Exhibit 10.39
 
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
 
This Settlement Agreement and Release (“Agreement”) is made and entered into by
and among Tara Minerals Corp. (“TARM”), American Metal Mining, S.A. de C.V.
(“AMM”)(TARM and AMM shall be collectively referred to as “Tara”), Jeffrey Holt
(“Holt”), Tom Claridge (“Claridge”), Steve Eady (“Eady”) (Holt, Claridge, and
Eady shall be collectively referred to as the “Individual Defendants”), Carnegie
Mining and Exploration, Inc. (“CMEI”), CME Operations, LLC (“CME”)(CMEI and CME
shall be collectively referred to as “Carnegie”), Harsco Corporation (“Harsco”),
and Pittsburgh Mineral & Environmental Technology, Inc. (“PMET”).  Each of the
parties to this Agreement may be referred to individually as a “Party,” and
collectively as the “Parties.”
 
Whereas, Tara and CMEI entered into an Option Agreement dated August 8, 2011
(the “Option Agreement”).
 
WHEREAS, on November 10, 2011, TARM filed a Complaint against CMEI in the United
States District Court for the District of Nevada known as Case No. 2:11-cv-01816
(the “Nevada Action”).
 
Whereas, on January 31, 2012, Carnegie filed a First Amended Complaint against
the Individual Defendants and TARM in the United States District Court for the
Northern District of Texas known as Civil Action No. 3:11-cv-03540 (the “Texas
Action”).
 
Whereas, on August 3, 2012, in response to the Nevada Action, CMEI filed a
Counterclaim against TARM and a Third Party Complaint against AMM, Harsco, and
PMET (the “CMEI Counterclaim and Third Party Complaint”).
 
Whereas, on August 21, 2012, the United States District Court for the District
of Nevada consolidated the Nevada Action and CMEI Counterclaim and Third Party
Complaint with the Texas Action under the base file of the Nevada Action.
 
Whereas, on September 7, 2012, in response to the Texas Action, TARM filed a
Counterclaim against CMEI (the “TARM Counterclaim”).
 
Whereas, on September 7, 2012, in response to the Texas Action, the Individual
Defendants filed Counterclaims against CMEI (the “Individual Defendants’
Counterclaims”).
 
Whereas, the Nevada Action, the Texas Action, the CMEI Counterclaim and Third
Party Complaint, the TARM Counterclaim, and the Individual Defendants’
Counterclaims shall be collectively referred to as the “Litigation.”
 
WHEREAS, the Parties wish to resolve their differences and bring an end to the
Litigation; and
 
WHEREAS, each Party understands and agrees that this Agreement is a compromise
and settlement of disputed claims and that this Agreement is not to be construed
as an admission of liability by any Party.
 
 
 

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NOW, THEREFORE, with the intent and purpose of satisfying and settling all
claims between the Parties, and in consideration of the promises contained in
this Agreement, the Parties agree as follows:
 
1.                                      Execution of Agreement, AMM Transfer
Agreement Conveying all of Tara’s Legal and Equitable Interests, including all
Concession Mining Rights, in Champinon “As Is.” In consideration of the releases
contained herein and other good and valuable consideration provided by this
Agreement, TARM will authorize AMM to enter into a transfer agreement (“Transfer
Agreement”) to convey and legally assign all concession mining rights and all
related work product, documentation, all contracts, including, but not limited
to contracts involving surface rights and rights of way, intellectual property,
improvements, mined and un-mined ore, and on-site equipment, except for the
weight scale (the “Champinon Information”) in the real property described by the
Mexico Secretaria de Economia Titulo de Concesion Minera de Exploracion Numero
214549 (“Champinon”) to the Plathio Trading Mexico, SA de CV, Carnegie’s Mexico
subsidiary (“Carnegie Mexico”).  In further consideration of the releases
contained herein and other good and valuable consideration provided by this
Agreement, Tara and AMM will be responsible to do the following:
 
a.      Forward to Carnegie a receipt from the Registro Publico de Mineria
(RPM), showing that the Corporation Kedah/AMM assignment and purchase contract,
executed 21 May 2012 and attached hereto as Exhibit A, is duly filed for
registration with the RPM (the “Receipt”), and that all other related contracts
described in Exhibit A that require RPM registration have been duly filed for
registration with the RPM (“Effective Registration”). Notwithstanding the
foregoing, the parties recognize that proof of Effective Registration from the
RPM may take several months.  Accordingly, Tara agrees that following complete
execution of this Agreement, Tara will take all reasonable steps necessary to
ensure Effective Registration is accomplished.
 
b.      Forward to Carnegie a document showing the written consent (the
“Consent”) of Corporation Kedah to transfer the 21 May 2012 contract from AMM to
another entity has not been withdrawn, is currently in effect in accordance with
its terms and that Corporation Kedah is duly filed for registration with the
RPM;
 
c.      Enter into and execute a Transfer Agreement with Carnegie Mexico as
deemed acceptable by Tara and Carnegie and take all reasonable steps necessary
to ensure the actual transfer of the Champinon Information in good standing.
 
The purpose of the Transfer Agreement will be to convey from AMM to Carnegie
Mexico, “AS IS,” all of Tara’s legal and equitable interests and mining rights
in Champinon and the Champinon Information.  The Transfer Agreement will comply
with and be governed by Mexican law and will be in Spanish with a copy in
English.  Tara represents to Carnegie that, to the best of its knowledge, there
are no other undisclosed encumbrances, claims or obligations against Champinon
and the Kedah/AMM assignment and purchase agreement is in good standing.  Upon
execution of this Agreement, Tara shall release and forward to Carnegie the
Champinon Information with the understanding that Carnegie shall not rely on
such information and Tara does not warrant the accuracy of such information.
 
 
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2.                                 Transfer Obligations.  Carnegie recognizes
that TARM’s and AMM’s transfer obligation with respect to Champinon in Section 1
ends upon the fulfillment of all terms and conditions outlined within Section 1
above. Thereafter, Carnegie is solely responsible for all regulatory, filing and
any other requirements necessary to keep Champinon, and related agreements,
including ongoing obligations under the Transfer Agreement, in good standing,
provided that the stock share conveyance below has been completed.
 
3.           Carnegie Recognition of Boundary Line and Survey Issue with
Champinon. Carnegie expressly acknowledges its understanding and agreement that
the “AS IS” nature of Champinon includes, among other things, a boundary line
and survey issue which will likely result in the hectares of Champinon being
reduced as per Exhibit B.  Carnegie expressly agrees and acknowledges that the
boundary line and survey issue will not be resolved as of the complete execution
of this Agreement and that the Transfer Agreement will be for the boundary line
adjusted Champinon.  Tara agrees that the boundary line and survey issue will
not materially affect Carnegie’s ability to mine the assets of Champinon, and
further agrees to not proceed with any partition of the current Champinon
boundary as recorded with the Secretary of the Economy until such time as the
Champinon mine has received its Padron Sectorial from the Secretary of the
Economy or the last payment has been verified as specified in Exhibit A.
 
4.                                 Restricted Shares in TARM. In consideration
of the releases contained herein and other good and valuable consideration
provided by this Agreement, TARM agrees to convey to Carnegie, or its assignee,
five hundred thousand (500,000) restricted shares of its common stock (the
“Restricted Shares”) within ten (10) business days after complete execution of
this Agreement (the “Conveyance Date”).   The certificates representing the
Restricted Shares shall bear a restrictive legend substantially in the form
attached as Exhibit C.  TARM and Carnegie agree that the Restricted Shares may
not be sold until the earlier of: 1) TARM common stock having traded at a
minimum price of $1.00 per share; or 2) two (2) years from the complete
execution of this Agreement.  Subject to the foregoing, Carnegie shall have the
right to transfer or assign these shares upon receipt of opinion of counsel
reasonably satisfactory to the company that the Restricted Shares may be
transferred pursuant to an exemption from registration under the Securities Act
of 1933, as amended or an effective registration statement.
 
5.                                 Stipulation and Dismissal with Prejudice. The
Parties agree that within five (5) days of complete execution of this Agreement,
execution of the Transfer Agreement, conveyance of the Restricted Shares to
Carnegie, and Tara forwarding Carnegie the Receipt, the parties shall submit to
the Court a Stipulation and Dismissal with Prejudice of the Litigation.
 
6.                                 Carnegie Acknowledgement of No Rights under
the Option Agreement. Carnegie expressly acknowledges and agrees that upon
complete execution of this Agreement, execution of the Transfer Agreement,
conveyance of the Restricted Shares to Carnegie, and Tara forwarding Carnegie
the Receipt, Carnegie will have no further claims or rights under the Option
Agreement.
 
 
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7.                                  Further Actions Necessary to Dismiss.  The
Parties agree to take any further action reasonably necessary to accomplish the
transfer of the interests and stock shares contemplated herein, whether before
or after the closing this agreement, and dismissal of all claims against the
Parties with prejudice.
 
8.                                  Releases.  The Parties, for themselves, and
where applicable, each of their current and former directors, officers,
shareholders, partners, principals, agents, employees, attorneys, and
accountants, and any predecessors-in-interest, successors-in-interest, assigns,
subsidiaries, divisions or affiliates, forever release and discharge all other
Parties, and where applicable, each of their current and former directors,
officers, shareholders, partners, principals, agents, employees, attorneys, and
accountants, and any predecessors-in-interest, successors-in-interest, assigns,
subsidiaries, divisions or affiliates, from all disputes, claims, causes of
action, actions, judgments, liens, indebtedness, costs, damages, obligations,
attorney’s fees, losses, liabilities and demands of whatever kind and character
(collectively, “Claims”) which now exist, or may exist or have existed, from the
beginning of time to the date this Agreement is fully executed, subject to each
parties’ fulfillment of their obligations herein.  This includes all Claims
whether known or unknown, foreseen or unforeseen, liquidated or unliquidated,
potential or actual, including but not limited to all Claims alleged, or that
could have been alleged, or that could be alleged, in the Litigation, and all
Claims relating to or arising out of any local, state, federal, or foreign
statute, ordinance, regulation, order, or common law.  This release does not
include breach of this Agreement.  
 
9.                                  Waiver of Fees and Costs.  Each of the
Parties shall pay all of its own legal fees, costs, and any other expenses
incurred or to be incurred in connection with the Litigation.
 
10.                                 Authority to Settle.  Each of the Parties
represents and warrants that it has the power, right and authority to enter into
this Agreement.
 
11.                                 Binding on Successors in Interest.  The
Parties agree that this Agreement shall be binding upon the Parties, and, as
applicable, upon their heirs, executors, administrators, dependents,
predecessors, successors, subsidiaries, divisions, parents, alter egos,
affiliated corporations and related entities, and their past or present
officers, directors, partners, employees, attorneys, assigns, agents,
representatives, and any or all of them.
 
12.                                 No Assignment.  Each Party warrants and
represents that it owns and controls each of the claims, causes of action, or
other matters that are released by this Agreement and that it has not assigned
or transferred to any other person any of the claims, causes of action, or other
matters that are released by this Agreement.
 
13.                                 Entire Agreement.  This Agreement contains
the entire agreement and understanding concerning the subject matter of the
Agreement between the Parties, and supersedes and replaces all prior
negotiations and proposed settlement agreements, written or oral.  Each of the
Parties to this Agreement acknowledges that no other Party to this Agreement,
nor any agent or attorney of any such Party, has made any promise,
representation or warranty, express or implied, not contained in this Agreement
to induce any Party to execute this Agreement.  The Parties further acknowledge
that they are not executing this Agreement in reliance upon any promise,
representation or warranty not contained in this Agreement.
 
 
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14.                                 Advice of Counsel.  Each Party represents
that he, she, or it has: i) been adequately represented, or has had the
opportunity to be represented, by independent legal counsel of its own choice,
throughout all of the negotiations that preceded the execution of this
Agreement; ii) executed this Agreement with the consent and upon the competent
advice of such counsel, or that it has had the opportunity to seek such consent
and advice; iii) read this Agreement, and understands and assents to all the
terms and conditions contained in this Agreement without any reservations; and
iv) had, or has had the opportunity to have had, the same explained to it by its
own counsel, who have answered any and all questions which have been asked of
them, or which could have been asked of them, with regard to the meaning of any
of the provisions of this Agreement.
 
15.                                 No Admissions or Disparagement.  By entering
into this Agreement, no Party intends to make, nor shall be deemed to have made,
any admission of any kind.  The Parties agree that they are entering into this
Agreement solely for the purpose of avoiding the costs of further litigation. 
This Agreement is the product of informed negotiations and compromises of
previously stated legal positions.  Nothing contained in this Agreement shall be
construed as an admission by any Party as to the merit or lack of merit of any
particular claim or defense.  Any statements made in the course of negotiations
have been and shall be without prejudice to the rights of the Parties in any
disputes or transactions with any other person or entity not party to this
Agreement, and shall remain confidential pursuant to Federal Rule of
Evidence 408.  All Parties agree not to disparage any other Party or any terms
of this Agreement, including the condition or value of any transfers under this
Agreement.
 
16.                                 Confidentiality.  This Agreement, the
Settlement Amount, and the terms and conditions of the Agreement are
confidential to the Parties, and the Parties shall not publish, reproduce,
transmit or disclose any of the information contained in this Agreement to any
third parties.  With respect to third parties, however, the Parties may disclose
and acknowledge the fact that the Action has been settled and mutually
resolved.  Moreover, nothing in this Agreement is in any way intended to
prevent, or prevents, the Parties from disclosing this Agreement, the Settlement
Amount, and the terms and conditions of the Agreement to their accountants,
attorneys, insurers, shareholders, or anyone to whom such disclosure is required
by, or necessary for compliance with, state or federal law or regulations, or
other legal and/or contractual obligations.
 
17.                                 Governing Law and Venue.  This Agreement
shall in all respects be interpreted, enforced, and governed by and under the
internal laws of the State of Nevada.  Each Party agrees that in the event a
dispute arises as to the validity, scope, applicability, or enforceability of
this Agreement, the prevailing party shall be entitled to recover its costs and
reasonable attorney’s fees.  Further, any action or other proceeding relating in
any way to this Agreement, including but not limited to any action initiated to
construe or enforce any of the provisions of this Agreement, shall be filed
exclusively in the United States District Court for the District of Nevada. 
 
 
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18.                                 Counterparts.  This Agreement may be
executed in one or more counterparts, each of which shall be an original as
against any Party who signed it, and all of which shall constitute one and the
same document.  Further, the Parties agree that facsimile and/or e-mail
signatures of each Party shall be deemed original signatures and shall be
binding on the Party whose signature is by facsimile and/or e-mail as if it were
their original signature.
 
19.                                 Construction.  The headings of the sections
of this Agreement are for convenience of reference only and shall not affect the
meaning or interpretation of this Agreement.  It is understood and acknowledged
that this Agreement shall not be construed in favor of or against any Party by
reason of the extent to which any Party or its counsel has participated in the
drafting of this Agreement.
 
20.                                 Authorization to Execute Agreement.  Each
individual who executes this Agreement on behalf of any Party represents and
warrants that the individual does so with the knowledge and express approval and
authorization of the Party on whose behalf the individual executes this
Agreement.
 
21.                                 Amendment of this Agreement.  This Agreement
and its terms, provisions, covenants and conditions may not be amended, changed,
altered, modified or waived except by an express instrument in writing signed by
each and every one of the Parties.
 
22.                                 No Waiver of Breach.  No waiver of any
breach of any term or provision of this Agreement shall be construed to be, nor
shall be, a waiver of any other breach of this Agreement.  No waiver shall be
binding unless in writing and signed by the Party waiving the breach.
 
23.                                 Disputes.  Prior to any Party commencing any
formal proceeding arising from a dispute or controversy under this Agreement,
its Exhibits or any related agreements thereto, the Parties shall make a good
faith attempt and use all reasonable efforts to resolve such dispute or
controversy through negotiation.
 

 

 

 

 
SIGNATURE PAGES TO FOLLOW
 
 
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BY EXECUTING THIS AGREEMENT, EACH OF THE PARTIES ACKNOWLEDGES THAT IT HAS READ
THIS ENTIRE AGREEMENT CAREFULLY AND UNDERSTANDS EACH OF THE TERMS AND PROVISIONS
SET FORTH HEREIN. 
 
This Agreement shall not become effective until it has been executed by all
Parties and approved by their respective counsel.  This Agreement consists of
nine (9) pages, including signature pages.
 

 
TARA MINERALS CORP.
     
By:    /s/ Francis R. Biscan Jr.
 
Name: Francis R. Biscan Jr.        
 
Title: President
     
AMERICAN METAL MINING, S.A. DE C.V.
     
By:    /s/ Ramiro Trevizo
 
Name:  Ramior Trevizo       
 
Title:  President
     
JEFFREY HOLT
     
By:    /s/ Jeffrey Holt
 
Name:  Jeffrey Holt    
     
TOM CLARIDGE
     
By:   /s/ Tom Claridge
 
Name:  Tom Calridge  
     
STEVE EADY
     
By:  /s/ Steve Eady
 
Name: Steve Eady
     
CARNEGIE MINING AND EXPLORATION, INC.
     
By:   /s/ Timothy Barton
 
Name:  Timothy Barton
 
Title: Authorized Agent

 
 
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CME OPERATIONS, LLC
     
By:    /s/ Michael Matthews
 
Name: Michael Matthews
 
Title: Managing Member
     
HARSCO CORPORATION
     
By:    /s/ Samuel Romaknsky
 
Name:  Samuel Romakinsky
 
Title: Senior Litigation Counsel
     
PITTSBURGH MINERAL & ENVIRONMENTAL TECHNOLOGY, INC.
     
By:  /s/ William F. Sutton
 
Name: William F. Sutton
 
Title: Executive Vice President

 
 
 

 
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