aecoexhibit101123109.htm


    
      

      

    

    Exhibit 10.5

    
 

     AGREEMENT FOR SALE OF ALL
SHARES IN EVANS COAL CORP.

     

    THIS
AGREEMENT made and entered into at Flat Lick, Knox County, Kentucky as of the
6th
day of February, 2010 by and between BARBARA EVANS, widow and not
remarried, being the owner of all the outstanding shares
of Evans Coal Corp., hereinafter called the "Seller," and EVANS COAL CORP.
(Evans), a Kentucky corporation, of 10853 South Highway U.S. 25E, Flat Lick,
Knox County, Kentucky 40935, hereinafter called "Evans" and AMERICAS ENERGY
COMPANY, INC., a Nevada corporation, of 249 North Peters Road, Suite 300,
Knoxville, Knox County, Tennessee 37923 hereinafter called the
"Buyer."

     

    Recitals

    The
Seller is the sole 'shareholder of Evans Coal Corp., a Kentucky corporation,
which Corporation holds certain coal mining leases upon coal­ bearing
property in Knox County, Bell County, Harlan County and Breathitt County,
Kentucky under various leases, has various surface disturbance
permits from the Commonwealth of Kentucky Natural Resources Cabinet upon
the Knox, Bell and Harlan County, Kentucky leaseholds and is the owner of
certain surface mining equipment and assets, and Evans
joins in this Agreement to certify certain items on behalf of the Seller, and
The
Seller desires to sell all of her stock in Evans, and the Buyer desires to
purchase the same and to assume the Seller's position as sole owner on
the terms and conditions hereinafter provided.

     

    NOW,
THEREFORE, WITNESSETH: That for and in consideration of the premises and the
mutual promises and the sums to be paid and the sum of Ten ($10.00) Dollars,
cash in hand paid, it is agreed to hereby by and between the Buyer and Seller as
follows, to wit:

     

    ARTICLE
I

    
      	
              1.  

            	
              Shares
      to be Purchased. The Seller shall sell and the Buyer shall buy all of the
      Seller's outstanding shares which consist of 100 fully paid and
      non­assessed shares in Evans and shall transfer and assign all the
      outstanding interest in Evans to the Buyer. A copy of Seller's shares to
      be transferred to Buyer is attached hereto as
  Exhibit"AA".

            


    

     

    
      	
              2.  

            	
              Purchase
      Price. The Buyer shall pay to the Seller as the purchase price of the
      shares as follows, to wit:

            


    

     

    
      	
              • 

            	
               The
      sum of $4.00,000.00 already paid, the receipt of which is acknowledged by
      the Seller; $2,600,000,00 upon execution of this Agreement; $4,000,000.00
      at closing on the 5th
      day of March,2010;
      $25,000,000,00" to be paid at the rate of $5.00 per short ton of coal
      mined, sold and shipped from the leaseholds of Evans subject to the
      payment
      schedule in Exhibit "B" attached hereto. Buyer will execute a
      Promissory Note in substantial compliance with the Promissory Note
      attached hereto and
      marked as Exhibit "c"
      which shall include interest and penalties for a default and/or.
      late payments.

            


    

     

    
      	
              3.  

            	
              Guaranty
      Reassignment. The Buyer shall substitute and/or relieve at the closing the
      Seller from the various guaranty agreements set out in Exhibit "F," same
      to be accomplished within thirty (30) days of the above date. Evidence of
      the Buyer’s assumption of the assignments as approved by the creditors
      shall be given to the Seller.

            


    

     

    
      	
              4.  

            	
              Net
      Worth. The Buyer has had full opportunity to review the balance sheet and
      books and records of Evans. The unaudited balance sheet as of December 31,
      2009 of Evans is attached hereto and marked as Exhibit "G". If
      the Buyer wishes to audit the net worth of Evans, it may do so at
      its own expense.

            


    

     

    
      	
              5.  

            	
              Restrictions
      against Withdrawals and Sale or Removal of Assets. Until such time as all
      the fixed and contingent payments from the Buyer to the Seller as required
      by this Agreement have been met and satisfied, the Buyer or Evans shall
      not remove any of the equipment identified in Exhibit "H"
      attached hereto from the permitted operating premises at the
      Breathitt Project, Artemus
      Project, 92 Project, Cardinal or Flat Lick, Knox County, Kentucky
      without the express written consent of the
  Seller.

            


    

     

    
 

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    ARTICLE
II

    Representations
and Warranties of Buyer. Buyer represents and warrants to Seller that the
statements contained herein are correct and complete as of the date of this
Agreement except in the case of representations and warranties
stated to be made as of the date of this Agreement or as of another date and
except for changes contemplated or permitted by this Agreement.

     

    
      	
              1.  

            	
              Organization
      and Qualification. Buyer is a corporation duly organized, validly existing
      and in good standing under the laws of its respective jurisdiction of
      organization. Buyer has all requisite power and authority to own, lease
      and use its assets as they are currently owned, leased and used and to
      conduct its business as it
      is currently conducted.

            


    

     

    
      	
              2.  

            	
              Authority
      and Validity. Buyer has all requisite corporate power to execute and
      deliver, to perform its obligations under, and to consummate the
      transactions contemplated by this Agreement. The execution and delivery by
      Buyer of the performance by Buyer of its obligations under, and the
      consummation by Buyer of the transactions contemplated by this Agreement
      have been duly authorized by all requisite action of Buyer, and certified
      copies of the Board of Directors of Buyer authorizing the purchase shall
      be delivered at closing.

            


    

     

    
      	
              3.  

            	
              No
      Breach or Violation. The execution, delivery and performance by Buyer of
      this Agreement and the Supporting Documents to which it is a party, and
      the consummation of the transactions contemplated hereby and thereby
      in  accordance with the terms and conditions hereof and thereof,
      do not and will not conflict with, constitute a violation or breach of,
      constitute a default or give rise to any right of termination or
      acceleration of any right or obligation of Buyer under, or result in the
      creation or imposition of any Encumbrance upon Buyer, Buyer's Assets,
      Buyer's Business or Buyer's Common
Stock.

            


    

     

    
      	
                
      4. 

            	
              Consents
      and Approvals. No consent, approval, authorization or order of,
      registration or filing with, or notice to, any Regulatory Authority or any
      other Person is necessary to be obtained, made or given by Buyer in
      connection with the execution, delivery and performance by Buyer of this
      Agreement or any Supporting Document or for the consummation by Buyer of
      the transactions contemplated hereby or thereby, except to the extent the
      failure to obtain any such consent, approval, authorization or order or to
      make any such registration or filing would not have a Material Adverse
      Effect on Buyer or a material adverse effect on the validity, binding
      effect or enforceability of this Agreement or the Supporting Documents or
      the ability of Buyer to perform its obligations under this Agreement or
      any of the Supporting Documents.

            


    

     

    
      	
                 
      5.

            	
              Compliance
      with Legal Requirements. Buyer has operated Buyer's Business in compliance
      with all Legal Requirements applicable to Buyer except to the extent the
      failure to operate in compliance with all material Legal Requirements
      would not have a Material Adverse Effect on Buyer or Material Adverse
      Effect on the validity, binding effect or enforceability of this Agreement
      or the Supporting Documents.

               

            


    

    
      	
                
      6.  

               

            	
              Financial
      Statements. Prior to the deposit of funds, Buyer shall provide Seller,
      if
      desired, with current financial statements of
  Buyer.

            


    


    
      
         


      

      
        2

        
          

        

      

      
         


      

    


    
      	
                
      7.

            	
              Litigation.
      There are no outstanding judgments or orders against or otherwise
      affecting or related to Buyer, Buyer's Business or Buyer's Assets, and
      there is no action, suit complaint, proceeding or investigation, judicial
      administrative or otherwise, that is pending or, to Buyer's knowledge,
      threatened that if adversely determined, would have a Material Adverse
      Effect on Buyer or a material adverse effect on the validity, binding
      effect or enforceability of this Agreement or the Supporting Documents,
      except as noted in the audited Company Financial Statements or documented
      by Buyer to Seller in Exhibit "I" hereto.

               

            


    

    
      	
                 8.

            	
              Brokers
      or Finders. All negotiations relative to this Agreement and the
      transactions contemplated hereby have been carried out by Buyer in
      connection with the transactions contemplated by this Agreement. Buyer has
      not incurred any obligation to pay any brokerage or finder's fee or other
      commission in connection with the transaction contemplated by this
      Agreement, except a two (2%) percent override to A.Y. Evans, Jr. set out
      in a separate override finder's fee agreement.

               

            


    

    
      	
                 9.

            	
              Disclosure.
      No representation or warranty of Buyer in this Agreement or in the
      Supporting Documents and no statement in any certificate furnished or to
      be furnished by Buyer pursuant to this Agreement contained, contains or
      will contain on the date such agreement or certificate was or is
      delivered, or on the Closing Date, any untrue statement of a material
      fact, or omitted, omits or will omit on such date to state any material
      fact necessary in order to make the statements made, in light of the
      circumstances under which they were made, not
  misleading.

            


    

     

    
      	
                 10.

            	
              Permits
      and Licenses. Buyer has all certificates of occupancy, rights, permits,
      certificates, licenses, franchises, approvals and other authorizations as
      are reasonably necessary to conduct its business and to own, lease, use,
      operate and occupy its assets, at the places and in the manner now
      conducted and operated, except those the absence of which would not
      materially adversely affect its business. Buyer has not received any
      written or oral notice or claim pertaining to the failure to obtain any
      material permit, certificate, license, approval or other authorization
      required by any federal, state or local agency or other regulatory body,
      the failure of .which to obtain would materially and adversely affect its
      business. Buyer is not “permit blocked" from receiving and/or obtaining
      surface disturbance permits from the Kentucky Natural Resources Cabinet
      and any other required permits to fully operate the leasehold premises of
      Evans for deep and surface coal mining
purposes.

            


    

     

    
      	
                 11.

            	
              Assets Necessary to Business. Buyer owns or leases all
      properties and assets, real, personal, and mixed, tangible and intangible,
      and is a party to all licenses, permits and other agreements necessary to
      permit it
      to carryon its business as presently conducted and the business of
      Evans as a surface and/or deep coal miner and
producer.

            


    

    
 


    
      
         


      

      
        3

        
          

        

      

      
         


      

    

     

    ARTICLE
III    Representations
by Seller. The Seller, to induce the Buyer to purchase her interest in Evans,
makes the following representations, to wit:

     

    
      	
              1.  

            	
              Entire
      Interest. On the closing date, the Seller is the holder of all the
      outstanding shares in Evans; said interest is valid, fully paid and
      non­assessable without any liens or encumbrances upon or against such
      interest, and there exists no limitation or restriction of any kind on her
      right to sell her interest and assign same to the Buyer upon the terms
      hereof. Further, there are no other options, warrants, agreements or
      similar rights created by the Seller for the issue or sale of any interest
      of any kind in Evans or for the purchase thereof by any other person other
      than the Buyer.

            


    

     

    ARTICLE
IV      Representations
of Evans

     

    
      	
              1.  

            	
              Balance
      Sheet. The pro forma income tax basis balance sheet of Evans as of
      December 31, 2009, Exhibit "G" hereto, which has
      been furnished to the Buyer, reflects with substantial accuracy the
      financial condition (income tax basis) of Evans on that date, and it then
      had the designated liabilities, commitments, obligations or agreements
      contingent or otherwise shown on the balance sheet and no
      other.

            


    

     

    
      	
              2.  

            	
              Leases
      of Evans Coal Corp. Evans represents and warrants that the leases set out
      in Exhibit "J" are valid, in Full force
      and in good standing. As of Closing, there shall be no threatened
      terminations; notices of default, or delinquencies occurring under the
      leases as set out in Exhibit "J".

            


    

     

    
      	
                
      3. 

            	
              Conduct
      of Business. From the date hereof to the closing date, Evans shall not
      operate the premises nor enter into any operating transactions or
      agreements other than in the ordinary course of business nor shall it
      borrow any funds from any banks or lending institutions other than
      as shown on the current
obligations.

            


    

     

    
      	
                
      4.

            	
              Titled
      Assets. On the closing date, Evans shall have good title, free of any
      liens, to all property owned or purported to be owned by it
      or included on its books as part of its fixed assets except as
      designated herein and by the attachments hereto in Exhibit
      "K".

               

            


    

    
      	
                
      5.

            	
              Litigation.
      On the closing date, there shall be no suits, claims or proceedings, not
      covered by adequate insurance, either pending or threatened, against Evans
      nor any fines or violations in anyone case involving an amount in excess
      of $10,000.00 or in an aggregate amount of in excess of $50,000.00 except
      as disclosed to the Buyer in the attached Exhibit "L".

               

            


    

    
      	
                
      6.

            	
              Employees.
      On the closing date, Evans shall have approximately one employee, more or
      less. There is no litigation or labor charges pending or to Seller's
      knowledge threatened against Evans regarding employee matters.
      Additionally, on the closing date, Evans
      shall have no commitments to any employees, past or present, for
      expenses, profit-sharing or consumption in addition to regular salary and
      bonus arrangements.

            


    


    
      
         


      

      
        4

        
          

        

      

      
         


      

    


    
      	
                
      7.

            	
              Increased
      Employee Compensation. From the date hereof to the closing date, there
      shall have been and shall be no general increases in salaries and no
      payments of bonus, shares and profits or extra compensation except as
      stated in Exhibit "M".

            


    

     

    
      	
                
      8.

            	
              Distributions.
      From the date hereof to the closing date, no distributions shall have been
      or will be declared or paid or distributions made for or on account of any
      of the shareholders of Evans, being the
Seller.

            


    

     

    
      	
                
      9.

            	
              Certification.
      On the closing date, there will be delivered to the Buyer a certificate
      signed by Evans to the effect that all the conditions have been met and
      satisfied,

            


    

     

    
      	
                10.

            	
              Compliance
      with Applicable Laws. Evans has complied with all applicable
      laws and regulations in relation to its business operations and has
      obtained all necessary licenses, permits, certifications and
      authorizations necessary for the conduct of its business and the use of
      the property. Evans is not subject to any fine as the result of any act or
      omission and has not received any notice which has not been complied. with
      from any governmental authority, insurance or inspection body to the
      effect that any of the operations of its businesses failed to comply with
      applicable laws and regulations. Exhibit"A" sets forth a true, complete
      and correct list of all permits, licenses and other necessary approvals
      issued for the operations of Evans. All permits, licenses, and other
      necessary approvals are validly issued and existing, in good standing,
      with no outstanding violations and without
      any modifications or alterations. Included
      in Exhibit “A” is a true and complete list of all permit obligations,
      including but not limited to any mine closing obligations such as all mine
      treatment and "perpetual care" (water treatment, monitoring, etc.) costs
      and liabilities. All reclamation required by the Permits is
      current.

            


    

     

    
      	
                11.

            	
              Contracts.
      Evans has not entered into any written, oral or implied contracts,
      agreements, leases or other commitments, except as set forth in Exhibit
      “J” attached
      hereto and incorporated herein by reference. Evans has complied with all
      obligations imposed by said contracts and commitments and is not in
      default under the terms of any of said
  obligations.

            


    

     

    
      	
                12.

            	
              No
      Violation of other Agreements. Seller's execution and compliance with the
      terms of this Agreement will not violate any provisions of law and will
      not conflict with or result in the breach of any of the terms, conditions
      or provisions of any other agreements to which Seller is a party or by
      which the Seller is bound.

            


    

     

    
      	
                13.

            	
              Tax
      Returns. Evans has filed all tax returns which are due or required to be
      filed by it
      prior to the date of this Agreement. Said returns are true and
      correct, and there are no outstanding tax claims or audits involving the
      Seller.

            


    

    


     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    ARTICLE
V

     

    
      	
                1.

            	
              Lien
      on Assets. In order to secure the Seller as to the future payments by the
      Buyer to the Seller, the Buyer and Evans shall execute a lien in favor of
      Seller upon all the assets of Evans, including a pledge of the stock, and
      shall
      execute a corporate guaranty all as set out in Exhibit “N”.
      However, said lien shall be subordinated to any commercial
      insurance bonding company for bonds identified in
      Exhibit “A”, which subordination agreements shall be executed to
      the insurance carrier from time to time as the bonds are replaced with
      insurance.

            


    

     

    


    
      	
                
      2.

            	
              Closing Date and Place. The
      purchase and sale of the Seller to the Buyer shall be consummated on the
      5th
      day of March, 2010 at the company office at 10853 South Highway
      U.S. 25E, Flat Lick, Knox County, Kentucky 40935, or at such other time or
      place as the parties may agree in
writing.

            


    

     

    
      	
                
      3.

            	
              Performance
      on Closing Date. On the closing date, the Buyer shall make the first
      payment of Four Million ($4,000,000.00) Dollars on account as set out in
      Section 2 by certified or bank check or wire transfer payable to the order
      of the Seller or her survivors in immediately available funds drawn upon a
      United States bank payable at First State Financial, Pineville, Bell
      County, Kentucky. The Seller shall immediately deliver to the Buyer
      endorsed share certificates for all the outstanding shares owned by Seller
      in Evans and resignations of Seller and Virginia Reynolds as officers and
      directors in Evans. Further, the Seller and Buyer shall execute all
      closing documents and debt instruments necessary to effect the purposes
      contemplated herein.

               

            


    

    
      	
                
      4.

            	
              Evans
      owes Seller $1,198,685.03 as reflected upon the books of Evans. Evans or
      before closing on March 5, 2010 shall reimburse Seller for said sums in
      full

            


    


    
      	
                
      5.

            	
              Evans
      currently owes Caterpillar Finance approximately $195,141.00 for a D-9
      bulldozer. On or before
      closing, Seller shall cause said indebtedness to be paid in full
      and produce evidence of this satisfactory to Buyer. See, Exhibit "0" and
      Exhibit "E".

               

            


    

    
      	
                
      6.

            	
              Evans
      currently has Kentucky Natural Resource & Environmental
      Protection Cabinet Permits Nos.
      807-0289,848-0223,807-5190,861-5340,807-0343 and 807-0329 secured by the
      bonds set out in Exhibit "A". Evans shall on or before closing on March 5,
      2010 cause all of the bonds for said permits to be replaced.

               

            


    

    
      	
                
      7.

            	
              Evans
      shall on or before closing on March 5, 2010 reimburse Seller for all
      accounts payable of Evans in the approximate sum of $ ____ incurred since
      November 5, 2009 through date of closing.

               

            


    

    
      	
                
      8.

            	
              Indemnity. As of the Closing
      Date, Seller agrees to indemnify and hold Buyer harmless from and against
      any and all claims, demands, suits, proceedings, judgments, losses,
      liabilities, damages, costs and expenses of every kind and nature
      (including, but not limited to, reasonable attorneys' fees) imposed upon
      or incurred by Buyer or Evans, as a result of or in connection with any
      misrepresentation or breach of warranty made by Seller in this Agreement
      and any breach of or default in the performance by Seller of any covenant,
      agreement or obligation to be performed by Seller under this Agreement.
      Said Indemnity will be as set out in Exhibit “O”.

            


    


    
      
         


      

      
        6

        
          

        

      

      
         


      

    


    
      	
                
      9.

            	
              Miscellaneous.
      This Agreement shall bind and inure to the benefit of the respective
      executors, administrators and assigns of the Seller and the successors and
      assigns of Evans and the Buyer. No finders fee or brokers commission shall
      be payable by the Seller;
      Evans or Buyer on account of the purchase and sale of the interest
      herein, except Buyer's override to A.Y. Evans, Jr. This Agreement may be
      executed in any number of counterparts, each of which shall be deemed an
      original but all of which shall constitute one and the same contract.
      Captions and headings are for convenience of reference only and shall not
      be deemed relevant to any interpretation of this Agreement, Any portion of
      this Agreement that is deemed to be ineffective shall not affect the
      remaining portions of the Agreement. Time shall be considered of the
      essence.

               

            


    

    
      	
               
      10.

            	
              Survival.
      All the representations and warranties contained in this Agreement shall
      survive the closing,

               

            


    

    
      	
               
      11.

            	
              Default.
      If the
      Buyer defaults in any of the payments called for herein, notice of default
      shall be given to Buyer in writing by delivering Notice of Default to Mr.
      Chris Headrick, 249 North Peters ,Road, Suite 300, Knoxville, Tennessee
      37923 and to Mr.
      Chris Headrick! 10853
      South U.S. Highway 25E, Flat Lick! Kentucky 40935, registered agent in
      the Commonwealth of Kentucky for the Buyer. If
      any payment under said Promissory Note remains unpaid after Notice
      of Default for ten (10)
      days then the Seller shall be entitled to interest at the legal
      rate in the Commonwealth of Kentucky from the date said payment is unpaid
      until fully paid, together with their attorney fees and court costs for
      the collection thereof.

            


    


    
      	
                12. 
      

            	
              Disputes.
      Any disputes as to the terms of this Agreement will be interpreted by the
      laws of the Commonwealth of Kentucky, and jurisdiction and venue shall be
      with the Knox County, Kentucky Circuit Court.

               

            


    

     

     

    ARTICLE VI

    Corporate
Books and Records. It
is hereby agreed that upon closing of this Agreement the Seller and Evans
shall deliver to the Buyer all corporate books and records including, but not
limited to, all outstanding shares held by the shareholder properly endorsed for
transfer, the stock transfer books, tax, royalty statements, bank records,
titles and deeds. The books and records of Seller or Evans accurately and fairly
represent Evans and its results of operations in all material
respects.

     

    IN
WITNESS WHEREOF, the parties have executed this Agreement as
of the day and year first hereinabove written.

     

    Buyer:


     

    AMERICAS
ENERGY COMPANY, INC.

     

    
      
        	
                Signature

              	 	
                Title

              	 
	 	 	 	 
	
                /s/
      Christopher L. Headrick

              	 	
                Title:
      President and CEO Evans

              	 
	
                Christopher
      L. Headrick

              	 	 	 
	 	 	 	 
	
                /s/
      Barbara Evans

              	 	
                Title:
      Seller

              	 
	
                BARBARA
      EVANS

              	 	 	 
	 	 	 	 
	
                /s/
      Barbara Evans

              	 	
                Title:
      EVANS COAL CORP., President

              	 
	
                Barbara
      Evans

              	 	 	 


      

    

     

    7