Document:

ex10_1stockpurchase.htm

 

Exhibit 10.1

STOCK PURCHASE AGREEMENT

BETWEEN

ALTO GROUP HOLDINGS, INC.

AND

__________________

January 24, 2011

 

 

 

 

 

 

 

 

 

 

  

  

  

 

 

 

STOCK PURCHASE AGREEMENT

 

 

This Stock Purchase Agreement (this "Agreement") is entered into as of the 24th day of January, 2011, by and between Alto Group Holdings, Inc., a Nevada corporation ("Alto"), and _____________, a resident of the State of Utah ("Seller"). Alto and Seller are referred to collectively herein as the "Parties."

 

Seller owns all of the outstanding membership units of Liberty American, LLC, a Utah limited liability company ("Liberty").

 

This Agreement contemplates a transaction in which Alto will purchase from Seller, and Seller will sell to Alto, all of the outstanding membership units of Liberty in return for common stock of Alto.

 

Now, therefore, in consideration of the premises and the mutual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the Parties agree as follows.

 

1.  Definitions. 

 

"Accredited Investor" has the meaning set forth in Regulation D promulgated under the Securities Act.

 

"Adverse Consequences" means all actions, suits, proceedings, hearings, investigations, charges, complaints, claims, demands, injunctions, judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid in settlement, Liabilities, obligations, Taxes, liens, losses, expenses, and fees, including court costs and reasonable attorneys' fees and expenses.

 

"Affiliate" shall mean, with respect to any Party hereto, any Person who controls, is controlled by, or is under common control, with such Party.

 

"Alto" has the meaning set forth in the preface above.

 

"Alto Shares" means the shares of common stock of Alto, par value $0.00001 per share.

 

"Basis" means any past or present fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act, or transaction that forms or could form the basis for any specified consequence.

 

"Closing" has the meaning set forth in §2(c) below.

 

"Closing Date" has the meaning set forth in §2(c) below.

 

"Confidential Information" means any information concerning the businesses and affairs of Alto that is not already generally available to the public.

 

"Financial Statements" means, collectively, the income statement, balance sheet, and cash flow statement of Liberty as at and for the years ended December 31, 2009 and 2010.

 

"Indemnified Party" has the meaning set forth in §7(d) below.

 

"Indemnifying Party" has the meaning set forth in §7(d) below.

 

"Intellectual Property" means all of the following in any jurisdiction throughout the world: (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents, patent applications, and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations thereof, (b) all trademarks, service marks, trade dress, logos, slogans, trade names, corporate names, Internet domain names, and rights in telephone numbers, together with all translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations, and renewals in

 

  

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connection therewith, (c) all copyrightable works, all copyrights, and all applications, registrations, and renewals in connection therewith, (d) all mask works and all applications, registrations, and renewals in connection therewith, (e) all trade secrets and confidential business information (including ideas, research and development, know-how, formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals), (f) all computer software (including source code, executable code, data, databases, and related documentation), (g) all advertising and promotional materials, (h) all other proprietary rights, and (i) all copies and tangible embodiments thereof (in whatever form or medium).

 

"Knowledge" means actual knowledge after reasonable investigation.

 

"Liability" means any liability or obligation of whatever kind or nature (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any liability for Taxes.

 

"Liberty" has the meaning set forth in the preface above.

 

"Liberty Share" means any of the membership units of Liberty.

 

"Lien" means any mortgage, pledge, lien, encumbrance, charge, or other security interest.

 

"Material Adverse Effect" or "Material Adverse Change" means any effect or change that would be materially adverse to the business, assets, condition (financial or otherwise), operating results, operations, or business prospects of Liberty or on the ability of Seller to consummate timely the transactions contemplated hereby (regardless of whether or not such adverse effect or change can be or has been cured at any time or whether Alto has knowledge of such effect or change on the date hereof), including the taking of any action contemplated by this Agreement and the other agreements contemplated hereby.

 

"Operator Agreement" means that certain Operator Agreement entered into between Liberty and Remediaciones Ambientales de Mexico Ramp, S.A. de C.V., a true and correct copy of which has been provided to Alto prior to the Closing, providing for the right of Liberty to operate and develop a mining interest known as the La Cienega mining concession in Northern Sonora, Mexico.

 

"Ordinary Course of Business" means the ordinary course of business consistent with past custom and practice (including with respect to quantity and frequency).

 

"Party" has the meaning set forth in the preface above.

 

"Person" means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, any other business entity, or a governmental entity (or any department, agency, or political subdivision thereof).

 

"Purchase Price" has the meaning set forth in §2(b) below.

 

"Securities Act" means the Securities Act of 1933, as amended.

 

"Seller" has the meaning set forth in the preface above.

 

"Subsidiary" means, with respect to any Person, any corporation, limited liability company, partnership, association, or other business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof or (ii) if a limited liability company, partnership, association, or other business entity (other than a corporation), a majority of partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more Subsidiaries of that Person or a combination thereof and for this purpose, a Person or Persons own a majority ownership interest in such a business entity (other than a corporation) if such Person or Persons shall be allocated a majority of such business entity's gains or losses or shall be or control any managing director or general partner of such

 

  

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business entity (other than a corporation). The term "Subsidiary" shall include all Subsidiaries of such Subsidiary.

 

"Tax" or "Taxes" means any federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under §59A of the Internal Revenue Code of 1986, as amended), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not and including any obligations to indemnify or otherwise assume or succeed to the Tax liability of any other Person.

 

"Tax Return" means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

 

"Third Party Claim" has the meaning set forth in §7(d) below.

 

2.   Purchase and Sale of Liberty Shares.

 

(a)       Basic Transaction.  On and subject to the terms and conditions of this Agreement, Alto hereby purchases from Seller, and Seller hereby sells to Alto, all of her Liberty Shares for the consideration specified below in this §2.

 

(b)       Issuance of Alto Shares. Alto agrees to issue to Seller Ten Million (10,000,000) Alto Shares (the "Purchase Price") within thirty (30) days of the Closing Date.

 

(c)  Closing.  The closing of the transactions contemplated by this Agreement (the "Closing") shall take place upon execution of this Agreement or such other date as Alto and Seller may mutually determine (the "Closing Date").

 

(d)      Deliveries at Closing.  At the Closing, (i) Seller will deliver to Alto the various certificates, instruments, and documents referred to in §6(a) below, (ii) Alto will deliver to Seller the various certificates, instruments, and documents referred to in §6(b) below, (iii) Seller will deliver to Alto stock certificates representing all of her Liberty Shares, endorsed in blank or accompanied by duly executed assignment documents, and (iv) Alto will deliver to Seller the consideration specified in §2(b) above.

 

3.   Representations and Warranties Concerning Transaction.

 

(a)   Seller's Representations and Warranties.  Seller represents and warrants to Alto that the statements contained in this §3(a) are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this §3(a)) with respect to himself.

 

(i)       Authorization of Transaction. Seller has full power and authority to execute and deliver this Agreement and to perform her obligations hereunder. This Agreement constitutes the valid and legally binding obligation of Seller, enforceable in accordance with its terms and conditions. Seller need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement.

 

(ii)  Non-contravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (A) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of

 

  

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any government, governmental agency, or court to which Seller is subject, (B) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which Seller is a party or by which she is bound or to which any of her assets is subject, or (C) result in the imposition or creation of a Lien upon or with respect to the Liberty Shares.

 

(iii)  Brokers' Fees. Seller has no Liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement.

 

(iv)  Investment. Seller (A) understands that the Alto Shares have not been, and will not be, registered under the Securities Act, or under any state securities laws, and are being offered and sold in reliance upon federal and state exemptions for transactions not involving any public offering, (B) is acquiring the Alto Shares solely for her own account for investment purposes, and not with a view to the distribution thereof, (C) is a sophisticated investor with knowledge and experience in business and financial matters, (D) has received certain information concerning Alto and has had the opportunity to obtain additional information as desired in order to evaluate the merits and the risks inherent in holding the Alto Shares, (E) is able to bear the economic risk and lack of liquidity inherent in holding the Alto Shares, and (F) is an Accredited Investor as defined in Regulation D promulgated under the Securities Act.

 

(v)      Liberty Shares. Seller holds of record and owns beneficially all of the Liberty Shares, free and clear of any restrictions on transfer (other than any restrictions under the Securities Act and state securities laws), Taxes, Liens, options, warrants, purchase rights, contracts, commitments, equities, claims, and demands. Seller is not a party to any option, warrant, purchase right, or other contract or commitment that could require Seller to sell, transfer, or otherwise dispose of any membership units of Liberty (other than this Agreement). Seller is not a party to any voting trust, proxy, or other agreement or understanding with respect to the voting of any Liberty Shares.

 

(b)      Alto's Representations and Warranties. Alto represents and warrants to Seller that the statements contained in this §3(b) are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this §3(b)).

 

(i)       Organization of Alto. Alto is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction of its incorporation.

 

(ii)      Authorization of Transaction. Alto has full power and authority (including full corporate or other entity power and authority) to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligation of Alto, enforceable in accordance with its terms and conditions. Alto need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by this Agreement. The execution, delivery, and performance of this Agreement and all other agreements contemplated hereby have been duly authorized by Alto.

 

(iii)      Non-contravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (A) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Alto is subject or any provision of its charter, bylaws, or other governing documents or (B) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which Alto is a party or by which it is bound or to which any

 

  

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of its assets is subject.

 

(iv)      Brokers' Fees. Alto has no Liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement for which Seller could become liable or obligated.

 

(v)      Investment. Alto is not acquiring the Liberty Shares with a view to or for sale in connection with any distribution thereof within the meaning of the Securities Act.

 

4.     Representations and Warranties Concerning Liberty.  Seller represents and warrants to Alto that the statements contained in this §4 are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this §4).

 

(a)       Organization, Qualification, and Corporate Power. Liberty is a limited liability company duly organized, validly existing, and in good standing under the laws of the state of Utah.  Seller has delivered to Alto correct and complete copies of the Articles of Organization and Operating Agreement of Liberty (as amended to date).  Liberty is not in default under or in violation of any provision of its Articles of Organization or Operating Agreement.

 

(b)      Capitalization.  All of the issued and outstanding Liberty Shares have been duly authorized, are validly issued, fully paid, and non-assessable, and are held of record by the Seller. There are no outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights, or other contracts or commitments that could require Liberty to issue, sell, or otherwise cause to become outstanding any other Liberty Shares than those held by the Seller immediately prior to Closing.

 

(c)      Non-contravention.  Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will (i) violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Liberty is subject or any provision of the charter or Operating Agreement of Liberty or (ii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which Liberty is a party or by which it is bound or to which any of its assets is subject (or result in the imposition of any Lien upon any of its assets). Liberty does not need to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order for the Parties to consummate the transactions contemplated by this Agreement.

 

(d)      Brokers' Fees. Liberty does not have any Liability or obligation to pay any fees or commissions to any broker, finder, or agent with respect to the transactions contemplated by this Agreement.

 

(e)  Subsidiaries.  There are no Subsidiaries of Liberty.

 

(f)  Undisclosed Liabilities. Liberty does not have any Liability (and there is no Basis for any present or future action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand against any of them giving rise to any Liability), except as shown in the Financial Statements of Liberty supplied to Alto prior to the Closing.

 

(g)  Tax Matters.  Liberty has paid any and all Taxes due and owing with respect to its business, operations, employees, and contract personnel.

 

(h)  Real Property.  Liberty does not own or lease any real property.

 

(i)       Intellectual Property.  Liberty does not own or

 

  

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possess any rights in any Intellectual Property and has not interfered with, infringed upon, misappropriated, or otherwise come into conflict with any Intellectual Property rights of third parties.

 

(j)  Operator Agreement.  The Operator Agreement is a legally binding and valid agreement of Liberty, enforceable in accordance with its terms, and there is no default or notice of termination received by Liberty in respect of the Operator Agreement and Seller does not reasonably contemplate that the transactions contemplated by this Agreement shall constitute a default or give rise to a right of termination of the Operator Agreement by any party thereto.

 

(k)  Disclosure.  The representations and warranties contained in this §4 do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements and information contained in this §4 not misleading.

 

5.      Post-Closing Covenants.  The Parties agree as follows with respect to the period following the Closing.

 

(a)      General.  In case at any time after the Closing any further action is necessary or desirable to carry out the purposes of this Agreement, each of the Parties will take such further action (including the execution and delivery of such further instruments and documents) as any other Party reasonably may request, all at the sole cost and expense of the requesting Party (unless the requesting Party is entitled to indemnification therefor under §7 below). Seller acknowledges and agree that from and after the Closing Alto will be entitled to possession of all documents, books, records (including Tax records), agreements, and financial data of any sort relating to Liberty.

 

(b)  Confidentiality. Seller will treat and hold as such all of the Confidential Information, refrain from using any of the Confidential Information except in connection with this Agreement, and deliver promptly to Alto or destroy, at the request and option of Alto, all tangible embodiments (and all copies) of the Confidential Information which are in her possession. In the event that Seller is requested or required pursuant to written or oral question or request for information or documents in any legal proceeding, interrogatory, subpoena, civil investigative demand, or similar process to disclose any Confidential Information, Seller will notify Alto promptly of the request or requirement so that Alto may seek an appropriate protective order or waive compliance with the provisions of this §5(d). If, in the absence of a protective order or the receipt of a waiver hereunder, Seller is, on the advice of counsel, compelled to disclose any Confidential Information to any tribunal or else stand liable for contempt, Seller may disclose the Confidential Information to the tribunal; provided, however, that Seller shall use her reasonable best efforts to obtain, at the reasonable request of Alto, an order or other assurance that confidential treatment will be accorded to such portion of the Confidential Information required to be disclosed as Alto shall designate. The foregoing provisions shall not apply to any Confidential Information which is generally available to the public immediately prior to the time of disclosure unless such Confidential Information is so available due to the actions of Seller.

 

(c)  Alto Shares.  Each Alto Share will be imprinted with a legend substantially in the following form:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE SECURITIES ACT OR, IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE AND SATISFACTORY TO THE ISSUER OF THE SECURITIES, SUCH OFFER, SALE, TRANSFER, PLEDGE, OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.

 

Each holder desiring to transfer an Alto Share first must furnish Alto with a written opinion reasonably satisfactory to Alto in form and substance from counsel reasonably satisfactory to Alto by reason of experience to the effect that the holder may transfer the Alto Share as desired without registration under the Securities Act.

 

6.       Conditions to Obligation to Close.

 

  

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(a)  Conditions to Alto's Obligation.  Alto's obligation to consummate the transactions to be performed by it in connection with the Closing is subject to satisfaction of the following conditions:

 

(i)  the representations and warranties set forth in §3(a) and §4 above shall be true and correct in all material respects at and as of the Closing Date, except to the extent that such representations and warranties are qualified by terms such as "material" and "Material Adverse Effect," in which case such representations and warranties shall be true and correct in all respects at and as of the Closing Date;

 

(ii)  Seller shall have performed and complied with all of her covenants hereunder in all material respects through the Closing, except to the extent that such covenants are qualified by terms such as "material" and "Material Adverse Effect," in which case Sellers shall have performed and complied with all of such covenants in all respects through the Closing;

 

(iii)  no action, suit, or proceeding shall be pending before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (A) prevent consummation of any of the transactions contemplated by this Agreement, (B) cause any of the transactions contemplated by this Agreement to be rescinded following consummation, (C) affect adversely the right of Alto to own the Liberty Shares and to control Liberty, or (D) affect adversely the right of Liberty to own its assets and to operate its businesses (and no such injunction, judgment, order, decree, ruling, or charge shall be in effect);

 

(iv)  Sellers shall have delivered to Alto a certificate to the effect that each of the conditions specified above in §6(a)(i)-(iii) is satisfied in all respects;

 

(v)  Alto shall have received the resignations, effective as of the Closing, of each manager of Liberty other than those whom Alto shall have specified in writing prior to the Closing;

 

(vi)  all actions to be taken by the Seller in connection with consummation of the transactions contemplated hereby and all certificates, opinions, instruments, and other documents required to effect the transactions contemplated hereby shall be reasonably satisfactory in form and substance to Alto;

 

(vii)  Liberty shall have obtained and delivered to Alto a written consent for the assignment of the Operator Agreement if such assignment is deemed necessary by Alto in connection with the transactions contemplated hereunder;

 

(viii)     Seller shall have delivered to Alto copies of the Articles of Organization of Liberty certified on or soon before the Closing Date by the Secretary of State of Utah; and

 

(ix)        Seller shall have delivered to Alto copies of the certificate of good standing of Liberty issued on or soon before the Closing Date by the Secretary of State of Utah.

 

Alto may waive any condition specified in this §6(a) if it executes a writing so stating at or prior to the Closing.

 

(b)  Conditions to Seller’s Obligation.  The obligation of Seller to consummate the transactions to be performed by him in connection with the Closing is subject to satisfaction of the following conditions:

 

(i)  the representations and warranties set forth in §3(b) above shall be true and correct in all material respects at and as of the Closing Date, except to the extent that such representations and warranties are qualified by terms such as "material" and "Material Adverse Effect," in which case such representations and warranties shall be true and correct in all respects at and as of the Closing Date;

 

  

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(ii)  Alto shall have performed and complied with all of its covenants hereunder in all material respects through the Closing, except to the extent that such covenants are qualified by terms such as "material" and "Material Adverse Effect," in which case Alto shall have performed and complied with all of such covenants in all respects through the Closing;

 

(iii)  no action, suit, or proceeding shall be pending before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (A) prevent consummation of any of the transactions contemplated by this Agreement or (B) cause any of the transactions contemplated by this Agreement to be rescinded following consummation (and no such injunction, judgment, order, decree, ruling, or charge shall be in effect);

 

(iv)  Alto shall have delivered to Seller a certificate to the effect that each of the conditions specified above in §6(b)(i)-(iii) is satisfied in all respects;

 

(v)  all actions to be taken by Alto in connection with consummation of the transactions contemplated hereby and all certificates, opinions, instruments, and other documents required to effect the transactions contemplated hereby will be reasonably satisfactory in form and substance to the Seller.

 

Seller may waive any condition specified in this §6(b) if she executes a writing so stating at or prior to the Closing.

 

7.  Remedies for Breaches of This Agreement.

 

(a)  Survival of Representations and Warranties.  All of the representations and warranties of Seller contained in this Agreement shall survive the Closing hereunder and continue in full force and effect for a period of one year thereafter.

 

(b)  Indemnification Provisions for Alto's Benefit.

 

(i)  In the event Seller breaches (or in the event any third party alleges facts that, if true, would mean Seller has breached) any of her representations, warranties, and covenants contained herein and, provided that Alto makes a written claim for indemnification against Seller pursuant to §9(f) below within the survival period, then Seller shall be obligated to indemnify Alto from and against the entirety of any Adverse Consequences Alto may suffer (including any Adverse Consequences Alto may suffer after the end of any applicable survival period) resulting from, arising out of, relating to, in the nature of, or caused by the breach (or the alleged breach).

 

(c)  Indemnification Provisions for Seller’s Benefit.  In the event Alto breaches (or in the event any third party alleges facts that, if true, would mean Alto has breached) any of its representations, warranties, and covenants contained herein and, provided that Seller makes a written claim for indemnification against Alto pursuant to §9(f) below within such survival period (if there is an applicable survival period pursuant to §7(a) above), then Alto shall indemnify Seller from and against the entirety of any Adverse Consequences suffered (including any Adverse Consequences suffered after the end of any applicable survival period) resulting from, arising out of, relating to, in the nature of, or caused by the breach (or the alleged breach).

 

(d)  Matters Involving Third Parties.

 

(i)  If any third party shall notify any Party (the "Indemnified Party") with respect to any matter (a "Third Party Claim") which may give rise to a claim for indemnification against any other Party (the "Indemnifying Party") under this §7, then the Indemnified Party shall promptly notify each Indemnifying Party thereof in writing; provided, however, that no delay on the part of the Indemnified Party in notifying any Indemnifying Party shall relieve the Indemnifying Party from any obligation hereunder unless (and then solely to the extent) the Indemnifying Party thereby is prejudiced.

 

  

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(ii)  Any Indemnifying Party will have the right to defend the Indemnified Party against the Third Party Claim with counsel of its choice reasonably satisfactory to the Indemnified Party so long as (A) the Indemnifying Party notifies the Indemnified Party in writing within 15 days after the Indemnified Party has given notice of the Third Party Claim that the Indemnifying Party will indemnify the Indemnified Party from and against the entirety of any Adverse Consequences the Indemnified Party may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third Party Claim, (B) the Indemnifying Party provides the Indemnified Party with evidence reasonably acceptable to the Indemnified Party that the Indemnifying Party will have the financial resources to defend against the Third Party Claim and fulfill its indemnification obligations hereunder, (C) the Third Party Claim involves only money damages and does not seek an injunction or other equitable relief, (D) settlement of, or an adverse judgment with respect to, the Third Party Claim is not, in the good faith judgment of the Indemnified Party, likely to establish a precedential custom or practice [materially] adverse to the continuing business interests or the reputation of the Indemnified Party, and (E) the Indemnifying Party conducts the defense of the Third Party Claim actively and diligently.

 

(iii)  So long as the Indemnifying Party is conducting the defense of the Third Party Claim in accordance with §7(d)(ii) above, (A) the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third Party Claim, (B) the Indemnified Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnifying Party (not to be withheld unreasonably), and (C) the Indemnifying Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnified Party (not to be withheld unreasonably).

 

(iv)  In the event any of the conditions in §7(d)(ii) above is or becomes unsatisfied, however, (A) the Indemnified Party may defend against, and consent to the entry of any judgment or enter into any settlement with respect to, the Third Party Claim in any manner it reasonably may deem appropriate (and the Indemnified Party need not consult with, or obtain any consent from, any Indemnifying Party in connection therewith), (B) the Indemnifying Parties will reimburse the Indemnified Party promptly and periodically for the costs of defending against the Third Party Claim (including reasonable attorneys' fees and expenses), and (C) the Indemnifying Parties will remain responsible for any Adverse Consequences the Indemnified Party may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third Party Claim to the fullest extent provided in this §7.

 

8.  Cooperation on Tax Matters.   Alto, Liberty, and Seller shall cooperate fully, as and to the extent reasonably requested by the other Party, in connection with the filing of Tax Returns pursuant to this Agreement and any audit, litigation or other proceeding with respect to Taxes. Such cooperation shall include the retention and (upon the other Party's request) the provision of records and information which are reasonably relevant to any such audit, litigation or other proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Liberty and Seller agree (A) to retain all books and records with respect to Tax matters pertinent to Liberty relating to any taxable period beginning before the Closing Date until the expiration of the statute of limitations (and, to the extent notified by Alto or Seller, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority, and (B) to give the other Party reasonable written notice prior to transferring, destroying or discarding any such books and records and, if the other Party so requests, Liberty or Seller, as the case may be, shall allow the other Party to take possession of such books and records.

 

9.  Miscellaneous.

 

(a)  No Third-Party Beneficiaries.  This Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns.

 

  

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(b)  Entire Agreement.  This Agreement (including the documents referred to herein) constitutes the entire agreement among the Parties and supersedes any prior understandings, agreements, or representations by or among the Parties, written or oral, to the extent they relate in any way to the subject matter hereof.

 

(c)  Succession and Assignment.  This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted assigns. No Party may assign either this Agreement or any of her or its rights, interests, or obligations hereunder without the prior written approval of Alto and Seller; provided, however, that Alto may (i) assign any or all of its rights and interests hereunder to one or more of its Affiliates and (ii) designate one or more of its Affiliates to perform its obligations hereunder (in any or all of which cases Alto nonetheless shall remain responsible for the performance of all of its obligations hereunder).

 

(d)  Counterparts.  This Agreement may be executed in one or more counterparts (including by means of facsimile), each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

(e)  Headings.  The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

 

(f)  Notices. All notices, requests, demands, claims, and other communications hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given (i) when delivered personally to the recipient, (ii) one business day after being sent to the recipient by reputable overnight courier service (charges prepaid), (iii) one business day after being sent to the recipient by facsimile transmission or electronic mail, or (iv) four business days after being mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid, and addressed to the intended recipient as set forth below:

 

	
If to Alto:

 

 

	
If to Seller:

	
Attn: Mr. Mark Klok

	
_______________________

	
245 Park Avenue, Suite 2431

	
_______________________

	
New York, NY 10167

	
_______________________

	
T +1 212 803 8187

	
_______________________

	
F +1 212 803 8179

	
_______________________

	
email: mdklok@gmail.com

	
_______________________

 

Any Party may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.

 

(g)  Governing Law.  This Agreement shall be governed by and construed in accordance with the domestic laws of the State of Utah without giving effect to any choice or conflict of law provision or rule (whether of the State of Utah  or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Utah.

 

(h)  Amendments and Waivers.  No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by Alto and Seller. No waiver by any Party of any provision of this Agreement or any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be valid unless the same shall be in writing and signed by the Party making such waiver nor shall such waiver be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such default, misrepresentation, or breach of warranty or covenant.

 

  

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(i)  Severability.  Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

 

(j)  Expenses.  Each of Alto, Seller, and Liberty will bear her or its own costs and expenses (including legal fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby.

 

(k)  Construction.  The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. The word "including" shall mean including without limitation. The Parties intend that each representation, warranty, and covenant contained herein shall have independent significance. If any Party has breached any representation, warranty, or covenant contained herein in any respect, the fact that there exists another representation, warranty, or covenant relating to the same subject matter (regardless of the relative levels of specificity) which the Party has not breached shall not detract from or mitigate the fact that the Party is in breach of the first representation, warranty, or covenant.

 

(l)  Specific Performance.  Each Party acknowledges and agrees that the other Parties would be damaged irreparably in the event any provision of this Agreement is not performed in accordance with its specific terms or otherwise is breached, so that a Party shall be entitled to injunctive relief to prevent breaches of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in addition to any other remedy to which such Party may be entitled, at law or in equity. In particular, the Parties acknowledge that the business of Liberty is unique and recognize and affirm that in the event Seller breaches this Agreement, money damages would be inadequate and Alto would have no adequate remedy at law, so that Alto shall have the right, in addition to any other rights and remedies existing in its favor, to enforce its rights and the other Parties' obligations hereunder not only by action for damages but also by action for specific performance, injunctive, and/or other equitable relief.

 

(m)  Submission to Jurisdiction. Each of the Parties submits to the jurisdiction of any state or federal court sitting in Salt Lake County, State of Utah, in any action or proceeding arising out of or relating to this Agreement and agrees that all claims in respect of the action or proceeding may be heard and determined in any such court.  Each of the Parties waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety, or other security that might be required of any other Party with respect thereto.

 

 

 

[end of Stock Purchase Agreement]

 

  

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* * * * *

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on as of the date first above written.

 

“ALTO”                                                                                                                                 “SELLER”

 

ALTO GROUP HOLDINGS, INC.                                                                           

 

/s/ Mark Klok                                                      _____________________

Mark Klok, Chief Executive Officer                                                                                      ____________, individually

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

12exhinit10-1.htm

 

 

EXHIBIT 10.1

 

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AND NON-COMPETITION AGREEMENT (“Agreement”) is made as of the 22nd day of January 2011, by and between TC Power Management Corp, a Nevada corporation (the “Company”), and John Larson, a resident of Tucson, Arizona (the “Employee”).

 

W I T N E S S E T H:

 

WHEREAS, the Company desires to retain the services of the Employee in the manner hereinafter specified in its business, thereby retaining for the Company the benefit of the Employee's business knowledge and experience and also to make provisions for the payment of reasonable and proper compensation to the Employee for such services; and

 

WHEREAS, the Employee is willing to be employed by the Company and to perform the duties incident to such employment upon the terms and conditions hereinafter set forth;

 

NOW, THEREFORE, in consideration of the premises and mutual covenants and representations herein contained, the Company and the Employee mutually agree as follows:

 

  

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AGREEMENT

 

ARTICLE I EMPLOYMENT AND DUTIES

 

Section 1.1                      Employment.  Commencing on the date hereof, the Company shall employ the Employee, and the Employee shall accept employment with the Company as an employee of the Company, upon the terms and subject to the conditions hereinafter set forth and shall hold the titles of President and Chief Executive Officer.  For so long as the Employee is the President and Chief Executive Officer of the Company will nominate the Employee for a position on the Company’s Board of Directors (the “Board”).

 

Section 1.2                      Duties.  The Employee shall serve as the President and Chief Executive Officer of the Company and, subject to the Company’s Certificate of Incorporation and By-Laws, Employee shall have supervision and control over, and executive responsibility for, the day to day business operations of the Company and its subsidiaries.  Employee shall have such other duties as customarily performed by the President and Chief Executive Officer and also have such other powers and duties as may be, from time to time, prescribed by the Company’s Board of Directors (the “Board”), provided that the nature of Employee’s powers and duties so prescribed shall not be inconsistent with Employee’s position and duties hereunder.  Employee shall report directly and exclusively to the Board and no other executive officer will be appointed with authority over the business operations of the Company or its subsidiaries.  Employee’s duties shall be performed from an office within the City of Tucson, or within no more than fifteen (15) miles from the city limits thereof.  Initially, the Employee shall establish and maintain, at his expense except as otherwise provided herein, an office at his home, but the Company shall open and establish an office within the aforesaid geographic area as soon as the finances of the Company permit.

 

The Employee shall devote his best efforts to the business and affairs of the Company and, during the Term (as defined in Section 2.1 of this Agreement) and thereafter to the extent provided in Article III, shall observe at all times the covenants regarding non-competition  and confidentiality provided in Article III hereof.  The Company and Employee acknowledge and agree that, notwithstanding the aforesaid covenants regarding non-competition and confidentiality and any other provision herein, Employee shall be permitted to (i) serve on

 

  

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corporate, civic or charitable boards or committees, (ii) manage passive personal investments and (iii) pursue the development of other products or services at his own expense which do not compete directly or indirectly with the Company’s products and services so long as any such activities do not unduly interfere with the performance of Employee’s responsibilities as an employee of the Company in accordance with this Agreement.

 

ARTICLE II

 

TERMS OF EMPLOYMENT; COMPENSATION AND BENEFITS

 

Section 2.1                      Term.  Except as otherwise provided herein, the term of this Agreement shall be three (3) years beginning on the date of this Agreement (the “Initial Term”).  This Agreement shall be renewed automatically in one (1) year increments (each a “Renewal Term” and together with the Initial Term, the “Term”) unless notice by either party is given in writing no less than ninety (90) days from the expiration of the Initial Term or the applicable Renewal Term.

 

Section 2.2                      Compensation.  Except as otherwise set forth herein, the Company shall pay, and the Employee shall accept as full consideration for the services to be rendered hereunder, and the covenants entered into hereunder, compensation as set forth in Exhibit “A”, attached hereto and incorporated herein by reference.

 

Section 2.3                      Benefits.  The Employee shall be entitled to participate in such fringe benefits as are generally available to employees of the Company or key executive personnel, and to the normal perquisites provided to such executives.  Such benefits, if any, shall be provided upon the terms and conditions as set forth on Exhibit “B”, attached hereto and incorporated herein by reference.  Provided however, nothing in this Agreement shall be construed to require the Company to establish any fringe benefit programs for its employees generally or its key executive personnel, except those specifically enumerated in Exhibit B, to effect compliance with this Section 2.3.

 

  

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ARTICLE III

 

NON-COMPETITION AND CONFIDENTIALITY

 

Section 3.1                      Restrictive Covenants.

 

(a)           Non-Competition.  For the period beginning on the date of this Agreement and ending at six (6) months following the termination of Employee’s employment with the Company or ending, if Employee’s employment with the Company is terminated pursuant to Sections 4(f), (g) or (h) below, the date of such termination (the “Expiration Date”), Employee will not, without the prior written approval of the Company, which approval shall not be unreasonably withheld by the Company:

(i)           become engaged, directly or indirectly, as an employee, consultant, contractor, partner, proprietor, principal, agent, director, officer, investor, shareholder (other than the holding of shares listed on a public stock exchange that does not exceed four point nine (4.9%) percent of the outstanding shares so listed) or advisor or in any other capacity, in a business or organization that, anywhere in North America, develops, markets, sells, performs or licenses products or services competitive with the Business;

	
  

	
(ii)

	
solicit prior, current or future customers of the Company for any purpose; or

	
  

	
(iii)

	
solicit any current or future employees employed by the Company.

Employee acknowledges that, based on his unique skills, position and knowledge relating to the Company and considering the benefit that Employee will receive from employment with the Company, the scope of the restrictions set forth in this Section 3.1(a) are reasonable under the circumstances and such restrictions are reasonably necessary for the protection of the Company’s proprietary interests.  Employee also acknowledges that the enforcement by the Company of the provisions of this Agreement during the period beginning on the date of termination of the Employee’s employment with the Company and ending on the Expiration Date will not preclude him from being gainfully employed during such period.

  

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                (b)          Confidentiality.  The Employee specifically agrees that, without the consent of the Company, he will not at any time, in any fashion, form, or manner, either directly or indirectly, divulge, disclose, or communicate to any person, firm or corporation (other than to an attorney or accountant in the regular course of the Company’s business) any Confidential Information (as hereinafter defined).  Upon the termination of this Agreement for any reason, the Employee shall immediately surrender and deliver to the Company all Confidential Information in all forms.  The covenants set forth in this Section 3.1(c) shall survive for six (6) months following the termination of this Agreement.

 

                (c)           Continuing Obligations.  The Employee agrees that his obligations and duties contained in this Article III are continuing obligations and, to the extent expressly set forth herein, said duties shall survive the termination or expiration of this Agreement for any reason whatsoever.

 

                (d)           Definitions.  For the purposes of this Article III, the following terms have the meanings set forth below:

 

“Business” shall mean the exploration of, mining for, processing of, refinement of, sale of and distribution of mineral resources and other products and services of the Company as they are developed to include that which directly aids or is directly incidental to mineral resources.

 

“Client” shall mean any entity, including without limitation, any natural person, company, partnership, corporation, trust, association, organization or governmental unit, (i) with whom the Employee has direct contact and/or to whom the Employee renders any services; and/or (ii) about whom the Employee has access to Confidential Information (as hereinafter defined).

 

“Confidential Information” shall mean any information, not generally known in the relevant trade or industry, obtained from the Company or any of its subsidiaries, affiliates, customers or suppliers or which falls within any of the following general categories:  (a) information relating to the business of the Company or that of any of its subsidiaries, affiliates, customers or suppliers, including but not limited to, financial reports, income

 

  

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statements, balance sheets, annual and quarterly reports, general ledger, accounts receivable, and other accounting reports, non-public filings with government agencies, business forms, handbooks, policies, and documents, business plans, business processes and procedures, sales or marketing methods, methods of doing business, customer lists, customer usages and/or requirements, and supplier information of the Company or any of its subsidiaries, affiliates, customers or suppliers; (b) information relating to existing or contemplated products, services, technology, designs, processes, formulae, computer systems, computer software, algorithms and research or developments of the Company or any of its subsidiaries, affiliates, customers or suppliers; (c) information relating to trade secrets of the Company or any of its subsidiaries, affiliates, customers or suppliers; or (d) information marked “Confidential” or “Proprietary” by or on behalf of the Company or any of its subsidiaries, affiliates, customers or suppliers.  Notwithstanding the foregoing, however, the Company recognizes that the Employee has over thirty years of experience in the geographic area of interest, that is, the Americas, and under no circumstances however will the extensive knowledge held by the Employee prior to his employment by the Company or as a result of his personal business or professional activities while employed by the Company but not connected to his duties therefor be deemed to become the property of the Company, nor will the use by Employee, during or after his employment by the Company, of said knowledge and experience, be deemed to be competitive with the business of the Company or a corporate opportunity thereof.

 

Section 3.2                      Enforcement; Remedies.  The Employee covenants, agrees, and recognizes that because the breach or threatened breach of the covenants, or any of them, contained in Section 3.1 hereof may result in immediate and irreparable injury to the Company, the Company may be entitled to an injunction restraining the Employee from any violation of Section 3.1 to the fullest extent allowed by law.

 

Section 3.3                      Construction.  Each party hereto hereby expressly acknowledges and agrees as follows:

 

(a)                      That the covenants set forth in Section 3.1 above are reasonable in all respects and are necessary to protect the legitimate business and competitive interests of the Company in connection with its business which the Employee agrees, pursuant to this Agreement, to assist the Company in maintaining and developing; and

 

  

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(b)           That each of the covenants set forth in Section 3.1 above is separately and independently given, and each such covenant is intended to be enforceable separately and independently of the other such covenants, including without limitation, enforcement by injunction; provided, however, that the invalidity or unenforceability of any provision of this Agreement in any respect shall not affect the validity or enforceability of this Agreement in any other respect.  In the event that any provision of this Agreement shall be held invalid or unenforceable by a court of competent jurisdiction by reason of the geographic or business scope or the duration thereof of any such covenant, or for any other reason, such invalidity or unenforceability shall attach only to the particular aspect of such provision found invalid or unenforceable as applied and shall not affect or render invalid or unenforceable any other provision of this Agreement or the enforcement of such provision in other circumstances, and, to the fullest extent permitted by law, this Agreement shall be construed as if the geographic or business scope or the duration of such provision or other basis on which such provisions has been challenged had been more narrowly drafted so as not to be invalid or unenforceable.

 

ARTICLE IV

 

TERMINATION

 

Section 4.1                      Termination.

 

(a)           If, during the term hereof, the Employee (i) violates in any material respect any provision of Article III hereof; (ii) is convicted of a felony or a crime involving moral depravity or the commission of any other act or omission involving dishonesty or fraud with respect to the Company or any of its subsidiaries, customers or suppliers; (iii) engages in conduct tending to bring the Company or any of its subsidiaries into substantial public disgrace or disrepute as reasonably determined by a majority of the Board based upon contemporary community standards for the New York, New York Metropolitan Area; or (iv) substantially and repeatedly fails to perform the duties of the office held by the Employee which continues after written warnings to correct such deficiency; the Company may immediately, in writing, terminate this Agreement without further obligation hereunder, except that the Company shall, within 30 days of termination, pay all compensation accrued or earned through the effective date of termination and reimburse Employee for all expenses incurred before the termination of Employee’s employment.

 

  

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(b)           If, during the term of this Agreement, the Employee is charged with any act referred to in Section 4.1(a) above, the Company may, upon one (1) days’ notice, require the Employee to take a leave of absence without pay for up to fifteen (15) days, the length of such leave of absence to be determined by the Company in the Company’s sole discretion.

 

(c)           Upon the Employee’s resignation from employment with the Company other than pursuant to Section 4(f) and Section 4(g), or the termination by the Company of Employee’s employment with the Company other than pursuant to Section 4(a), the Company shall, within 30 days of termination, pay all compensation accrued or earned through the effective date of resignation and reimburse Employee for all expenses incurred before the termination of Employee’s employment, and Employee shall have no further right for any salary or other benefits except as otherwise required by law.

 

(d)           This Agreement shall be terminated by the death of the Employee.  If the death of the Employee occurs and this Agreement is thereby terminated, the Company shall, within 30 days of termination, pay to the Employee's estate or legal representative in complete settlement for relinquishment of his interest in this Agreement, compensation and benefits payable to him through the end of the calendar month in which his death and the Agreement's termination occur, and shall reimburse Employee’s estate or legal representative for all expenses incurred before the Employee’s death.

 

(e)           The Company may terminate this Agreement by written notice to the Employee in the event that during the term hereof the Employee shall become “permanently disabled” as the term “permanently disabled” is hereinafter fixed and defined. For purposes of this Agreement, “permanently disabled” shall mean (i) the Employee is unable, by reason of accident, physical or mental infirmity or other causes beyond his control, to satisfactorily perform duties then assigned to him or such reduced duties which the Company is willing to assign to him for a continuous period of one hundred eighty (180) days or for a total period of one hundred eighty (180) days, either consecutive or not, in any twelve month period, or (ii) the Employee is unwilling for whatever reason to perform on a full-time basis the duties then assigned to him for a continuous period of one hundred eighty (180) days or for a total period of

 

  

8

  

one hundred eighty (180) days, either consecutive or not, in any twelve month period.  For purposes of this Agreement, the Company shall determine the existence of “permanent disability”; provided, however, a determination of “permanent disability” under subsection (i) above may be made only upon receipt of a certificate of disability from a qualified physician, selected by the Company, subject to the reasonable approval of Employee or his representative after examination by such physician of the disabled Employee; provided, further, that in the event the Employee has failed to substantially perform his duties for a period of 30 consecutive days as a result of accident or injury and thereafter refuses to submit to a medical examination at the request of the Company for a continuous period of one hundred eighty (180) days, the Employee shall be deemed to be “permanently disabled.”  Upon termination pursuant to this Section 4.1(e), the Company shall, within 30 days of termination, pay to the Employee in complete settlement for relinquishment of the Employee's interest in this Agreement, compensation and benefits payable to the Company through the end of the calendar month in which termination of this Agreement occurs, and reimburse Employee for all expenses incurred before the termination of Employee’s employment.

 

(f)           In the event that the Employee’s employment hereunder is terminated (i) at any time by the Company without cause or (ii) by the resignation of Employee as a result of (A) a breach by the Company of any provision of this Agreement, including, without limitation, the failure of the Company to pay any amount hereunder when the same shall be due and payable, (B) a material change in Employee’s duties, including, without limitation, a material diminution in Employee’s title, position as CEO/President and board member, duties or responsibilities, or the assignment to Employee of duties that are inconsistent, in a material respect, with the scope of duties and responsibilities associated with the positions specified in the Agreement, or the reduction in any of the Employee’s then-current compensation or benefits, the Company shall (x) within 30 days of termination, pay Employee all compensation accrued through the effective date of resignation and reimburse Employee for all expenses incurred before the termination of Employee’s employment, (y) within 30 days of termination, pay Employee in a lump sum an amount equal to one times Employee’s annual guaranteed salary in effect on the date of termination and (z) provide to Employee in a lump sum on termination, the Medical Insurance Payments (as set out in Exhibit B) for a period of one year, and Employee shall have no further right for any salary or other benefits except as otherwise required by law.

 

  

9

  

 

 

 

(g)           In the event that the Employee’s employment hereunder is terminated by Employee for any reason during the 90-day period subsequent to a Change in Control (as hereinafter defined), the Company shall (x) within 30 days of termination, pay Employee all compensation accrued through the effective date of resignation and reimburse Employee for all expenses incurred before the termination of Employee’s employment, (y) within 30 days of termination, pay Employee in a lump sum an amount equal to Employee’s annual guaranteed salary in effect on the date of termination and (z) provide to Employee in a lump sum on termination, the Medical Insurance Payments (as set out in Exhibit B) for a period of one year, and Employee shall have no further right for any salary or other benefits except as otherwise required by law. In addition, upon termination of Employee’s employment pursuant to this Section 4(g), all options granted to Employee shall immediately vest and become exercisable.

 

For purposes of this Agreement, “Change in Control” shall mean:

 

(i) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”), other than the current principal stockholders of the Company, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%) or more of either (A) the then outstanding shares of the Company’s Common Stock (the “Outstanding Company Common Stock”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of members of the Board or board of any corporate successor to the business of the Company (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change of Control: (1) any acquisition by the Company, or (2) any acquisition by any Person pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (c) below; or

 

(ii) Consummation after the date of this Agreement of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of assets of another corporation (a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and

 

  

10

  

entities who were the beneficial owners, respectively, of the Outstanding Company Securities and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of, respectively, the then Outstanding Company Securities and the Outstanding Company Voting Securities, as the case may be, of the corporation resulting from such Business Combination in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Company Securities and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, fifty percent (50%) or more of, respectively, the then Outstanding Company Securities and the Outstanding Company Voting Securities resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such Person had an ownership position in excess of such fifty percent (50%) of the Outstanding Company Voting Securities prior to the Business Combination or (C) at least a majority of the members of the board of the entity resulting from such Business Combination were members of the Incumbent Board or Persons who replaced such Incumbent Board without causing a Change in Control pursuant to Section (b) above at the time of the execution of the initial agreement, or of the action of the Incumbent Board, providing for such Business Combination; or

 

(iii)          Approval by the security holders of the Company of a complete liquidation or dissolution of the Company.

 

(h)           The Employee may terminate this Agreement and his employment by the Company, effective immediately by written notice to the Company, if, within sixty (60) days after the date hereof, the Company and its stockholders have not entered into and implemented such amendments to this Agreement, an option plan for the stock options required to be issued to the Employee pursuant hereto, or other agreements among the Company and/or its stockholders (including without limitation the pooling agreement among certain stockholders of the Company), or have not taken other actions (including without limitation obtaining directors and officers insurance), all as may have been required by the Employee in his sole discretion.

 

(i)           Without limiting Sections 4(f), (g) or (h) above, the Employee may terminate this Agreement and his employment with the Company at any time for any reason in his sole discretion by giving 60 day written notice.

 

  

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ARTICLE V

 

INDEMNIFICATION

 

Section 5.1                      Indemnification.  Should the Employee be made a party or threatened to be made a party to or be involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “Proceeding”), by reason of the fact that he is or was an officer, employee or agent of the Company or any subsidiary or other affiliate thereof, including service with respect to employee benefit plans, whether the basis of such Proceeding is an alleged action in his official capacity as an officer, employee or agent or in any other capacity while serving as an officer, employee or agent, he shall be indemnified and held harmless by the Company to the fullest extent authorized by Nevada corporations law, or as otherwise permitted by such law as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Company to provide broader indemnification rights than said law permitted the Company to provide prior to such amendment), against all expense, liability and loss (including attorneys’ fees), judgments, fines and amounts paid or to be paid in settlement actually and reasonably incurred by the Employee in connection therewith; provided, however, that the Employee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interest of the Company and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Such indemnification shall continue should the Employee cease to be an officer, employee or agent of the Company for any reason whatsoever, and shall inure to the benefit of his heirs, executors and administrators.

 

This right to indemnification shall include the right of the Employee to have the Company pay the expenses defending any such Proceeding in advance of its final disposition; provided, however, that, if Nevada corporations law requires, the payment of such expenses incurred by the Employee in his capacity as an officer (and not in any other capacity in which service was or is rendered by the Employee while an officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a Proceeding, such advance shall be made only upon delivery to the Company of an undertaking, by or on behalf of the Employee, to repay all amounts so advanced if it shall ultimately be determined that he is not entitled to be indemnified under this section or otherwise.

 

  

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ARTICLE VI

 

MISCELLANEOUS PROVISIONS

 

Section 6.1                      Governing Law.  The validity, construction, interpretation and enforceability of this Agreement shall be determined and governed by the laws of the State of New York.

 

Section 6.2                     Assignment.  This Agreement shall inure to the benefit of and shall be binding upon the heirs and legal representatives of the Employee and upon the successors and assigns of the Company.  The Company may not assign any of its rights, or delegate any of its obligations hereunder without the prior written consent of the Employee, and any purported assignment or delegation without such written consent shall be void and of no force or effect.  This Agreement is a personal service contract and it may not be assigned by the Employee; the Agreement is, however, expressly assignable by the Company to an affiliate of the Company.

 

Section 6.3                      Remedies.

 

(a)                    Termination of this Agreement shall not constitute a waiver of the Company's or the Employee’s rights under this Agreement or otherwise, nor a release of the Company or the Employee from its or his obligations under Article III hereof.

 

(b)                    The rights and remedies provided each of the parties herein shall be cumulative and in addition to any other rights and remedies provided by law or otherwise.  Any failure in the exercise by either party of his or its right to terminate this Agreement or to enforce any provision of this Agreement for default or violation by the other party shall not prejudice such party's right of termination or enforcement for any further or other default or violation.

 

Section 6.4                      Entire Agreement; Amendment.  This Agreement constitutes the entire agreement between the parties respecting the Employee's employment. This Agreement may be amended only by an instrument in writing executed by the parties hereto.

 

Section 6.5                      Notices.  Any notice, request, demand or other communication hereunder shall be in writing and shall be deemed to be duly given when personally delivered to an officer of the Company or to the Employee, as the case may be, or when delivered by mail at the addresses set forth below or such other address as may be subsequently designated in writing:

 

  

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The Employee:              John Larson

                                                         11150 North Calamondin Place

                                                         Tucson, AZ 85737 USA

The Company:              TC Power Management Corp.

                                                         c/o Sanders Ortoli Vaughn-Flam Rosenstadt LLP

                                                         501 Madison Avenue 

                                                         New York, NY 10022

                                                         United States

With copy to:                Sanders Ortoli Vaughn-Flam Rosenstadt LLP

                                                         501 Madison Avenue – 14th Floor

                                                         New York, New York 10022

                                                         Attn: Steven A. Sanders, Esq.

Section 6.6                      Severability.  The provisions of this Agreement and any exhibits are severable and, if any one or more provisions may be determined to be illegal or otherwise unenforceable, the remaining provisions shall be enforceable.  Any partially enforceable provisions shall be enforceable to the extent enforceable.

 

Section 6.7                      Gender.  Throughout this Agreement, the masculine gender shall be deemed to include the feminine and neuter, and vice versa, and the singular the plural, and vice versa, unless the context clearly requires otherwise.

 

Section 6.8                      Freedom To Contract.  The Employee represents and warrants that he has the right to enter into this Agreement and that no other agreements exist, whether written or oral, which would be in conflict with any of the terms and conditions of this Agreement.  The Employee represents and warrants that he will not enter into any agreement, which is in conflict with the terms and conditions of this Agreement.

 

Section 6.9                      Waiver of Breach.  Either party’s waiver of a breach of any provision of this Agreement by the other shall not operate or be construed as a waiver of any subsequent breach by such other party. No waiver shall be valid unless in writing and, in the case of Company, signed by an authorized officer of the Company.

 

  

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Section 6.10                    Headings.  Headings in this Agreement are for convenience only and shall not be used to interpret or construe its provisions.

 

Section 6.11                    Waiver of Jury Trial.  The Parties hereto waive the right to a jury with respect to the resolution of any dispute brought in connection with this Agreement.

 

Section 6.12.                  Successors; Binding Effect; Third Party Beneficiaries.  In the event of a future disposition by the Company (whether direct or indirect, by sale of assets or stock, merger, consolidation or otherwise) of all or substantially all of its business and/or assets, the Company will require any successor, by agreement in form and substance reasonably satisfactory to Employee or by operation of law, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such disposition had taken place. As used in this Agreement, “the Company” shall mean the Company as herein before defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

 

 

 

  

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IN WITNESS WHEREOF, with due authorization the parties have executed this Agreement as of the day and year first above written.

 

THE COMPANY

TC Power Management Corp.

a Nevada corporation

By:  /s/ Francisco Quiroz

Name: Francisco Quiroz

Its:  Chief Executive Officer

                                                                    

EMPLOYEE

/s/ John Larson

John Larson

  

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EXHIBIT A

 

Compensation

	
A.

	
Salary

 

During the Initial Term of this Agreement, the Company shall provide Employee a guaranteed salary of $180,000.00 per annum, payable monthly in accordance with the Company’s normal payroll practices.  After the Initial Term, the Employee’s salary shall be determined by the Board, based on its good faith determination of the Employee’s performance of his duties hereunder, the financial and business condition and prospects of the Company, and prevailing market standards for executives having experience and responsibilities comparable to those of the Employee.

 

B.           Stock Options

 

Effective as of the date of this Agreement, Employee shall receive stock options (which shall be incentive stock options under the U.S. Internal Revenue Code) to purchase 5,500,000 shares of the Company’s common stock at $0.25 per share for a period of ten (10) years from the date that such options vest, of which (i) 2,200,000 shall vest on the date hereof, (ii) 1,400,000 shall vest on the one-year anniversary hereof (provided that the Employee is still an employee of the Company, (iii) 1,300,000 shall vest on the two-year anniversary hereof (provided that the Employee is still an employee of the Company) and (iv) 600,000 shall vest on the three-year anniversary hereof (provided that the Employee is still an employee of the Company; provided, however, that (a) if the Company sells shares of its common stock or any other securities convertible into its common stock at a price which is less than $0.25 per share on or after the date of this Agreement, the exercise price for the options shall be the lowest price paid for the Company’s common stock or the lowest price into which such other securities are then convertible and (b) upon any stock split or stock dividend affecting all stockholders, the number of options and exercise price thereof shall be accordingly adjusted.  The stock options will have standard cashless exercise provision.

 

  

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C.           Stock Awards

 

The Employee shall be granted a stock award, as a signing bonus, in the amount of one hundred thousand shares (100,000) of common stock.  The Company will issue the shares in the most tax advantage manner available to the employee.

 

As well, and for so long as the Employee is an employee of the Company, the Company shall pay the Employee an award of (i) 100,000 shares of common stock within 30 days of the verified determination of all single discoveries between 250,000 and 499,999 ounces gold equivalent (such determination in accordance with Canadian National Instrument 43-101- and/or JORC- compliant measured and/or indicated Resource) and (ii) an additional 100,000 share stock award for each additional 250,000 ounces gold equivalent single discoveries up to a maximum of 400,000 shares for over 1 million ounces gold equivalent. (i.e. total of 400,000 shares for every 1 million ounce (or greater) gold or gold equivalent discovery in accordance with Canadian National Instrument 43-101- and/or JORC-compliant measured and/or indicated Resource).

 

  

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EXHIBIT B

Benefits

The Employee shall be provided with benefits now or in the future provided by the Company to its employees and executives, including but not limited to comprehensive family health insurance and disability insurance.  In the event that the Company does not offer health and disability insurance to its employees, the Company and the Employee will diligently explore options for health care provided directly through the Company.  In the interim, the Company shall reimburse Employee for the costs of obtaining such coverage.

 

(a)           The Employee shall be promptly reimbursed for the following expenses: (i) meals/entertainment, airfare, hotel, cellular phone fees and other business-related charges and expenses necessary for the Employee to fully perform his functions as the President and Chief Executive Officer of the Company, provided that Employee submits proper expense reports and receipts for such permitted business expenses in accordance with Company policy, (ii) gifts and contributions approved by the Board, (iii) reasonable expenses necessary to maintain a home office (including the one-time purchase of a new laptop computer) and (iv) quarterly payments of up to $5,000 for medical insurance payments (the “Medical Insurance Payments”) upon provision of receipts thereof.

 

(c)           The Employee shall be entitled to six weeks paid vacation in each year.  A maximum of 50% vacation may be carried over from one year to the next, unless the Employee receives a written extension from the Company’s Board of Directors.  The Employee shall also be entitled to all paid holidays given by the Company to its employees and key management personnel.

 

(d)           The Employee shall be provided, at Company’s expense, with remote computer access from home, as available.  The Company agrees to provide such access promptly pursuant to the estimate provided to the Company.

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