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 PAN AMERICAN GOLDFIELDS LTD.
 DEBT ASSUMPTION AND RELEASE AGREEMENT
 

 This DEBT ASSUMPTION AND RELEASE AGREEMENT (this “Agreement”) is made as of the __th day of August 2011 (the “Assignment Date”), by and between Pan American Goldfields Ltd., a corporation organized under the laws of Delaware (the “Transferor”), Minera Rio Tinto, S.A. de C.V., an entity organized under the laws of the United Mexican States (“MRT”), Marje Minerals S.A., an entity organized under the laws of the United Mexican States (“Transferee”), Mario Ayub (“Mr. Ayub”) and Robert Knight (“Mr. Knight” and along with MRT and Mr. Ayub, the “Releasing Parties”).
 RECITALS
 A.
 As of the date of this Agreement, the Releasing Parties claim that Transferor owes the debt outstanding set forth on Schedule A attached hereto (the “Outstanding Debt”).
 B.
 Transferor wishes to assign all of its rights and obligations with respect to the Outstanding Debt to Transferee, and Transferee wishes to accept such rights and assume such obligations, all as set forth below (the “Assignment”).
 C.
 In consideration for the Assignment and the assumption of the debts and obligations of the Transferee, Transferor is issuing 3,333,333 shares of Transferor’s common stock (the “Shares”) pursuant to a Stock Purchase Agreement, dated as of the date hereof, by and among the Transferor and Transferee (“Purchase Agreement”).
 D.
 Transferor, Transferee and MRT are parties to the Amended and Restated Development Agreement, dated as of the date hereof (the “Development Agreement”) which, among other things, restructures the economic interests of the parties with respect to the Property (as defined in the Development Agreement).
 NOW, THEREFORE, in consideration of the recitals and the mutual covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
 1.
 Assignment.
 (a)
 The Transferor hereby irrevocably sells and assigns to the Transferee, effective as of the Assignment Date, all of its liabilities, obligations and commitments with respect to the Outstanding Debt.  On and after the Assignment Date, the Transferee shall have the same rights, duties and obligations as the Transferor had, as a borrower, and the Transferor shall be irrevocably released from its obligations, liabilities and responsibilities with respect to the Outstanding Debt.  All payments of interest, fees and other amounts or past due monies owed by Transferor (including but not limited to legal expenses incurred by Transferor) in respect of the Outstanding Debt shall be paid to the Releasing Parties by Transferee.  
  
  

 
 (b)
 Transferor does not make any representation or warranty of any kind to the Releasing Parties  and, in particular, the financial condition or creditworthiness of the Transferee o Transferor.
 2.
 Assumption and Agreement to be Bound.  Transferee hereby accepts, effective as of the Assignment Date, the assignment of all of Transferor’s liabilities, obligations and commitments with respect to the Outstanding Debt, and assumes and agrees to perform fully all of the obligations of the Transferor with respect to the Outstanding Debt.
 3.
 Representations and Warranties.  
 (a)
 The Transferee hereby represents and warrants to the Transferor that as of the Assignment Date:
 (i)
 The Transferee is duly authorized and qualified to purchase and accept the assignment of the Outstanding Debt and assume the duties and obligations with respect to the Outstanding Debt.
 (ii)
 This Agreement is valid and binding on the Transferee and enforceable against the Transferee in accordance with its terms.
 (b)
 The Releasing Parties each hereby represent and warrant to the Transferor that, as of the Assignment Date, the Outstanding Debt constitutes all of the liabilities owed to them by the Transferor immediately prior to the execution of this Agreement. 
 4.
 Net Cash Flow Interests.  In consideration for entering into the Assignment, Transferor shall pay to an entity or persons designated by Transferee fifty percent (50%) of the  Net Cash Flow (as Defined in the Development Agreement) otherwise  allocable to the Transferor until the earlier of (i) December 31, 2012, or (ii) the date the Transferee has received Net Cash Flow from Transferor in an amount equal to the aggregate amount of the Outstanding Debt.
 5.
 Conditions.  This Agreement is conditioned and contingent upon Transferor and Transferee entering into the Purchase Agreement. 
 6.
 Release by Releasing Parties.  Execution of this Agreement will automatically, by operation of this Agreement and without any further action on the part of the parties hereto, effect a release and discharge by the Releasing Parties and their affiliates and past, present and future officers, directors, shareholders, employees, agents, successors and assigns from all manner of action, cause and causes of action, suits, debts, sums of money, accounts, covenants, controversies, agreements, promises, damages, judgments, executions, costs, expenses, rights, claims or demands whatsoever, at law or in equity, existing at the date thereof, at any time before the date thereof, or thereafter arising, both anticipated and unanticipated, known and unknown, contingent and non-contingent, liquidated and non-liquidated, that Releasing Parties have had, now has, then has or may have against the Transferor or its affiliates or past, present or future officers, directors, shareholders, employees, agents, successors or assigns by reason of any cause or thing, arising or to arise, out of the Outstanding Debt and any and all agreements, purchase orders, invoices or other arrangements, written or oral, with respect to the relationship between the Transferor and the Releasing Parties and concerning the Outstanding Debt.  For purposes herein, “Releasing Parties” shall be deemed to include any affiliate of the Releasing Parties.
  

 
 7.
 Waiver.  The Releasing Parties hereby irrevocably waive their rights under any applicable statute, rule, regulation, legal principle or legal doctrine that provides that a general release does not extend to claims which a releasing party does not know or suspect to exist in its favor at the time of executing such release, which if known by the releasing party would have materially affected its settlement with the released party.
 

 8.
 GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK (REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE NEW YORK PRINCIPLES OF CONFLICTS OF LAW) AS TO ALL MATTERS, INCLUDING, WITHOUT LIMITATION, MATTERS OF VALIDITY, CONSTRUCTION, EFFECT, PERFORMANCE AND REMEDIES.
 9.
 Miscellaneous.
 (a)
 Headings.  Article and Section headings have been inserted in this Agreement as a matter of convenience for reference only and it is agreed that such article and section headings are not a part of this Agreement and shall not be used in the interpretation of any provision of this Agreement.
 (b)
 Entire Agreement.  This Agreement embodies the entire agreement and understanding between the parties hereto and supersedes all prior agreements and understandings between the parties relating to the subject matter hereof.
 (c)
 Further Assurances.  Each of the Transferor and the Transferee hereby agrees to execute and deliver such other instruments, and take such other action, as any party may reasonably request in furtherance of the transactions contemplated by this Agreement.
 (d)
 Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties hereto, their respective successors and assigns.  This Agreement may not be assigned without the consent of the other parties hereto; provided however, Transferee may assign this Agreement to a wholly-owned subsidiary.
 (e)
 Counterparts.  This Agreement may be executed in counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
 [SIGNATURE PAGES FOLLOW]
  
  
  
  
 

  

 
  
 
 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written.

 	 	
	  
  
  
  
 TRANSFEROR:
	  
  
  
  
 PAN AMERICAN GOLDFIELDS LTD.

	  
	  

	  
	  

	  
	 By:       "Neil Maedel"

	  
	  

	  
	 Name:     Neil Maedel

	  
	  

	  
	 Title:        Chairman

  

 	 	
	 TRANSFEREE:
	 MARJE MINERALS S.A.

	  
	  

	  
	  

	  
	 By:     "Mario Ayub"

	  
	  

	  
	 Name:   Mario Ayub

	  
	  

	  
	 Title:     President

	  
	  

  

 	 	
	 RELEASING PARTIES:
	 
"Mario Ayub"

	  
	 Mario Ayub

	  
	  

	  
	 

 "Robert Knight"

	  
	 Robert Knight

	  
	  

	  
	 MINERA RIO TINTO, S.A. DE C.V.

	  
	  

	  
	  

	  
	 By:       "Mario Ayub"

	  
	  

	  
	 Name:   Mario Ayub

	  
	  

	  
	 Title:      President

  

 

  
  

 
  

 

 Schedule A
 

 OUTSTANDING DEBT SCHEDULEConverted by EDGARwiz

  

 

 PAN AMERICAN GOLDFIELDS, INC.
 
ACKNOWLEDGEMENT AND AGREEMENT
 

 This Acknowledgement and Agreement, dated August __, 2011 (this “Acknowledgement and Agreement”), is entered into by and among Pan American Goldfields Ltd., a Delaware corporation (the “Company”), Sunburst Mining de Mexico S.A. de C.V., an entity organized under the laws of the United Mexican States and a wholly owned subsidiary of Pan American (“Sunburst”), Minera Rio Tinto, S.A. de C.V., an entity organized under the laws of the United Mexican States (“MRT”) and Corporativo Minero, S.A. De C.V., an entity organized under the laws of the United Mexican States (“Corporativo Minero”).
 

 RECITALS
 

 WHEREAS, Corporativo Minero granted certain mining concessions (the “License”) to MRT with respect to 822 hectacres of property located in the Baja Tarahumara in Cieneguita Lluvia De Oro, an area of canyons in the Municipality of Urique, in southwest Chihuahua, Mexico (the “Property”).
 WHEREAS, MRT assigned the License to Sunburst. 
 WHEREAS, Sunburst currently owes $[________] (the “Outstanding Amount”) to Corporativo Minero in consideration for the License in addition to future monthly payments to be made by Sunburst to Corporative Minero in respect of the License (the “Future Payments”, and together with the Outstanding Amount, the “License Payments”).
 WHEREAS, the Company, MRT and Sunburst are parties to the Amended and Restated Development Agreement, dated as of the date hereof (the “Development Agreement”) which, among other things, restructures the economic interests of the parties with respect to the Property.
 WHEREAS, the Company, MRT and Corporativo Minero seek to amend the License Payments as set forth herein.
 AGREEMENT
 

 NOW THEREFORE, in consideration of the mutual promises and agreements of the parties herein, and for other valuable consideration, the sufficiency of which is hereby acknowledged and confirmed, it is agreed as follows:
 

 1.
 Acknowledgements by the Parties.  
 

 (a)
 Each party agrees that subsequent to the date hereof, the terms of the Future Payments shall be amended such that Corporativo Minero shall be entitled to a monthly payment of $30,000 (the “Monthly Payments”), payable on the first day of each month, in lieu of any Future Payments to be made by Sunburst in respect of the License, until the earlier of (i) an aggregate amount of [        ] has been paid by Sunburst to Corporativo Minero, or (ii) [DATE].
  
 1
  

  

 (b)
 Each party hereby acknowledges and agrees that effective on the date hereof, Sunburst shall assign, and MRT shall assume, all of the liabilities, duties and obligations in respect of the License Payments (including the Outstanding Amount) from the date hereof through the earlier of (i) completion of First 15 Meters of Production (as defined in the Development Agreement), or (ii) December 31, 2012 (such date, the “Payment Change Date”).  Any such amounts assumed by MRT shall be paid out of the Net Cash Flow Interests (as defined in the Development Agreement) allocable to MRT from First 15 Meters of Production.
 

 (c)
 On the Payment Change Date, any amounts then owed to Corporative Minero in respect of the License Payments shall be made to Corporativo Minero by MRT and the Company on a pro rata basis in accordance with their Ownership Interests (as defined in the Development Agreement).  Following the Payment Change Date, any Monthly Payments shall be made by MRT and the Company on a pro rata basis in accordance with their respective Ownership Interests.
 

 (d)
 In the event either the Company or MRT (“Defaulting Party”) fails to pay their respective amounts owed to Corporativo Minero in accordance with the terms hereof (the “Funding Default”), the other Party (“Non-Defaulting Party”) may serve upon the Defaulting Party a written notice specifying the nature of the default (“Default Notice”). If the Defaulting Party does not, within thirty (30) days after it has received the Default Notice (“Grace Period”) fully cure the Funding Default, the Non-Defaulting Party may, at its sole and exclusive option and without prejudice to any other rights and remedies available to it, elect by written Notice to the Defaulting Party (“Default Remedy Notice”) to make such payment as required to cure the Funding Default of the Defaulting Party (“Default Cure Payment”) and require that the Ownership Interest of the Defaulting Party be diluted by one percent (1%) for every $100,000 which the Defaulting Party failed to pay to Corporativo Minero pursuant to the terms of this Acknowledgement and Agreement (the “Dilution”).  For avoidance of doubt, if a Defaulting Party failed to make a payment to Corporativo Minero in the amount of $150,000 when due, upon such payment by the Non-Defaulting Party in accordance with the terms herein, the Defaulting Party shall have its Ownership Interest decreased by one and a half percent (1.5%) (the “Diluted Interest”), and the Non-Defaulting Party shall have its Ownership Interest correspondingly increased by one and a half percent (1.5%).  
 

 2.
 The provisions of this Agreement shall be binding upon and inure to the benefit of parties and their respective successors and assigns.
  
 2
  

  

 3.
 Each of the parties hereto shall execute and deliver all additional documents, agreements and instruments and shall do any and all acts and things reasonably requested by the Company or any other parties hereto in connection with the performance of its obligations undertaken in this Acknowledgement and Agreement, including without limitation, taking all actions required by applicable law to transfer the ownership interests in accordance with the terms of this Agreement.
 

 4.
 This Agreement may be executed in any number of counterparts (including by facsimile or other electronic transmission), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  It shall be governed by and construed in accordance with the laws of the State of California, without giving effect to provisions regarding conflicts of law.  Any action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement may be brought against any of the parties in the United States District Court for the Southern District of California or the state courts located in San Diego, California, and each of the parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein.  Process in any action or proceeding referred to in the preceding sentence may be served on any party anywhere in the world. Each of the parties hereto irrevocably waives any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. 
 

 5.
 In any action or proceeding brought to enforce any provision of this Agreement or where any provision hereof is validly asserted as a defense, the successful party shall, to the extent permitted by applicable law, be entitled to recover reasonable attorneys’ fees in addition to any other available remedy.
 

 [Signature Page to Follow]
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 IN WITNESS WHEREOF, each of the parties has caused this Acknowledgment of Agreement to be executed on its behalf, as of the date set forth above.
 

 	 	
	 PAN AMERICAN GOLDFIELDS LTD. 
  

	 By:      "Neil Maedel"

	 

 Name:  Neil Maedel

	 

 Title:     Chairman

 

 	
	 SUNBURST MINING DE MEXICO S.A. DE C.V.
 

	 By:       "Manuel Flores"

	 

 Name:  Manuel Flores

	 

 Title:    Secretary

  
 	 	
	 MINERA RIO TINTO S.A. DE C.V.
  

	 By:        "Mario Ayub"

	 

 Name:    Mario Ayub

	 

 Title:n     President

  
  
 	
	 CORPORATIVO MINERO S.A. DE C.V.
 

	 By:        "Jose Conrado Terrazas"

	 

 Name:    Jose Conrado Terrazas

	 

 Title:      President

 

 

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