Document:

ex10-1.htm

Exhibit 10.1

 

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”), dated June 9, 2011, to be effective as of the Commencement Date, amends, restates and supersedes in its entirety, the Employment Agreement dated the 1st day of October, 2004, as amended on the 13th day of July 2009 (collectively the “Prior Agreement”), between American International Industries, Inc., a Nevada corporation, having its principal place of business at 601 Cien Street, Suite 235, Kemah, Texas 77565 (the “Company”), and Daniel Dror (the “Executive”), each a “Party” and collectively the “Parties.”

WHEREAS, the Company has benefited from the services of Executive for many years and desires to formalize the terms of the employment of Executive pursuant to this amended employment agreement (“Employment Agreement”) and Executive desires to continue to be employed by the Company as Chief Executive Officer and President of the Company pursuant to this Employment Agreement.

NOW, THEREFORE, in consideration of the premises and covenants herein contained, the parties hereto agree as follows:

1.           Term of Agreement. Subject to the terms and conditions hereof, the term of employment of the Executive under this Employment Agreement shall be for the period commencing effective March 30, 2011 (the "Commencement Date”) and terminating on March 30, 2016, subject to the provisions of this Employment Agreement. Such term of employment is herein called the "Employment Term.”

2.           Employment. As of the Commencement Date, the Company hereby agrees to employ the Executive as Chief Executive Officer and President of the Company, and the Executive hereby accepts such employment and agrees to perform his duties and responsibilities hereunder in accordance with the terms and conditions hereinafter set forth.

3.           Duties and Responsibilities. Executive shall serve as Chief Executive Officer and President during the Employment Term. Executive shall report to and be subject to the direction of the board of directors of the Company, of which the Executive has served and shall continue to serve as chairman and shall perform duties which are consistent with his current title and position as Chief Executive Officer and President of the Company and such other duties as may be assigned to him from time to time by the board of directors which are consistent with his position of management and leadership. During the Employment Term, Executive shall devote his full time, skill, energy and attention to the business of the Company and shall perform his duties in a diligent, trustworthy, loyal and businesslike manner.

4.           Compensation and Benefits During the Employment Term:

	
(a)  

	
The Executive’s base compensation shall be at the rate of $10,000 per month, for the term of this Agreement, payable in regular semi-monthly installments in accordance with the Company’s practice for its executives. At the election of the Executive, his compensation may be payable in shares of the Company’s restricted common stock or such other form as may be appropriate, or at the election of the Executive pursuant to an exemption from registration under the Securities Act of 1933, as amended (the “Act”). Cash compensation shall be less applicable withholding for income and employment taxes as required by law and other deductions as to which the Executive shall agree. Such base compensation shall be subject to increases as and when determined by the Company’s board of directors at its sole discretion. Any unpaid balance during the year shall be adjusted and paid on or before each fiscal year end.

	
(b)  

	
In addition to the Executive’s base compensation, Executive will be entitled to a bonus as determined by the Company’s board of directors from time to time. Further, the Executive shall be entitled to a special bonus in the event that lenders or investment bankers working with the Company require the personal guarantee of the Executive. In the event of a change in control of the Company, resulting in Executive ceasing to serve as the Company’s Chief Executive Officer, President and Chairman, Executive shall be entitled to receive and the Company shall pay to Executive within ninety (90) days of the change in control a sum equal to five (5) years of the base salary then payable to Executive under this Employment Agreement, and issue to Executive the shares underlying the common stock purchase warrants provided in 4(d) below, based upon and adjusted exercise price equal to par value of the shares at the date of the change in control and $1,000,000 cash. The Company shall provide and pay premiums on life insurance policy on the Executive (up to $3,000,000 in coverage), with the beneficiary designated by the Executive.

	
(c)  

	
The Executive shall be entitled to reimbursement of all reasonable, ordinary and necessary business related expenses incurred by him in the course of his duties and upon compliance with the Company’s procedures.

	
(d)  

	
In addition to the Executive’s base compensation, the Executive shall receive $10,000 per month in restricted shares of common stock per month at the Company’s option, commencing on January 1, 2008 and on each consecutive month thereafter during the term of this Employment Agreement, which number of shares shall be subject to upward adjustment as determined by the board of directors.

	
(e)  

	
In consideration for Executive agreeing to enter into an amended and restated employment agreement and Executive agreeing to personally guaranty the following loans of the Company (1) a $1,450,000 loan to Northeastern Plastics (“NPI”) at Icon Bank; (2) a $3,000,000 loan to Delta Seaboard at Trustmark National Bank; (3) a $1,850,000 loan to the Company, Rob Derrick and Ron Burleigh at Texas Community Bank (which has since been repaid); and (4) a $3,250,000 loan to NPI at Trustmark National Bank; from time to time, which the Company agrees it has received and continues to receive significant value in connection therewith, the Company agrees to issue the Executive 1,000 shares of Series A Preferred Stock, in the form of the Amended and Restated Certificate of Designation of the Company’s Series A Preferred Stock, attached hereto as Exhibit A.

5.           Termination. The Company may terminate this Employment Agreement (1) for death or disability under Section 5(a) or 5(b); (2) with “cause” as set forth under Section 5(c); or this Agreement may be terminated by the Executive for good reason as defined under Section 5(d). All other terminations which may occur shall constitute a breach of this Employment Agreement.

	
(a)

	
The Company shall have the right to terminate the employment of the Executive under this Employment Agreement for disability in the event Executive suffers an injury, illness or incapacity of such character as to substantially disable him from performing his duties without reasonable accommodation by the Company hereunder for a period of more than one hundred and twenty (120) consecutive days upon the Company giving at least thirty (30) days written notice of termination; provided, however, that if the Executive is eligible to receive disability payments pursuant to a disability policy paid for by the Company, the Executive shall assign such benefits to the Company for all periods as to which he is receiving full payment under this Employment Agreement.

 

	
(b) 

	
This Employment Agreement shall terminate upon the death of Executive.

 

	
(c)

	
The Company may terminate this Employment Agreement at any time because of (i) Executive's material breach of any term of this Employment Agreement, (ii) the willful engaging by the Executive in misconduct which is materially injurious to the Company, monetarily or otherwise; provided, in each case, however, that the Company shall not terminate this Employment Agreement pursuant to this Section 5(c) unless the Company shall first have delivered to the Executive, a notice which specifically identifies such breach or misconduct and the Executive shall not have cured the same within thirty (30) days after receipt of such notice, (iii) Executive’s gross negligence in the performance of his duties, or (iv) the failure of Executive to perform his essential duties or comply with reasonable directions of the board of directors.

 

	
(d)  

	
The Executive may terminate his employment for "Good Reason” if: 

(i) he is assigned, without his express written consent, any duties inconsistent with his positions, duties, responsibilities, authority and status with the Company as of the date hereof, or a change in his reporting responsibilities or titles as in effect as of the date hereof;

(ii) his compensation is reduced; or

(iii) (1) the Company shall file a petition for bankruptcy or re-organization under the federal bankruptcy statues or an involuntary petition is filed against the Company and not removed or withdrawn within thirty (30) days or 

       (2) the Company does not pay any material amount of compensation due hereunder and then fails either to pay such amount within the ten (10) day notice period required for termination hereunder or to contest in good faith said notice. Further, if such contest is not resolved within thirty (30) days the Company shall submit such dispute to arbitration, under Section 6.

 

6.           Arbitration. If a dispute should arise regarding this Employment Agreement, all claims, disputes, controversies, differences or other matters in question arising out of this relationship shall be settled finally, completely and conclusively by arbitration of a single arbitrator in Harris County, Texas, in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the “Rules”). Arbitration shall be initiated by written demand. This Employment Agreement to arbitrate shall be specifically enforceable only in the District Court of Harris County, Texas. A decision of the arbitrator shall be final, conclusive and binding on the Company and the Executive, and judgement may be entered in the District Court of Harris County, Texas, for enforcement and other benefits. On appointment, the arbitrator shall then proceed to decide the arbitration subjects in accordance with the Rules. Any arbitration held in accordance with this paragraph shall be private and confidential and no person shall be entitled to attend the hearings except the arbitrator, Executive, Executive’s attorneys, and designated representatives of the Company and their respective attorneys. The matters submitted for arbitration, the hearings and proceedings and the arbitration award shall be kept and maintained in strictest confidence by Executive and the Company and shall not be discussed, disclosed or communicated to any persons. On request of any party, the record of the proceeding shall be sealed and may not be disclosed except insofar, and only insofar, as may be necessary to enforce the award of the arbitrator and any judgement enforcing an award. The prevailing party shall be entitled to recover reasonable and necessary attorneys’ fees and costs from the non-prevailing party.

7.           Opportunities. During his employment with the Company, and for one year thereafter, Executive shall not take any action which might divert from the Company any opportunity learned about by him during his employment with the Company (including without limitation during the Employment Term) which would be within the scope of any of the businesses then engaged in or planned to be engaged in by the Company.

8.           Survival. In the event that this Employment Agreement shall be terminated, then notwithstanding such termination, the obligations of Executive pursuant to Section 7 of this Employment Agreement shall survive such termination.

9.           Contents of Employment Agreement, Parties in Interest, Assignment. This Employment Agreement sets forth the entire understanding of the parties hereto with respect to the subject matter hereof. All of the terms and provisions of this Employment Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of Executive hereunder which are of a personal nature shall neither be assigned nor transferred in whole or in part by Executive. This Employment Agreement shall not be amended except by a written instrument duly executed by the parties.

10.           Severability. If any term or provision of this Employment Agreement shall be held to be invalid or unenforceable for any reason, such term or provision shall be ineffective to the extent of such invalidity or unenforceability without invalidating the remaining terms and provisions hereof, and this Employment Agreement shall be construed as if such invalid or unenforceable term or provision had not been contained herein.

11.           Notices. Any notice, request, instruction or other document to be given hereunder by any party to the other party shall be in writing and shall be deemed to have been duly given when delivered personally or five (5) days after dispatch by registered or certified mail, postage prepaid, return receipt requested, to the party to whom the same is so given or made:

If to the Company, addressed to:

American International Industries, Inc.

601 Cien Street, Suite 235

Kemah, Texas 77565

If to Executive addressed to:

Daniel Dror

601 Hanson Road

Kemah, Texas 77565

or to such other address as the one party shall specify to the other party in writing.

12.           Entire Agreement.  This Agreement sets forth the entire agreement between the Parties with respect to the subject matter hereof, and supersedes any and all prior agreements between the Company and Executive, whether written or oral, relating to any or all matters covered by and contained or otherwise dealt with in this Agreement, including but not limited to the Prior Agreement.  This Agreement does not constitute a commitment of the Company with regard to Executive’s employment, express or implied, other than to the extent expressly provided for herein.

13.           Counterparts and Headings. This Employment Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all which together shall constitute one and the same instrument. All headings are inserted for convenience of reference only and shall not affect the meaning or interpretation of this Employment Agreement.

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

American International Industries, Inc.

By:/s/ SHERRY MCKINZEY

                                                                                      Sherry L. McKinzey, Chief Financial Officer

Executive

By: /s/ DANIEL DROR

       Daniel DrorPotash - Property Acquisition Agreement FINAL (W0096074).DOC

MINING PROPERTY ACQUISITION AGREEMENT

THIS  is dated for reference June 6, 2011.

BETWEEN:

POTASH AMERICA, INC., a company registered pursuant to the laws of the State of Nevada having a registered office at 200 South Virginia Street, 8th Floor, Reno, Nevada, U.S.A., 89501

( “Purchaser”)

AND:

HABITANTS MINERALS LTD., a company having an address at 500 – 120 Eglinton East, Toronto, Ontario, Canada, M4P 1E2

 ( “Vendor”)

A.

The Vendor is the registered beneficial owner of an undivided one hundred percent (100%) interest in and to those certain mineral interests which are more particularly described in Schedule "A" attached hereto (the “Property”); and 

B.

The Vendor wishes to sell to the Purchaser an undivided one hundred percent (100%) interest in and to the Property and any deposits of minerals on the Property, and the Purchaser wishes to acquire the same on the terms and subject to the conditions as are more particularly set forth herein.

THEREFORE in consideration of the mutual covenants and agreements in this Agreement, the parties agree as follows:

1.

DEFINITIONS AND INTERPRETATION

1.1

For the purposes of this Agreement:

(a)

"Affiliate" means any person, partnership, joint venture, corporation or other form of enterprise which directly or indirectly controls, is controlled by, or is under common control with, a party to this Agreement. For purposes of the preceding sentence, "control" means possession, directly or indirectly, of the power to direct or cause direction of management and policies through ownership of voting securities, contract, voting trust or otherwise;

(b)

"Effective Date" means, June 6, 2011;

(c)

"Payment" means the payments contemplated in paragraph 3.2;

(d)

"Property" means properties in Newfoundland, Canada, more particularly described in Schedule "A" of this Agreement; and

(e)

"Property Rights" means all licences, permits, easements, rights-of-way, certificates and other approvals obtained by either of the parties, either before or after the date of this Agreement, and necessary for the development of the Property or for the purpose of placing the Property into production or of continuing production on the Property.

1.2

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

(a)

"this Agreement" means this mining acquisition agreement and all Schedules attached hereto;

(b)

any reference in this Agreement to a designated "Section", "Schedule", "paragraph" or other subdivision refers to the designated section, schedule, paragraph or other subdivision of this Agreement;

(c)

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

(d)

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

(e)

any reference to "party" or "parties" means the Vendor, the Purchaser, or both, as the context requires;

(f)

the headings in this Agreement are for convenience of reference only and do not affect the interpretation of this Agreement; and

(g)

all references to currency refer to United States dollars. 

1.3

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

Schedule "A":

Property-Legal Description and Location

2.

REPRESENTATIONS AND WARRANTIES OF THE VENDORS AND THE PURCHASER

2.1

The Vendor represents and warrants to the Purchaser that:

(a)

the Vendor is the beneficial owner of a 100% interest in the Property and the Vendor has the full right, power, capacity and authority to enter into, execute and deliver this Agreement;

(b)

the Property is free and clear of, and from, all liens, charges and encumbrances with all assessment work therein having been duly completed through the year ended December 31, 2010;

(c)

the Vendor holds all permits, licences, consents and authorities issued by any government or governmental authority which are necessary in connection with the ownership and operation of its business and the ownership of the Property;

(d)

the Property has been properly staked, located and recorded pursuant to the applicable laws and regulations of Newfoundland, Canada and all mining claims comprising the Property are in good standing;

(e)

there are no outstanding agreements or options to acquire the Property or any portion thereof, and no person, firm or corporation has any proprietary or possessor interest in the Property;

(f)

to the best of the Vendor's knowledge, there are no outstanding orders or directions relating to environmental matters requiring any work, repairs, construction or capital expenditures with respect to the Property and the conduct of the operations related thereto, and the Vendor has not received any notice of the same and is not aware of any basis on which any such orders or direction could be made;

(g)

there is no adverse claim or challenge against or to the ownership of or title to any part of the Property and, to the best of the Vendor’s knowledge there is no basis for such adverse claim or challenge which may affect the Property;

(h)

the consummation of the transactions contemplated by this Agreement does not and will not conflict with, constitute a default under, result in a breach of, entitle any person or company to a right of termination under, or result in the creation or imposition of any lien, encumbrance or restriction of any nature whatsoever upon or against the property or assets of the Vendor, under its constating documents, any contract, agreement, indenture or other instrument to which the Vendor is a party or by which it is bound, any law, judgment, order, writ, injunction or decree of any court, administrative agency or other tribunal or any regulation of any governmental authority;

(i)

there are no actual or pending proceedings for, and the Vendor is unaware of any basis for, the institution of any proceedings leading to the placing of the Vendor in bankruptcy or subject to any other laws governing the affairs of insolvent parties and the Property does not represent all or substantially all of the Vendor’s corporate undertaking;

(j)

reclamation and rehabilitation of those parts of the Property which have been previously worked have been properly completed in compliance with all applicable laws;

(k)

the Vendor has advised the Purchaser of all of the material information relating to the mineral potential of the Property of which it has knowledge; and

(l)

there are no mine workings or waste dumps or mine tailings on the property.

2.2

The representations and warranties contained in paragraph 2.1 are provided for the exclusive benefit of the Purchaser, and a breach of any one or more representations or warranties may be waived by the Purchaser in whole or in part at any time without prejudice to its rights in respect of any other breach of the same or any other representation or warranty, and the representations and warranties contained in paragraph 2.1 will survive the execution and delivery of this Agreement.

2.3

The Purchaser represents and warrants to the Vendor that:

(a)

the Purchaser is a valid and subsisting corporation duly incorporated and in good standing under the laws of the State of Nevada, U.S.A.;

(b)

the Purchaser has the full right, power, capacity and authority to enter into, execute and deliver this Agreement and to be bound by its terms;

(c)

the consummation of this Agreement will not conflict with nor result in any breach of its constating documents or any covenants or agreements contained in or constitute a default under any agreement or other instrument whatever to which the Purchaser is a party or by which the Purchaser is bound or to which the Purchaser may be subject; and

(d)

no proceedings are pending for, and the Purchaser is unaware of any basis for, the institution of any proceedings leading to the placing of the Purchaser in bankruptcy or subject to any other laws governing the affairs of insolvent parties.

2.4

The representations and warranties contained in paragraph 2.3 are provided for the exclusive benefit of the Vendor, and a breach of any one or more representations or warranties may be waived by the Vendor in whole or in part at any time without prejudice to its rights in respect of any other breach of the same or any other representation or warranty, and the representations and warranties contained in paragraph 2.3 will survive the execution and delivery of this Agreement.

2.5

The Vendor and the Purchaser acknowledge that the Vendor will maintain control of the Property, subject to this Agreement, and subject to all appropriate local and national governmental approvals and environmental considerations.

3.

PURCHASE

3.1

The Vendor hereby sells to the Purchaser a one hundred percent (100%) undivided interest in and to the Property and all minerals on the Property, free and clear of all claims, taxes, liens or encumbrances, on the terms and conditions set out herein.

3.2

The consideration payable by the Purchaser to the Vendor pursuant to this Agreement shall be for the aggregate consideration of $50,000 consisting of the following: 

(a)

$30,000 which has already been provided to the Vendor, and

(b)

balance of $20,000 on the closing of this Agreement. 

3.3

If the Purchaser identifies any material defect in the Vendor’s title to the Property, the Purchaser shall give the Vendor notice of such defect.  If the defect has not been cured within 30 days of receipt of such notice, the Purchaser shall be entitled to take such curative action as is reasonably necessary, and shall be entitled to deduct the costs and expenses incurred in taking such action from Payments then otherwise due or accruing due to the Vendor.  If there are no such Payments, the Purchaser shall be entitled to a refund in the amount of said costs and expenses.

3.4

If any third party asserts any right or claim to the Property or to any amounts payable to the Vendor, the Purchaser may deposit any amounts otherwise due to the Vendor in escrow with a suitable agent until the validity of such right or claim has been finally resolved.  If the Purchaser deposits said amounts in escrow, the Purchaser shall be deemed not in default under this Agreement for failure to pay such amounts to the Vendor.

4.

PROPERTY EXPLORATION AND MAINTENANCE

4.1

The Purchaser shall be the operator in connection with the Property. 

4.2

The Purchaser agrees that when acting as operator it will submit reports of its exploration activities on the Property to the appropriate government or regulatory authorities as may be required to maintain the Property in good standing.

5.

RIGHT OF ENTRY

5.1

The Purchaser and its employees, agents, directors, officers and independent contractors will have the exclusive right in respect of the Property to:

(a)

enter the Property without disturbance;

(b)

do such prospecting, exploration, development and/or other mining work on and under the Property to carry out exploration expenditures as the Purchaser may determine necessary or desirable;

(c)

bring and erect upon the Property such buildings, plant, machinery and equipment as the Purchaser may deem necessary or desirable in its sole discretion; and

(d)

remove from the Property all metals and minerals derived from its operations on the Property as may be deemed necessary by the Purchaser for testing.

6.

RECORDING OF AGREEMENT

6.1

The Vendor and the Purchaser will execute and deliver such additional documentation as legal counsel for the Vendor and the Purchaser determine is necessary in order to duly register and record in the appropriate registration and recording offices notice that the Vendor’s interest in and to the Property is subject to and bound by the terms of this Agreement.

7.

CONDITIONS PRECEDENT

7.1

The obligation of the Purchaser to consummate the transactions contemplated under this Agreement is subject to the receipt of any required governmental or regulatory approvals and the Purchaser being satisfied with a due diligence review of the title to the Property held by the Vendor which is for the Purchaser’s sole benefit and may be waived in writing by the Purchaser.

8.

JOINT OBLIGATIONS

8.1

Unless this Agreement is terminated in accordance with paragraph 12.1, the parties covenant and agree with each other that they will co-operate in good faith to:

(a)

maintain the Property in good standing by doing and filing all assessment work or making payments in lieu thereof and by performing all other acts which may be necessary in order to keep the Property in good standing and free and clear of all liens and other charges arising from or out of the Purchaser's activities on the Property;

(b)

do all work on the Property in accordance with sound mining, exploration and engineering practices and in compliance with all applicable laws, bylaws, regulations, orders, and lawful requirements of any governmental or regulatory authority and comply with all laws governing the possession of the Property, 

including, without limitation, those governing safety, pollution and environmental matters; and, 

(c)

maintain true and correct books, accounts and records of operations thereunder, such records to be open at all reasonable times upon reasonable notice for inspection by the other party or its duly authorized representative.

9.

RIGHTS AND OBLIGATIONS AFTER TERMINATION

9.1

If this Agreement terminates pursuant to the provisions of paragraph 12.1, then the Purchaser will deliver a deed of quit claim or other appropriate instrument to the Vendors in recordable form whereby the Purchaser will acknowledge and agree that it has no interest either legal or equitable in and to the Property.

10.

FORCE MAJEURE

10.1

If either party is at any time prevented or delayed in complying with any of the provisions of this Agreement (the "Affected Party") by reason of strikes, lockouts, land claims and blockages, NGO activities, forest or highway closures, earthquakes, subsidence, general collapse or landslides, interference or the inability to secure on reasonable terms any private or public permits or authorizations, labour, power or fuel shortages, fires, wars, acts of God, civil disturbances, governmental regulations restricting normal operations, shipping delays or any other reason or reasons beyond the reasonable control of the Affected Party whether or not foreseeable (provided that lack of sufficient funds to carry out exploration on the Property will be deemed not to be beyond the reasonable control of the Affected Party), then the time limited for the performance by the Affected Party of its obligations hereunder will be extended by a period of time equal in length to the period of each such prevention or delay.  Nothing in this paragraph 10.1 or this Agreement will relieve either Party from its obligation to maintain the claims comprising the Property in good standing and to comply with all applicable laws and regulations including, without limitation, those governing safety, pollution and environmental matters.

10.2

The Affected Party will promptly give notice to the other party of each event of force majeure under paragraph 10.1 within 7 days of such event commencing and upon cessation of such event will furnish the other party with written notice to that effect together with particulars of the number of days by which the time for performing the obligations of the Affected Party under this Agreement has been extended by virtue of such event of force majeure and all preceding events of force majeure.

11.

CONFIDENTIAL INFORMATION

11.1

The terms of this Agreement and all information obtained in connection with the performance of this Agreement will be the exclusive property of the parties hereto and except as provided in paragraph 11.2, will not be disclosed to any third party or the public without the prior written consent of the other party, which consent will not be unreasonably withheld.

11.2

The consent required by paragraph 11.1 will not apply to a disclosure:

(a)

to an Affiliate, consultant, contractor or subcontractor that has a bona fide need to be informed;

(b)

to any third party to whom the disclosing party contemplates a transfer of all or any part of its interest in this Agreement;

(c)

to a governmental agency or to the public which such party believes in good faith is required by pertinent laws or regulation or the rules of any applicable stock exchange;

(d)

to an investment dealer, broker, bank or similar financial institution, in confidence if required as part of a due diligence investigation by such financial institution in connection with a financing required by such party or its shareholders or affiliates to meet, in part, its obligations under this Agreement; or

(e)

in a prospectus or other offering document pursuant to which such party proposes to raise financing to meet, in part, its obligations under this Agreement.

12.

DEFAULT AND TERMINATION

12.1

Subject to section 10, if at any time a party is in default of any requirement of this Agreement or is in breach of any provision contained in this Agreement, the party affected by the default (the "Non-Defaulting Party") may terminate this Agreement by giving written notice of termination to the other party but only if:

(a)

it will have given to the other party written notice of the particular failure, default, or breach on the part of the other party; and

(b)

the other party has not, within 30 days following delivery of such written notice of default, cured such default or commenced to cure such default, it being agreed by each party that should it so commence to cure any default it will prosecute such cure to completion without undue delay.

12.2

Notwithstanding any termination of this Agreement, the Purchaser will remain liable for those obligations specified in Sections 9, 11 and 13 and the Vendor will remain liable for its obligations under Subsection 3.4 and Sections 11 and 13.

13.

INDEPENDENT ACTIVITIES

13.1

Except as expressly provided herein, each party shall have the free and unrestricted right to independently engage in and receive the full benefit of any and all business endeavours of any sort whatsoever, whether or not competitive with the endeavours contemplated herein without consulting the other or inviting or allowing the other to participate therein. No party shall be under any fiduciary or other duty to the other which will prevent it from engaging in or enjoying the benefits of competing endeavours within the general scope of the endeavours contemplated herein. The legal doctrines of "corporate opportunity" sometimes 

applied to persons engaged in a joint venture or having fiduciary status shall not apply in the case of any party. In particular, without limiting the foregoing, no party shall have any obligation to any other party as to:

(a)

any opportunity to acquire, explore and develop any mining property, interest or right presently owned by it or offered to it outside of the Property at any time; and

(b)

the erection of any mining plant, mill, smelter or refinery, whether or not such mining plant, mill, smelter or refinery treats ores or concentrates from the Property.

14.

INDEMNITY

14.1

The Vendor covenants and agrees with the Purchaser (which covenant and agreement will survive the execution, delivery and termination of this Agreement) to indemnify and save harmless the Purchaser against all liabilities, claims, demands, actions, causes of action, damages, losses, costs, expenses or legal fees suffered or incurred by the Purchaser, directly or indirectly, by reason of or arising out of any warranties or representations on the part of the Vendor herein being untrue or arising out of work done by the Vendor on or with respect to the Property.

14.2

The Purchaser covenants and agrees with the Vendor (which covenant and agreement will survive the execution, delivery and termination of this Agreement) to indemnify and save harmless the Vendor against all liabilities, claims, demands, actions, causes of action, damages, losses, costs, expenses or legal fees suffered or incurred by reason of or arising out of any warranties or representations on the part of the Purchaser herein being untrue or arising out of the Purchaser and its duly authorized representatives accessing the Property.

15.

GOVERNING LAW

15.1

This Agreement will be construed and in all respects governed by the laws of the State of Nevada.

16.

NOTICES

16.1

All notices, payments and other required communications and deliveries to the parties hereto will be in writing, and will be addressed to the parties as follows or at such other address as the parties may specify from time to time:

(a)

to the Vendor:

HABITANTS MINERALS LTD., a company having an address at 500 – 120 Eglinton East, Toronto, Ontario, Canada, M4P 1E2.

and:

(b)

to the Purchaser:

POTASH AMERICA, INC., a company having an address at 200 South Virginia Street, 8th Floor, Reno, Nevada, U.S.A., 89501

Notices must be delivered, sent by prepaid registered mail or if transmitted by facsimile or other form of recorded communication, tested prior to transmission to such Party and addressed to the Party to which notice is to be given. If notice is sent by facsimile or other form of recorded communication or is delivered, it will be deemed to have been given and received at the time of transmission or delivery. If notice is mailed, it will be deemed to have been received five business days following the date of the mailing of the notice. If there is an interruption in normal mail service due to strike, labour unrest or other cause at or prior to the time a notice is mailed the notice will be sent by facsimile or other form of recorded communication or will be delivered.

16.2

Either party hereto at any time or from time to time notify the other party in writing of a change of address and the new address to which a notice will be given thereafter until further change.

17.

ASSIGNMENT

17.1

The Purchaser has the right to assign all or any part of its interest in the Property and this Agreement.  It shall be a condition to any such assignment that the assignee of the interest being transferred agrees in writing to be bound by the terms of this Agreement, as if it had been an original party hereto.

18.

ENTIRE AGREEMENT

18.1

This Agreement constitutes the entire agreement between the Vendor and the Purchaser and will supersede and replace any other agreement or arrangement, whether oral or in writing, previously existing between the parties with respect to the subject matter of this Agreement.

19.

CONSENT OR WAIVER

19.1

No consent or waiver, express or implied, by either party hereto in respect of any breach or default by the other party in the performance by such other party of its obligations under this Agreement will be deemed or construed to be consent to or waiver or any other breach or default.

20.

FURTHER ASSURANCES

20.1

The parties will promptly execute, or cause to be executed, all bills of sale, transfers, documents, conveyances and other instruments of further assurance which may be reasonably necessary or advisable to carry out fully the intent and purpose of this Agreement or to record wherever appropriate the respective interests from time to time of the parties hereto in and to the Property.

21.

SEVERABILITY

21.1

If any provision of this Agreement is or will become illegal, unenforceable or invalid for any reason whatsoever, such illegal, unenforceable or invalid provisions will be severable from the remainder of this Agreement and will not affect the legality, enforceability or validity of the remaining provisions of this Agreement.

22.

ENUREMENT

22.1

This Agreement will enure to the benefit of and be binding upon the parties hereto and their respective successors and assigns.

23.

AMENDMENTS

23.1

This Agreement may only be amended in writing with the mutual consent of all parties.

24.

COUNTERPARTS

24.1

This Agreement may be executed in any number of counterparts and by facsimile transmission with the same effect as if all parties hereto had signed the same document. All counterparts will be construed together and constitute one and the same agreement.

IN WITNESS WHEREOF the parties hereto have executed this Agreement the 6th day of June, 2011.

POTASH AMERICA, INC.

Per:  /s/ “Barry Wattenberg”

Authorized Signatory

HABITANTS MINERALS LTD.

Per:  /s/ “Samantha Ram”

Authorized Signatory

SCHEDULE "A"

Licence 018321M

												
	Licence Holder:

	Habitants Minerals Ltd.

	Address:

	500 - 120 Eglinton East

Toronto, ON

Canada, M4P 1E2 

	Licence Status:

	Issued 

	Location:

	Robinsons River,Western Nfld

	Electoral Dist.:

	11    St. George's-Stephenville

	Recorded Date:

	2010/12/03

	Issuance Date:

	2011/01/03

	Renewal Date:

	2016/01/03 

	Report Due Date:

	2012/03/05 

	Org. No. Claims:

	11.0000

	Cur. No. Claims:

	11.0000

	Recording Fee:

	$110.00

	Receipt(s):

	57044012

	(2010/12/03)

	$110.00

	 

	Deposit Amount:

	$550.00

	Deposit:

	57044012

	(2010/12/03)

	$550.00

	 

	Map Sheet No(s):

	12B/02

	 
	 

	Comments:

	 

	 
	 

	Mapped Claim Descripton:

	Beginning at the Northeast corner of the herein described parcel of land, and said corner having UTM coordinates of 5 340 000 N, 362 500 E; of Zone 21; thence South 1,500 metres, thence West 1,500 metres, thence North 500 metres, thence West 500 metres, thence North 1,000 metres, thence East 2,000 metres to the point of beginning. All bearings are referred to the UTM grid, Zone 21. NAD27.

	 

	Land Claims (effective 2005/12/01):

	 
	LISA: 0.00%

	LIL: 0.00%

	VBP: 0.00%

	Crown: 100.00%

	 

	 

	Extensions:

	None

	 
	 

	Work Reports:

	None

	 

	              $2,200.00 to be expended on this license by 2012/01/03

														
	 

	Licence Transfers:

	 

	New Holder

	Transfer Date

	Fee

	Receipt Number

	Receipt Date

	Volume/Folio

	 

	_________________________________________________________________________

	Habitants Minerals Ltd.

	2011/03/15

	 
	 
	 
	24/134

	 

	 

	Partial Surrenders:

	None

	 

	This Licence replaces Licence Number(s):

	None

	 

	This Licence is replaced by Licence Number(s):

	None

	 

	Work Report Descriptions:

	None

	 

	Detailed breakdown of projected required expenditure:

	 

	Actual Year

	Actual Expenditure

	 
	Work Year

	Excess Expenditure

	Claims

	_________________________________________________________________________

	1

	$0.00

	 
	 
	 
	 

	 
	 
	 
	1

	-$2,200.00

	11.0000

	_________________________________________________________________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00191-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00191-of-00352.parquet"}]]