Document:

EX10-1

Exhibit 10.1

__________

 

 

 

 

 

 

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

__________

 

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;

 

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

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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.

 

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.

- 3 -

 

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. 

 

IN WITNESS WHEREOF this Agreement has been executed by the Parties effective as of the Effective Date first above written.

 

	
MAINLAND RESOURCES, INC.

By: "William D. Thomas"

     Name:  William D. Thomas

     Title: Chief Financial Officer
	
AMERICAN EXPLORATION CORPORATION

By: "Steven Harding"

     Name: Steven Harding

     Title:  President and CEO

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
	 	 

__________ex10-10.htm

AMENDMENT NO. 2

TO

SPLIT-DOLLAR AGREEMENT

This Amendment No. 2, dated as of June 15, 2011 (this “Amendment”), amends the Split-Dollar Agreement between Prudential Savings Bank (formerly known as “Prudential Savings Bank, PaSA”), a Pennsylvania-chartered stock savings bank (the “Company”), and Joseph W. Packer, Jr. (the “Director”) originally dated June 22, 1994 (the “Agreement”), as amended on November 19, 2008 pursuant to Amendment No. 1.

WITNESSETH:

WHEREAS, Section 7 of the Agreement permits either party, with the consent of the other party, to terminate the Agreement by giving written notice of termination to the other party;

WHEREAS, upon any termination of the original Agreement, the Director had the right to purchase the life insurance policy from the Company and to thereafter obtain the cash surrender value of the policy;

WHEREAS, as a result of the Director’s prior right to obtain the cash surrender value of the policy upon a termination of the Agreement, the original Agreement did not satisfy the exemption for death benefit only plans under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”);

WHEREAS, the parties amended the Agreement in Amendment No. 1 to grandfather the Agreement for purposes of Section 409A of the Code, with the amount of the grandfathered cash surrender value to be determined in accordance with the “proportional allocation method” set forth in Notice 2007-34 issued by the Internal Revenue Service;

WHEREAS, Amendment No. 1 provided that the cash surrender value that the Director would receive in the event of a termination of the Agreement and a surrender of the policy would be reduced by the Non-Grandfathered Cash Surrender Value (as such term is defined in the Agreement) of the policy;

WHEREAS, Amendment No. 1 inadvertently amended Section 6(a) of the Agreement to provide that the death benefits payable to the beneficiaries of the Director and his spouse would also be reduced by the Non-Grandfathered Cash Surrender Value, which was not intended because (i) death benefits are exempt from Section 409A of the Code and (ii) the amount of the cash surrender value is irrelevant in determining the amount of the death benefits;

WHEREAS, the Company desires to correct the inadvertent amendment to Section 6(a) of the Agreement by simply revising such section so that it provides the benefits provided by such section prior to the adoption of Amendment No. 1;

 

  

  

  

WHEREAS, the Agreement as amended is currently deemed to be grandfathered under Treasury Regulation §1.61-22 and under Section 409A of the Code, which grandfathering treatment would normally be lost in the event of a modification of the Agreement which materially enhances the benefits thereunder;

WHEREAS, the parties hereto believe that this Amendment does not materially enhance the value of the benefits to the Director under the Agreement, since it simply corrects an inadvertent error and the death benefits to the beneficiaries of the Director and his spouse will be the same as they would have been in the absence of the inadvertent error in Amendment No. 1;

WHEREAS, Section 10 of the Agreement permits the parties to amend the Agreement by a written instrument signed by each of the parties and attached to the Agreement; and

WHEREAS, the parties do not expect or intend to make any material modifications to the Agreement which would result in the grandfathering treatment being lost under either Treasury Regulation §1.61-22 or Section 409A of the Code.

NOW, THEREFORE, in consideration of the mutual agreements herein set forth and such other consideration the sufficiency of which is hereby acknowledged, the parties hereby amend the Agreement as follows:

1.              Amendment to Section 6(a) of the Agreement.  Section 6(a) of the Agreement is hereby amended to read in its entirety as follows:

“(a)           Death of Director and Spouse – At the death of both the Director and his spouse, the Company shall be entitled to an amount equal to the Aggregate Premiums Paid (as defined below) by the Company at the time of such death.”

2.           Other Provisions of the Agreement.  Except as expressly set forth herein, this Amendment shall not by implication or otherwise alter, modify, amend or in any way affect any of the other terms or provisions of the Agreement, all of which are ratified and affirmed in all respects and shall continue in full force and effect and shall be otherwise unaffected.

3.           Effectiveness.  This Amendment shall be deemed effective as of the date first written above, as if executed on such date; provided, however, that if it is subsequently determined that this Amendment results in the grandfathering treatment being lost under either Treasury Regulation §1.61-22 or Section 409A of the Code, then this Amendment shall be deemed null and void.

4.           Governing Law.  Except to the extent that federal law is applicable, this Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania.

 

  

2

  

 

IN WITNESS WHEREOF, the Company and the Director have duly executed this Amendment as of the day and year first written above.

	  	  	  	  	  	  	  	  
	Attest:	  	
PRUDENTIAL SAVINGS BANK

	  	  	  	  
	
By:

	
/s/Joseph R. Corrato

	  	
By:

	
/s/Thomas A. Vento

	
Name:

	
  Joseph R. Corrato

	  	
Name:

	
Thomas A. Vento

	
Title:

	
Executive Vice President/CFO

	  	
Title:

	
   President and Chief Executive Officer

	  	  	  	  
	
Witness:

	  	
DIRECTOR

	 	 	 
	
By:

	
s/Joseph R. Corrato

	  	
By:

	
/s/Joseph W. Packer, Jr.

	
Name:

	
  Joseph R. Corrato

	  	
Name:

	
Joseph W. Packer, Jr.

	
Title:

	
Executive Vice President/CFO

	  	
 

	  

 

 

 

3

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