREAS,
by that certain Assignment Agreement with Contingent Right of Reverter
(hereafter the “Agreement”) made effective as of August 10, 2002 (the
“Effective Date”), i-minerals inc. (formerly Alchemy Ventures Ltd. “ALY”) a
company incorporated pursuant to the Canada Business Corporations Act (“IMA”),
received certain state mineral lease applications from Idaho Industrial
Minerals, LLC., an Idaho limited liability company (“IIM”) and Northwest
Kaolin, Inc., an Idaho Corporation (“NWK”), collectively, referred to
hereinafter as the “Parties”.
WHEREAS,
a Memorandum of Assignment Agreement with Contingent Right of Reverter was
recorded for notice purposes in the Latah County Recorder’s office at Moscow,
ID covering the then lease applications which became mineral leases as more
completely described on Exhibit A, attached hereto and incorporated herein.
WHEREAS,
ALY changed its name to i-minerals inc. and was continued from jurisdiction of
the Company Act (British Columbia) to the jurisdiction of the Canada
Business Corporations Act on January 22, 2004 and its wholly owned subsidiary,
AlchemyKaolin, Inc., an Idaho incorporated company, changed its name to
i-minerals, USA inc. in February 2005. (“IMI”);
WHREAS,
IMA, IMI, IIM and NWK amended the Agreement effective August 10, 2005 (“First
Amendment”) to extend the term of the Agreement and arrange for additional
consideration to IIM and NWK;
WHEREAS,
the First Amendment proved difficult for the TSX Venture Exchange (the “TSX.V”)
to quickly approve due to the complexity of evaluating the future share
consideration, and the parties prefer to avoid such a delay; and.
WHEREAS,
the parties now desire to rescind the First Amendment and ratify the Agreement
in all its terms except as modified, amended and changed to the extent and in
the manner hereinafter provided, effective as of August 10, 2005.
NOW
THEREFORE, in consideration of Fifty Thousand (50,000) common shares of IMA to
be issued to IIM, as soon as practicable after approval of this amendment by
the TSX V, and other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, we, the undersigned, and each for itself,
himself and herself, as the case may be, do hereby:
1. Revoke the First
Amendment and replace it in its entirety with this Second Amendment and
Ratification of Assignment Agreement with Contingent Right of Reverter (the
“Second Amendment”) effective as of August 10, 2005.
2. Replace all references
to Alchemy Ventures, Ltd. (“ALY”) with i-minerals inc. (“IMA”), respectively,
throughout the Agreement, except as herein amended.
3. Replace in their
entirety the sections of the Agreement corresponding to the subsequent numbered
sections such that the wording at each such replaced section of the Agreement
will read
1.2 Accord and Satisfaction.
The Parties agree that with the issuance of a total of 1,750,000 common shares,
plus an additional Fifty Thousand (50,000) common shares as consideration for
this Second Amendment, of IMA to IIM, IIM releases any and all interest in the
Lease Applications, Leases and Properties, as those capitalized terms are
defined in the Agreement, and that IIM acknowledges that it has received full
and final consideration of the transfer of the rights to the Lease Applications
to IMI.
1.4 Term. The Term
of this Agreement shall commence on the Effective Date and shall continue for a
period of six (6) years (the “Term”), unless sooner terminated as
provided in this Agreement.
4. Ratify, adopt and
confirm the Agreement in all its terms and provisions as modified, amended and
changed herein, and do hereby grant, convey and assign said Lease Applications,
Leases and Properties, as more fully described in Exhibit A attached hereto and
incorporated by this reference, which description supercedes and replaces all
previous descriptions of the Lease Applications, Leases and Properties, unto
IMA, its successors, subsidiaries, affiliates and assigns in interest, as fully
and completely as if it had originally been named as assignee in said
Agreement.
5. This Second Amendment
and all share issuances contemplated herein are subject to the approval of the
TSX V.
We,
the undersigned, hereby declare that said Assignment Agreement with Contingent
Right of Reverter in all its terms and provisions, as herein amended, is
binding on us and each of us and is a valid and subsisting Assignment Agreement
with Contingent Right of Reverter, which is binding, as herein amended, on the
respective heirs, executors, administrators, successors or assigns of the
undersigned.
This
Second Amendment may be executed in counterparts and a facsimile of the
executed signature page shall constitute an original for all purposes.
IN
WITNESS WHEREOF, this Second Amendment has been executed as of the day and year
first above written.
| IIM: |
IMA: |
| IDAHO INDUSTRIAL MINERALS LLC. |
i-minerals,
inc. |
| |
|
| |
|
| By /s/
W. Robert Lemke |
By /s/ Roger Kauffman |
| ____________President |
_____________President |
| |
|
| |
|
| NWK: |
IMI: |
| Northwest
Kaolin, INC. |
i-minerals USA, inc. |
| |
|
| |
|
| By /s/
W. Robert Lemke |
By /s/ Roger Kauffman |
| ____________President |
____________President |
EXHIBIT
A
TO
THAT CERTAIN
SECOND
AMENDMENT AND RATIFICATION OF ASSIGNMENT
AGREEMENT
WITH CONTINGENT RIGHT OF REVERTER
Dated
Effective August 10, 2005
By
and between i-minerals, inc. and Idaho Industrial Minerals, LLC
MINERAL
LEASES HELD BY I-MINERALS USA, INC.
AS
OF AUGUST 10, 2005
|
LEASE No. |
Township |
Range |
Section |
Legal
Description |
Acres |
| 9266 |
41 North |
1 East |
18 |
Lot 2
(SW1/4NW1/4), NE1/4, E1/2NW1/4, W1/2SE1/4, W1/2SE1/4SE1/4 |
381 |
| 9267 |
41 North |
1 East |
17 |
NW1/4, N1/2SW1/4,
S2/2SW1/4SE1/2, SE1/4SE1/4, W1/2NE1/4, W1/2NE1/4NE1/4 |
400 |
| 9268 |
40 North |
1 West |
6 |
Lot 9
(SW1/4NW1/4),
Lot 10
(NW1/4SW1/4),
Lot 11
(SW1/4SW1/4), SE1/4NW1/4, E1/2SW1/4, SE1/4, SW1/4NE1/4 |
451 |
| 9269 |
40 North |
1 West |
8 |
S1/2, NE1/4NE1/4,
S1/2NE1/4 |
440 |
| 9272 |
41 North |
1 West |
23 |
Lot 1
(NE1/4NE1/4)
Lot 2
(NW1/4NW1/4)
Lot 3
(SW1/4NW1/4)
Lot 4
(SE1/4NE1/4)
Lot 5
(NE1/4SE1/4)
Lot 6
(NW1/4SW1/4)
Lot 7
(SW1/4SW1/4)
Lot 8
(SE1/4SE1/4)
E1/2SW1/4,
W1/2SE1/4 |
485 |
| 9273 |
41 North |
1 West |
22
27 |
NE1/4SW1/4
Lot 1
(SE1/4SE1/3)
Lot 2
(SW1/4SE1/4)
Lot 3
(SE1/4SW1/4)
Lot 4
(SW1/4SW1/4)
W1/3NW1/4,
SE1/4NW1/4, S1/2NE1/4, N1/2S1/2 |
556 |
| 9275 |
41 North |
1 West |
20
24
36 |
W1/2NE1/4,
NE1/4NE1/4, W1/2SE1/4, SE1/4 SE1/4
Lot 2
(NW1/4NW1/4), Lot 3 (SW1/4NE1/4),
E1/2NW1/4,
NW1/4NE1/4
SW1/4SE1/4, E1/2SW1/4 |
562 |
| 9276 |
41 North |
1 West |
21
22 |
N1/2
N1/2 |
640 |
| 9279 |
41 North |
1 West |
16 |
Lot 3
(SE1/4SW1/4),
Lot 4
(SW1/4SW1/4),
NW1/4, N1/3SW1/4,
S1/2NE1/4 |
414 |
| 9293 |
40 North |
1 West |
17 |
NW1/4, N1/2NE1/4,
SE1/4NE1/4, NW1/4SE1/4 |
320 |
THIRD AMENDMENT
AND RATIFICATION OF ASSIGNMENT
AGREEMENT
WITH CONTINGENT RIGHT OF REVERTER
Effective
August 10, 2008
KNOW ALL
MEN BY THESE PRESENTS THAT:
WHEREAS, by
that certain Assignment
Agreement with Contingent Right of Reverter (hereafter the “Agreement”) made
effective as of August 10, 2002 (the “Effective Date”), i-minerals inc.
(formerly Alchemy Ventures, Ltd. “ALY”) a company incorporated pursuant to the
Canada Business Corporations Act (“IMA”), received certain state mineral lease
applications from Idaho Industrial Minerals, LLC., an Idaho limited liability
company (“IIM”) and Northwest Kaolin, Inc., an Idaho corporation (“NWK”),
collectively, referred to hereinafter as the “Parties”.
WHEREAS, a
Memorandum of Assignment Agreement with Contingent Right of Reverter was
recorded for notice purposes in the Latah County Recorder’s office at Moscow, ID covering the then lease applications which became mineral leases as more
completely described on Exhibit A, attached hereto and incorporated herein.
WHEREAS, ALY changed its name to i-minerals inc. and was
continued from the jurisdiction of the Company Act (British Columbia) to
the jurisdiction of the Canada Business Corporation Act on January 22, 2004 and
its wholly owned subsidiary, AlchemyKaolin, Inc., an Idaho incorporated
company, changed its name to i-minerals, USA inc. in February 2005. (“IMI”);
WHEREAS, IMA,
IMI, IIM and NWK amended the Agreement effective August 10, 2005 (“First
Amendment”) to extend the term of the Agreement and arrange for additional
consideration to IIM and NWK;
WHEREAS,
the First Amendment proved difficult for the TSX Venture Exchange (the
“TSX.V”) to quickly approve due to the
complexity of evaluating the future share consideration, and the parties rescinded
the First Amendment and ratified the Agreement in all its terms, except as
modified, amended and changed by the Second Amendment And Ratification Of Assignment
Agreement With Contingent Right Of Reverter
effective as of August 10, 2005 (“Second Amendment”), which included an
extension of the Term.
NOW
THEREFORE, in consideration of Fifty Thousand (50,000) warrants of IMA exercisable
by IIM at a cost of C$0.70/common share within two years, and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
we, the undersigned, and each for itself, himself and herself, as the case may
be, do hereby:
| Second Amendment and Ratification |
1 |
1. Replace in its entirety Section 1.4 of
the Agreement such that the new Section 1.4 of the Agreement will read:
1.4 Term.
The Term of this Agreement shall commence on the Effective Date and shall
continue for a period of nine (9) years (the “Term”), unless
sooner terminated as provided in this Agreement.
2. Ratify, adopt and confirm the Agreement
in all its terms and provisions as previously modified, amended and changed and
as modified, amended and changed herein, and do hereby grant, convey and assign
said Lease Applications, Leases and Properties, as more fully described in
Exhibit A attached hereto and incorporated by this reference, which description
supercedes and replaces all previous descriptions of the Lease Applications,
Leases and Properties, unto IMA, its successors, subsidiaries, affiliates and assigns
in interest, as fully and completely as if it had originally been named as
assignee in said Agreement.
3.
This Third Amendment And Ratification Of Assignment Agreement With
Contingent Right Of Reverter (“Third
Amendment”) is subject to the approval of the TSX V.
We, the
undersigned, hereby declare that said Assignment Agreement with Contingent
Right of Reverter in all its terms and provisions, as herein and previously amended,
is binding on each of us and on the respective heirs, executors, administrators,
successors or assigns of the undersigned.
This Third Amendment may be executed in counterparts and
a facsimile of the executed signature page shall constitute an original for all
purposes.
IN WITNESS WHEREOF,
this Third Amendment has been executed effective as of the 10th Day
of August, 2008.
| IIM: |
IMA: |
| IDAHO INDUSTRIAL MINERALS LLC. |
i-minerals,
inc. |
| |
|
| |
|
| By /s/
W. Robert Lemke
|
By /s/ Roger Kauffman
|
| _____________President |
_____________President |
| |
|
| |
|
| NWK: |
IMI: |
| Northwest
Kaolin, INC. |
i-minerals USA, inc. |
| |
|
| |
|
| By /s/
W. Robert Lemke
|
By /s/ Roger Kauffman
|
| _____________President |
_____________President |
| Second Amendment and Ratification |
2 |
EXHIBIT A
TO THAT CERTAIN
THIRD AMENDMENT AND RATIFICATION
OF ASSIGNMENT AGREEMENT WITH CONTINGENT RIGHT OF REVERTER
Dated Effective August 10, 2008
By and between i-minerals, inc.
and Idaho Industrial Minerals, LLC
MINERAL
LEASES HELD BY I-MINERALS USA, INC.
AS
OF AUGUST 10, 2008
|
LEASE No. |
Township |
Range |
Section |
Legal Description |
Acres |
| 9266 |
41 North |
1 East |
18 |
Lot 2 (SW¼NW¼),
NE¼, E½NW¼, W½SE¼, W½SE¼SE¼ |
381 |
| 9267 |
41 North |
1 East |
17 |
NW¼, N½SW¼, S½SW¼SE¼, SE¼SE¼, W½NE¼,
W½NE¼NE¼ |
400 |
| 9268 |
40 North |
1 West |
6 |
Lot 9 (SW¼NW¼),
Lot 10 (NW¼SW¼),
Lot 11 (SW¼SW¼),
SE¼NW¼, E½SW¼, SE¼, SW¼NE¼ |
451 |
| 9269 |
40 North |
1 West |
8 |
S½, NE¼NE¼, S½NE¼ |
440 |
| 9272 |
41 North |
1 West |
23 |
Lot 1 (NE¼NE¼)
Lot 2 (NW¼NW¼)
Lot 3 (SW¼NW¼)
Lot 4 (SE¼NE¼)
Lot 5 (NE¼SE¼)
Lot 6 (NW¼SW¼)
Lot 7 (SW¼SW¼)
Lot 8 (SE¼SE¼)
E½SW¼, W½SE¼ |
485 |
| 9273 |
41 North |
1 West |
22
27 |
NE¼SW¼
Lot 1 (SE¼SE¼)
Lot 2 (SW¼SE¼)
Lot 3 (SE¼SW¼)
Lot 4 (SW¼SW¼)
W½NW¼, SE¼NW¼, S½NE¼, N½S½ |
556 |
| Second Amendment and Ratification |
3 |
| 9275 |
41 North |
1 West |
20
24
36 |
W½NE¼, NE¼NE¼, W½SE¼, SE¼SE¼
Lot 2 (NW¼NW¼),
Lot 3 (SW¼NW¼),
E½NW¼, NW¼NE¼
SW¼SE¼, E½SW¼ |
562 |
| 9276 |
41 North |
1 West |
21
22 |
N½
N½ |
640 |
| 9279 |
41 North |
1 West |
16 |
Lot 3 (SE¼SW¼),
Lot 4 (SW¼SW¼),
NW¼, N½SW¼, S½NE¼ |
414 |
| 9293 |
40 North |
1 West |
17 |
NW¼, N½NE¼, SE¼NE¼, NW¼SE¼ |
320 |
| Second Amendment and Ratification |
4 |
FOURTH AMENDMENT AND
RATIFICATION OF THE ASSIGNEMENT AGREEMENT
WITH A CONTINGENT
RIGHT OF REVERTER
Effective January 21,
2010
KNOW ALL MEN BY THESE PRESENTS THAT:
WHERESAS, by
that certain Assignment Agreement with Contingent Right of Reverter (hereafter
the “Agreement”) made effective as of August 10, 2002 (the “Effective Date”),
i-minerals inc. (formerly Alchemy Ventures Ltd. “ALY”) a company continued to
the Canada Business Corporations Act (“IMA”), received certain state mineral
lease applications from Idaho Industrial Minerals LLC an Idaho limited
liability company (“IIM”) and Northwest Kaolin, a Idaho corporation (“NWK”),
collectively, referred to herein after as the “Parties”; and
WHEREAS, the
sixteen lease applications were modified and consolidated, which became ten
Mineral Leases as more completely described on Exhibit A, attached hereto and
incorporated herein (the “Leases”), and the
Idaho Department of Lands issued the Leases to AlchemyKaolin, inc., which later
assigned the Leases to a partnership, i-minerals Helmer-Bovill, L.L.P.;
and
WHEREAS,
ALY changed its name to i-minerals inc and was continued from the jurisdiction
of the Company Act (British Columbia) to the jurisdiction of the Canada
Business Corporation Act on January 24, 2004 and its wholly owned subsidiary
AlchemyKaolin Inc., an Idaho incorporated company, changed its name to
i-minerals USA inc. in February 2005 (“IMI”); and
WHEREAS,
IMA, IMI, IIM and NWK amended the Agreement effective August 10, 2005 (the
“First Amendment”) to extend the term of the Agreement to six years from the
Effective Date of the Agreement and arrange for additional consideration to IIM
and NWK; and
WHEREAS, the
First Amendment proved difficult for the TSX Venture Exchange (the “TSX.V”) to
quickly approve due to the complexity of evaluating the future share
consideration, and the parties rescinded the First Amendment and ratified the
Agreement in all of its terms, except as modified, amended and changed by the
Second Amendment And Ratification of Assignment Agreement With Contingent Right
of Reverter effective as of August 10, 2005 (the “Second Amendment”), which
included the same extension of the term of the Agreement to six years from its
Effective Date; and
WHEREAS, the
term of the Agreement as agreed to and extended by the Parties in the Second
Amendment was of insufficient length for IMA to meet the share issuance
milestones as set forth in the Agreement; therefore, IMA, IMI, IIM and NWK
amended the Agreement effective August 10, 2008 (the “Third Amendment”) to
extend the term of the Agreement to nine years from the Effective Date of the
Agreement and arrange for additional consideration to IIM and NWK; and
WHEREAS, by that certain Plan of Merger filed with the
Idaho Secretary of State’s Office on January 20, 2010 and made effective on the
date of filing, i-minerals Helmer-Bovill, L.L.P. merged with i-minerals USA,
inc., and the sole surviving entity is was i-minerals USA, inc., which
automatically transferred the Leases to i-minerals USA, inc. by State law I.C. 30-18-206 (the
Idaho Entities Transaction Act).
| Fourth Amendment and Ratification 1.22.10 |
Page 1 of 8 |
NOW THEREFORE, in consideration of the sum of $500 and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
we, the undersigned, and each for itself, himself or herself as the case may
be, do hereby:
1. Replace in its entirety Section 1.4 of the Agreement such that
the new Section 1.4 of the Agreement will read:
1.4 Term. The term of this Agreement shall commence on the Effective Date
and shall continue for a period of eleven (11) years (the
“Term”), unless sooner terminated as provided in this Agreement.
2. Replace in its
entirety Section 2.1.2 of the Agreement such that the new Section 2.1.2 of
the Agreement will read:
2.1.2 Upon Completion of a
Feasibility Study. Upon completion of a
Feasibility Study, IMA shall deliver to IIM, Six Hundred Thousand
(600,000) common shares of IMA.
3. Replace in its
entirety Section 2.1.4 of the Agreement such that the new Section 2.1.4 of
the Agreement will read:
2.1.4 Upon Completion of the
Permitting Process. Upon completion of the
Permitting Process, IMA shall deliver to IIM Seven Hundred Thousand
(700,000) common shares of IMA. The “Permitting Process” means the
activities and time period required to obtain all federal, state or local
government permits, licenses or other approval (including water rights)
necessary for IMA (or its subsidiaries or affiliates), to construct and operate
commercial mining and beneficiation facilities on the Properties, including, if
required through the development of a Production Plant.
4. Strike
from the Agreement Section 2.1.5 in
its entirety eliminating any and all
obligation of IMA to issue any shares on the Completion of a Production
Plant and First Delivery of Commercial Product.
5. Ratify, adopt and confirm the Agreement
in all its terms and provisions as previously modified, amended and
changed and as modified amended and changed herein, and do hereby grant convey
and assign said Lease Applications, Leases and Properties, as more fully
described in Exhibit A attached hereto and incorporated by this reference,
which description supersedes and replaces all previous descriptions of
Lease Applications, Leases and Properties unto IMA, its successors,
subsidiaries, affiliates and assigns in interest, as fully and completely
as if it had originally been named as assignee in said Agreement.
| Fourth Amendment and Ratification 1.22.10 |
Page 2 of 8 |
6. This Fourth
Amendment and Ratification of Assignment Agreement and Contingent Right of
Reverter (the “Fourth Amendment”) is subject to the acceptance of the
TSX.V.
We, the undersigned, hereby declare that
the Agreement in all its terms and provisions, as herein and previously
amended, is binding on each of us and our respective heirs, executors,
administrators, successors of the undersigned.
This Fourth Amendment may be executed in
two or more counterparts and a facsimile of the executed signature page shall
constitute an original for all purposes, each of which shall be deemed to be an
original and all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, this
Fourth Amendment has been executed effective as of the 21st day of
January 2010.
IIM:
IDAHO INDUSTRIAL MINERALS LLC |
|
IMA
i-minerals inc. |
| By /s/ Robb Lemke |
|
By /s/ Barry Girling |
| President |
|
Director |
| |
|
|
NWK
Northwest Kaolin, Inc. |
|
IMI
i-minerals USA inc. |
| By /s/ Robb Lemke |
|
By /s/ Roger Kauffman |
| President |
|
President |
THE REST OF
THIS PAGE INTENTIONALLY LEFT BLANK.
| Fourth Amendment and Ratification 1.22.10 |
Page 3 of 8 |
PROVINCE OF BRITISH COLUMBIA )
:
ss.
CITY OF VANCOUVER )
On this _____
day of January, 2010, before me, ______________, a notary public in and for
said State, personally appeared W. Barry Girling, known or identified to me to
be the Director of i-minerals inc., a British Columbia corporation, the
corporation that executed the instrument, and acknowledged to me that said
corporation executed the same.
IN WITNESS
WHEREOF, I have hereunto set my hand and affixed my official seal the day and
year in this certificate first above written.
| |
_______________________________________________
Notary Public
Residing at
Comm. Expires
|
STATE OF IDAHO )
:
ss.
COUNTY OF )
On this _____
day of January, 2010, before me, ______________, a notary public in and for
said State, personally appeared Robb Lemke, known or identified to me to be the
President of IDAHO INDUSTRIAL MINERALS, LLC., an Idaho limited liability company, the corporation that
executed the instrument, and acknowledged to me that said corporation executed
the same.
IN WITNESS
WHEREOF, I have hereunto set my hand and affixed my official seal the day and
year in this certificate first above written.
| |
_______________________________________________
Notary Public
Residing at
Comm. Expires
|
| Fourth Amendment and Ratification 1.22.10 |
Page 4 of 8 |
STATE OF IDAHO )
: ss.
COUNTY OF ADA )
On this _____
day of January, 2010, before me, ______________, a notary public in and for
said State, personally appeared Robb Lemke, known or identified to me to be the
President of NORTHWEST KAOLIN, INC.,
an Idaho corporation, the corporation that executed the instrument, and
acknowledged to me that said corporation executed the same.
IN WITNESS
WHEREOF, I have hereunto set my hand and affixed my official seal the day and
year in this certificate first above written.
| |
_______________________________________________
Notary Public
Residing at
|
Comm. Expires
STATE OF IDAHO )
:
ss.
COUNTY OF )
On this _____
day of January, 2010, before me, ______________, a notary public in and for
said State, personally appeared Roger A. Kauffman, known or identified to me to
be the _____________ of I-MINERALS USA, INC., an Idaho limited liability
company, the corporation that executed the instrument, and acknowledged to
me that said corporation executed the same.
IN WITNESS
WHEREOF, I have hereunto set my hand and affixed my official seal the day and
year in this certificate first above written.
| |
_______________________________________________
Notary Public
Residing at
Comm. Expires
|
| Fourth Amendment and Ratification 1.22.10 |
Page 5 of 8 |
EXHIBIT
A
TO
THAT CERTAIN
FOURTH
AMENDMENT AND RATIFICATION OF THE ASSIGNMENT AGREEMENT WITH A
CONTINGENT
RIGHT OF REVERTER
Dated
Effective January 21, 2010
By
and between Idaho Industrial Minerals, LLC and i-minerals, inc.
MINERAL
LEASES HELD BY I-MINERALS USA, INC.
AS
OF JANUARY 20, 2010
| Fourth Amendment and Ratification 1.22.10 |
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|
LEASE No. |
Township |
Range |
Section |
Legal Description |
Acres |
| 9266 |
41 North |
1 East |
18 |
Lot 2 (SW¼NW¼),
NE¼, E½NW¼, W½SE¼, W½SE¼SE¼ |
381 |
| 9267 |
41 North |
1 East |
17 |
NW¼, N½SW¼, S½SW¼SE¼, SE¼SE¼, W½NE¼,
W½NE¼NE¼ |
400 |
| 9268 |
40 North |
1 West |
6 |
Lot 9 (SW¼NW¼),
Lot 10 (NW¼SW¼),
Lot 11 (SW¼SW¼),
SE¼NW¼, E½SW¼, SE¼, SW¼NE¼ |
451 |
| 9269 |
40 North |
1 West |
8 |
S½, NE¼NE¼, S½NE¼ |
440 |
| 9272 |
41 North |
1 West |
23 |
Lot 1 (NE¼NE¼)
Lot 2 (NW¼NW¼)
Lot 3 (SW¼NW¼)
Lot 4 (SE¼NE¼)
Lot 5 (NE¼SE¼)
Lot 6 (NW¼SW¼)
Lot 7 (SW¼SW¼)
Lot 8 (SE¼SE¼)
E½SW¼, W½SE¼ |
485 |
| 9273 |
41 North |
1 West |
22
27 |
NE¼SW¼
Lot 1 (SE¼SE¼)
Lot 2 (SW¼SE¼)
Lot 3 (SE¼SW¼)
Lot 4 (SW¼SW¼)
W½NW¼, SE¼NW¼, S½NE¼, N½S½ |
556 |
| Fourth Amendment and Ratification 1.22.10 |
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| 9275 |
41 North |
1 West |
20
24
36 |
W½NE¼, NE¼NE¼, W½SE¼, SE¼SE¼
Lot 2 (NW¼NW¼),
Lot 3 (SW¼NW¼),
E½NW¼, NW¼NE¼
SW¼SE¼, E½SW¼ |
562 |
| 9276 |
41 North |
1 West |
21
22 |
N½
N½ |
640 |
| 9279 |
41 North |
1 West |
16 |
Lot 3 (SE¼SW¼),
Lot 4 (SW¼SW¼),
NW¼, N½SW¼, S½NE¼ |
414 |
| 9293 |
40 North |
1 West |
17 |
NW¼, N½NE¼, SE¼NE¼, NW¼SE¼ |
320 |
| Fourth Amendment and Ratification 1.22.10 |
Page 1 of 8 |
EXHIBIT
“C”
Binding
Settlement
Term
Sheet
