Document:

ex10_4.htm

EXCLUSIVE RIGHTS AGREEMENT

THIS AGREEMENT is dated the 28th day of May, 2013, by and between Valley High Mining Company., a company duly incorporated pursuant to the laws of Nevada and having an office located at 12835 E. Arapahoe Road, Tower 1 Penthouse # 810, Centennial, CO 80112 (hereinafter called "VHM" or the "Purchaser") and Grupo Bernas SA de CV and Hector Mora Gomez, the legal representative and signing authority for Grupo Bernas SA de CV, Corporativo de Minerales Mexicanos S.A de C.V and the Mining Concessions; # 219074 known as El Diamante, # 227686 known as Jaimito, # 227687 known as Yunuen, operating pursuant to the laws of Mexico and having an office located in Manzanillo, Colima, Mexico (hereinafter called "GIUV" or the "Vendor"), who hereby agree as follows.

RECITALS

WHEREAS, Purchaser wishes to acquire the Exclusive Rights to develop, explore and produce mineral revenue on the concessions as well as to process the existing tailings piles located on the concessions held by GIUV and associates; and

WHEREAS, Vendor wishes grant the Exclusive Rights to mine on the Concessions (as hereinafter defined) and to process the said tailing piles locate on the Concession legally described as; the El Diamante Concession, as per the legal description (attached hereto and incorporated herein as Schedule “A”), Further that GIUV has all rights, permissions and mining permits to allow VHM access to the said concessions to remove and further process the said tailings; and

WHEREAS, Vendor is the Joint Venture Partner and authorized signing authority for 100% of the Concessions # 219074, # 227686,  and # 227687, all rights,  chattels and mining  permits  held  by GIUV and associates (the “Concession”);

WHEREAS, VHM is desirous of furthering the completion of the proposed tailings recovery project from GIUV concessions and in providing the necessary funding on a best efforts basis, to process the existing tailings, to complete such project.

WHEREAS, based upon the representations and warranties set forth herein, the Purchaser has agreed to purchase from the Vendor and the Vendor has agreed to grant to the Purchaser, on the terms and conditions set forth herein, the complete and Exclusive Rights on the Concessions to mine and Exclusive Rights in and to the tailings located in and on the said Concession in consideration of the issuance by Purchaser to Vendor of 100,000 common shares of VHM (the "Payment Shares").

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the aforesaid agreements and the mutual covenants and conditions herein contained the Purchaser covenants and agrees with the Vendor, and the Vendor covenants and agrees with the Purchaser as follows:

SECTION   1.

INTERPRETATION AND DEFINITIONS

	
  

	
1.1

	
Definitions.  For all purposes of this Agreement:

 

	
  

	
(a)

	
"Closing Date" means the 28th day of May 2013, or such other date as the Parties hereto may mutually agree;

  

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(b)           "Exchange" means the OTCQB.

	
  

	
(c)

	
"Payment Shares" means, in the aggregate, 100,000 common shares of VHM, to be issued and held in trust for the benefit of the Vendor in exchange for the Exclusive Rights to mine and process the existing tailings, assignment and sale of the complete and total interest in and to 100 % of the tailings located in and on the Concession # 219074, # 227686, and# 227687 of GIUV.

	
  

	
(d)

	
"Purchase Price" means, in the aggregate, the issuance of the Payment Shares;

(e)           "Purchaser" means VHM or nominee.

	
  

	
(f)

	
“Vendor” means GIUV and any individual or party involved with the Vendor or GIUV who has, or purports to have, any interest of any nature whatsoever in the Concession.

	
  

	
(g)

	
“Concession” means title to the Concession described as the El Diamante Concession # 219074 and # 227686, and # 227687, as per the attached (Schedule “A”) all rights and entitlements, chattels, concessions and mining permits held by GIUV.

	
  

	
(h)

	
“Valley High Mining Company” means a publically traded, reporting company under the US Securities Exchange Act of 1934, as amended, whose common stock trades on the OTC-QB.

	
  

	
(i)

	
“Tailings” also called mine dumps, culm dumps, slimes, tails, refuse, leach residue or slickens means, the materials left over after the process of separating the valuable fraction from the uneconomic fraction (gangue) of an ore.

	
  

	
(j)

	
"Joint Venture" means Grupo Hemas SA de CV, Corporative de Minerales Mexicanos S.A de C.V and the Mining Concessions # 219074 known as El Diamante, # 227686 known as Jaimito and # 227687 known as Yunuen.

1.2            Interpretation

For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

	
  

	
(a)

	
"This Agreement" means this Agreement and all Schedules and Exhibits attached hereto;

	
  

	
(b)

	
Any reference in this Agreement to a designated "Article", "Section", "Schedule" or other subdivision refers to the designated Article, Section, Schedule or other subdivision of this Agreement;

	
  

	
(c)

	
The headings used in this Agreement are for convenience only and do not form a part of this Agreement and are not intended to interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof;

  

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(d)

	
The words "herein" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision of this Agreement;

	
  

	
(e)

	
Unless otherwise stipulated herein, all references to currency are deemed to mean lawful money of United States of America (USA) and all amounts to be calculated or paid pursuant to this Agreement are to be calculated in lawful money of U.S.A.;

	
  

	
(f)

	
The word "including", when following any general statement term or matter, is not to be construed to limit such general statement, term or matter to the specific items or matters set forth immediately following such work or to similar items or matters, whether or not non-limited language (such as "without limitation" or "but not limited to" or words of similar import) is used with reference thereto but rather refers to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter;

	
  

	
(g)

	
Any reference to a statute includes and, unless otherwise specified herein, is a reference to such statute and to the regulations made pursuant thereto, with all amendments made thereto and in force from time to time, and to any statute or regulations that may be passed which has the effect of supplementing or superseding such statute or such regulation;

	
  

	
(h)

	
"Person" means an individual, corporation, body corporate, associate ship, joint venture, association, trust or unincorporated organization or any trustee, executor, administrator or other legal representative.

1.3           Schedules

The following are the Schedules to this Agreement, and are incorporated herein by reference:

	
  

	
Schedule "A":

	
Concession Legal Description

	
  

	
Schedule "Al":

	
Copy of Joint Venture Agreement between Grupo Hemas SA de CV and Corporativo de Minerales Mexicanos S.A de C.V.

SECTION 2

PURCHASE AND SALE

2.1           Purchase and Sale Exclusive Rights.

Based upon the representations, warranties and covenants of the parties herein contained and subject to the conditions herein contained, the Purchaser hereby purchases from Vendor and the Vendor hereby sells to Purchaser the Exclusive Rights to mine and to process the tailings located in and on the Concession and all right, title and interest of the Vendor in and to the said tailings located in and on the Concession for a period of ten (10) calendar years, commencing on the first day following the post the due diligence period described below herein.

  

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2.2           Consideration

In consideration of the purchase and sale herein contemplated and in complete satisfaction of the purchase price, the Purchaser shall:

	
  

	
(a)

	
issue to the Vendors 100,000 “restricted” common shares of VHM (the "Payment Shares") to be held in trust for the Vendor by Whitehall Trust and released and delivered to Vendor upon the Purchaser providing written confirmation to Whitehall Trust of its satisfaction of the test results obtained during the due diligence period.  Purchaser agrees to pay all of the filing and registration costs, including the legal fees associated with the issuance of the Payment Shares as contemplated in this purchase and sale; and

	
  

	
(b)

	
Pay to Vendor the royalty provided in Section 5(c) below herein.

SECTION 3

REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER

3.1           Purchaser's Representations and Warranties

The Purchaser represents and warrants to the Vendor as continuing representations and warranties which are true and correct on the date hereof or, if any such representation and warranty is expressed to be made and given in respect of a particular date other than the date hereof, then such representation and warranty shall be true and correct on such date, and all representations and warranties herein shall be true and correct on each day thereafter to and including the Closing Date with the same effect as if made and given on and as of each such day, that:

	
  

	
(a)

	
The Purchaser is a company duly incorporated, validly existing and in good standing under the laws of the State of Nevada and has the necessary corporate capacity and is fully qualified in Nevada and each other jurisdiction in which it carries on business or holds assets to carry on the business which it now carries on and to hold the assets which it now holds;

	
  

	
(b)

	
The Purchaser has carried on its business in the normal course;

	
  

	
(c)

	
There are no actions, suits proceedings or investigations pending to the knowledge of the Purchaser, threatened against or affecting the Purchaser, at law or in equity, before or by any court, administrative agency or other tribunal or any governmental authority, other than as previously disclosed to the Vendor;

	
  

	
(d)

	
There are no contractual obligations of the Purchaser considered onerous by the Purchaser which have not been disclosed to the Vendor and the Purchaser has no information or knowledge of facts pertaining to the Purchaser which, if known to the Vendor, might reasonably be expected to deter the Vendor from completing the transactions contemplated hereby;

	
  

	
(e)

	
Purchaser is up-to-date and in good standing with respect to all filings required to be made with the Regulatory Authorities.

  

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3.2           Covenants of the Purchaser

 

The Purchaser covenants and agrees with the Vendor that:

The Purchaser will forthwith use its best efforts to obtain the necessary Development Funding in accordance with the terms of this Agreement;

	
  

	
(a)

	
The Purchaser will, both before and after the Closing Date, execute and do all such further deeds and assurances as may be required in the reasonable opinion of the Vendor's counsel for more perfectly consummating the transactions contemplated herein;

	
  

	
(b)

	
The Purchaser will further the objectives and commercialization of the mining and refining of the tailings locate on the Concession.

SECTION 4

VENDOR’S REPRESENTATIONS AND WARRANTIES

4.1           Vendor’s Representations and Warranties

The Vendor represent and warrants to the Purchaser as continuing representations and warranties, which representations and warranties are made in respect of and as specific representations and warranties of the Vendor, in each or their specific capacities and in their collective capacity for the purposes of this Agreement, which are true and correct on the date hereof or, if any such representation and warranty is expressed to be made and given in respect of a particular date other than the date hereof, then such representation and warranty shall be true and correct on such date, and all representations and warranties herein shall be true and correct on each day thereafter to and including the Closing Date with the same effect as if made and given on and as of each such day, that:

	
  

	
(a)

	
The Vendor holds all permits, licenses, concessions, consents and authorities issued by any government or governmental authority which are necessary in connection with the operation of its business and of the ownership of its business and of the ownership of its properties and assets, including but not limited to the Concession;

	
  

	
(b)

	
There has been no material adverse change in the financial condition and position of the Vendor and no damage, loss destruction or other change in circumstances materially affecting the Concession or the Vendor’s right or capacity to carry on business;

	
  

	
(c)

	
The Vendor has not engaged in any transaction nor made any disbursement or assumed or incurred any liability or obligation or made any commitment, including, without limitation, any forward purchase commitment or similar obligation, to make any expenditure which would materially adversely affect the Concession or the Exclusive Right to the tailings in and on the concession;

	
  

	
(d)

	
Other than as set forth herein, the Vendor has not purchased, leased or acquired or agreed to purchase, lease or acquire, any additional Concession or assets and has not sold, transferred, disposed, mortgaged, pledged, charged, leased or otherwise encumbered, or agreed to sell, transfer, dispose of, mortgage, pledge, charge, lease or otherwise encumber, any of its Concession or assets other than those acquired by it or sold, disposed of or encumbered by it in the course of its normal and ordinary day to day business;

  

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(e)

	
With respect to the Concession, the Vendor has not waived or surrendered any right of substantial value and has not made any gift of any of its Concession or assets;

	
  

	
(f)

	
The Vendor has carried on its business in the normal course;

	
  

	
(g)

	
The Vendor does not have outstanding any continuing contractual obligations whatsoever relating to or affecting the Concession other than those contracts entered into by it in the course of its normal and ordinary day to day business;

	
  

	
(h)

	
The Vendor is not in default under or in breach of, or would, after notice or lapse of time or both, be in default under or in breach of, and neither this Agreement nor the consummation of the transactions contemplated hereby will conflict with, constitute a default under, result in a breach of, entitle any person or company to a right of termination under, or result in the creation or imposition of any lien, encumbrance or restriction of any nature whatsoever upon or against the Concession or assets of the Vendor under its constating documents, any contract, agreement, indenture or other instrument to which it is a party or by which it is bound, any law, judgement, order, writ, injunction or decree of any court, administrative agency or other tribunal or any regulation of any governmental authority, and all such contracts, agreements, indentures, or other instruments are in good standing and the Vendor is entitled to all benefits thereunder;

	
  

	
(i)

	
There are no actions, suits proceedings or investigations pending to the knowledge of the Vendor, threatened against or affecting the Vendor or the Concession, at law or in equity, before or by any court, administrative agency or other tribunal or any governmental authority;

	
  

	
(j)

	
The Vendor has good and marketable title to the Concession and the Concession is free and clear of any liens, charges or encumbrances;

	
  

	
(k)

	
Statements of the Vendor are true and correct in every material respect, and fairly reflect the business, Concession, assets and financial position of the Vendor and the results of its operations and there are no liabilities of the Vendor, contingent or otherwise, not reflected in the Statements of the Vendor;

	
  

	
(l)

	
With respect to the Concession, there are no contractual obligations of the Vendor considered onerous by the Vendor, which have not been disclosed to the Purchaser and the Vendor has no information or knowledge of facts pertaining to the Vendor or the Concession which, if known to the Purchaser, might reasonably be expected to deter the Purchaser from completing the transactions contemplated hereby;

  

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SECTION 5

COVENANTS OF THE VENDOR

5.1           Vendor’s Covenants

 

The Vendor hereby covenants and agrees with the Purchaser that:

	
  

	
(a)

	
The Vendor has validly obtained and is duly vested with the right to Grant/Sell the Exclusive Rights in and to the tailings located on the El Diamante Concession and the Vendor has full right and authority to enter into this Agreement;

	
  

	
(b)

	
Upon request from the Purchaser and for the exclusive benefit of the Purchaser, the Vendor will take all steps as are reasonably necessary or prudent to obtain, perfect and enforce any and all rights in the Concession. The Vendor will forthwith advise the Purchaser of any new developments or modifications to the Concession and all such new developments and modifications will for all purposes be deemed to be part of the Concession covered by this Agreement; and

	
  

	
(c)

	
The Vendors and Purchaser acknowledge that it is an express condition of the Exclusive Rights Agreement contemplated herein that Vendor will receive a royalty payment of 6% of the net smelter received by the Purchaser less the recovery, refining and trucking costs and other customary operating costs associated with the production derived from the Concession.

	
  

	
(d)

	
The Vendor specifically acknowledge that the Vendor and current management of the Vendor will agree to execute such additional documentation as is required to more particularly satisfy its duties and obligations stated herein upon the reasonable request of Purchaser.

SECTION 6

CONDITIONS TO CLOSING

6.1           Purchaser's Conditions

The obligations of the Purchaser to complete the transactions contemplated hereby are subject to the following conditions (which are for the exclusive benefit of the Purchaser) having been satisfied or expressly waived in writing by the Purchaser:

	
  

	
(a)

	
Prior to the Closing Date the Purchaser shall not have become aware of any breach of any of the covenants, warranties or representations of the Vendor set forth herein.

	
  

	
(b)

	
All of the covenants and agreements of the Vendor to be observed or performed on or before the Closing Date pursuant to the terms hereof shall have been duly observed or performed; and

	
  

	
(c)

	
Such documents and other materials (including any materials requested for the Purchaser’s due diligence purposes) in form and content necessary to allow the Purchaser the Exclusive Rights to the tailings located in and on the said concession, from the Vendor to the Purchaser as Purchaser's counsel considers appropriate shall have been delivered by the Vendors to the Purchaser.

6.2           Vendor's Conditions

  

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The obligations of the Vendor to complete the transactions contemplated hereby are subject to the following conditions (which are for the exclusive benefit of the Vendor) having been satisfied or expressly waived in writing by the Vendor:

	
  

	
(a)

	
That this Agreement and all documents prepared in connection with this Agreement have been duly executed and authorized and are valid and binding on the Purchaser in accordance with their terms;

	
  

	
(b)

	
That the Purchaser has taken all action necessary to issue and release into trust the Payment Shares in accordance with all applicable provisions of the applicable legislation and the constating documents of the Purchaser and that such shares are fully paid and non-assessable and as to all other legal matters pertaining to the Purchaser and the transactions contemplated hereby as the Vendor’s counsel may reasonably require;

	
  

	
(c)

	
All consents, approvals and authorizations of the Regulatory Authorities required in connection with the transactions herein contemplated have been obtained;

	
  

	
(d)

	
Prior to or on the Closing Date the Vendors shall not have become aware of any breach of any of the warranties and representations of the Purchaser set forth herein;

	
  

	
(e)

	
All of the covenants and agreements of the Purchaser to be observed or performed on or before the Closing Date pursuant to the terms hereof shall have been duly observed or performed;

	
  

	
(f)

	
The Purchaser has delivered to the Vendors on the Closing Date all of the documents required to be delivered hereunder; and

6.3           Closing Documents

On the Closing Date the Vendor shall deliver to the Purchaser and the Purchaser shall deliver to the Vendor, the documents and other materials as more particularly set forth in Schedules “A” and “B” attached hereto and forming a part hereof.

SECTION 7

TERMINATION

7.1           Method of Termination.  This Agreement may be terminated by any Party hereto if the other Party (the “Defaulting Party”) is in material breach of any of its obligations hereunder and fails to remedy such breach within 60 days following receipt by the Defaulting Party of written notice from the non-defaulting Party advising of such breach.

7.2           Event of Default.  This Agreement will automatically terminate

(a)  if the Purchaser becomes insolvent, bankrupt or subject to the provisions of the Insolvency Act (1986), including but without limitation, if any composition, arrangement, proposal or petition under the bankruptcy laws is entered into or filed by or against it or if a receiver, receiver-manager or trustee in bankruptcy or similar officer is appointed to take charge of the Purchaser's affairs or if dissolution proceedings are commenced by or against the Purchaser or if the Purchaser goes into liquidation, either voluntarily or under an order of a court of competent jurisdiction, of if it makes a general assignment for the benefit of creditors or otherwise acknowledges its insolvency.

  

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(b)           the failure by Purchaser to deliver the Payment Shares at closing.

	
  

	
(c)

	
Both parties also agree that, should the corporation elect to dissolve, whether voluntarily or involuntarily, then the following provisions will apply:

 

 

	
  

	
(i)

	
If no funding or insufficient funding to cause the Project contemplated herein to go forward occurs as purported, then the Exclusive Rights brought forth by GIUV (Vendor) shall be returned in total and without recourse to GIUV; and

	
  

	
(ii)

	
Any and all shares brought forth as a result of this Agreement shall be returned to the Purchaser, without recourse to either party; and

	
  

	
(iii)

	
Not withstanding good faith and best efforts provisions inherent in this Agreement, each party agrees to hold the other harmless for the other’s failure to perform and further agrees to indemnify the other against all actions that may be brought as a result of its own misrepresentations.

7.3           Confidential Information.  Upon any termination of this Agreement, the Purchaser will forthwith return to the Vendor all documents, instruments, drawings, plans or other materials containing confidential information relating to the Concession or GIUV, whether such confidential material is in its possession or in the possession of any other person.  Upon any termination of this Agreement, the Purchaser will cease using the Concession. Upon any termination of this Agreement the Vendor shall return the Payment Shares to the Purchaser for cancellation and return to the Purchaser’s treasury.

SECTION 8

GENERAL

8.1           Survival of Covenants, Representations and Warranties.  The covenants, representations and warranties of the Purchaser and the Vendor contained herein or in certificates or documents delivered pursuant to or in connection with this Agreement will survive the completion of this Agreement and, notwithstanding the completion of the transactions contemplated in this Agreement, will continue in full force and effect from and after the date of this Agreement.

8.2           Indemnity to The Purchaser.  Without prejudicing any other remedy available to the Purchaser at law or in equity, the Vendor covenants and agrees on demand to indemnify and hold harmless the Purchaser from and against all losses, judgments, amounts paid in settlement of actions or claims, liabilities (whether accrued, actual, contingent or otherwise), claims, costs, deficiencies, damages, expenses (including but not limited to legal fees and disbursements on a solicitor and his own client basis), demands and injury in any manner accruing from, arising out of or with respect to or relating to any representation or warranty of the Vendor contained herein being untrue or incorrect or its failure to observe or perform any of its obligations pursuant to this Agreement or any other agreement or instrument executed and delivered by it pursuant to this Agreement.

8.3           Notices.  Every notice, request, demand, direction or other communication required or permitted to be given pursuant to this Agreement by any party to another will be deemed to be well and sufficiently given if in writing and delivered or transmitted by facsimile or email to the parties at the addresses first above written or to such other address as is specified by the particular party by notice to the others, and any such notice shall be deemed to be received on the day of such delivery.

  

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8.4           Amendment or Termination.  Except as otherwise provided herein, this Agreement may not be amended or terminated except by an instrument in writing executed by both parties hereto.

8.5           Transfer or Assignment.  This Agreement and the rights hereunder may be transferred or assigned by Purchaser without the consent of Vendor.

8.6           Further Agreements.  The Parties hereto agree that they will prepare, execute and deliver such further or other agreements as may be necessary or expedient to give effect to the transactions contemplated hereunder.

8.7           Governing Law.  This Agreement is and will be deemed to have been made in Commonwealth of the Bahamas and for all purposes will be governed exclusively by and construed and enforced in accordance with the laws prevailing in the Bahamas and the rights and remedies of the parties will be determined in accordance with those laws.

8.8           Cumulative Remedies.  The rights of the parties provided in this Agreement are cumulative and no exercise or enforcement by the parties of any right or remedy under this Agreement will preclude the exercise or enforcement by the parties of any other right or remedy under this Agreement or otherwise available to the parties at law or in equity.

8.9           Counterparts Facsimile Execution. For purposes of this Agreement, a document (or signature page thereto) signed and transmitted by facsimile machine or telecopier is to be treated as an original document.  The signature of any party thereon, for purposes hereof, is to be considered as an original signature, and the document transmitted is to be considered to have the same binding effect as an original signature on an original document.  At the request of any party, a facsimile or telecopy document is to be re-executed in original form by the parties who executed the facsimile or telecopy document.  No party may raise the use of a facsimile machine or telecopier machine as a defense to the enforcement of the Agreement or any amendment or other document executed in compliance with this Section.

8.10           Time.  Time is of the essence in the performance of each obligation under this Agreement.

8.11           Further Assurances.  The parties hereto will execute and deliver all such further documents and instruments and do all such further acts and things as any other party reasonably requests to evidence, carry out and give full effect to the terms, conditions, intent and meaning of this Agreement.

8.13           Inurement.  This Agreement will inure to the benefit of and be binding on the respective successors and permitted assignees of both parties.

It is a condition Precedent that the Purchaser shall have a 90 day due diligence period from the date of signing in which his representatives shall have full access to the concession for the purpose of taking samples for assaying and removing tailings for refining tests. 

Further, the Vendor herein grants the purchaser a one year option to purchase the aforementioned Concession on terms and conditions to be established and contracted, post the due diligence period.

  

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(Balance of page intentionally left blank.  Signature page follows)

  

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IN WITNESS WHEREOF this Agreement has been executed by the parties hereto on the day and date first above written.

 

	
Valley High Mining Company

	 	  
	
Signed, and delivered by:

	 	  
	
Andrew Telsey, President

	 	  
	  	 	  
	 s/ Andrew Telsey 	 	s/ Phillip Knight 
	
Authorized Signatory

	 	
Witness

	  	 	  
	  	 	  
	
Grupo Hemas

	 	  
	
Signed, and delivered by:

	 	  
	
Captain Hector Mora Gomez, CEO

	 	  
	
With Power of Attorney for Associates

	 	  
	  	 	  
	  	 	  
	s/ Captain Hector Mora Gomez  	 	 
	
Authorized Signatory

	 	 

  

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Schedule “A”

Legal Description

 

  

 

 

  

 

 

  

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Schedule “A1”

“Hector Mora Gomez” declares that he is legal authorized signing authority for the Mining Concession “EL DIAMANTE”, under Title Number 219074, located in the Municipality of Arteaga, State of Michoacán as it is registered in the Mining General Direction, from the Ministry of Commerce and Industrial Promotion (Secretaría de Comercio y Fomento Industrial) (today the Ministry of Economy), under the referred Title..

See attached notarized document.

  

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Schedule “B”

Payment Shares

100,000 free trading fully paid non assessable common shares of Valley High Mining Company will be place intrust with Whitehall Trust for the beneficial interest of the Vendor. The said shares will be releasable to the vendor upon Valley High Mining Company acknowledging that it has completed its due-diligence on the El Diamante concession to its satisfaction.

The vendor on receipt of the said shares herein agrees to deliver the shares to a one sell all sell pool administered by Whitehall Trust.

Acknowledged and Accepted

Grupo Hemas

	
Signed, and delivered by:

	
Captain Hector Mora Gomez CEO

With Power of Attorney for Associates

 

	 s/ Captain Hector Mora Gomez 	 	 
	
Authorized Signatory

	 	 

 

 

 

 

Page 15 of 15worthingtonexh101.htm

Exhibit 10.1

WORTHINGTON ENERGY, INC.

COMMON STOCK PURCHASE AGREEMENT

This Common Stock Purchase Agreement (the "Agreement") is made as of April 17, 2013, among Worthington Energy, Inc., a Nevada corporation (the "Company") and Charles Volk (the "Investor").

The Investor understands that the Company proposes to offer and sell to the Investor 1,000,000 shares of its Series A Preferred Stock at a purchase price of $0.05 per share.

1.           Purchase and Sale of Common Stock.

a.           The Common Stock.  Subject to the terms and conditions of this Agreement, the Investor agrees to purchase from the Company 1,000,000 shares of Company Series A Preferred Stock at a purchase price of $0.05 per share for an aggregate purchase price of $50,000.00.   The Common Stock is referred to as the “Securities”.

b.           Initial Closing.

The purchase and sale of the Securities shall take place at the offices of the Company at 220 Montgomery Street, Suite 1094, San Francisco, CA  94104 ("Closing").  At the Closing, the Company shall deliver to the Investor the Securities, which such Investor is purchasing against delivery to the Company by such Investor of cancellation of indebtedness in the ag­gregate amount of the purchase price due to the Investor for previously unpaid back salary.

2.           The Company's Representations and Warranties.  The Company represents and warrants to the Investor as follows:

a.           Organization and Standing.  The Company is a corporation duly organized and validly existing under the laws of the State of Nevada.

b.           Authorization.  The execution, delivery and perfor­mance of this Agreement by the Company has been duly authorized by all requisite corporate action, and this Agreement constitutes the legal, valid and binding obligation of the Company enforceable in accordance with its terms, subject as to enforcement of remedies to applicable bankruptcy, insolvency, reorganization or similar laws relating to or affecting the enforcement of creditors' rights.  The execution, delivery and performance of this Agreement and compli­ance with the provisions hereof by the Company does not conflict with, or result in a breach or violation of the terms, conditions or provisions of, or constitute a default (or an event with which the giving of notice or passage of time, or both could result in a default) under, or result in the creation or imposition of any lien pursuant to the terms of, the Articles of Incorporation or the Bylaws of the Company.

c.           Securities. When issued pursuant to the terms of this Agreement, the Securities will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances caused or created by the Company; provided, however, that the Securities shall be subject to restrictions on transfer under state or federal securities laws as set forth in this Agreement or otherwise required at the time a transfer is proposed.

  

  

  

3.           Representations, Warranties of Investor and Restrictions on Transfer

a.           Representations and Warranties of Investor.  The Investor represents and warrants to the Company with respect to the purchase of Securities under this Agreement as follows:

i.           This Agreement constitutes the Investor’s valid and legally binding obligation, enforceable in accordance with its terms.

ii.           The Investor is acquiring the Securities for its own account for investment purposes only and not with a view to, or for the resale in connection with, any "distribution" thereof for purposes of the Securities Act of 1933, as amended (the "Act").  The Investor understands that the Securities have not been registered under the Act or any applicable state securities laws by reason of a specific exemption therefrom that depends upon, among other things, the bona fide nature of the investment intent as expressed herein.

iii.           The Investor has discussed the Company and its plans, operations and financial condition with its officers and has received all such information as the Investor deems necessary and appropriate to enable the Investor to evaluate the financial risk inherent in making an investment in the Securities.  The Investor has received satisfactory and complete information concerning the business and financial condition of the Company in response to the Investor's inquiries.

iv.           The Investor realizes that the acquisition of the Securities will be a highly speculative investment.  The Investor is able, without impairing the Investor's financial condition, to hold the Securities for an indefinite period of time and to suffer a complete loss of the Investor's investment.  The Investor recognizes that the Company has only recently been organized and that it has a limited financial and operating history and the investment in the Company involves substantial risks.  The Investor understands all of the risks related to the acquisition of the Securities.  By virtue of the Investor's experience in evaluating and investing in private placement transactions of securities in companies similar to the Company, the Investor is capable of evaluating the merits and risks of the Investor's investment in the Company and has the capacity to protect the Investor's own interests.

v.           The Investor understands that the Securities must be held indefinitely unless subsequently registered under the Act or unless an exemption from registration is otherwise available.  Moreover, the Investor understands that the Company is under no obligation to register the Securities.  The Investor is aware of Rule 144 promulgated under the Act that permits limited resale of secur­ities purchased in a private placement subject to the satisfaction of certain conditions.  The Investor understands that the Securities will be imprinted with a legend which prohibits the transfer of the Securities unless they are registered or such registration is not required in the opinion of counsel for the Company.

 

  

  

  

 

vi. The Investor has substantial experience in evaluating and investing in securities of companies similar to the Company and acknowledges that it can protect its own interests. The Investor has such knowledge and experience in financial and business matters so it is capable of evaluating the merits and risks of its investment in the Company.  The Investor is an “accredited investors” within the meaning of Regulation D, Rule 501(a), promulgated by the Securities and Exchange Commission under the Securities Act.

 vii.           The Investor confirms that the statements made in the Confidential Prospective Purchaser Questionnaire are true on the date hereof, and acknowledges that the statements made therein have been relied upon by the Company in making its offering to Investor.  The Investor agrees to indemnify and hold harmless the Company and its respective officers, directors and stockholders, from any and all damages, losses, costs and expenses(including reasonable attorneys’ fees) that they may incur, by reason of any breach of any of the statements or representations made by Investor contained  herein or therein.

 

b.           Legends.  In addition to any legend imposed by state securities laws, each certificate representing the Securities shall be endorsed with the following legends:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

The Company need not register a transfer of Securities unless the conditions specified in the foregoing legends are satisfied.  The Company may also instruct its transfer agent not to register the transfer of any of the Securities unless the conditions specified in the foregoing legends are satisfied.

c.           Removal of Legends and Transfer Restrictions.  The legend relating to the Act endorsed on a stock certificate pursuant to paragraph 4(b) of this Agreement and the stop transfer instruc­tions with respect to such Securities shall be removed and the Company shall issue a stock certificate without such legend to the holder of such Securities if such Shares are regis­tered under the Act and a prospectus meeting the requirements of Section 10 of the Act is available, or if such holder provides to the Company an opinion of counsel for such holder of the Shares or Note reasonably satisfactory to the Company or a no-action letter or interpretive opinion of the staff of the Commission to the effect that a public sale, transfer or assignment of such Shares or Note may be made without registration and without compliance with any restric­tion such as Rule 144.  Any legend imposed by state securities laws will be removed if the state agency imposing such legend has consented to its removal.

4.           Miscellaneous.

a.           Governing Law.  This Agreement shall be governed in all respects by the laws of the State of Nevada without regard to the conflict of law provisions thereof.

b.           Survival.  The representations and warranties con­tained herein shall survive the execution and delivery of this Agreement and the sale of the Securities.

c.           Successors and Assigns.  Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.

  

  

  

 

d.           Entire Agreement.  This Agreement embodies the entire understanding and agreement between each Investor and the Company and supersedes all prior agreements and understandings relating to the subject matter hereof.

e.           Notices, etc.  All notices and other communications required or permitted hereunder shall be effective upon receipt and shall be in writing and may be delivered in person, by telecopy, electronic mail, overnight delivery service or U.S. mail, addressed (a) if to an Investor, at his or her address set forth opposite such Investors name on the last page of this Agreement, or at such other address as such Investor shall have furnished the Company in writing, or (b) if to the Company, at the address of its principal office, or at such other address as the Company shall have furnished to the Investor in writing.

f.           Titles and Subtitles.  The titles of the paragraphs and subparagraphs of this Agreement are for convenience of refer­ence only and are not to be considered in construing this Agreement.

g.           Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

h.           Amendments and Waivers.  Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the holders of a majority of the Securities.  Any amendment or waiver effected in accordance with this Section shall be binding upon each holder of any securit­ies pur­chased under this Agreement at the time outstanding (including securities into which such securities are convertible), each future holder of all such securities, and the Company.

  

  

  

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the day and year first written above.

                    

 

	 COMPANY: 	WORTHINGTON ENERGY, INC.
	  	
a Nevada corporation

	  	  
	  	
By:

	  	Charles Volk, CEO

 

	
INVESTOR:

	  
	  	  
	
$  50,000

	  
	
Amount of Investment

	  
	  	
CHALES VOLK

	  	  
	  	
By: _______________________

  

  

  

 

CONFIDENTIAL PURCHASER QUESTIONNAIRE

THIS QUESTIONNAIRE MUST BE ANSWERED FULLY AND RETURNED ALONG WITH YOUR COMPLETED SUBSCRIPTION AGREEMENT IN CONNECTION WITH YOUR PROSPECTIVE PURCHASE OF SECURITIES FROM WORTHINGTON ENERGY, INC. (THE “COMPANY”).

THE INFORMATION SUPPLIED IN THIS QUESTIONNAIRE WILL BE HELD IN STRICT CONFIDENCE.  NO INFORMATION WILL BE DISCLOSED EXCEPT TO THE EXTENT THAT SUCH DISCLOSURE IS REQUIRED BY LAW OR REGULATION, OTHERWISE DEMANDED BY PROPER LEGAL PROCESS OR IN LITIGATION INVOLVING THE COMPANY AND ITS CONTROLLING PERSONS.

Capitalized terms used herein without definition shall have the respective meanings given such terms as set forth in the Subscription Agreement between Worthington Energy, Inc. and the subscriber signatory thereto (the “Subscription Agreement”).

(1)           The undersigned represents and warrants that he, she or it comes within at least one category marked below, and that for any category marked, he, she or it has truthfully set forth, where applicable, the factual basis or reason the undersigned comes within that category.  The undersigned agrees to furnish any additional information which the Company deems necessary in order to verify the answers set forth below.

	
Category A  

	
The undersigned is an individual (not a partnership, corporation, etc.) whose individual net worth, or joint net worth with his or her spouse, presently exceeds $1,000,000.

 

Explanation. In calculating net worth you may include equity in personal property and may include real estate, provided, however, you can not include your principal residence), cash, short-term investments, stock and securities. Equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property.

 

	
Category B  

	
The undersigned is an individual (not a partnership, corporation, etc.) who had an income in excess of $200,000 in each of the two most recent years, or joint income with his or her spouse in excess of $300,000 in each of those years (in each case including foreign income, tax exempt income and full amount of capital gains and losses but excluding any income of other family members and any unrealized capital appreciation) and has a reasonable expectation of reaching the same income level in the current year.

	
Category C  

	
The undersigned is a director or executive officer of the Company which is issuing and selling the Securities.

	
Category D  

	
The undersigned is a bank, as defined in Section 3(a)(2) of the Securities Act of 1933, as amended (the “Act”); a savings and loan associa­tion or other institution as defined in Section 3(a)(5)(A) of the Act, whether acting in its individual or fiduciary capacity; any insurance company as defined in Section 2(13) of the Act; any investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act; any Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment advisor, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors (describe entity).

  

  

  

 

	
Category E  

	
The undersigned is a private business development company as defined in section 202(a) (22) of the Investment Advisors Act of 1940 (describe entity)

 

	
Category F  

	
The undersigned is either a corporation, partnership, Massachusetts business trust, or non-profit organization within the meaning of Section 501(c)(3) of the Internal Revenue Code, in each case not formed for the specific purpose of acquiring the Securities and with total assets in excess of $5,000,000. (describe entity)

 

	
Category G  

	
The undersigned is a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, where the purchase is directed by a “sophisticated investor” as defined in Regulation  506(b)(2)(ii) under the Act.

 

	
Category H  

	
The undersigned is an entity (other than a trust) in which all of the equity owners are “accredited investors” within one or more of the above categories.  If relying upon this Category alone, each equity owner must complete a separate copy of this Purchaser Questionnaire.  (describe entity)

 

The undersigned agrees that the undersigned will notify the Company at any time on or prior to the applicable closing in the event that the representations and warranties in this Purchaser Questionnaire shall cease to be true, accurate and complete.

 

(2)           Suitability (please answer each question)

	
  

	
(a)

	
For an individual, please describe your current employment, including the company by which you are employed and its principal business:

 

	
  

	
(b)

	
For an individual, please describe any college or graduate degrees held by you:

 

	
  

	
(c)

	
For all subscribers, please list types of prior investments:

  

  

  

	
  

	
(d)

	
For all subscribers, please state whether you have you participated in other private placements before:

	
YES

	  	  	
NO

	  

	
  

	
(e)

	
If your answer to question (d) above was “YES”, please indicate frequency of such prior participation in private placements of:

	  	

Public

Companies

	

Private

Companies

	
Frequently

	  	  
	
Occasionally

	  	  
	
Never

	  	  

	
  

	
(f)

	
For individuals, do you expect your current level of income to significantly decrease in the foreseeable future?

 

	
YES

	 	 	
NO

	 

 

	
  

	
(g)

	
For trust, corporate, partnership and other institutional subscribers, do you expect your total assets to significantly decrease in the foreseeable future?

 

	
YES

	 	 	
NO

	 

 

	
  

	
(h)

	
For all subscribers, do you have any other investments or contingent liabilities which you reasonably anticipate could cause you to need sudden cash requirements in excess of cash readily available to you?

 

	
YES

	 	 	
NO

	 

 

	
  

	
(i)

	
For all subscribers, are you familiar with the risk aspects and the non-liquidity of investments such as the Securities for which you seek to purchase?

	
YES

	 	 	
NO

	 

 

	
  

	
(j)

	
For all subscribers, do you understand that there is no guarantee of financial return on this investment and that you run the risk of losing your entire investment?

 

	
YES

	 	 	
NO

	 

  

  

  

 

(3)           Manner in which title is to be held: (circle one)

	
(a)

	
Individual Ownership

	
(b)

	
Community Property

	
(c)

	
Joint Tenant with Right of Survivorship (both parties must sign)

	
(d)

	
Partnership

	
(e)

	
Tenants in Common

	
(f)

	
Company

	
(g)

	
Trust

	
(h)

	
Other

 

(4)           FINRA Affiliation.

Are you affiliated or associated with an FINRA member firm (please check one): 
  

 

	
YES

	 	 	
NO

	 

If Yes, please describe how you are affiliated/associated:

_________________________________________________________

_________________________________________________________

_________________________________________________________

*If subscriber is a Registered Representative with an FINRA member firm, have the following acknowledgment signed by the appropriate party:

The undersigned FINRA member firm acknowledges receipt of the notice required by the FINRA Conduct Rules.

_________________________________

Name of FINRA Member Firm

By: ______________________________

Authorized Officer

Date: ____________________________

(5) For Trust Subscribers

A. Certain trusts generally may not qualify as accredited investors except under special circumstances.  Therefore, if you intend to purchase the securities of the Company in whole or in part through a trust, please answer each of the following questions.

Is the trustee of the trust a national or state bank that is acting in its fiduciary capacity in making the investment on behalf of the trust?

Yes o                                         No o

  

  

  

 

Does this investment in the Company exceed 10% of the trust assets?

Yes o                                         No o

B. If the trust is a revocable trust, please complete Question 1 below.  If the trust is an irrevocable trust, please complete Question 2 below.

 

1.           REVOCABLE TRUSTS

Can the trust be amended or revoked at any time by its grantors:

Yes o                                         No o

 

If yes, please answer the following questions relating to each grantor (please add sheets if necessary):

Grantor Name: _________________________

Net worth of grantor exceeds $1,000,000 (including spouse, if applicable, real estate (excluding personal residence), automobiles, cash, short-term investments, stock and securities.  Equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property) ?

Yes o                                         No o

OR

Income (exclusive of any income attributable to spouse) was in excess of $200,000 for 2010 and 2011 and is reasonably expected to be in excess of $200,000 for 2012?

Yes o                                         No o

 
OR

Income (including income attributable to spouse) was in excess of $300,000 for 2010 and 2011 and is reasonably expected to be in excess of $300,000 for 2012?

Yes o                                         No o

  

  

  

 

2.           IRREVOCABLE TRUSTS

If the trust is an irrevocable trust, please answer the following questions:

Please provide the name of each trustee:

Trustee Name: ________________________________________

Trustee Name: ________________________________________

Does the trust have assets greater than $5 million?

Yes o                                         No o

Do you have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Company?

Yes o                                         No o

	
Indicate how often you invest in:

	  	  	  
	  	  	  	  
	
Marketable Securities

	  	  	  
	  	  	  	  
	
Often o

	
Occasionally o

	
Seldom o

	
Never o

	  	  	  	  
	  	  	  	  
	
Restricted Securities

	  	  	  
	  	  	  	  
	
Often o

	
Occasionally o

	
Seldom o

	
Never o

	  	  	  	  
	
Venture Capital Companies

	  	  	  
	  	  	  	  
	
Often o

	
Occasionally o

	
Seldom o

	
Never o

This completes the questions applicable to Trust Investors.  Please sign below.

[Remainder of page intentionally left blank]

 

  

  

  

 

The undersigned has been informed of the significance to the Company of the foregoing representations and answers contained in this Confidential Purchaser Questionnaire and such representations and answers have been provided with the understanding that the Company will rely on them.

	
 

	
Individual

	  	  
	
Date:

	  
	  	
Name of Individual

	  	
(Please type or print)

	  	  
	  	
_______________________________

	  	
Signature of Individual

	  	  
	  	  
	  	
_______________________________

	  	
Name of Joint Owner

	  	
(Please type or print)

	  	  
	  	  
	  	
_______________________________

	  	
Signature (Joint Owner)

	  	  
	  	  
	  	
Partnership, Corporation or

	  	
Other Entity

	  	  
	  	  
	
Date:

	  
	  	
Print or Type Entity Name

	  	  
	  	 
By: Name:_______________________

	  	Print or Type Name
	  	  
	  	
 
Title: ___________________________

	  	  
	  	  
	  	
Signature

	  	  
	 	Title: ____________________________
	  	  
	  	  
	  	
Signature

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