Exhibit 10.10

 

Focus Gold [image_001.jpg]

 

 

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS, AND ARE PROPOSED TO BE ISSUED IN RELIANCE UPON AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT. SUCH SECURITIES
MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO ANY U.S. PERSON EXCEPT IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE U.S. SECURITIES ACT,
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE U.S. SECURITIES ACT,
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE U.S.
SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. HEDGING TRANSACTIONS
INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE U.S.
SECURITIES ACT. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED IN REGULATION S
UNDER THE U.S. SECURITIES ACT.

 

Aug. 2, 2013

 

MinJay Holdings Ltd.

398 New Dundee Rd

Kitchener, Ontario,

Canada N2P 2N7

Stephanie Carey

21 Corlet Rd.,

P.O. Box CB 10985,

Nassau, Bahamas

   

Tripod Enterprises Ltd.

137 Mackey Street,

P.O. Box N 7780,

Nassau, Bahamas

Erika Knowles

137 Mackey Street,

P.O. Box N 7780,

Nassau, Bahamas

   

Andrew Butler

West Bay Street,

P. O. Box CB 13049,

Nassau, Bahamas

James Lalonde

Unit 46 - 225 Benjamin Rd.,

Waterloo, Ontario, N2V 1Z3

   

Cleavon Nixon

Windsor Field Road,

P. O. Box So 59229,

Nassau, Bahamas

     

Re: Letter of Intent for the Acquisition of the Waters Sunset Gold Property,
located in Yavapai County, Arizona

 

This letter of intent (the “LOI”) confirms our intention to effect the
acquisition of a 100% legal and beneficial interest in and to the Waters Sunset
Gold Property (excluding the water rights, specifically 51 miner’s inches,
separately deeded to MinJay Holdings Ltd., and not part of this Letter of Intent
for the Acquisition), located in Yavapai County, Arizona (the “Property”) on the
terms set forth below (the “Transaction”). This LOI is not intended to create
legally binding obligations except as set out in paragraphs 6 and 7 below but
will serve as the basis for negotiating a definitive agreement (the “Definitive
Agreement”) leading to the completion of the Transaction. All references to
currency in this LOI are to the lawful currency of the United States of America.

 

1

 

 

1.The Transaction

 

1.1          Structure: Focus Gold Corporation (“Focus”) proposes to acquire
from each of MinJay Holding Ltd. (“MinJay”), Stephanie Carey, Tripod Enterprises
Ltd., Erika Knowles, Andrew Butler, James Lalonde and Cleavon Nixon (each, a
“Co-Vendor” and collectively, the “Co-Vendors” and each of Focus and the
Co-Vendors being hereinafter singularly also referred to as a “Party” and
collectively referred to as the “Parties” as the context so requires) 100% of
the Co-Vendors legal and beneficial interest in and to the Purchase Contract,
(excluding certain water rights, separately deeded to MinJay Holdings Ltd., and
not part of this agreement) dated June 13, 2013, between MinJay and each of
Bobby J. Westbrook and Wanda Westbrook (Collectively the “Westbrooks”) (the
“Head Agreement”), and to the Property, if any. The Property is more
particularly described in the Head Agreement attached as Schedule “A” hereto,
which is considered an integral part of this LOI.

 

1.2          Consideration: The consideration payable by Focus to the Co-Vendor
for acquiring their rights in the Head Agreement shall consist of:

 

1) a $70,000 non-refundable payment payable to the order and direction of MinJay
in respect of payments made by MinJay to the Westbrooks under the Head Agreement
of $75,000, on the Closing Date (as defined below);

 

2) issuance of $600,000 of Series B Non-Voting 6% Convertible Preferred Stock of
Focus, redeemable on or after the second anniversary of the Closing Date (the
“Convertible Preferred Stock”), to the order and direction of MinJay as to
$175,000 of the Series B Non-Voting 6% Convertible Preferred Stock of Focus and
to the Westbrooks as to $425,000 of the Series B Non-Voting 6% Convertible
Preferred Stock of Focus A mortgage in the amount of $425,000 shall be granted
on the Property to the Westbrooks to secure Focus’s redemption obligation under
the terms of the Convertible Preferred Stock issued to the Westbrooks; and

 

3) issuance of 60,000,000 fully paid and restricted shares in the common stock
of Focus (each, a “Share” and together with the Convertible Preferred Stock and
the Conversion Shares, the “Securities”), at a deemed issuance price of $0.01
per Share, to be issued on the Closing Date to each of the Co-Vendors in the
quantity set forth next to each such Co-Vendors name in the table below.

 

Stephanie Carey 9,800,000 Shares MinJay Holdings Ltd. 9,800,000 Shares Tripod
Enterprises Ltd. 9,800,000 Shares Erika Knowles 9,800,000 Shares Andrew Butler
9,000,000 Shares James Lalonde 2,000,000 Shares Cleavon Nixon 9,800,000 Shares

 

 

2

 

 

1.3          Restrictions Applicable to Securities: The Securities have not been
and will not be registered under the United States Securities Act of 1933, as
amended (the “U.S. Securities Act”), or under the securities laws of any state
of the United States, and will be issued only pursuant to an exemption from such
registration requirements, and pursuant to exemptions from the registration and
prospectus requirements of all other applicable securities laws (including,
without limitation, the Securities Act (Ontario). The Securities will be issued
in certificated form as “restricted securities” as defined in Rule 144(a)(3)
under the U.S. Securities Act and will be subject to such additional
restrictions on resale as may be applicable under relevant securities laws.

 

Certificates representing the Convertible Preferred Stock will be imprinted with
restrictive legends substantially in the following forms:

 

“THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON CONVERSION
THEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE “U.S. SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS
THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE U.S. SECURITIES ACT AND
SUCH LAWS COVERING SUCH SECURITIES, OR THE COMPANY RECEIVES AN OPINION OF
COUNSEL ACCEPTABLE TO THE COMPANY STATING THAT SUCH OFFER, SALE, PLEDGE OR OTHER
TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES
ACT. THE SECURITIES REPRESENTED HEREBY CANNOT BE THE SUBJECT OF HEDGING
TRANSACTIONS UNLESS SUCH TRANSACTIONS ARE CONDUCTED IN COMPLIANCE WITH THE U.S.
SECURITIES ACT.

 

THE SECURITIES REPRESENTED HEREBY MAY NOT BE CONVERTED INTO COMMON STOCK BY OR
FOR THE ACCOUNT OR BENEFIT OF A “U.S. PERSON” OR A PERSON IN THE UNITED STATES,
UNLESS THE SECURITIES REPRESENTED HEREBY AND THE UNDERLYING COMMON STOCK HAVE
BEEN REGISTERED UNDER THE U.S. SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS, OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS
AVAILABLE. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S
UNDER THE U.S. SECURITIES ACT.

 

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST
NOT TRADE THE SECURITY BEFORE THE DATE THAT FOUR MONTHS AND ONE DAY AFTER THE
LATER OF (I) [the date of issuance of the Securities will be inserted], AND (II)
THE DATE THE ISSUER BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY.”

 

Certificates representing the Shares will be imprinted with a restrictive legend
substantially in the following form:

 

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR ANY
STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE U.S. SECURITIES ACT AND SUCH LAWS COVERING SUCH SECURITIES, OR THE COMPANY
RECEIVES AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY STATING THAT SUCH
OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE U.S. SECURITIES ACT. THE SECURITIES REPRESENTED HEREBY
CANNOT BE THE SUBJECT OF HEDGING TRANSACTIONS UNLESS SUCH TRANSACTIONS ARE
CONDUCTED IN COMPLIANCE WITH THE U.S. SECURITIES ACT.”

 

3

 

 

Certificates representing any Shares issued to a resident of Canada or to any
person who is otherwise subject to the securities laws of a Canadian
jurisdiction will also be imprinted with a restrictive legend substantially in
the following form:

 

“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST
NOT TRADE THE SECURITY BEFORE THE DATE THAT FOUR MONTHS AND ONE DAY AFTER THE
LATER OF (I) [the date of issuance of the Securities will be inserted], AND (II)
THE DATE THE ISSUER BECAME A REPORTING ISSUER IN ANY PROVINCE OR TERRITORY.”

 

Each Co-Vendor who is a resident of Canada, or who is otherwise subject to the
securities laws of a Canadian jurisdiction, acknowledges that Focus is not a
reporting issuer under the securities legislation of any Canadian jurisdiction,
and there is no assurance that Focus will become a reporting issuer in Canada
with the result that any Securities issued to MinJay may be subject to
indefinite resale restrictions under National Instrument 45-102 – Resale of
Securities, as adopted by the Canadian Securities Administrators.

 

1.4           Terms and Conditions: The Definitive Agreement under which the
Parties will agree to carry out the Transaction will contain provisions that are
customary for a transaction of this nature and will include (but not be limited
to) representations and warranties from Focus and the Co-Vendors, including a
representation from the Co-Vendors to Focus that each Co-Vendor holds an
interest in and to the Head Agreement. The closing conditions in favour of Focus
and the Co-Vendors will include the following:

 

(a)approvals of the boards of directors of the Parties, if applicable, of the
Definitive Agreement;

 

(b)obtaining any required consents of third parties;

 

(c)completion, to the sole satisfaction of Focus, of due diligence
investigations of the Property to be completed by Aug. 15, 2013;

 

(d)all representations in the Definitive Agreement being accurate as of the
closing of the Transaction;

 

(e)no adverse material change in the status of the Property prior to the closing
of the Transaction;

 

(f)closing of the Transaction to be completed on a best efforts basis by the
Parties within the following parameters:

 

(i)notice of completion of substantial due diligence and board approval by the
Parties (if applicable) by Aug. 15, 2013;

 

(ii)execution of Definitive Agreement by Aug. 16, 2013; and

 

(iii)closing of Transaction by Aug. 22, 2013.

 

4

 

 

The Parties will work diligently during this period but recognize that
regulatory and other market delays may require adjustments to this timetable.

 

MinJay will agree that, in order to facilitate the closing of the Transaction,
it will use all reasonable efforts:

 

(a)to assist Focus in raising a minimum of $90,000 by way of a private placement
prior to closing of the Transaction;

 

(b)to enter into a consulting agreement with Focus, the terms and conditions of
which shall be negotiated in good faith, to raise capital and provide market
support for Focus through MinJay’s international investor network.

 

Stephanie Carey will agree to enter into a consulting agreement with Focus, the
terms and conditions of which shall be negotiated in good faith, to support
Focus in its rebuilding efforts.

 

Each of the Co-Vendors acknowledge that it may not act as a finder in respect of
any securities offerings that may be effected by Focus in the United States
absent registration as a broker-dealer under the United States Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and applicable state
securities laws, unless an exemption from such registration requirements is
available.

 

2.Due Diligence

 

Focus and its duly authorized representatives will be entitled to make such
investigations of the Property and such other matters relating to the
transaction contemplated herein as Focus deems advisable. Without limiting the
generality of the foregoing, the Co-Vendors will make available, or cause to be
made available, to Focus and its duly authorized representatives all
documentation in any way relating to the Property. Any obligation of Focus
herein or in the Definitive Agreement will be subject to the aforesaid
investigation being to the satisfaction of the Focus, in its sole discretion.

 

3.Definitive Agreement

 

While Focus is conducting the due diligence investigations described in section
2 above, Focus and the Co-Vendors intend to negotiate in good faith to agree
upon a form of Definitive Agreement setting out in detail the terms and
conditions of the sale and purchase of the Property. The Definitive Agreement
will incorporate the terms and conditions set out in this LOI together with such
other terms and conditions as the Parties consider necessary or desirable,
including representations, warranties and covenants, indemnities from the
Parties relating to such representations, warrants and covenants and conditions
to closing. Unless Focus is dissatisfied with the results of its due diligence
investigations and notifies the Co-Vendors accordingly, Focus and MinJay intend
to complete negotiations of the terms of the Definitive Agreement and to execute
the Definitive Agreement within 14 calendar days of the date hereof. The closing
of the Transaction shall take place on a date agreed to by the Parties in the
Definitive Agreement (the “Closing Date”), which the Parties will agree shall be
no later than Aug. 31, 2013, unless extended by mutual agreement of the Parties.

 

5

 

 

4.Indemnities in the Definitive Agreement

 

While the Definitive Agreement will contain usual indemnities applicable to
property purchase agreements, the Definitive Agreement will also contain further
indemnities in favour of Focus indemnifying it from any and all liabilities
which the Co-Vendors may become obligated to pay arising in respect of time
period prior to or events occurring prior to the time of closing of the
Transaction. Any pending litigation or claims against the Co-Vendors with
respect to the Property as of the closing of the Transaction will be, and
remain, the responsibility of the Co-Vendors.

 

5.Transaction Costs

 

In the event that the Transaction does not close, each of the Parties will be
responsible for all costs (including, but not limited to, financial advisory,
accounting, legal and other professional or consulting fees and expenses)
incurred by it in connection with the transactions contemplated hereby.

 

6.Publicity; Non-Disclosure of this Letter; Non-Solicitation of Other Proposals

 

Neither Focus nor the Co-Vendors will make any announcement, issue any press
release or otherwise disclose the existence of this LOI, without prior
consultation with the other Party. Each of the Co-Vendors acknowledges that, as
a reporting company under the Exchange Act, Focus will be required to give
public disclosure about the Transaction. In addition, Focus intends to file a
current report on Form 8-K announcing this LOI.

 

Each of the Co-Vendors agrees that: (i) it will not disclose the existence of
this LOI or any of the terms hereof to any third party who might reasonably be
expected to have interest in acquiring the Property; and (ii) it will not
solicit or encourage any proposal from any other person to purchase the
Property, in each case until the transactions contemplated by this LOI have
closed or until Aug. 26, 2013, whichever will first occur.

 

7.Confidentiality Agreements

 

Each Party agrees that any information provided to the other in connection with
the negotiation and entering into of the Definitive Agreement will be maintained
in confidence, will not be disclosed to any other Party, other than each Party’s
respective professional advisors, except where disclosure is compelled by
applicable law and will not be used by the Party for any purpose other than the
evaluation and completion of the Transaction. Each Party will ensure that its
respective officers, directors, employees and consultants will agree to maintain
all information in connection with this LOI confidential. All obligations
regarding confidentiality will survive termination of this LOI.

 

6

 

 

8.General

 

This LOI will be governed by and construed in accordance with the laws of the
State of California. Focus and the Co-Vendors submit to the jurisdiction of the
courts of California with respect to any matters arising out of this letter.

 

This document constitutes a non-legally binding memorandum of understanding
(except for paragraphs 6 and 7) between us with respect to the principal terms
and conditions to be included in the Definitive Agreement.

 

If you are in agreement with the foregoing, please confirm that this LOI
accurately sets forth your understanding of the terms of the proposed
Transaction and the other matters set forth herein, by signing a copy of this
letter below and returning it to us prior to 5:00 p.m. (Pacific time) on Aug. 5,
2013, failing which this letter shall be null and void.

 

This LOI may be executed in any number of counterparts, each of when executed
and delivered (including by way of facsimile) is an original but all of which
taken together shall constitute one and the same instrument.

 

Yours very truly,

 

Focus Gold CorpORATION                   Per:   /s/ Gordon F. Lee     Authorized
Signatory  

 

 

 

7

 

Agreed and confirmed this 2nd day of Aug., 2013. Each of the Co-Vendors
represents and warrants that it was not offered any Securities in the United
States; it was outside the United States when it received this LOI, and it did
not execute or deliver this LOI in the United States.

 

        MinJay Holdings Ltd.   STEPHANIE CAREY             Per: /s/ Rob Kelly  
/s/ Stephanie Carey     Authorized Signatory      

 

TRIPOD ENTERPRISES LTD.   ERIKA KNOWLES             Per: /s/ Anastasia Francis  
/s/ Erika Knowles     Authorized Signatory      

 

ANDREW BUTLER   JAMES LALONDE           /s/ Andrew Butler   /s/ James Lalonde  
       

 

CLEAVON NIXON               /s/ Cleavon Nixon              

 

8

 

 

SCHEDULE A

 

HEAD AGREEMENT AND PROPERTY

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Sc A-1

 

 

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Sc A-3

 

 

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Sc A-4

 

 

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Sc A-5

 

 

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Sc A-6

 

 

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Sc A-7

 

 

[sched_p8.jpg] 

 

 

Sc A-8

 

 

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Sc A-9

 

 

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Sc A-10

 

 

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Sc A-11

 

 

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Sc A-12