Document:

exv10w5

Exhibit 10.5

ROYALTY STREAM AGREEMENT

     THIS AGREEMENT is made effective the 20th day of January, 2009, by and between Coeur Mexicana
S. A. de C. V., herein referred to as “Operator”, and Franco-Nevada Mexico Corporation S. A. de C.
V. herein referred to as “Payee”. Operator, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, has granted, bargained, sold, remised, released, and
forever assigned, and by these presents does grant, bargain, sell, remise, release and forever
assign, unto the Payee the rights and interests, subject to the obligations, set forth below.

     WHEREAS Operator has agreed to sell and Payee has agreed to purchase a royalty stream relating
to the Palmarejo Project in Mexico for a purchase price of up to US$75,000,000 in cash and
US$5,000,000 in Special Warrants, exercisable into common shares of the public parent of the Payee
on the satisfaction of certain conditions on or before September 15, 2010;

     AND WHEREAS this Royalty Stream Agreement is entered into to set out the specific rights and
obligations of Operator and Payee in respect of the royalty stream relating to the Palmarejo
Project in Mexico;

     AND WHEREAS it is anticipated that the Spanish version of this Royalty Stream Agreement will
be registered against the interest of Operator in the Mining Property to provide notice that the
obligations under this Royalty Stream Agreement are a lien on the Mining Property;

     1. Meaning of Terms.

          (a) “Business Day” means a day on which banks are generally open for the transaction of
regular business in each of Mexico City, Toronto, Canada and Boise, Idaho;

          (b) “Cost Deduction” means US$400 per ounce of Gold for the first four years of this Agreement
and from January 13, 2013 a 1% annual inflation compounding adjustment will apply to the U.S.$400
figure (as previously adjusted) on each succeeding anniversary of the date of this Agreement;

          (c) “Environmental Obligations” shall have the meaning set forth in Section 6 hereof;

          (d) “Gold” means any and all gold or gold products whether in the form of concentrate, doré,
metal bars and any materials containing gold which are mined, excavated, extracted, recovered in
soluble solution or otherwise recovered, produced or taken from the Property;

          (e) “Gold Metal” means a form of gold bullion, with a fineness of not less than .995 fine, as
refined by a commercially acceptable gold refiner;

          (f) “Gold Price” means for the purposes of Section 4, the arithmetic mean average of the
London Bullion Market Association’s, Afternoon Gold Fix, spot gold price in US

 

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dollars for the applicable period; provided, however, that if the spot gold price is no longer
available or published from the London Bullion Market Association’s Afternoon Gold Fix, then “Gold
Price” shall mean, for purposes of Section 4, the price described in Section 4.2 hereof;

          (g) “Hedging Transactions” means any and all activities by which the Operator sells or
disposes of Gold Metal by engaging in any commodity futures trading, option trading, metals
trading, or sales or dispositions of Gold Metal for other than spot prices, or any combination
thereof, and any other hedging transactions;

          (h) “Laws” means all applicable present or future federal, canton, provincial, state and local
laws, statutes, rules, regulations, permits, ordinances, certificates, licenses and other
regulatory requirements of Canada or United States of America or Mexico whether relating to
Operator and its operations and activities on or with respect to the Property or relating to Payee
and its operations and activities;

          (i) “Mining Properties” means the mining concessions listed in Exhibit A attached hereto, the
whole of which is commonly referred to as the Palmarejo Project;

          (j) “MR Amount” means an amount equal to 4,167 troy ounces of gold per month for each month
commencing July, 2009 and ending in the month in which Royalty payments have been paid to the Payee
under this Royalty Stream Agreement in the aggregate relating to a total of 400,000 ounces of Gold;

          (k) “NI 43-101” means National Instrument 43-101 — Standards of Disclosure for Mineral
Projects of the Canadian Securities Administrators, or any successor instrument, rule or policy;

          (l) “Offtake Party” means the smelter, refiner, processor, offtake party, purchaser or other
recipient to whom Production is shipped or delivered by Operator;

          (m) “Operator” includes all of Operator’s successors-in-interest in the Property subject to
the terms of section 12.2 and its corporate successors and permitted assigns to the Mining
Properties including inter alia assignees, lessees and, when applicable, mortgagees of the Property
and to the extent any shall have an interest in the Property, Operator’s subsidiary, parent or
affiliated companies;

          (m) “Party” or “Parties” means one or more of the persons or entities who or which are a party
to this Agreement;

          (n) “Payee” includes all of Payee’s successors-in-interest, including inter alia assignees,
partners, joint venture partners, lessees and, when applicable, mortgagees and Payee’s subsidiary,
parent, sister or affiliated companies;

          (o) Production” means 50% of the number of troy ounces of Gold Metal contained in the
production from the Property which were delivered to an Offtake Party by the Operator;

 

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          (p) “Produced Gold Returns” has the meaning ascribed to that term in section 4.1;

          (q) “Property” means all of the right, title and interest in the Mining Properties described
in Exhibit A attached hereto and all other real property rights, including rights to use the
surface lands connected with the Mining Properties (“Interests in Land”), and incorporated herein
by this reference and shall includes all future or after-acquired right, title and interest of
Operator or any affiliate thereof in and to replacement, substitute or additional Interests in Land
in the Area of Interest marked in Exhibit B and all renewals, extensions, amendments, restatements
and replacements thereof.;

          (r) “Royalty” means the Royalty described in Section 4 of this Agreement, together will all
other rights of the Payee as set forth elsewhere in this Agreement.

     2. Term. The term of this Agreement shall be perpetual, it being the intent of the
Parties hereto that, to the extent allowed by law, this Agreement and the Royalty created hereby
constitute grant of a vested interest in the Property and all successions thereof whether created
privately or through governmental action.

     3. Property Subject to Royalty. The Property subject to this Agreement, generally
known as the Palmarejo Project, includes without limitation all real, personal, and other property
rights or interests appurtenant to the Property as is more particularly described above and in
Exhibit A attached hereto and incorporated herein by this reference.

     4. Royalty. Operator shall pay to Payee a perpetual Royalty in the amount of the
Produced Gold Returns from the sale or other disposition of Gold produced from the Property,
determined in accordance with the provisions set forth in this Section and, if applicable, Section
8.

          4.1. Produced Gold Returns for shipments in a month shall be determined by multiplying:

          (a) prior to the end date in the definition of MR Amount, the greater of (i) Production and
(ii) MR Amount or after such end date, Production; by

          (b) the remainder of the Gold Price for such month after subtracting therefrom the Cost
Deduction. In the event the Cost Deduction is greater than the Gold Price, no Produced Gold Returns
are payable for that month. In no event shall the Produced Gold Returns be negative.

          4.2. Unavailable Spot Prices. If the applicable spot prices in the definition of Gold
Price for use in Section 4.1 are no longer available from the London Bullion Market Association’s
Afternoon Gold Fix, then the Gold Price shall be determined from the New York Commodities
Exchange’s settlement price for gold’s most actively traded futures contract, adjusted (as
described in the following sentence) to yield a spot gold price. Such adjustment shall be a
transparent, market-acceptable calculation used by all market-makers, bullion banks and brokers
that is mutually acceptable to Operator and Payee. If the Gold Price cannot be determined from the
London Bullion Market Association’s Afternoon Gold Fix (as described in

 

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the definition of Gold Price) or from an adjustment of the New York Commodities Exchange’s
settlement price for gold’s most actively traded futures contract (as described above), then the
spot price for gold will be determined as the arithmetical mean average of the bid and ask spot
gold prices as published on the bullion desk internet website (www.thebulliondesk.com) as close to
10 am New York time as practicable; provided that if none of the aforementioned methods
for determining spot prices shall be available, the parties shall select a comparable commodity
quotation for purposes of calculating the Produced Gold Returns. If such selection has not been
completed prior to the end of the calendar month following the month in which the applicable spot
prices are no longer available, the mean average spot price for the calendar month in which the
spot price becomes no longer available shall be used on an interim basis pending such selection.

          4.3. Time and Manner; In-Kind or Cash Payment. Within the time provided in Section
4.4, Operator shall pay, or cause the Offtake Party to pay, the Royalty in accordance with written
instructions given to the Operator by Payee as provided in Section 4.3.1. Once Operator has
received instructions from Payee, such instructions shall remain in effect until Operator has
received different instructions from Payee. Payee may, from time to time in its discretion, change
the bank or account number for payment under to Section 4.3.1 by giving written notice thereof to
the Operator; (in accordance with Section 12.7). All costs charged by the Offtake Party as a result
of complying with the payment provisions of Sections 4.3 and 4.4 shall be paid by Payee, and
Operator shall have no liability or responsibility therefor.

               4.3.1. The Operator shall pay, or cause the Offtake Party to pay, the Royalty for each month
either (a) in the form of gold bullion (.995+ fine gold) directly to Payee’s account maintained
with the Offtake Party as directed by Payee, which amount shall be the Produced Gold Returns
divided by the applicable average month’s Gold Price (the mechanics of which calculation are
illustrated for greater clarity in Exhibit C hereto), or (b) by delivery of an electronic funds
transfer payment to Payee’s account with a bank to be designated in writing by Payee. All costs,
charges and risk of loss relating to the payment of such Royalty in gold bullion shall be paid or
assumed by the Payee once the direction to the Offtake Party has been properly delivered by
Operator. Payee shall set up accounts with the Offtake Parties to permit the delivery of Gold to
Payee’s account .

               4.3.2 IVA Taxes. Operator shall gross up the amount of the royalty payment, or will
cause the Offtake Party to gross up the amount of the Royalty payment, by the applicable IVA (or
any similar replacement taxes) amounts which the Payee will remit as required by Law.

          4.4. Payment Accounting; Interim Settlements; Late Charges. All credits or payments of
the Royalty shall be accompanied by a detailed statement explaining the manner in which the payment
was calculated together with any available settlement sheets from the Offtake Party. In no event
shall payment of the Royalty in respect of any month be made later than fifteen (15) days after the
end of the applicable month. Should for any reason shipments of any Gold to the Offtake Party or
other purchaser be delayed beyond 20 calendar days following the time at which the quantities of
Gold have reached the highest point of beneficiation on the Property payment of the Royalty
relating to such late shipments will be estimated by the Operator based on the mill assays and paid
with the next month’s Royalty payment to the Payee

 

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and accompanied by copies of such assays. Such payments and statements shall be deemed
conclusively correct unless Payee objects to them in writing within fifteen (15) months after
receipt thereof. On those occasions when all necessary information is not available to the Operator
within the fifteen (15) day period following the end of each month, the Operator shall make an
interim settlement of the Royalty for the previous month within the fifteen (15) day period; such
interim settlement shall provide for payment of not less than ninety percent (90%) of the
anticipated final settlement Royalty as determined by the assays and quantities of the Gold
received by the Offtake Party with respect to which such interim settlement is being made. Final
settlement of the Royalty shall be promptly made upon receipt by the Operator of all information
necessary or appropriate to make final settlement. In the event payment of any Royalty is not made
within the time set forth above, Payee may give the Operator notice in writing of such default, and
unless within five (5) days of receipt of such notice Payee shall have received such Royalty
payment, then Operator shall pay an additional sum equal to ten percent (10%) of the delinquent
payment (“late charge”) plus interest on the delinquent payment and the late charge at the rate
twelve percent (12%) per annum which shall accrue from the day three months after the delinquent
payment was due to the date of payment of the Royalty, late charge and accrued interest. For
accounting purposes of the Payee, the Operator shall report to the Payee by the 10th
Business Day of the each month a good faith estimate of the Royalty owing to the Payee for the
preceding month.

          4.5. Hedging Transactions: Futures, Options and Other Trading. All profits and losses
resulting from Operator engaging in any Hedging Transactions are specifically excluded from
Royalty calculations pursuant to this Agreement. All Hedging Transactions by Operator and all
profits or losses associated therewith, if any, shall be solely for Operator’s account.

          4.6. Commingling. Before any Gold produced from the Property is commingled with
minerals from properties that are not one of or do not constitute part of the Mining Properties
(the “Other Properties”), the Gold produced from the Property shall be measured and sampled in
accordance with sound mining and metallurgical practices for moisture, metal, commercial minerals
and other appropriate content. Representative samples (based upon mutually agreed upon industry
standards protocols) of the Gold shall be retained by Operator and assays (including moisture and
penalty substances) and other appropriate analyses of these samples shall be made before
commingling to determine metal, commercial minerals, and other appropriate content. Reasonably
detailed records shall be kept by Operator consistent with industry practices showing measures,
moisture, assays of metal, commercial minerals, and other appropriate content and penalty
substances, and gross metal content of the Gold. From this information, Operator shall determine
the amount of Royalty due and payable to Payee from Gold produced from the Property commingled with
minerals from other properties. Following the expiration of the period for objection described
above in Section 4.4, and absent timely objection, if any, made by Payee, Operator may dispose of
the materials and data required to be kept and produced by this Section 4.6.

     5. Books; Records; Inspections; Confidentiality.

          5.1. Books. Operator shall keep true and accurate books and records of all of its
operations and activities on the Property and under this Agreement. Such books and records shall be
kept on the accrual basis in accordance with United States of America generally

 

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accepted accounting principles consistently applied. Not more frequently than annually and
within the time provided in Section 4.4 of this Agreement, Payee may, at Payee’s sole expense, give
notice to Operator that Payee desires to perform an audit or other examination of all of Operator’s
books and records kept as required by this Agreement. All financial information shall conclusively
be deemed correct for purposes of this Agreement unless Payee has given timely notice that it
desires to audit or examine Operator’s books and records in the manner and within the time provided
in Section 4.4 of this Agreement. Payee shall promptly commence any such audits and shall
diligently prosecute the same to conclusion.

          5.2. Reports. Not later than March 5 following the end of each calendar year, Operator
shall provide Payee with an annual report of all activities and operations conducted upon or with
respect to the Mining Properties during the preceding calendar year. Such annual report shall
include estimates of proposed expenditures upon, anticipated production for the succeeding calendar
year from, and estimated remaining ore reserves, resources or mineralized material on the Mining
Properties. In addition this annual report should include the updated life of mine plan for the
Property in similar detail and address similar aspects as the current life of mine plan available
to the Payee as at the date of this Agreement. Additionally and within 30 days of the end of each
calendar quarter, Operator shall provide Payee access to all data and information generated with
respect to the Mining Properties during the calendar quarter just ended. Not later than the end of
the tenth (10th) Business Day of each calendar month Operator shall provide Payee with
an estimate of the Gold produced from the Mining Properties in the preceding month.

          5.3. Inspections. Subject to the confidentiality provision of this Agreement, Payee,
or its authorized agents or representatives, on not less than two (2) days notice to Operator, may
enter upon all surface and subsurface portions of the Mining Properties for the purpose of
inspecting the Mining Properties, all improvements thereto and operations thereon, as well as
inspecting and copying all records and data, including without limitation such records and data
which are maintained electronically, pertaining to all activities and operations on or with respect
to the Mining Properties, improvements thereto and operations thereon provided that Operator shall
have no obligation to disclose attorney-client privileged communication or information not relevant
to Gold production from the Property. Payee, or its authorized agents or representatives, shall
enter the Mining Properties at Payee’s own risk and expense and may not unreasonably hinder
operations on or pertaining to the Mining Properties. Payee shall indemnify and hold Operator
harmless from any damage, claim or demand by reason of injury to Payee or Operator or any of their
respective employees, officers, directors, agents or representatives caused by Payee’s exercise of
its rights herein.

          5.4. Investor Tours; Use of Public Information; Securities Law Compliance. Upon
reasonable notice to Operator and not more frequently than semi-annually, Payee shall have the
right to conduct an investors tour on the Mining Properties and facilities associated therewith;
provided that such tours shall not unreasonably interfere with Operator’s activities and
operations. Such investors tours shall be at the sole risk of Payee and its invitees, and Payee
shall indemnify and hold Operator harmless from any liability, damage, claim or demand by reason of
injury to Payee or Operator or any of their respective invitees, employees, officers, directors,
agents, or representatives or other loss or expense caused by Payee’s exercise of its rights under
this Section. Payee shall have the right to inspect and copy all data. In order to comply with

 

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National Policy 43-101 and similar or other rules, regulations or aspects of securities laws
generally applicable to the Payee and its public disclosure obligations, Payee shall have the right
of access to such data and analyses and the right to perform certain inspections of the Operator
and to perform such inspections it considers necessary or convenient relating to the operations on
the Mining Properties or respecting the facilities, as reasonably necessary for Payee to comply
with NI 43-101 and similar or other rules, regulations or aspects of securities laws generally
applicable to the Payee and its public disclosure obligations. Operator agrees to cooperate fully
and in a timely manner to facilitate necessary access to data and personnel to accommodate such
compliance by the Payee. Operator acknowledges and agrees that Payee will need to use certain
graphics, maps, photos and other data relating to the Mining Properties and the Operator’s related
operations in the public disclosure of the Payee and the Operator agrees that use and disclosure.

          5.5. Confidentiality. Payee shall not, without the express written consent of
Operator, which consent shall not be unreasonably withheld, disclose any data or information
concerning the Operations conducted on the Mining Properties or obtained under the Agreement or
this Agreement which is not already in the public domain; provided, however, that to the extent any
such disclosure would concern prospective or projected data or information, Operator may withhold
its consent to such disclosure in its sole but good faith discretion and provided further, Payee
may disclose data or information obtained under this Agreement without the consent of Operator: (i)
if required for compliance with applicable laws, rules, regulations or orders of a governmental
agency or stock exchange having jurisdiction over Payee or its parent corporation, including
without limitation for the purposes discussed above in Section 5.4; (ii) to any of Payee’s
consultants; (iii) to any third party to whom Payee, in good faith, anticipates selling or
assigning Payee’s interest hereunder; or (iv) to a prospective lender to whom an interest in the
Royalty payments to be made to Payee hereunder is proposed to be granted as security, provided that
Operator shall first have been provided with a confidentiality agreement executed by such
consultant, third party or lender, which agreement shall include the confidentiality provisions of
this Section 5.5. Payee shall not issue any press releases pertaining to the Mining Properties
except upon giving Operator 24 hours advance written notice of the contents thereof, and Payee
shall make any reasonable changes to such proposed press releases requested by Operator. Payee
shall not, without Operator’s prior written consent, issue any press release that implies or infers
that Operator endorses or joins in Payee’s statements or representations contained in any press
release. It is understood and acknowledged that disclosure by Payee will be permitted without
consent if it is a copy of the relevant language from the Operator’s public disclosure.

     6. Compliance with Laws; Reclamation, Environmental Obligations, and Indemnities.

          6.1. Compliance with Laws. Operator shall at all times comply with all applicable
present or future Laws relating to operations and activities on or with respect to the Mining
Properties; provided, however, Operator shall have the right to contest any of the same if such
contest does not unreasonably jeopardize the Mining Properties or Payee’s rights thereto or under
this Agreement.

 

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          6.2. Reclamation, Environmental Obligations, and Indemnities. Operator shall, from and
after the date this Agreement takes effect, timely and fully perform all reclamation required by
all governmental authorities pertaining or related to Operator’s operations or activities on or
with respect to the Mining Properties or required under this Agreement. Subject to Sections 9.2 and
13.2, Operator, from and after the date this Agreement takes effect, covenants and agrees not to
undertake, cause, suffer, or permit any condition or activity at, on or in the vicinity of the
Mining Properties which constitutes a violation of or liability under any present or future
applicable federal, provincial, or local environmental Laws, (collectively “Environmental
Obligations”). From and after the date this Agreement takes effect, and in the event Operator fails
to comply with any Environmental Obligations, undertakes any activity giving rise to liability
under any Environmental Obligations, or otherwise breaches any Environmental Obligations, Operator
shall promptly remedy and correct such failure to comply, satisfy such liability, cure such breach
and satisfy all obligations in connection therewith. Operator covenants and agrees to indemnify and
hold Payee harmless from any and all liabilities, obligations, claims (including administrative
claims and claims for injunctive relief), losses, costs, damages, expenses, attorney fees and
causes of action asserted against Payee related to Operator’s failure to comply with and satisfy
Environmental Obligations or other obligations under this Agreement. The covenants and agreements
of this Section 6.2 shall survive the termination of Operator’s rights under this Agreement or to
the Mining Properties.

     7. Stockpiling. The rights of Operator to stockpile, store or place Gold Metal off of
the Mining Properties pursuant to any of the provisions of this Agreement shall not be exercisable
until Operator has first secured from the property owner where such stockpiling, storage or
placement is to occur a written agreement in recordable form which provides that Payee’s rights to
the Gold shall be preserved. Such agreement shall provide, inter alia, that (a) Payee’s rights
pursuant to this Agreement, insofar as they are applicable, shall continue in full force and effect
with respect to Gold from the Mining Properties; (b) Payee’s rights in and to the Gold shall be the
same as if the Gold were situate on the Mining Properties; (c) Payee’s rights set forth in this
Section 7 shall have precedence over the rights to the Gold of the property owner where the Gold
are stockpiled, stored or placed, as well as the creditors of the said property owner; and (d) the
agreement shall be irrevocable as long as the Gold from the Mining Properties, or any part thereof,
remain on the property not part of the Mining Properties. The provisions of this Section 7 shall
not be applicable to stockpiles which at any given point in time cumulatively do not exceed a value
of contained Gold in excess of Five Million Dollars ($5,000,000).

     8. Tailings and Residues. All tailings, residues, waste rock, spoiled leach materials,
and other materials (collectively “Materials”) resulting from Operator’s operations and activities
on the Property shall be the sole property of Operator, but shall remain subject to the Royalty
should the same be processed or reprocessed, as the case may be, in the future and result in the
production of Gold. Notwithstanding the foregoing, Operator shall have the right to dispose of
Materials from the Property on or off of the Property and to commingle the same with Material from
other properties. In the event Materials are processed or reprocessed by or for the benefit of
Operator, as the case may be, the Royalty payable thereon shall be determined on a pro rata basis
as determined by using commercially reasonable engineering and technical practices then available.
No Royalty shall be payable by Operator with respect to Gold in materials to which

 

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Operator shall have no interest as a result of termination of Operator’s rights in any Mining
Property through expiry or extinguishment.

     9. Title Maintenance, Maintenance, and Taxes; Abandonment.

          9.1. Title Maintenance and Taxes. From the date this Agreement takes effect, Operator
shall maintain title to the Property, including without limitation, paying when due all taxes on or
with respect to the Property and doing all things and making all payments necessary or appropriate
to maintain the right, title and interest of Operator and Payee, respectively, in the Mining
Properties and under this Agreement. Notwithstanding the Foregoing, Operator shall have no
responsibility for any tax assessed upon the Royalty or the value thereof except as provided in
section 4.3.2, or based on the net or gross income of Payee.

          9.2. Abandonment. In the event Operator intends to abandon any of the lands comprising
a portion or all of the Mining Properties (“Abandonment Property”), Operator shall first give
notice of such intention to Payee at least sixty (60) days in advance of the proposed date of
abandonment. If not later than ten (10) days before the proposed date of abandonment Operator
receives from Payee written notice that Payee desires Operator to convey the Abandonment Property
to Payee, Operator shall, without additional consideration, convey the Abandonment Property by quit
claim deed, without warranty, to Payee and shall thereafter have no further obligation to maintain
the title to the Abandonment Property; provided that the foregoing right of Payee to acquire and
the obligation of the Operator to convey any Abandonment Property shall be subject to (i) such
conveyance being permitted under all applicable Laws and third party contracts affecting the
Abandonment Property, (ii) Payee meeting all applicable requirements with respect to the
Abandonment Property under applicable Laws (including without limitation the provision of bonds or
other security of performance), and (iii) Payee executing assumption and indemnity documentation in
favor of Operator reasonably acceptable to Operator. If Payee does not timely give such notice to
Operator, Operator may abandon the Abandonment Property and shall thereafter have no further
obligation to maintain the title to the Abandonment Property; provided, however, if Operator, the
ultimate parent of the Operator or any subsidiary of the ultimate parent of the Operator reacquires
any of the ground covered by the Abandonment Property at any time within five (5) years following
abandonment, the production of Gold from such ground shall be subject to this Agreement.

     10. Insurance. Operator shall purchase or otherwise arrange at its own expense and
shall keep in force at all times, directly or through the services of an independent contractor,
insurance, including but not limited to, the following:

          10.1. General Liability. Comprehensive general public liability insurance against
claims for bodily injury or death or property damage arising out of or resulting from Operator’s
activities or operations on or with respect to the Property, in such amounts and with such
deductibles as customarily carried by similar operators of similar properties in Mexico from any
and all claims, liabilities and damages which may arise with respect to this Agreement or the
Property. Payee shall be named as a co-insured or an additional insured.

          10.2 Business Interruption Insurance. Business interruption insurance against full or
partial cessation temporary or permanent of the Operator’s activities or operations

 

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on or with respect to the Property, in such amounts and with such deductibles as customarily
carried by similar operators of similar properties in Mexico.

          10.2. Self Insurance. Payee may self insure the foregoing obligations, provided such
self insurance is sufficient to meet the requirements of Sections 10.1 and 10.2 above and is in
compliance with applicable Laws.

     11. Operator hereby represents and warrants to Payee as follows:

          11.1. Mineral Rights: Operator holds mining concessions or other property,
proprietary or contractual interests or rights, licenses or permits recognized in the jurisdiction
in which the Property is located, in respect of the Property under valid, subsisting and
enforceable title documents or other recognized and enforceable agreements or instruments,
sufficient to permit Operator to explore, develop and exploit the minerals relating thereto or,
with respect to licences or permits not currently required, Operator reasonably expects to be able
to obtain them when required. Except as disclosed in the Information (as defined in a purchase and
sale agreement between Operator, Payee and other Persons dated the date of this agreement (the
“Purchase and Sale Agreement”) all such mining concessions or property, in which Operator has an
interest or right have been validly located and recorded in accordance with all applicable laws and
are valid and subsisting, Operator has all necessary surface rights, access rights and other
necessary rights and interests relating to the Property granting Operator the right and ability to
exploit the Property or to explore for minerals, ore and metals for development purposes on the
Property, with only such exceptions as do not materially interfere with the use made by the
Operator of the rights or interests so held and each of the proprietary interests or rights and
each of the documents, agreements and instruments and obligations relating thereto referred to
above is currently in good standing and either in the name of Operator or under contract to be
conveyed to the Operator.

          11.2. Property Agreements: Except as disclosed in the Information any and all of the
agreements and other documents and instruments pursuant to which Operator holds the Property
(including any interest in, or right to earn an interest in, any Property) are valid and subsisting
agreements, documents or instruments in full force and effect, enforceable in accordance with terms
thereof. Except as disclosed in the Information, Operator is not in default of any of the material
provisions of any such agreements, documents or instruments nor has any such default been alleged,
and such properties and assets are in good standing under the applicable statutes and regulations
of the jurisdictions in which they are situated. Except as disclosed in the Information the
Property (or any interest in, or right to earn an interest in, the Property) is not subject to any
right of first refusal or purchase, acquisition right charges, pledges, security interests,
encumbrances, including royalty interests, claims or demands except the Royalty. All of the
reserves and resources in the Palmarejo Technical Report dated June 21, 2008 are located on the
Mining Concessions.

 

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     12. Dispute Resolution.

          12.1. Matters to be Arbitrated

          Any dispute, controversy or claim arising under or on connection with this Agreement or any
document, instrument or agreement delivered pursuant hereto, the resolution of which is not
provided for in this Agreement and which cannot be resolved or settled by the parties, within 30
business days after one party gives writing notice to another party that a controversy, dispute, or
claim exists, shall be resolved and determined by arbitration in accordance with this Article 12
upon written notice by a party to the other.

          12.2. Procedure for Arbitration

          (a) Arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules
and Procedures and be determined before three arbitrators. Each party will appoint one arbitrator,
and such arbitrators together shall appoint the third arbitrator. Each arbitrator shall be an
individual with not less than 15 years of expertise in the precious metals mining industry as a
senior executive, accountant or lawyer and no arbitrator shall have been a director, officer or
employee of, or contractor or service provider to, or director, officer, beneficial owner or close
relative of a beneficial owner of any contractor or service provider to, any party to this
Agreement or the Purchase and Sale Agreement for a period of five years preceding his or her
appointment as an arbitrator. The place of arbitration will be Denver, Colorado. The language of
the arbitration will be English. The arbitration shall be the sole and exclusive forum for
resolution of the dispute, controversy or claim. The award (including any award as to the costs of
the arbitration) shall be subject to the JAMS Optional Appeal Procedure and appeal to a court of
competent jurisdiction on any of the following grounds:

	 	(1)	 	the award was procured by corruption, fraud or
other undue means;
	 
	 	(2)	 	there was corruption in any of the arbitrators;
	 
	 	(3)	 	the rights of the party were substantially
prejudiced by misconduct of a neutral arbitrator;
	 
	 	(4)	 	the arbitrators exceeded their powers and the
award cannot be corrected without affecting the merits of the decision
upon the controversy submitted;
	 
	 	(5)	 	the rights of the party were substantially
prejudiced by the refusal of the arbitrators to postpone the hearing
upon sufficient cause being shown therefor or by the refusal of the
arbitrators to hear evidence material to the controversy or by other
conduct of the arbitrators contrary to the provisions of this title; or
	 
	 	(6)	 	an arbitrator making the award either: (A)
failed to disclose within the time required for disclosure a ground for
disqualification of which the arbitrator was then aware; or (B) was
subject to disqualification under the relevant laws and regulations
applicable

 

- 12 -

	 	 	 	to the arbitrator but failed upon receipt of timely demand to
disqualify himself or herself as required by such laws and
regulations.

Judgment on any award may be entered by any court of competent jurisdiction. Any arbitration and
hearings relating thereto and all decisions, documents and submissions prepared or filed in
connection therewith shall be in the English language.

          (b) All matters relating to any dispute, controversy or claim which is the subject matter or
arbitration hereunder, including all submissions made to the arbitrators and the decision of the
arbitrators, shall be treated as confidential by the parties and the parties shall, and shall cause
any witnesses, counsel or professional advisers retained in connection with such an arbitration to,
maintain all such matters in strict confidence.

          (c) The prevailing party in any arbitration proceedings (or litigation) as determined by the
panel of arbitrators shall, in addition to any other relief awarded by the arbitrators (or court)
be entitled to a judgment against the non-prevailing party for reasonable attorneys fees and cost
incurred in such proceedings or litigation. The arbitrators may, in any award, allocate all or part
of the costs of the arbitration, including the fees of the arbitrators and the reasonable
attorneys’ fees of the prevailing party.

          12.3. Continuing Obligations. Pending settlement of any dispute, controversy or claim,
the parties shall abide by their obligations under this Agreement without prejudice to a final
adjustment in accordance with an award or judgment settling such dispute, controversy or claim.

     13. General Provisions.

          13.1. Additional Documents. The Parties shall from time to time execute all such
further instruments and documents and do all such further actions as may be necessary to effectuate
the purposes of this Agreement. Until the Royalty Agreement or the Mortgage has been registered
against all of the mineral interests listed in Exhibit A to this Agreement, together with any
renewals required of such registrations, the cost and expenses relating to such registrations will
be for the account of the Operator; however, all other requests shall be in each case at the cost
and expense of the Party requesting such further instruments, document or actions, unless expressly
indicated otherwise.

          13.2. Assignment. Operator shall not sell, assign, lease, license, transfer,
hypothecate, encumber, or otherwise dispose of, or agree to sell, assign, lease, license, transfer,
hypothecate, encumber or otherwise dispose of, the Property or portion thereof, (other than by
Permitted Liens) without the prior written consent of Payee, such consent not to be unreasonably
withheld conditioned or delayed; provided that, any assignee or transferee shall have first entered
into an agreement reasonably satisfactory to Payee under which such assignee or transferee shall
assume Operator’s obligations to Payee under this Agreement arising after the date of such
assignment or transfer with respect to those portions of the Property assigned or transferred. For
greater certainty it will be unreasonable for Payee to withhold consent other than on the grounds
of insufficient technical or financial competence of the proposed assignee or transferee and for

 

- 13 -

illustrative purposes only, it is agreed and acknowledged that a corporate party with publicly
listed securities, at least two operating mines of at least 100,000 ounces of gold equivalent
production annually and a market capitalization of at least $350 million would be considered
technically and financially competent. Notwithstanding the previously mentioned consent
requirement, it is agreed and acknowledged that an assignment, lease, or transfer to an affiliate
of Operator is permitted provided that the transferee, lessee or assignee shall have first entered
into an agreement reasonably satisfactory to Payee under which such assignee or transferee shall
assume Operator’s obligations to Payee under this Agreement arising after the date of such
assignment or transfer with respect to those portions of the Property assigned or transferred.
Notwithstanding the previously mentioned consent requirement, it is agreed and acknowledged that an
assignment or encumbrance for security purposes from time to time is permitted, provided that the
assignee or encumbrancer shall have first entered into an agreement reasonably satisfactory to
Payee under which such assignee or encumbrancer acknowledges the first ranking obligation of
Operator to satisfy its obligations under this Agreement the senior ranking Lien or burden created
by the registration of this Royalty Agreement on the Property. Payee shall have the unrestricted
right, in its sole and absolute discretion, to freely assign, convey, transfer or relinquish any of
its rights or interests with respect to the Royalty and/or all or any part of its rights,
liabilities and obligations under this Agreement to any third party, provided that (a) Payee has
paid in full US$75,000,000 cash portion of the Purchase Price under the Purchase and Sale Agreement
and (b) the assignee has also been assigned all rights and obligations of Payee under the Purchase
and Sale Agreement, the Share Pledge and the Mortgage (as such terms are defined in the Purchase
and Sale Agreement) and has assumed and has agreed to perform all obligations of Payee thereunder.

Notwithstanding any other provision herein to the contrary, any Operator shall have no liability
with respect to any Property relating to any time after Operator has assigned its rights to such
Property in accordance with this Section 12.2. For greater certainty, the Environmental Indemnity,
as such term is defined in the Purchase and Sale Agreement, shall remain in effect as an obligation
of Operator unless it is assumed by the assignee with the consent of Payee.

To the extent that Operator or any of its affiliates endeavors to obtain any financing involving
any of the Property, Payee shall, promptly upon the reasonable request of Operator, execute and
deliver to Operator, or any party specified by Operator, customary consents and estoppel
certificates with respect to any such Property.

          13.3. No Partnership. Nothing in this Agreement shall be construed to create,
expressly or by implication, a joint venture, mining partnership, commercial partnership, or other
partnership relationship between Parties.

          13.4. Governing Law. This Agreement is to be governed by and construed under the laws
of the State of Colorado with respect to all provisions other than those relating to property,
which shall be governed by the laws of Mexico.

          13.5. Legal Fees. In the event a dispute between the Parties results in litigation,
the prevailing Party in such litigation shall, in addition to any other relief granted by the
court, be entitled to a judgment against the non-prevailing party for reasonable legal fees and
costs of suit.

 

- 14 -

          13.6. Time of Essence. Time is of essence in this Agreement.

          13.7. Notices. Unless otherwise provided in this Agreement, any notice or other
correspondence required or permitted by this Agreement shall be deemed to have been properly given
or delivered when made in writing and hand-delivered to the Party to whom directed, or when sent by
mail, electronic facsimile transmission, with all necessary postage or charges fully prepaid,
return receipt requested (or in the case of a facsimile or telegram, confirmation of delivery), and
addressed to the Party to whom directed at the following address:

	 	 	 	 	 	 	 
	OPERATOR:

	 	AV. Perif. de la Juventud #6112
	 	PAYEE:
	 	Insurgentes Sur No. 2355
	 

	 	Local 3, Plaza Carrizales
	 	 	 	Col. San Ángel, Delegación Álvaro Obregón
	 

	 	Chihuahua, Chih. MEXICO
	 	 	 	C.P. 01000, Mexico D.F.
	 

	 	Fax: (52) 614-4144421
	 	 	 	Fax: 5255-5616-9014 Ext. 133
	 
	 	 	 	 	 	 
	 

	 	with a copy to:
	 	 	 	with a copy to:
	 

	 	Coeur Mexicana, S.A. de C.V.
	 	 	 	C.P. Ernesto Durán Trinidad
	 

	 	Attention: General Counsel
	 	 	 	Partner
	 

	 	505 Front Avenue
	 	 	 	Tax and Administrative Services, S.C.
	 

	 	P.O. Box I
	 	 	 	World Trade Center, Montecito
	 

	 	Coeur d’Alene, ID 83816-0316
	 	 	 	No. 38 Floor 12, Office 12
	 

	 	Fax: (208) 667-2213
	 	 	 	Col. Nápoles, Delegación Benito Juárez
	 

	 	 	 	 	 	C.P. 03810, México, D.F.
	 

	 	 	 	 	 	Fax: 5255-1107-0764

Either Party may change its address for the purpose of notices or communications by furnishing
notice thereof to the other Party in the manner provided in this Section.

Without prejudice to any other mode of service allowed under any relevant law, each Party hereto:

	 	(i)	 	irrevocably appoints, in the case of Operator, Ocampo Resources
Inc. at 505 Front Avenue, P.O. Box 1, Coeur d’Alene, Idaho 83816-0316, and in
the case of Payee, Franco-Nevada U.S. Corporation at 1745 Shea Center Drive,
Suite 310, Highlands Ranch, Colorado, 80129 as its agent for service of process
in relation to any proceedings before the courts of the State of Colorado or
under the rules of JAMS in connection with this Agreement and by separate
irrevocable power of attorney grounded in a material instrument as required by
applicable Mexican law the Operator will appoint Ocampo Resources Inc. and the
Payee will appoint Franco-Nevada U.S. Corporation, the foregoing in case that
any proceedings or results thereto are brought to Mexican courts for execution
purposes; and
	 
	 	(ii)	 	agrees that failure by another party to notify it of the
process in accordance with (i) above will not invalidate the relevant
proceedings.

          13.8. Entire Agreement; Integration. This Agreement contains the entire agreement
between Parties other than the Purchase and Sale Agreement, the Share Pledge and

 

- 15 -

the Mortgage, and no oral agreement, promise, statement or representation which is not
contained herein shall be binding on the Parties unless subsequently reduced to writing and signed
by the Parties. The provisions of this Agreement shall supersede all previous oral or written
agreements between the Parties hereto and in the event of a conflict between the terms of this
Agreement and the Purchase and Sale Agreement, this Agreement shall govern.

          13.9. Binding Effect. All of the covenants, conditions, and terms of this Agreement
shall (i) be of benefit to the Parties, (ii) to the maximum extent allowed by law, be an interest
in the Property, and (iii) bind and inure to the benefit of the Parties, their successors and
permitted assigns.

          13.10. Registration on Title. Operator agrees that the Payee may register or record
against title to the Property this Agreement and such form of notice, caution or other document(s)
evidencing the Payee’s right to receive the Royalty under this Agreement. The Operator hereby
consents to such registering or recording and agree to co-operate with the Payee to accomplish the
same.

          13.11. Spanish Translations. If required by either the Party, the Parties agree that
this Agreement and any document delivered pursuant to this Agreement, if applicable, shall be
translated into the Spanish language and each Party hereby agrees to execute such Spanish version.
The cost of the translation service shall be split equally by the parties. In the event of any
discrepancy between the Spanish version and the English version of this Agreement, the English
version shall prevail.

 

     IN WITNESS WHEREOF, Operator and Payee have executed this Agreement effective on the date
first set forth above.

	 	 	 	 	 
	 	COEUR MEXICANA S.A. de C.V.

 	 
	 	By:  	/s/ Dennis Wheeler
 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 
	 	FRANCO-NEVADA MEXICO 

CORPORATION S.A. de C.V.

 	 
	 	By:  	/s/  Joe Enrique Rodriguez del Bosque
 	 
	 	 	Authorized Signatoryexv10w1

Exhibit 10.1

SETTLEMENT AGREEMENT AND RELEASE

     This Settlement Agreement and Release (this “Agreement”), by and between Jones Soda Co.
(“Jones Soda”) and Peter M. van Stolk (“PVS”), is made effective as of the date that this Agreement
is executed by the last party to execute it.

RECITALS

A. PVS is a former employee of Jones Soda and a member of Jones Soda’s Board of Directors (the
“Board”). Jones Soda and PVS are parties to a Separation Agreement and Release that was entered
into by and between Jones Soda (signature dated February 13, 2008) and PVS (signature dated
February 5, 2008) (the “Separation Agreement”). The Separation Agreement obligates Jones Soda
to pay severance pay to PVS, contingent on PVS’s compliance with certain post-employment
obligations.

B. The parties have a dispute regarding their obligations under the Separation Agreement. PVS
asserts that he has a right to payment of unpaid and future severance payments pursuant to the
Separation Agreement.

C. The parties now desire to resolve any claims that PVS has or may have against Jones Soda
(including its directors, officers, employees, agents, attorneys, successors and assigns).

     NOW THEREFORE, in consideration of the promises and covenants set forth herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

AGREEMENTS

     1. Each and every provision of the Separation Agreement shall remain in full force and effect
except as expressly modified in this Agreement.

     2. Jones Soda will pay to PVS in one lump sum the amount of $150,000, less required
withholdings and deductions, which will be reported on an IRS Form W-2. No further payment by
Jones Soda will be required pursuant to the Separation Agreement. Jones Soda will also pay to
PVS’s counsel, Timothy Leyh of Danielson Harrigan Leyh & Tollefson LLP in one lump sum the amount
of $9,500, representing reasonable actual attorneys’ fees, which shall be reported on an IRS Form
1099. Such payments shall be made within five (5) business days of the effective date of this
Agreement. PVS agrees that he is solely responsible for all tax obligations arising out of such
payments.

     3. PVS hereby resigns as a member of the Board of Directors of Jones Soda, effective as of the
effective date of this Agreement.

-1-

 

     4. The Separation Agreement is amended as follows, effective as of the effective date of this
Agreement:

     4(a). The second sentence of Paragraph 1 of the Separation Agreement (from “Thereafter
PVS” through “federal law”) is deleted in its entirety. In the third sentence of Paragraph
1 of the Separation Agreement, “as a member of the Board of Directors and” is deleted. In
the same sentence, the phrase”, except as otherwise set forth herein,” is added immediately
following “acknowledges that.” In the same sentence, “those capacities” is deleted and
replaced with “that capacity.”

     4(b). Paragraph 2 of the Separation Agreement is deleted in its entirety.

     4(c). Paragraphs 11 and 12.1 of the Separation Agreement are deleted in their entirety.

     4(d). Notwithstanding anything in Paragraph 12 of the Separation Agreement, to the
extent that PVS has any continuing non-competition obligations under the EA (as defined in
the Separation Agreement), Jones Soda agrees that such obligations will no longer be in
force after the effective date of this Agreement.

     4(e). Paragraph 14 of the Separation Agreement is deleted in its entirety and the
following substituted therefore:

In the event that PVS is contacted by any of Jones Soda’s employees or independent
contractors; Jones Soda’s investors, shareholders or lenders; Jones Soda’s current or
prospective customers; Jones Soda’s distributors or vendors; any other parties with
whom Jones Soda does business; analysts or other securities industry professionals;
or any news media, then, prior to communicating with any of the foregoing persons or
entities regarding Jones Soda, PVS shall advise such person or entity that he is no
longer an officer or director of Jones Soda and that he is therefore no longer
authorized to speak on behalf of Jones Soda in any capacity.

     5. No later than five (5) business days after PVS executes this Agreement, PVS shall deliver
to Jones Soda all books, records, lists, brochures, documents (and any other Jones Soda property or
Confidential Information as defined in the Separation Agreement) belonging to Jones Soda, or
developed in connection with the business of Jones Soda.

     6. PVS hereby releases Jones Soda and its affiliates, successors, and past and present
officers, directors, agents, employees and subsidiaries from all claims (other than claims for the
payments provided for under this Agreement), causes of action or liabilities,
suspected or unsuspected and irrespective of any present lack of knowledge of any possible
claim or of any fact or circumstance pertaining thereto, which he may have or could claim to have
against Jones Soda, except any claim pursuant to the Company’s Bylaws or statute for
indemnification and/ or defense for any third party claim asserted against PVS arising out of

-2-

 

his
service as an officer and/or director of the Company. This release is intended to be all
encompassing, and without limitation covers all matters relating to the Separation Agreement. This
release includes, but is not limited to, claims of discrimination; claims under state or federal
law governing the payment of wages; claims under any express or implied contract, including,
without limitation, under the Separation Agreement; claims based on tort law; and any other claim
of whatever kind or nature. This release applies to all claims which arose up through the date of
PVS’s execution of this Agreement. This release is supplemental to, and does not modify in any
way, Paragraph 6 of the Separation Agreement. Jones Soda hereby releases PVS from all claims,
causes of action or liabilities, suspected or unsuspected and irrespective of any present lack of
knowledge of any possible claim or of any fact or circumstance pertaining thereto, which Jones Soda
may have or could claim to have against PVS, to the fullest extent of the Company’s ownership of
such claims. Jones Soda represents that it has not assigned or purported to assign to any person
or entity any claim released pursuant to this Agreement.

     7. PVS represents as follows:

     7(a). He has not filed any complaints, charges or lawsuits against Jones Soda or any of
its affiliates, subsidiaries, successors, past and present officers, directors, agents or
employees with any governmental agency or any court, and he will not do so at any time
hereafter. He has not assigned or purported to assign to any person or entity any claim
released pursuant to this Agreement.

     7(b). He has not, as of the date of his execution of this Agreement, breached any of
his noncompetition obligations as set forth in Paragraph 12.1 of the Separation Agreement.

     7(c). In entering into this Agreement, he does not rely and has not relied upon any
representation or statement made by Jones Soda or any of its employees or agents concerning
this Agreement. He has had adequate time to review the contents of this Agreement, has
read, considered, and fully understands this Agreement and all its terms, has consulted with
his attorney concerning the terms and conditions of this Agreement, including without
limitation the release set forth in this Agreement, and enters into this Agreement knowingly
and voluntarily.

     7(d). PVS has reviewed and approves of the form of 8-K filing attached hereto as
Exhibit A and agrees that Jones Soda may file it with the SEC at any time after both parties
have executed this Agreement.

     8. This Agreement shall not in any way be construed as an admission by Jones Soda or PVS that
it or he has acted wrongfully or breached any contractual or other
obligation with respect to PVS, Jones Soda, or Jones Soda’s directors, offices, agents,
employees, or any other person.

-3-

 

     9. The parties agree that they will keep the terms of this Agreement confidential and that
they will not hereafter disclose any information concerning this Agreement to anyone, provided that
either party may make such disclosures as (a) are required by law, and explicitly recognizing the
obligation to disclose this Agreement via a public filing with the SEC; (b) reasonably necessary to
enforce the terms of this Agreement, and (c) to their respective attorneys, accountants and
financial advisors.

     10. If any provision of this Agreement is determined to be invalid or unenforceable, all of
the other provisions shall remain valid and enforceable notwithstanding, unless the provision found
to be unenforceable is of such material effect that the Separation Agreement as amended by this
Agreement cannot be performed in accordance with the intent of the parties in the absence thereof.

     11. The parties agree that the common law principle of construing ambiguities against the
drafter shall have no application to this Agreement.

     12. This Agreement represents the parties’ full understanding and agreement with respect to
the subject matter of this Agreement, and supersedes and replaces any prior agreements by the
parties, whether verbal or written, with respect to the subject matter of this Agreement.

     13. This Agreement may be executed in counterparts. Facsimile signatures and facsimile and
photocopy reproductions of this Agreement shall be deemed as originals.

	 	 	 	 	 	 	 	 	 
	     /s/ Peter M. van Stolk	 	 	 	     April 3, 2009	 	 
	 	 	 	 	 	 	 
	Peter M. van Stolk	 	 	 	DATE	 	 
	 
	 	 	 	 	 	 	 	 
	JONES SODA CO.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By

	 	/s/ Stephen C. Jones
	 	 	 	April 3, 2009	 	 
	 

	 	 
	 	 	 	 	 	 
	Its

	 	Chief Executive Officer
	 	 	 	DATE	 	 

-4-

 

Exhibit A

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): April 3, 2009

Jones Soda Co.

 

(Exact name of registrant as specified in its charter)

	 	 	 	 	 
	Washington
	 	0-28820
	 	91-1696175
	 
	 	 
	 	 
	(State or other jurisdiction 

of incorporation)
	 	(Commission

File Number)
	 	(I.R.S. Employer

Identification No.)

	 	 	 
	234 Ninth Avenue N., Seattle, 

Washington
	 	98109
	 
	 	 
	(Address of principal executive offices)
	 	(Zip Code)

Registrant’s telephone number, including area code: 206-624-3357

Not Applicable

 

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:

	o	 	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
	 
	o	 	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
	 
	o	 	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
	 
	o	 	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))

 

 

 

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.

Effective April 3, 2009, Peter van Stolk resigned from the Board of Directors of Jones Soda Co.
(the “Company”). In his resignation letter to the Board of Directors (a copy of which is filed as
Exhibit 99.1 to this Current Report on Form 8-K), Mr. van Stolk stated that he was concerned with
the direction of the Company and believed it was time for him to pursue other interests.

In connection with his resignation, the Company and Mr. van Stolk entered into a settlement
agreement and release (the “Settlement Agreement”) that settles certain obligations under the
Separation Agreement and Release that was entered into between the Company and Mr. van Stolk on
February 13, 2008 (the “Separation Agreement”). Under the Settlement Agreement, (1) Mr. van Stolk
agreed to reduce his severance payments under the Separation Agreement by approximately $100,000
(to an aggregate of approximately $350,000) and the Company agreed to pay the remaining unpaid
severance amount of $150,000 to Mr. van Stolk in a single lump sum payment, and (2) the Company
agreed to terminate, effective immediately, Mr. van Stolk’s noncompetition and nondisparagement
obligations under the Separation Agreement and the provisions in that agreement limiting Mr. van
Stolk’s ability to discuss the Company’s business with certain third parties.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

99.1 Peter van Stolk resignation letter, dated April 3, 2009

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.

	 	 	 	 	 
	 	

Jones Soda Co.

 	 
	April 8, 2009 
	By:  	/s/ Stephen C. Jones
 	 
	 	 	Name:  	Stephen C. Jones 	 
	 	 	Title:  	Chief Executive Officer 	 
	 

 

 

Exhibit Index

	 	 	 	 	 
	Exhibit No.	 	Description
	99.1		 	 	Peter van Stolk resignation letter

 

 

EX-99.1

April 3, 2009

To the Board of Directors:

It has been amazing opportunity to serve the shareholders of Jones Soda for more then 15 years. The
company that I founded on innovation, passion, and determination has achieved many notable
successes and overcome numerous seemingly-insurmountable challenges during this period. These
challenges were overcome by the employee’s and stakeholders who cared about our company and our
brand. They embodied the slogan “run with the little guy” It has been a privilege and a honor to
work with such great people.

That being said I am concerned with current direction of the company, and believe that it is time
for me to pursue other interests.

Therefore I tender my resignation effective immediately.

I would like to wish the best for the entire Jones Soda Co family and thank you all for your
support from the start of this adventure.

	 	 	 
	 

	 	Always,
	 
	 	 
	 

	 	/s/ Peter van Stolk
	 
	 	 
	 

	 	Peter van Stolk

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