EXHIBIT 10.2
 
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 TERMINATION AND RELEASE AGREEMENT
 

 

 
Between:

MAINLAND RESOURCES, INC.

 

And:

AMERICAN EXPLORATION CORPORATION

 
Mainland Resources, Inc.
21 Waterway Avenue, Suite 300, The Woodlands, Texas, U.S.A., 77380
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TERMINATION AND RELEASE AGREEMENT
 
WITH RESPECT TO THE MERGER AGREEMENT AND PLAN OF MERGER
 
THIS TERMINATION AND RELEASE AGREEMENT (the “Agreement”) is made as of December
21, 2011 (the “Effective Date”)
 
BETWEEN:

MAINLAND RESOURCES, INC., a company existing under the laws of the State of
Nevada, U.S.A.

(“Mainland”);

AND:

AMERICAN EXPLORATION CORPORATION, a company existing under the laws of the State
of Nevada, U.S.A.

(“American Exploration”).
 
WHEREAS:

(A)   Mainland and American Exploration (each a “Party” and, together, the
“Parties”) entered into a Merger Agreement and Plan of Merger dated March 22,
2010, as amended by a Letter Agreement dated July 28, 2010, and as further
amended by an Amending Agreement dated September 7, 2010, an Amending Agreement
dated December 23, 2010, an Amending Agreement dated March 14, 2011, an Amending
Agreement dated May 17, 2011, an Amending Agreement dated August 18, 2011, and
an Amending Agreement dated October 31, 2011 (as so amended, collectively, the
“Merger Agreement”) which, subject to certain conditions, contemplated a merger
between the Parties to be effected pursuant to Chapters 78 (Private
Corporations) and 92A – Mergers, Conversions, Exchanges and Domestications, of
the Nevada Revised Statutes, with Mainland as the surviving corporation;

(B)   The Merger Agreement is subject to termination by either Party under
Section 7.3 of the Merger Agreement if certain conditions specified in the
Merger Agreement are not satisfied at or before the “Termination Date”, which is
defined in Section 1.1 of the Merger Agreement to mean January 31, 2012, or such
later date as may be mutually agreed by the Parties;

(C)   Pursuant to Section 7.3 of the Merger Agreement, the Merger Agreement may
be terminated by the mutual agreement of the Parties (without further action on
the part of the American Exploration Shareholders) anytime prior to the filing
of the Articles of Merger; and

(D)   The Parties wish to terminate the Merger Agreement as described in this
Agreement;

 
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THIS AGREEMENT WITNESSES that in consideration of the respective covenants and
agreements herein contained, the Parties covenant and agree as follows:
 
Certain Definitions

1.      Capitalized terms not otherwise herein defined shall have the meaning
ascribed to them in the Merger Agreement.
 
Agreement to Terminate the Merger Agreement and Mutual Release

2.      Pursuant to and in accordance with Section 7.3 of the Merger Agreement,
the Parties hereby mutually agree to the termination of the Merger Agreement as
of the Effective Date first written above.

3.      Each Party hereby agrees to release the other Party hereto from any
further liability to perform such other Party’s obligations under the Merger
Agreement.  For the avoidance of doubt, the Parties acknowledge and agree that
Mainland shall have no obligation under the Merger Agreement or otherwise to
issue any Mainland Shares, any Mainland Exchange Options or any Mainland
Exchange Warrants and including to, but not limited to, the American Exploration
Option holders as set forth in Schedule “A” to this Agreement.
 
Promissory Note

4.      The Parties acknowledge and agree that, contemporaneously with the
execution and delivery of this Agreement, the Parties shall enter into a new
promissory note (the “Promissory Note”) evidencing American Exploration’s
current obligation to pay to Mainland Resources U.S. $67,002.73; comprised of
U.S. $60,000 in principal and U.S. $7,002.73 in accrued interest; pursuant to
that certain promissory note entered into by and between the Parties dated
September 27, 2010, as amended by Amendment No. 1 thereto dated December 23,
2010, as further amended by Amendment No. 2 thereto dated March 30, 2011, as
further amended by Amendment No. 3 thereto dated May 17, 2011, as further
amended by Amendment No. 4 thereto dated August 18, 2011, and as further amended
by Amendment No. 5 thereto dated October 31, 2011 (such Promissory Note, as
amended, being, collectively, the “Original Promissory Note”).  The Promissory
Note shall supersede and replace the Original Promissory Note.
 
 
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Entire Agreement

5.      This Agreement constitutes the entire agreement between the Parties and
supersedes every previous agreement, communication, expectation, negotiation,
representation or understanding, whether oral or written, express or implied,
statutory or otherwise between the Parties with respect to the subject matter of
this Agreement.  Nothing in this Section 5 will limit or restrict the
effectiveness and validity of any document with respect to the subject matter of
this Agreement that is executed and delivered contemporaneously with or pursuant
to this Agreement and including, but not limited to, the Promissory Note
referred to in Section 4 above.
 
Governing Laws

6.      This Agreement shall be governed by and construed in accordance with the
laws of the Province of British Columbia, Canada, and the laws of Canada
applicable therein and shall be treated in all respects as a British Columbia
contract.
 
Counterparts

7.      This Agreement may be executed in any number of counterparts, in
original form or by facsimile, each of which will together, for all purposes,
constitute one and the same instrument, binding on the Parties, and each of
which will together be deemed to be an original, notwithstanding that each Party
is not a signatory to the same counterpart.
 
Headings

8.      The descriptive headings of the several Sections of this Agreement were
formulated, used and inserted in this Agreement for convenience only and shall
not be deemed to affect the meaning or construction of any of the provisions
hereof.
 
 
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IN WITNESS WHEREOF this Agreement has been executed by the Parties effective as
of the Effective Date first above written.
 

MAINLAND RESOURCES, INC.     AMERICAN EXPLORATION CORPORATION            
/s/ William D. Thomas
   
/s/ Steven Harding
 
William D. Thomas
   
Steven Harding
 
Chief Financial Officer
   
President and CEO
 

 
 
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Schedule “A”
 
American Exploration Options now terminated
 
As set forth in Section 3 of the Termination and Release Agreement of which this
Schedule “A” forms a part, and for the avoidance of doubt, Mainland shall have
no obligation under the Merger Agreement or otherwise to issue any Mainland
Shares, any Mainland Exchange Options or any Mainland Exchange Warrants and
including to, but not limited to, the American Exploration Option holders as set
forth below.

American Exploration Options

American Exploration
Option holder
Number of American Exploration
Shares Under Option
Exercise Price
(U.S. $)
Expiry
Date
Cory Bass
50,000
$0.80
Sept. 25, 2019
Moni Minhas
100,000
$0.80
Sept. 14, 2019
Marc Bustin
100,000
$0.80
Sept. 14, 2019
Brian Manko
150,000
$0.80
Sept. 14, 2019
David Sidoo
250,000
$0.80
Sept. 14, 2019
Herb Dhaliwal
300,000
$0.80
Sept. 25, 2019
Dev Randhawa
750,000
$0.80
Sept. 14, 2019
Steve Harding
1,000,000
$0.80
Sept. 14, 2019
Herb Dhaliwal
50,000
$0.13
March 14, 2021
Moni Minhas
50,000
$0.13
March 14, 2021
Herb Dhaliwal
400,000
$0.09
May 10, 2021
Moni Minhas
400,000
$0.09
May 10, 2021
Brian Manko
150,000
$0.09
May 10, 2021
Diane Dalmy
150,000
$0.09
May 10, 2021
Total:
3,900,000
   

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