Document:

bitzio_ex1015.htm

Exhibit10.15

 

 

 

_______________________________________________

CHIEF EXECUTIVE OFFICER

 

EMPLOYMENT AGREEMENT

 

 

 

BETWEEN

 

WILLIAM SCHONBRUN

 

AND

 

BITZIO, INC.

 

 

 

FEBRUARY 1, 2012

______________________________________________

 

 

 

 

 

  

  

  

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”) is effective as of February 1, 2012 (the “Effective Date”) between Bitzio Inc., a corporation incorporated under the laws of Canada (“Bitzio”) and William Schonbrun (“Employee”).

 

For good and valuable consideration, the mutual promises and conditions in this Employment Agreement, and all benefits associated with the employment of Employee, it is agreed as follows:

 

 

ARTICLE 1 - EMPLOYMENT

 

	
1.1  

	
Employment

 

	
(a)  

	
Commencing on the Effective Date, Bitzio and each of its affiliated companies will employ Employee as its Chief Executive Officer (the “Employment”).  Employee will perform such duties and exercise such powers related to such offices as set forth in the by-laws of Bitzio and as prescribed or specified by the Board of Directors of Bitzio, subject always to the control and direction of such Board of Directors.

 

	
(b)  

	
As of the Effective Date, Employee is a member of Bitzio’s Board of Directors. Employee’s position on the Board of Directors shall be subject to the discretion of Bitzio’s Governance and Nomination Committee and the election by shareholders.  Employee shall not receive any additional remuneration in connection with his duties on the Board of Directors.

 

	
1.2  

	
Termination of Prior Agreement

 

Effective immediately upon execution of this Agreement, the Consulting Agreement between the Bitzio, Inc. and the Employee dated January 1, 2012 (the “Prior Agreement”) is terminated without cause.  Notwithstanding the provisions of section 6 of the Prior Agreement, the parties agree that no amounts are owed or owing thereunder as a result of this termination, no notice or pay in lieu of notice shall be made and that no fees, penalties or other amounts are due or payable as a result of such termination.  This provision shall not cancel or otherwise affect any deferred payments, option or other stock grants made or accrued under the Prior Agreement.

 

  

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ARTICLE 2 - REMUNERATION

 

	
2.1  

	
Base Salary

 

As compensation for the services by Employee hereunder, Bitzio will pay Employee during the term of the Employment a gross annual salary of $180,000 (“Base Salary”), payable on the fifteenth and the last day of each calendar month.  Notwithstanding the foregoing, the Employee has agreed to defer payment of this compensation for the period from the Effective Date through June 30, 2012, and receive payment thereof over the twelve (12) month period following the deferral (Bitzio shall make reasonable efforts to make the repayment over a six (6) month period following the deferral).

 

	
2.2  

	
Bonus

 

The Employee will be eligible to participate in the Bitzio bonus program, if and when established by Bitzio, such participation, the terms and goals of such a program shall be in the sole discretion of the Bitzio’s Board of Directors.

 

	
2.3  

	
Benefits

 

The Employee will be entitled to participate in any and all of Bitzio’s benefit plans generally available to its senior executive employees from time to time, as determined by Bitzio in its discretion, in accordance with the terms thereof.  The Employee acknowledges that as of the Effective Date, Bitzio does not currently have any such programs.

 

	
2.4  

	
Vacation

 

Employee will be entitled to four (4) weeks paid vacation per year pursuant to Bitzio’s Vacation Policy, to be taken at a time or times convenient for Bitzio.

 

	
2.5  

	
Expenses

 

Employee will be reimbursed for all authorized travel and other out of pocket expenses actually and properly incurred by him in connection with his duties hereunder.  For all such expenses, Employee will furnish to Bitzio statements and vouchers as and when required by Bitzio.

 

ARTICLE 3 - EMPLOYEE’S COVENANTS

 

	
3.1  

	
Service

 

During his employment, Employee will devote such time, attention, energies, interests, and abilities for the business of Bitzio as is reasonably necessary to fulfill his responsibilities, will well and faithfully serve Bitzio, and will use his best efforts to promote the interests of Bitzio.  Employee will not engage in any business activity that would be adverse to Bitzio or its business prospects, financial or otherwise.

 

  

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3.2  

	
Duties and Responsibilities

 

Employee will use reasonable efforts to duly and diligently perform all the duties assigned to him while in the employ of Bitzio, and will truly and faithfully account for and deliver to Bitzio all money, securities and things of value belonging to any entity in Bitzio that Employee may, from time to time, receive for, from or on account of any entity in Bitzio.

 

	
3.3  

	
Rules, Regulations, Policies and Procedures

 

Employee will be bound by and will faithfully observe and abide by all the rules, regulations, policies and procedures that Bitzio may institute at its discretion from time to time that are brought to Employee’s notice or of which he should reasonably be expected to be aware.

 

	
3.4  

	
Confidentiality and Rights Agreement

 

Employee will execute and deliver the Confidentiality and Rights Agreement in the form attached hereto as Exhibit “A”.  The terms of the Confidentiality and Rights Agreement are incorporated herein as if fully set forth.  Employee’s obligations under such Confidentiality and Rights Agreement will continue both before and after he has used any confidential information for the purposes of such Confidentiality and Rights Agreement, and both before and after the employment of Employee with Bitzio ceases for whatever reason, and will continue until such time as Employee is expressly released therefrom by Bitzio in writing.  The obligations of Employee under this Agreement will be binding on the assigns, executors, administrators or legal representatives of Employee.  Any breach by Employee of the provisions of this paragraph of this Agreement or the Confidentiality and Rights Agreement will cause irreparable damage to Bitzio, and any such breach will entitle Bitzio to seek immediate injunctive relief from a court of competent jurisdiction.

 

ARTICLE 4 - TERMINATION OF EMPLOYMENT

 

	
4.1  

	
Termination by Bitzio Without Cause

 

In the event that Bitzio terminates that Employee’s employment under this Agreement at any time without cause, then in exchange for Employee executing and delivering to Bitzio a release and indemnity in the form attached as Exhibit “B”, Bitzio will provide Employee with the following:

 

	
(a)  

	
an amount equal to the sum of:

 

	
(i)  

	
Twelve (12) months’ Base Salary,  and

 

	
(ii)  

	
the average Annual Bonus paid to Employee, if any, in respect of the two most recently completed fiscal years preceding the date of the termination.

 

  

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(b)  

	
The Employee shall be entitled to exercise all vested options for a term of twelve (12) months following such termination.

 

Except as provided above, Employee is not entitled to any further salary, bonus, options, benefits, remuneration or compensation of any kind.

 

	
4.2  

	
Termination by Employee

 

Employee may resign his employment under this Agreement at any time, upon the giving of 30 days prior written notice to Bitzio.  In these circumstances, Employee will receive no payment of any kind or nature, including but not limited to severance or anticipated earnings.  Employee shall only receive any outstanding salary and vacation pay calculated up to the date of resignation and is not entitled to any bonus or pro-rated bonus.

 

	
4.3  

	
Termination by Bitzio for cause

 

Bitzio may terminate Employee’s employment under this Agreement at any time for cause without payment of any compensation of any kind or nature, including but not limited to severance, anticipated earnings, stock options or accelerated vesting thereof or other securities of any kind.  Employee shall only receive any outstanding salary and vacation pay calculated up to the date of such termination and is not entitled to any bonus or pro-rated bonus.  For the purposed of this section 4.3, “cause" shall mean:  (i) a willful act by the Employee of dishonesty, theft, breach of trust, or misappropriation of the property of Bitzio; or (ii) a material breach or default by the Employee of its duties pursuant to this Agreement and the failure to remedy such breach or default within a reasonable period of time after delivery of written notice from Bitzio to Employee; or (iii) any act or omission which would in law permit Bitzio to, without notice or payment in lieu of notice, terminate the relationship, including but not limited to, a material breach of this Agreement.

 

	
4.4  

	
Return of Property

 

Upon any termination of Employee’s employment under this Agreement, Employee will at once deliver or cause to be delivered to Bitzio, all books, documents, effects, money, securities or other property belonging to Bitzio, or for which Bitzio is liable to others, that are in the possession, charge, control or custody of Employee.

 

	
4.5  

	
Provisions That Will Operate Following Termination

 

Notwithstanding any termination of Employee’s employment under this Agreement for any reason whatsoever, the provisions of sections 3.4 and 4.4 of this Agreement and any other provisions of this Agreement necessary to give effect thereto, will continue in full force and effect following such termination; in addition, upon any such termination, Employee shall immediately resign from Bitzio’s Board of Directors.

 

  

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4.6  

	
Indemnity

 

Employee shall be entitled to indemnification from Bitzio to the fullest extent permitted by law in connection with his providing services for and on behalf of Bitzio. Bitzio agrees to name Employee as an additional named insured on its general liability, E&O policies, and D&O policies then in force from time to time during the term. Bitzio will indemnify Employee to the fullest extent permitted by applicable law and to the fullest extent authorized by the Articles of Incorporation (or their equivalent) and By-Laws of Bitzio.  Bitzio shall implement a D&O insurance policy for the benefit of it directors and officers upon such terms and conditions as determined by Bitzio’s Board of Directors within forth-five (45) days following the Effective Date.

 

ARTICLE 5 - GENERAL

 

	
5.1  

	
Interpretation

 

The division of this Agreement into Articles and Sections and the insertion of headings are for the convenience of reference only and will not affect the construction or interpretation of this Agreement.  The terms “this Agreement”, “hereof”, “hereunder” and similar expressions refer to this Agreement and not to any particular article, section or other portion of this Agreement.  All references herein to “$” or “dollars” are to Canadian dollars.

 

	
5.2  

	
Benefit of Agreement

 

This Agreement will bind Employee’s heirs, personal representatives, legal representatives, successors, and assigns, and will bind Bitzio, and its successors, purchasers, assignees or any entities who acquire assets of Bitzio.

 

	
5.3  

	
Entire Agreement

 

This Agreement, including the Confidentiality and Rights Agreement at Exhibit “A” and any stock option agreement entered into between the parties in relation to the grant of stock options referred to herein, constitutes the entire Agreement between the parties with respect to the subject matter hereof, and replaces and supercedes any prior understandings and agreements between the parties.

 

	
5.4  

	
Amendments and Waivers

 

No amendment to this Agreement will be valid or binding unless set forth in writing and duly executed by Employee and the Chairman of the Board of Directors of Bitzio.  No waiver of any breach of any provision of this Agreement will be effective or binding unless made in writing and signed by the party purporting to give the same and, unless otherwise provided in the written waiver, will be limited to the specific breach waived.

 

  

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5.5  

	
Severability

 

If any provision of this Agreement is determined to be invalid or unenforceable in whole or in part, such invalidity or unenforceability will attach only to such provision or part thereof, and the remaining part of such provision and all other provisions hereof will continue in full force and effect.

 

	
5.6  

	
Notices

 

Any demand, notice or other communication to be given in connection with this Agreement will be given in writing and may be given by personal delivery, by electronic delivery (with proof of successful transmission) or by registered or certified mail, return receipt requested, addressed to the recipient as follows:

 

	
To the Employee:

	
William Schonbrun

2323 Bellevue Ave

West Vancouver, BC

V7V 1C9

William@bitzio.com

 

	
To the Employer:

	
Bitzio Inc.

Attention:  the CFO

With a copy to the Chairman of the Board of Directors

 

or such other address or individual as may be designated by notice by either party to the other.

 

Any communication given by personal delivery will be conclusively deemed to have been given on the day of actual delivery thereof; or if made or given by electronic delivery, on the business day following receipt thereof; or if made or given by registered or certified mail, on the 7th day, other than a Saturday, Sunday or Statutory holiday in Ontario, following the deposit thereof in the mail.

 

If the party giving any communication knows or ought reasonably to know of any difficulties with the postal system that might affect the delivery of mail, then such communication will not be mailed but will be given by facsimile or personal delivery.

 

  

Bitzio – Schonbrun:  Employment Agreement | 6

  

 

	
5.7  

	
Governing Law

 

This Agreement will be deemed to have been entered into and will be construed and enforced in accordance with the laws of the Province of British Columbia as applied to contracts made and to be performed within the Province of British Columbia.

 

	
5.8  

	
Reasonableness

 

Employee declares that he has read the foregoing and agrees to the conditions and obligations set forth.  Employee also acknowledges that he has been given a reasonable amount of time in which to consult with, and has consulted with, a lawyer with respect to this Agreement.

 

	
5.9  

	
Counterparts

 

This Agreement may be executed in two or more identical counterparts, facsimile counterparts or electronic counterparts, each of which when executed by a Party shall be deemed to be an original and such counterparts shall together constitute one and the same Agreement

 

	
5.10  

	
Execution and Signature Dates

 

Signing of this Agreement and transmission of the signed Agreement by facsimile or electronic document transfer will be acceptable and binding upon the Parties hereto. This Agreement shall be binding when the Agreement has been signed once by each of the Parties and shall take full force and effect as of the Effective Date regardless of any other dates appearing in the signature block. Subsequent signatures on additional copies, or the lack thereof, shall not have any impact on the enforceability of this Agreement.

 

	
5.11  

	
Handwritten Change

 

Any handwritten changes made to this Agreement (with the exception of the Effective Date when the Effective Date is handwritten onto the Agreement) must be initialled by all Parties in order to be binding on the Parties.

 

** Signature Page Follows **

 

  

Bitzio – Schonbrun:  Employment Agreement | 7

  

 

IN WITNESS WHEREOF the parties have executed this Agreement as of the Effective Date:

 

 

	
Dated:

	  	
February 1, 2012

	  	
/s/ William Schonbrun

	  	  	  	  	
WILLIAM SCHONBRUN

	 	 	 	 	 
	 	 	 	 	 
	
Dated:

	  	 	  	  
	  	  	  	  	
Witness to Employee Signature

	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	
BITZIO INC.

	 	 	 	 	 
	 	 	 	 	 
	
Dated:

	  	
February 1, 2012

	
By:    

	
/s/ illegible

	  	  	  	  	
Director

 

 

  

Bitzio – Schonbrun:  Employment Agreement | 8

  

 

EXHIBIT “A”

 

PROPRIETARY RIGHTS AGREEMENT

 

I, William Schonbrun, recognize that BITZIO INC. (the “Company”) is engaged in a continuous program of software research and development and the marketing of software products, and that the Company also provides technical support, consultation and training services relating to those software products.  I also recognize the importance of protecting the Company’s trade secrets, confidential information and other proprietary information and related rights acquired through the Company’s expenditure of time, effort and money.

 

Therefore, because I wish to be employed as an employee by the Company in a capacity in which I will receive and/or contribute to the Company’s Confidential Information, and in consideration of the salary or wages I will receive from the Company and for my employment by the Company, I agree to be bound by the following terms and conditions:

 

	
1.  

	
Definitions

 

For purposes of this Agreement:

 

(a) “Confidential Information” includes any of the following:

 

	
(i)  

	
any and all versions of the software and related documentation owned or marketed by the Company, as well as the software and documentation owned by the Company’s suppliers and used internally by the Company, including all related algorithms, concepts, data, designs, flowcharts, ideas, programming techniques, specifications and source code listings;

 

	
(ii)  

	
all Developments (as defined below);

 

	
(iii)  

	
information regarding the Company’s business operations, methods and practices, including marketing strategies, product pricing, margins and hourly rates for staff and information regarding the financial affairs of the Company;

 

	
(iv)  

	
the names of the Company’s clients and the names of the suppliers of computer services and software to the Company, and the nature of the Company’s relationships with these clients and suppliers;

 

	
(v)  

	
technical and business information of or regarding the clients of the Company obtained in order for the Company to provide such clients with software products and services, including information regarding the data processing requirements and the business operations, methods and practices and product plans of such clients; and

 

  

  

  

 

	
(vi)  

	
any other trade secret or confidential or proprietary information in the possession or control of the Company,

 

but Confidential Information does not include information that is or becomes generally available to the public without my fault or that I can establish, through written records, was in my possession prior to its disclosure to me as a result of my work for the Company.

 

(b) “Developments” include all

 

	
(i)  

	
software, documentation, data, designs, reports, flowcharts, trade-marks, specifications and source code listings, and any related works, including any enhancements, modifications, or additions to the software products owned, marketed or used by the Company; and

 

	
(ii)  

	
inventions, devices, discoveries, concepts, ideas, algorithms, formulae, know-how, processes, techniques, systems and improvements, whether patentable or not,

 

developed, created, generated or reduced to practice by me, alone or jointly with others, during my employment with the Company or that result from tasks assigned to me by the Company or that result from the use of the premises or property (including equipment, supplies or Confidential Information) owned, leased or licensed by the Company.

 

	
2.  

	
Non-Disclosure of Confidential Information

 

At all times during and subsequent to the termination of my employment with the Company, I will keep in strictest confidence and trust the Confidential Information, I will take all necessary precautions against unauthorized disclosure of the Confidential Information, and I will not directly or indirectly disclose, allow access to, transmit or transfer the Confidential Information to a third party, nor will I copy or reproduce the Confidential Information except as may be reasonably required for me to perform my duties for the Company.

 

	
3.  

	
Restricted Use of Confidential Information

 

(a) At all times during and subsequent to the termination of my employment with the Company, I will not use the Confidential Information in any manner except as reasonably required for me to perform my duties for the Company.

 

(b) Without limiting my obligations under subsection 3(a), I agree that at all times during and subsequent to the termination of my employment with the Company I will not use or take advantage of the Confidential Information for creating, maintaining or marketing, or aiding in the creation, maintenance or marketing, of any software that is competitive with any software owned or marketed by the Company.

 

  

  

  

 

(c) Upon the request of the Company, and in any event upon the termination of my employment with the Company, I will immediately return to the Company all materials, including all copies in whatever form, containing the Confidential Information that are in my possession or under my direction or control.

 

	
4.  

	
Ownership of Confidential Information

 

(a) I acknowledge and agree that I will not acquire any right, title or interest in or to the Confidential Information.

 

(b) I agree to make full disclosure to the Company of each Development promptly after its creation.  I hereby assign and transfer to the Company, and agree that the Company will be the exclusive owner of, all of my right, title and interest to each Development throughout the world, including all trade secrets, patent rights, copyrights and all other intellectual property rights therein.  I further agree to cooperate fully at all times during and subsequent to my employment with respect to signing further documents and doing such acts and other things reasonably requested by the Company to confirm such transfer of ownership of rights, including intellectual property rights, effective at or after the time the Development is created and to obtain patents or copyrights or the like covering the Developments.  I agree that the obligations in this clause (b) will continue beyond the termination of my employment with the Company with respect to Developments created during my employment with the Company.

 

(c) I agree that the Company, its assignees and their licensees are not required to designate me as the author of any Developments.  I hereby waive in whole all moral rights that I may have in the Developments, including the right to the integrity of the Developments, the right to be associated with the Developments, the right to restrain or claim damages for any distortion, mutilation or other modification of the Developments, and the right to restrain use or reproduction of the Developments in any context and in connection with any product, service, cause or institution.

 

(d) Listed in Schedule A to this Agreement are those works and inventions created by me, alone or jointly with others, prior to my employment by the Company, that are exempt from the operation of this Agreement.  If nothing is listed in Schedule A, I represent that I have made no such works or inventions as of the date of this Agreement.

 

	
5.  

	
Protection of Computer Systems and Software

 

I agree to take all necessary precautions to protect the computer systems and software of the Company and of the suppliers and clients of the Company, including without limitation complying with the obligations set out in the Company’s Acceptable Use Policy.

 

  

  

  

 

	
6.  

	
Non-Competition

 

I agree that while I am employed by the Company, and for twelve (12) months  following the termination of my employment with the Company, without the prior written approval of the Chief Financial Officer of the Company, I will not become engaged, directly or indirectly as an employee, consultant, partner, principal, agent, proprietor, shareholder (other than a holding of shares listed on a stock exchange that does not exceed 2% of the outstanding shares so listed) or advisor, in a business in Canada or the United States of America that

 

	
(i)  

	
develops or markets software competitive with the software owned or marketed by the Company, or

 

	
(ii)  

	
provides consulting, maintenance, support or training services that are competitive with the consulting, maintenance, support or training services provided by the Company, or

 

	
(iii)  

	
is a direct competitor of the Company in the software application development market,

 

provided that if, with respect to the period after the termination of my employment with the Company, such business has two or more divisions located at different addresses, then this Section 6 will not prohibit me from becoming engaged in a division that neither develops nor markets software competitive with the software owned or marketed by the Company nor provides services that are competitive with the services provided by the Company (provided further that in such case all the other obligations of this Agreement will continue to apply to me).

 

	
7.  

	
Non-Solicitation of Clients

 

I agree that while I am employed by the Company, and for twelve (12) months immediately following the termination of my employment with the Company, I will not, directly or indirectly, contact, accept business from or solicit any Clients of the Company for the purpose of selling or supplying to these Clients of the Company any products or services that are competitive with the products or services sold or supplied by the Company at the time of my termination.  The term “Client of the Company” in the preceding sentence means any business or organization that:

 

(a) was a client of the Company (i.e. has conducted any business with the Company in the prior 24 months) at the time of the termination of my employment with the Company; or

 

(b) became a client of the Company within six months after the termination of my employment with the Company if I was involved with any marketing efforts in respect of such client prior to the termination of my employment with the Company.

 

  

  

  

 

	
8.  

	
Non-Solicitation of Employees

 

I agree that while I am employed by the Company, and for six (6) months after the termination of my employment with the Company, I will not directly or indirectly hire or retain, directly or indirectly, any employees of or consultants to the Company nor will I solicit or induce or attempt to induce any persons who were employees of or consultants to the Company at the time of such termination or during the 90 days immediately preceding such termination, to terminate their employment or consulting agreement with the Company.

 

	
9.  

	
Reasonableness of Non-Competition and

 

	
  

	
Non-Solicitation Obligations

 

I confirm that the obligations in Sections 6, 7 and 8 are fair and reasonable given that, among other reasons,

 

	
(i)  

	
the sustained contact I will have with the clients of the Company will expose me to Confidential Information regarding the particular requirements of these clients and the Company’s unique methods of satisfying the needs of these clients, all of which I agree not to act upon to the detriment of the Company; and/or

 

	
(ii)  

	
I will be performing important development work on the software owned or marketed by the Company,

 

and I agree that the obligations in Sections 6, 7 and 8, together with my other obligations under this Agreement, are reasonably necessary for the protection of the Company’s proprietary interests.  I further confirm that the geographic scope of the obligation in Section 6 is reasonable given the international nature of the market for the products and services of the Company.  I also agree that the obligations in Sections 6, 7 and 8 are in addition to the non-disclosure and other obligations provided elsewhere in this Agreement.  I also acknowledge that my obligations contained in this Agreement will not preclude me from becoming gainfully directly employed in the computer software industry following a termination of my employment with the Company given my general knowledge and experience in the computer industry.

 

	
10.  

	
No Conflicting Obligations

 

(a) I acknowledge and represent to the Company that my performance as an employee of the Company will not breach any agreement or other obligation to keep confidential the proprietary information of any prior employer of mine or any other third party.  I further acknowledge and represent that I am not bound by any agreement or obligation with any third party that conflicts with any of my obligations under this Agreement.

 

(b) I represent and agree that I will not bring to the Company, and will not use in the performance of my work with the Company, any trade secrets, confidential information and other proprietary information of any prior employer of mine or any other third party.  I represent and agree that in my work creating Developments I will not knowingly infringe the intellectual property rights, including copyright, of any third party.

 

  

  

  

 

	
11.  

	
Enforcement

 

I acknowledge and agree that damages may not be an adequate remedy to compensate the Company for any breach of my obligations contained in this Agreement, and accordingly I agree that in addition to any and all other remedies available, the Company will be entitled to obtain relief by way of a temporary or permanent injunction to enforce the obligations contained in this Agreement.

 

	
12. 

	
General

 

(a) This Agreement will be governed by the laws in force in the Province of British Columbia.  If any provision of this Agreement is wholly or partially unenforceable for any reason, such unenforceable provision or part thereof will be deemed to be omitted from this Agreement without in any way invalidating or impairing the other provisions of this Agreement.  In this Agreement any reference to a termination of employment will include termination for any reason whatsoever and with or without cause.

 

(b) The rights and obligations under this Agreement will survive the termination of my service to the Company and will inure to the benefit of and will be binding upon (i) my heirs and personal representatives and (ii) the successors and assigns of the Company.

 

I HAVE READ THIS AGREEMENT, UNDERSTAND IT, HAVE HAD THE OPPORTUNITY TO OBTAIN INDEPENDENT LEGAL ADVICE IN RESPECT OF IT, AND I AGREE TO ITS TERMS.  I acknowledge having received a fully executed copy of this Agreement.

 

Signed, sealed and delivered on this ______ day of February__, 2012 in the presence of:

 

	
Dated:

	  	  	  	
/s/ William Schonbrun

	  	  	  	  	
WILLIAM SCHONBRUN

	 	 	 	 	 
	
Dated:

	  	  	  	  
	  	  	  	  	
Witness to Employee Signature

	 	 	 	 	 
	  	  	  	  	  
	  	  	  	  	
BITZIO INC.

	 	 	 	 	 
	 	 	 	 	 
	
Dated:

	  	  	
By:

	
/s/ illegible

	  	  	  	  	  

 

  

  

  

 

Schedule A

 

To:           BITZIO INC. (“Company”)

 

The following is a complete list of all works and inventions relative to the subject matter of my service as an employee of the Company that I created prior to my employment by the Company:

 

o No works and inventions.

 

o See below:

 

	
  

 

	
 

 

	
 

 

	
 

 

	
 

 

 

o Additional sheets attached.

 

	  	
)

	  	  
	  	
)

	  	  
	  	
)

	  	  
	
Witness

	  	  	
Employee (signature)

	  	  	  	  
	  	  	  	  
	
(name of witness – printed)

	  	  	
(name – printed)

	  	  	  	  
	  	  	  	  
	  	  	  	
Date

 

  

  

  

 

EXHIBIT “B”

 

RELEASE AND INDEMNITY

 

WHEREAS my employment with Bitzio Inc. (“Bitzio”) ceased pursuant to the terms of an Employment Agreement with Bitzio with an effective date of February 1, 2012;

 

AND WHEREAS I have agreed to accept the benefits set out in Section 4.1 of the Employment Agreement to which this Release and Indemnity is attached as Exhibit “B”, less all applicable deductions;

 

NOW THEREFORE THIS RELEASE AND INDEMNITY WITNESSES that in consideration of the benefits set out in Section 4.1 of the Employment Agreement to which this Release and Indemnity is attached as Exhibit “B”, less all applicable deductions, and other good and valuable consideration, I hereby release and forever discharge Bitzio and its officers, directors, employees, shareholders and agents from any and all actions, causes of action, claims, complaints and demands arising directly or indirectly from my employment with Bitzio or from the termination thereof and, without limiting the generality of the foregoing, any claims, statutory or otherwise, for bonuses, overtime pay, vacation pay, public holiday pay, termination pay, severance pay or compensation in lieu of notice and against Bitzio or its insurers in respect of any claims for benefits of any kind, including any express or implied right under any contract of employment, the common law, the applicable Employment Standards Act, the Human Rights Code or any other statute or regulation;

 

AND FOR THE SAID CONSIDERATION I further agree not to make any claim or commence any proceedings against any other individual, partnership, association, trust, unincorporated organization or corporation with respect to any matters which may have arisen between the parties to this Release and Indemnity or in which any claim could arise against Bitzio  for contribution or indemnity or other relief over;

 

AND FURTHERMORE, FOR THE SAID CONSIDERATION I further covenant and agree to save harmless and indemnify Bitzio from and against all claims, charges, taxes, penalties, or demands which may be made by the Minister of National Revenue requiring Bitzio to pay income tax, charges, taxes or penalties under the Income Tax Act (Canada) and/or the Income Tax Act of any province in respect of income tax payable by me in excess of income tax previously withheld or withheld from the monies paid to me by Bitzio in respect of the agreement herein or otherwise and any interest or penalties relating thereto and any costs or expenses incurred in defending such claims or demands, except for interest or penalties levied against Bitzio for failure to withhold the amounts required by law.  I further covenant and agree to save harmless and indemnify Bitzio from and against all claims, charges, taxes, penalties or demands which may be made by the Minister of Human Resources Development requiring Bitzio to pay or reimburse any monies in respect of benefits I may have received under the Canada Employment Insurance Act, and without restricting the generality of the foregoing, under sections 45 and 46 of the aforesaid Act and any interest or penalties relating thereto and any costs or expenses incurred in defending such claims or demands;

 

  

Bitzio – Schonbrun:  Exhibit B to Employment Agreement | 1

  

 

AND I HEREBY DECLARE that I have had the opportunity to seek independent legal advice with respect to benefits set out in Section 4.1 of the Employment Agreement to which this Release and Indemnity is attached as Exhibit “B” and I fully understand them.  I hereby voluntarily accept the benefits set out in Section 4.1 of the Employment Agreement to which this Release and Indemnity is attached as Exhibit “B”, less all applicable deductions, for the purpose of making full and final compromise, adjustment and settlement of all actions, causes of action, claims, complaints, demands and liability referred to above;

 

AND FOR THE SAID CONSIDERATION, I agree to keep the terms of this Release and Indemnity and the terms of settlement and the discussions leading up to them completely confidential and agree not to disclose the terms of this Release and Indemnity, the terms of settlement and the discussions leading up to them to anyone, except members of my immediate family and my legal and financial advisors;

 

AND I hereby agree that the payment of the said consideration shall not be construed as an admission of liability by Bitzio;

 

THIS RELEASE AND INDEMNITY shall be deemed to have been made in and shall be construed in accordance with the laws of the Province of British Columbia;

 

THIS RELEASE AND INDEMNITY shall enure to the benefit of and be binding upon me and Bitzio and our respective heirs, executors, administrators, legal personal representatives, successors and assigns.

 

IN WITNESS WHEREOF I have executed this document at  , ­­­­­__________ on the   day of  , 200___ and set my hand and seal thereto.

 

 

	SIGNED, SEALED and DELIVERED    )	
 

	  	  
	  in the presence of 	
)

	  	  
	 	)	 	 
	 	)	 	 
	 	)	 	 
	  	
)

	  	  
	
 

	  	  	
 

	WITNESS	  	  	WILLIAM SCHONBRUN

 

 

 

  

Bitzio – Schonbrun:  Exhibit B to Employment Agreement | 2Unassociated Document

 

ASSET PURCHASE AGREEMENT

 

AMONG

 

VICTORIA GOLD CORP.

 

VICTORIA RESOURCES (US) INC.

 

AND

 

PERSHING GOLD CORPORATION

 

DATED AS OF MARCH 23, 2012

 

___________________________________________

 

  

  

  

 

TABLE OF CONTENTS

 

	  	  	
Page

	  	  	  
	
ARTICLE 1 DEFINED TERMS

	 
2

	
1.1

	
Certain Definitions

	
2

	
ARTICLE 2 SALE AND PURCHASE

	 
3

	
2.1

	
Assets to be Sold and Purchased

	
3

	
2.2

	
Assumed and Retained Liabilities and Obligations

	
3

	
2.3

	
Purchase Price

	
4

	
2.4

	
Closing.

	
4

	
ARTICLE 3 REPRESENTATIONS, WARRANTIES and covenants OF SELLER

	 
6

	
3.1

	
Organization of Seller

	
6

	
3.2

	
Authority of Seller

	
6

	
3.3

	
Execution and Binding Effect

	
6

	
3.4

	
No Violation; Consents and Approvals

	
6

	
3.5

	
Litigation

	
7

	
3.6

	
Title.

	
7

	
3.7

	
Contracts.

	
8

	
3.8

	
Compliance with Law.

	
9

	
3.9

	
Environmental Compliance.

	
9

	
3.10

	
Tax Representations.

	
9

	
3.11

	
Investment Representations.

	
10

	
3.12

	
Brokers and Finders.

	
12

	
3.13

	
Representations.

	
12

	
3.14

	
Pershing Shares.

	
12

	
3.15

	
Survival of Representations and Warranties.

	
12

	
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER

	 
13

	
4.1

	
Organization of Pershing.

	
13

	
4.2

	
Authority of Pershing.

	
13

	
4.3

	
Execution and Binding Effect.

	
13

	
4.4

	
No Violation; Consents and Approvals.

	
13

	
4.5

	
Litigation.

	
14

	
4.6

	
The Securities.

	
14

	
4.7

	
Recent SEC Reports; etc..

	
14

	
4.8

	
Private Placement

	
15

	
4.9

	
Brokers and Finders.

	
15

	
4.10

	
Representations.

	
15

	
4.11

	
Survival of Representations and Warranties.

	
15

	
ARTICLE 5 ADDITIONAL COVENANTS

	 
16

	
5.1

	
Conduct of Business.

	
16

	
5.2

	
Access to Records and Properties and Due Diligence

	
16

	
5.3

	
Consultation and Reporting.

	
17

	
5.4

	
Confidentiality.

	
17

	
5.5

	
Consents; Pre-Closing and Post-Closing Efforts.

	
18

	
5.6

	
Satisfaction of Conditions Precedent.

	
18

	
5.7

	
Transfer Taxes.

	
18

	
5.8

	
Tax Allocations.

	
18

	
5.9

	
No Obligation to Develop.

	
20

	
5.10

	
Form D and Blue Sky.

	
20

	
ARTICLE 6 CONDITIONS TO BUYER’S OBLIGATIONS

	 
20

	
6.1

	
Representations and Warranties of Seller to be True; Performance by Seller.

	
20

	
6.2

	
Deliveries.

	
20

	
6.3

	
Consents.

	
21

	
6.4

	
No Proceeding or Litigation.

	
21

	
ARTICLE 7 CONDITIONS TO SELLER’S OBLIGATIONS

	 
21

	
7.1

	
Representations and Warranties of Buyer to be True; Performance by Buyer.

	
21

	
7.2

	
Deliveries.

	
22

	
7.3

	
Consents.

	
22

	
7.4

	
No Proceeding or Litigation.

	
22

	
ARTICLE 8 INDEMNIFICATION

	 
22

	
8.1

	
Indemnification by Seller.

	
22

	
8.2

	
Indemnification by Pershing.

	
23

	
8.3

	
General Indemnification Provisions.

	
23

	
8.4

	
Limits on Liability.

	
24

	
ARTICLE 9 TERMINATION, AMENDMENT AND WAIVER

	 
25

	
9.1

	
Termination of Agreement.

	
25

	
9.2

	
Procedure and Effect of Termination.

	
25

	
9.3

	
Amendment.

	
26

	
9.4

	
Waiver.

	
26

	
ARTICLE 10 MISCELLANEOUS

	 
26

	
10.1

	
Expenses.

	
26

	
10.2

	
Consents.

	
26

	
10.3

	
Assignment; Parties in Interest.

	
26

	
10.4

	
Further Assurances.

	
27

	
10.5

	
Title and Risk of Loss.

	
27

	
10.6

	
Entire Agreement.

	
27

	
10.7

	
Headings

	
27

	
10.8

	
Notices

	
27

	
10.9

	
Governing Law

	
28

	
10.10

	
Counterparts

	
28

	
10.11

	
Affiliate

	
28

	
10.12

	
Survival

	
28

	
10.13

	
Interpretation

	
28

	
10.14

	
Other Business Opportunities

	
29

	
10.15

	
Public Announcements.

	
29

	
10.16

	
Joint and Several Liability

	
29

	
10.17

	
Remedies

	
30

	
10.18

	
Third Party Beneficiaries

	
30

 

EXHIBITS

 

	
Exhibit A

	
The Properties

	
Exhibit B

	
Seller’s Data and Information

	
Exhibit C

	
Form of Warrant

	
Exhibit D

	
Form of Grant, Bargain and Sale Deed

	
Exhibit E

	
Form of Assignment of Mineral Lease and Sublease

	
Exhibit F

	
Form of Seller’s Officer’s Certificate

	
Exhibit G

	
Form of FIRPTA Certificate

	
Exhibit H

	
Form of Buyer’s Officer’s Certificate

	
Exhibit I

	
March 15, 2012 Estoppel Certificate and Consent to Assignment

	
Exhibit J

	
Form of Notice to Newmont of Assumption

 

  

  

  

 

THIS ASSET PURCHASE AGREEMENT (the “Agreement”), dated as of March 23, 2012 (the “Effective Date”), is by and among VICTORIA GOLD CORP., a British Columbia corporation (“VGC”), whose address is 80 Richmond Street West, Suite 303, Toronto, Ontario M5H 2A4, Canada, VICTORIA RESOURCES (US) INC., a Nevada corporation (“VRI” or “Seller”), whose address is 1015 Telegraph Street, Suite B, Reno, Nevada 89502, and PERSHING GOLD CORPORATION, a Nevada corporation (“Pershing” or “Buyer”), whose address is 1658 Cole Boulevard, Building 6 – Suite 210, Lakewood, Colorado 80401.

 

RECITALS

 

A.           VRI (i) owns certain unpatented mining claims in Pershing County, Nevada, as more particularly described in Part 1 of Exhibit A attached hereto (the “Owned Claims”), (ii) holds a leasehold interest in certain unpatented mining claims in Pershing County, Nevada, as more particularly described in Part 2 of Exhibit A attached hereto (the “Newmont Claims”), pursuant to that Minerals Lease and Sublease dated June 15, 2006, between Newmont USA Limited, d/b/a in Nevada as Newmont Mining Corporation (“Newmont”), and VRI (as amended by (A) that Amendment to Minerals Lease and Sublease dated February 26, 2007, and (B) that Second Amendment to Minerals Lease and Sublease dated June 14, 2011, the “2006 Mineral Lease”), (iii) is the sublessee, pursuant to the 2006 Mineral Lease, of an interest in certain fee minerals in Pershing County, Nevada, as more particularly described in Part 3 of Exhibit A, in which Newmont holds a leasehold interest pursuant to that Minerals Lease SPL-6700, dated August 17, 1987, between Southern Pacific Land Company and SFP Minerals Corporation (the “SFP Lease”), (iv) is the sublessee, pursuant to the 2006 Mineral Lease, of an interest in certain fee lands in Pershing County, Nevada, as more particularly described in Part 4 of Exhibit A, in which Newmont holds a leasehold interest pursuant to that Mining Lease dated June 1, 1994, between The Atchison, Topeka and Santa Fe Railway Company and Santa Fe Pacific Gold Corporation (the “SFPG Lease”), and (v) is the sublessee, pursuant to the 2006 Mineral Lease, of an interest in certain fee minerals in Pershing County, Nevada, as more particularly described in Part 5 of Exhibit A, in which Newmont holds a leasehold interest pursuant to that Mining Lease dated March 23, 1999, between Nevada Land & Resource Company, LLC and Santa Fe Pacific Gold Corporation (the “NLRC Lease”).

 

B.           Seller desires to convey and assign, and Buyer desires to purchase and assume, the Owned Claims and VRI’s interest in the 2006 Mineral Lease (including its interest as sublessee of the SFP Lease, the SFPG Lease and the NLRC Lease), and certain other assets and liabilities related to the Properties (as defined in Section 1.1), upon and subject to the terms and conditions hereinafter set forth.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and of the mutual agreements and covenants hereinafter set forth, the receipt and sufficiency of which are hereby acknowledged and confirmed, the parties hereto agree as follows:

 

  

  

  

 

ARTICLE 1

 

DEFINED TERMS

 

1.1           Certain Definitions.  In addition to other terms defined in this Agreement, the following terms shall have the meanings set forth below when used in this Agreement:

 

(a)           The term “Closing Date” has the meaning set forth in Section 2.4(a).

 

(b)           The term “Environmental Conditions” means any degradation of the soil, water, air or natural resources, including without limitation wetlands and plant and animal life, that is regulated pursuant to or addressed under any Environmental Law.  Environmental Conditions shall include, but shall not be limited to (i) any release of any hazardous or toxic material or substance pursuant to CERCLA, TSCA, or other authority; (ii) any disposal of a hazardous or solid waste pursuant to the RCRA or other authority; (iii) any disturbance of a wetland or any other area requiring a permit or otherwise regulated under Section 404 of FWPCA; (iv) any emission of any air pollutant pursuant to the CAA, or other authority; (v) any discharge of stormwater or any pollutant or contaminant regulated by FWPCA, or any other authority relating to water quality; (vi) any contamination of drinking water or a public drinking  water system pursuant to SDWA, or other authority; and (vii) any other condition or activity which causes or consists of a violation of any Environmental Law.

 

(c)           The term “Environmental Laws” means any federal, state or local statute, law, regulation, rule, code, ordinance or requirement, including any judicial or administrative order, consent decree or judgment, relating to the environment, health or safety, including without limitation the provisions of N.R.S. §§ 445A, 445B and 519A, the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601, et seq. (“CERCLA”), the Toxic Substances Control Act, 15 U.S.C. § 2601, et seq. (“TSCA”), the Resource Conservation and Recovery Act, 42 U.S.C. § 6901, et seq. (“RCRA”), the Federal Water Pollution Control Act, 33 U.S.C. § 1344 (“FWPCA”), the Clean Air Act, 42 U.S.C. § 7401, et seq. (“CAA”), the Safe Drinking Water Act, 42 U.S.C. § 300i (“SDWA”), the Hazardous Materials Transportation Act, 49 U.S.C. § 6901 et seq., the Clean Water Act, 33 U.S.C. § 1251 et seq. (“CWA”) and the Superfund Amendments and Reauthorization Act of 1986, Pub. L. 99-499, 100 Stat. 1613, the Endangered Species Act, 16 U.S.C. § 1531, et seq., and the National Historic Preservation Act, 16 U.S.C. § 461, et seq.), each as amended or reauthorized, and any state law counterparts, including any plan, judgment, injunction, notice or demand letter issued, entered, promulgated or approved by any governmental authority, now or hereafter in effect, relating to the generation, production, installation, use, storage, treatment, handling, distribution, transportation, release, threatened release, recycling or disposal of hazardous materials or substances, noise control, reclamation or the protection of human health and safety, natural resources or the environment.

 

(d)           The term “Leased Properties” means all of the property interests covered by the 2006 Mineral Lease and the Underlying Leases.

 

  

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(e)           The term “Losses” means, with respect to any person or entity, any liabilities, commitments, obligations, losses, damages, penalties (civil or criminal), expenses (including reasonable attorneys’ fees), fines, settlements, interest, suits, causes of action, legal or administrative proceedings, arbitration awards, demands or claims, including claims for personal injury, injunctive relief or damage to property, of such person or entity of any kind, character or description, whether known or unknown, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, secured or unsecured, and whether due or to become due, regardless of when asserted, except to the extent the same arise from a party’s own gross negligence or willful misconduct.

 

(f)           The term “Properties” means, collectively, the Owned Claims and the Leased Properties.

 

(g)           The term “Tax Returns” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

 

(h)           The term “Underlying Leases” means, collectively, the SFP Lease, the SFPG Lease and the NLRC Lease.

 

(i)           “$” or “dollars” means United States currency.

 

ARTICLE 2

 

SALE AND PURCHASE

 

2.1           Assets to be Sold and Purchased.

 

(a)           Subject to the terms and conditions of this Agreement, at the Closing (as defined in Section 2.4(a)) Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase from Seller, free and clear of all liens, claims, charges or encumbrances other than the production royalties payable under the 2006 Mineral Lease and the Underlying Leases (collectively, the “Encumbrances”), the following property, assets and rights (collectively, the “Assets”):

 

(i)           The Owned Claims;

 

(ii)           All of Seller’s rights in and to the 2006 Mineral Lease and the Underlying Leases; and

 

(iii)           All of Seller’s data, information and records, in whatever form,  related to the Owned Claims and the Leased Properties, including all internal analyses and reports prepared by third party consultants or contractors, as described in Exhibit B (the “Data and Information”).

 

2.2           Assumed and Retained Liabilities and Obligations.

 

(a)           Subject to Section 2.2(b) below, Buyer shall assume, pay, fulfill, perform or otherwise discharge the liabilities and obligations of Seller arising with respect to periods after the Closing Date and pertaining to or under the 2006 Mineral Lease and the Underlying Leases (including, for certainty, the full amount of additional Expenditures to be made on or before six years from the Effective Date in accordance with Section 2 of the 2006 Mineral Lease, with the amount of such additional Expenditures being $750,000) (the “Assumed Liabilities”).

 

  

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(b)           Notwithstanding anything to the contrary in Section 2.2(a), Buyer shall not be required to assume, pay, fulfill, perform or otherwise discharge any of the following liabilities and obligations of Seller (collectively, “Excluded Liabilities”):

 

(i)           Any liabilities for or arising from reclamation or restoration of the Properties which was required to be performed by the Seller prior to the Closing Date, except to the extent such reclamation or restoration has been made impractical as a result of actions of the Buyer; and

 

(ii)           All obligations and liabilities for rentals, delay rentals, advance royalty payments or production royalty payments under the 2006 Mineral Lease and the Underlying Leases accruing prior to the Closing Date, or liabilities pertaining to obligations or the failure to perform obligations required to be performed under the 2006 Mineral Lease or the Underlying Leases prior to the Closing Date, including such obligations and liabilities discovered subsequent to the Closing.

 

2.3           Purchase Price.  The purchase price for the Assets shall consist of the following (collectively, the “Purchase Price”):

 

(a)           $2,000,000 in cash payable by Buyer to VRI, or as it may direct in writing, on the Closing Date (the “Closing Date Payment”);

 

(b)           10,000,000 shares of Buyer common stock, $.0001 par value (“Common Stock”), to be issued to VGC at the written direction of VRI at the Closing (the “Pershing Shares”);

 

(c)           a warrant to be issued to VGC at the written direction of VRI at the Closing to purchase 5,000,000 shares of Common Stock, with an exercise price of $0.60 per share, exercisable at any time on or prior to 5:00 p.m. Pacific time on the second anniversary of the Closing Date, in the form attached hereto as Exhibit C (the “Pershing Warrant”); and

 

(d)           a net smelter returns royalty of two percent (2%) on those Owned Claims which are not encumbered by a production royalty payable to Newmont under the 2006 Mineral Lease (the “Royalty”), to be reserved by Seller and calculated as set forth in the Deed.

 

2.4           Closing.

 

(a)           Subject to the terms and conditions of this Agreement, including Section 9.1 below, the consummation of the sale and purchase of the Assets contemplated by this Agreement (the “Closing”) shall take place at 10:00 a.m., local time, at the offices of Davis Graham & Stubbs LLP, 1550 Seventeenth Street, Suite 500, Denver, Colorado 80202, on the date that is the third (3rd) business day following the satisfaction or waiver of all of the conditions in Articles 6 and 7 of this Agreement, or at such other time and place as is mutually agreeable to the parties.  The date on which the closing occurs is referred to as the “Closing Date.”

 

  

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(b)           At the Closing, Seller shall deliver to Buyer:

 

(i)           a Grant, Bargain and Sale Deed conveying the Owned Claims to Buyer and reserving the Royalty, substantially in the form attached hereto as Exhibit D (the “Deed”) together with the applicable form of Declaration of Value required for recording purposes;

 

(ii)           an assignment and assumption of the 2006 Mineral Lease (including Seller’s rights in the Underlying Leases) to Buyer, suitable for recording in the official records of Pershing County, Nevada, substantially in the form attached hereto as Exhibit E (the “Assignment”) together with, if required, the applicable form of Declaration of Value required for recording purposes;

 

(iii)           a certificate of an authorized officer of Seller substantially in the form attached hereto as Exhibit F (the “Seller Officer’s Certificate”);

 

(iv)           copies of all consents that Seller has obtained pursuant to Sections 5.5 and 6.3;

 

(v)           such other instruments of assignment or conveyance as Buyer may reasonably request as necessary or appropriate to vest in Buyer good and marketable title to the Assets to be sold by Seller hereunder;

 

(vi)           possession of the Assets;

 

(vii)           a certificate of an authorized officer of Seller dated the Closing Date in the form attached hereto as Exhibit G (the “FIRPTA Certificate”); and

 

(viii)           the Data and Information.

 

(c)           At the Closing, Buyer shall deliver to Seller:

 

(i)           the Closing Date Payment, by wire transfer of immediately available funds, pursuant to wire transfer instructions provided by Seller to Buyer prior to Closing;

 

(ii)           a certificate, duly executed by authorized officers of Buyer and countersigned by the transfer agent for the Common Stock evidencing the Pershing Shares, registered in the name of VGC;

 

(iii)           the Pershing Warrant, duly executed by an authorized officer of Buyer, and registered in the name of VGC;

 

(iv)           the Deed together with a Declaration of Value as referred to in paragraph 2.4(b)(i);

 

  

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(v)           the Assignment together with, if required, a Declaration of Value as referred to in paragraph 2.4(b)(ii); and

 

(vi)           a certificate of an authorized officer of Buyer substantially in the form attached hereto as Exhibit H (the “Buyer Officer’s Certificate”).

 

ARTICLE 3

 

REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER

 

Seller and VGC jointly and severally represent, warrant and covenant to Buyer as set forth below.

 

3.1           Organization of Seller.  VGC is a corporation duly organized, validly existing and in good standing under the laws of British Columbia.  VRI is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada.  All of the issued and outstanding capital stock of VRI is held by VGC.

 

3.2           Authority of Seller.  VRI has all requisite corporate power and authority to own the Assets and to hold a leasehold interest in the 2006 Mineral Lease and a subleasehold interest in the Underlying Leases.  Each of VGC and VRI has all requisite corporate power and authority to execute and deliver this Agreement and the other agreements and instruments to be executed and delivered by it pursuant to this Agreement, including the Pershing Warrant (the “Ancillary Agreements”) and to consummate the transactions contemplated hereby and thereby.

 

3.3           Execution and Binding Effect.  The execution, delivery and performance of this Agreement and the Ancillary Agreements to which they are a party have been duly authorized by all necessary corporate action on the part of each of VGC and VRI.  This Agreement has been duly and validly executed and delivered by each of VGC and VRI and constitutes, and the Ancillary Agreements upon their execution and delivery by such of VGC and VRI who is a party thereto on or prior to the Closing Date will constitute (assuming, in each case, the due and valid authorization, execution and delivery thereof by the other parties thereto), legal, valid and binding agreements of such of VGC and VRI, as applicable, enforceable against VGC and VRI, as applicable, in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency or similar laws and by equitable principles generally.

 

3.4           No Violation; Consents and Approvals.  Neither the execution, delivery and performance of this Agreement or the Ancillary Agreements nor the consummation by VGC or VRI of the transactions contemplated hereby or thereby will (a) conflict with, violate or result in any breach of the terms, conditions or provisions of VGC’s and VRI’s articles of incorporation or by-laws, as amended and as currently in place, (b) conflict with, violate or result in any breach of, or constitute a default (or give rise to any right of termination, cancellation or acceleration) under, any of the terms, conditions or provisions of any agreement, lease, instrument, obligation, understanding or arrangement to which either VGC or VRI is a party or by which either VGC or VRI or any of the Assets may be bound or subject, except for such defaults (or rights of termination, cancellation or acceleration), as to which requisite waivers or consents have been obtained or are to be obtained as contemplated herein, (c)  violate any statute, ordinance or law or any rule, regulation, order, judgment, writ, injunction or decree of any court or of any public, governmental or regulatory body, agency or authority applicable to VGC or VRI or by which any of their respective properties or assets may be bound or subject, or (d) other than providing the required notice to Newmont under Section 11 of the 2006 Mineral Lease or obtaining the consent of Newmont to the assignment of the 2006 Mineral Lease, and providing thirty (30) days notice to the lessor under the SFP Lease that Buyer will replace VRI as sublessee thereunder, require any filing, declaration or registration with, or permit, consent or approval of, or the giving of any notice to, any person or entity, including any public, governmental or regulatory body, agency or authority.

 

  

-6-

  

 

3.5           Litigation.

 

There are no claims, actions, suits, proceedings or investigations pending or, to Seller’s knowledge, threatened, by or against Seller with respect to the Properties, the 2006 Mineral Lease, any of the Underlying Leases or any other of the Assets, or its activities on the Properties, or which are reasonably likely to have a material adverse effect on Seller’s right or ability to consummate the transactions contemplated by this Agreement, at law or in equity or before or by any federal, state, municipal, foreign or other governmental department, commission, board, agency, instrumentality or authority.  Seller is not subject to any pending judgment relating to the Assets or its activities on the Properties.

 

3.6           Title.

 

(a)           With respect to each of the Owned Claims, (i) subject to the paramount title of the United States of America and the statutory rights of third parties to use of the surface, and Note 1 and Note 2 in Part 1 of the Exhibit A, Seller owns the Owned Claims free and clear of all Encumbrances arising by, through or under Seller; (ii) to the knowledge of the Seller, the Owned Claims were located by qualified locators and properly laid out and monumented on available public domain land open to appropriation by mineral location; (iii) to the knowledge of the Seller, location notices or certificates for each of the Owned Claims were timely and properly recorded and filed with the appropriate governmental agencies, and all payments required in connection therewith were timely and properly made; (iv) all claim maintenance, recording and related fees have been timely and properly paid as required by law in order to hold the Owned Claims through the assessment year ending on September 1, 2012; and (v) all affidavits of assessment of work, notices of intent to hold, evidence of payment of claim maintenance fees, and other filings required to maintain the Owned Claims in good standing have been timely and properly recorded or filed with the appropriate governmental agencies.

 

(b)           With respect to the Leased Properties, to the Seller’s knowledge:

 

(i)           Subject to the paramount title of the United States of America  and the statutory rights of third parties to use of the surface, and subject to the terms and conditions of the 2006 Mineral Lease and Note 1 in Part 2 of Exhibit A, Newmont is the owner of the Newmont Claims, free and clear of all Encumbrances, and with respect to each of the Newmont Claims, (A) the Newmont Claims were located by qualified locators and properly laid out and monumented on available public domain land open to appropriation by mineral location; (B) location notices or certificates for each of the Newmont Claims were timely and properly recorded and filed with the appropriate governmental agencies, and all payments required in connection therewith were timely and properly made; (C) all claim maintenance, recording and related fees have been timely and properly paid as required by law in order to hold the Newmont Claims through the assessment year ending on September 1, 2012; and (D) all affidavits of assessment of work, notices of intent to hold, evidence of payment of claim maintenance fees, and other filings required to maintain the Newmont Claims in good standing have been timely and properly recorded or filed with the appropriate governmental agencies;

 

  

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(ii)           New Nevada Resources, LLC (“NNR”) is the owner of good and marketable title to the fee minerals (excluding sand, gravel, clay, rock and placer minerals) covered by the Underlying Leases, free and clear of all Encumbrances (subject to the terms and conditions of the Underlying Leases);

 

(iii)           New Nevada Lands, LLC (“NNL”) is the owner of good and marketable title to the surface (including sand, gravel, clay, rock and place minerals) in the lands covered by the Underlying Leases (except for Sections 5, 7, 19 and 29 as described in (iv) below), free and clear of all Encumbrances (subject to the terms and conditions of the Underlying Leases); and

 

(iv)           Nevada Land & Resources Company, LLC (“NLRC”) conveyed the surface of Sections 5, 7, 19 and 29 identified on Part 3 of Exhibit A hereto to certain third parties, with NLRC reserving the minerals and right to use such surface.

 

(c)           To Seller’s knowledge, subject to the terms and conditions of the 2006 Mineral Lease and the Underlying Leases, Seller has contractual or common law rights to use the surface of the Properties in a manner sufficient to allow for the development and operation of either surface or underground mines thereon, without payment of additional consideration to any third party other than those payments due under the 2006 Mineral Lease and the Underlying Leases.

 

3.7           Contracts.

 

Except for the 2006 Mineral Lease and the Underlying Leases, Seller is not a party to any agreement or contract pertaining to the Properties.  The 2006 Mineral Lease and the Underlying Leases are valid and in full force and effect, there has been and is no breach by Seller of the terms and conditions thereof, and to the knowledge of the Seller there is no pending or threatened claim that Seller or Newmont has breached any of the terms or conditions of the 2006 Mineral Lease or the Underlying Leases.  Seller has not breached, and to the Seller’s knowledge, Newmont has not breached any of the terms or conditions of the 2006 Mineral Lease or any of the Underlying Leases, and to the knowledge of the Seller there is no condition that exists that with the providing of notice or the passage of time will become a breach.  Seller has provided Buyer with complete and correct copies of the 2006 Mineral Lease and the Underlying Leases, as amended and as currently in effect.  Seller owns its interest in the 2006 Mineral Lease and the Underlying Leases free and clear of all Encumbrances (other than the royalties payable to the lessors thereunder).  Seller has timely and properly made all rental, advance or minimum royalty and royalty payments and timely and properly performed all work commitment and other obligations required of it under the 2006 Mineral Lease and the Underlying Leases.  None of the Leased Properties is encumbered by any production royalty payable to any party other than the lessors under the 2006 Mineral Lease and the Underlying Leases.

 

  

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3.8           Compliance with Law.

 

Seller’s activities on the Properties have been conducted and are currently in material compliance with all applicable federal, state or local laws, regulations, ordinances, rules or orders, including Environmental Laws (compliance with which shall be qualified by knowledge as set out in Section 3.9) and laws, rules and regulations pertaining to reclamation or restoration of the Properties.  No permits, licenses or approvals are required from any federal, state or local governmental agency in connection with Seller’s activities to date on the Properties.

 

3.9           Environmental Compliance.

 

To the Seller’s knowledge, there are no Environmental Conditions associated with the Assets or arising out of Seller’s activities on the Properties which constitute a nuisance or have resulted in or could reasonably be expected to result in a violation of or liability under applicable Environmental Laws.  No governmental authority has issued to Seller under applicable Environmental Laws any notices of violations or consent orders pertaining to the Properties or its activities thereon, or any notice of any inspection or possible inspection or investigation by any governmental authority under any applicable Environmental Laws.  There are no pending or to Seller’s knowledge threatened proceedings by or before any court or other governmental authority with respect to activities of the Seller on the Properties alleged to be, or have been, in violation of, or to be the basis of liability under, any Environmental Law, and Seller is not aware of any “release” (as defined under CERCLA) of any hazardous materials at, from or affecting the Properties.

 

3.10           Tax Representations.

 

(a)           Tax Definitions. In this Agreement, “Taxes” means all gross receipts, sales, use, ad valorem, transfer, franchise, license, excise, severance or property taxes, alternative or add-on minimum taxes, customs duties and other taxes, fees, assessments or charges of any kind whatsoever, together with all interest and penalties, additions to Tax and other additional amounts imposed by any taxing authority (domestic or foreign) on the Assets, and “Tax” means any one of the foregoing Taxes.

 

(b)           Seller has timely paid all Taxes relating to the Assets. There are no liens on any of the Assets that arose in connection with any failure (or alleged failure) to pay any Tax, other than liens for Taxes not yet due and payable or for Taxes that are being disputed in good faith by appropriate proceedings.  There are no Taxes of Seller for which Buyer may reasonably be expected to become liable for as a result of the transactions contemplated by this Agreement.

 

(c)           There is no dispute or claim concerning any Tax liability of Seller relating to the Assets either (i) claimed or raised by any governmental authority in writing or (ii) as to which Seller has knowledge based upon personal contact with any agent of such governmental authority for which Buyer may be reasonably expected to become liable as a result of the transactions contemplated by this Agreement.

 

  

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3.11           Investment Representations.

 

(a)           VGC is acquiring the Pershing Shares and the Pershing Warrant, and will acquire the Common Stock issuable on the exercise of the Pershing Warrant (the “Pershing Warrant Shares” and, collectively with the Pershing Shares and the Pershing Warrant, the “Securities”) for investment solely for Seller’s own account and not for distribution, transfer or sale to others in connection with any distribution or public offering, provided, however, that by making the representations herein, VGC does not agree to hold any of the Securities acquired by it for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to an effective registration statement or an exemption from registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”).

 

(b)           VGC has such knowledge, experience and skill in financial and business matters in general and with respect to investments of a nature similar to the Securities so as to be capable of evaluating the merits and risks of, and making an informed business decision with regard to, such investment.  VGC can bear the economic risk of an investment in Buyer for an indefinite period of time, and can afford to suffer the complete loss thereof.

 

(c)           VGC is an “Accredited Investor” as that term is defined in Rule 501 promulgated under the Securities Act.

 

(d)           VGC maintains its principal place of business at the address shown in Section 10.8 of this Agreement.

 

(e)           VGC acknowledges that at no time was it presented with or solicited through any leaflet, public promotional meeting, public advertisement, prospectus or any other form of general advertising or general solicitation in connection with the offer and sale of the Securities.

 

(f)           VGC (i) has had the opportunity to review the Recent SEC Reports (as defined in Section 4.7) and has received all information that VGC deems necessary to make an informed investment decision with respect to the Securities; (ii) has had the opportunity to make such investigation as VGC desires pertaining to Buyer and an investment in the Securities and to verify any information furnished to VGC; and (iii) has had the opportunity to ask questions of Buyer’s representatives.

 

(g)           VGC has not relied upon any representations, warranties or agreements, other than those set forth in this Agreement.

 

(h)           VGC acknowledges that (i) the Securities have not been registered under the Securities Act or other applicable securities laws, and (ii) the Securities may not be sold, transferred, pledged or otherwise disposed except pursuant to Rule 144 promulgated under the Securities Act, as amended (or a successor rule thereto) (“Rule 144”), when available, or another exemption from registration under the Securities Act or any applicable securities laws or an effective registration statement filed under the Securities Act. For purposes hereof, “securities laws” means the securities laws, legislation and regulations of, and the instruments, policies, rules, orders, codes, notices and interpretation notes of, the securities regulatory authorities (including the United States Securities and Exchange Commission (the “SEC”)) of the United States and any applicable states and other jurisdictions.

 

  

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(i)           VGC acknowledges that Buyer is not obligated to register the Securities for resale under the Securities Act or any applicable securities laws.

 

(j)           VGC acknowledges that the Securities will be “restricted securities” as defined in Rule 144.

 

(k)           VGC further acknowledges that it is aware that Buyer is a domestic issuer under the Securities Act and that therefore the Securities Act Legend set forth below may not be removed in accordance with Rule 905 under the Securities Act.

 

(l)           It is understood that the certificates evidencing the Pershing Shares, the Pershing Warrant and the Pershing Warrant Shares, except as set forth below, will bear the legend set forth below (the “Securities Act Legend”):

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR ANY STATE SECURITIES LAWS, AND MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO BUYER, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE U.S. SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THE U.S. SECURITIES ACT, (D) IN COMPLIANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR (E) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE LAWS AND REGULATIONS GOVERNING THE OFFER AND SALE OF SECURITIES, AND, IN THE CASE OF (C) OR (E), THE HOLDER HAS PRIOR TO SUCH TRANSFER FURNISHED TO THE CORPORATION AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN CUSTOMARY FORM AND SUBSTANCE AND IN THE CASE OF (D), THE HOLDER HAS PROVIDED TO THE CORPORATION CUSTOMARY DOCUMENTATION OF THE HOLDER AND ITS BROKER.

 

  

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Upon the written request to Pershing of a holder of a certificate or other instrument representing any of the Securities, the Securities Act Legend (and any related stop-transfer instructions) shall be removed and Pershing shall cause its transfer agent to issue a certificate without the Securities Act Legend to the holder of the Securities upon which it is stamped, if (i) such Securities are registered for resale under the Securities Act, (ii) in connection with a sale transaction, such holder provides Pershing with an opinion of counsel, in a form reasonably acceptable to Pershing and its counsel, to the effect that a sale, assignment or transfer of the Securities may be made without registration under the Securities Act, (iii) such holder provides Pershing customary documentation of such holder and its broker to the effect that the Securities have been or are being sold pursuant to and in compliance with Rule 144, or (iv) such holder certifies, on or after the date that is six (6) months after the date on which such holder acquired the Securities (or is deemed to have acquired the Securities under Rule 144), that such holder is not an “affiliate” of Pershing (as defined in Rule 144).  Pershing shall be responsible for the fees of its transfer agent and all of The Depository Trust Company fees associated with such issuance.  Pershing acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the holders of the Securities.  Accordingly, Pershing acknowledges that the remedy at law for a breach of its obligations under this Section 3.11(l) will be inadequate and agrees that, in the event of a breach or threatened breach of this Section 3.11(l), such holder shall be entitled, in addition to all other available remedies, to an injunctive order and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security being required.

 

3.12           Brokers and Finders.

 

Neither Seller, VGC nor any of their respective directors, officers, employees or agents has employed any broker or finder or incurred any liability for any brokerage fees, commissions or finders’ fees which could in any way be deemed payable by Buyer in connection with the transactions contemplated by this Agreement.

 

3.13           Representations.

 

No statements, warranties, or representations made by Seller or VGC herein contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were or will be made, not misleading.

 

3.14           Pershing Shares.

 

As of the date hereof, neither Seller, VGC nor any of their respective affiliates is the beneficial owner, as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of any Pershing Common Stock.

 

3.15           Survival of Representations and Warranties.

 

The representations, warranties and covenants contained in this Article 3 shall survive the execution and delivery of this Agreement and the Closing as well as any assignment hereof and the execution and delivery of the Deed, the Assignment and any other conveyance document, for a period of two (2) years following the Closing Date.

 

  

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ARTICLE 4

 

REPRESENTATIONS AND WARRANTIES OF BUYER

 

Buyer represents and warrants to Seller and VGC as set forth below.

 

4.1           Organization of Pershing.

 

Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada.

 

4.2           Authority of Pershing.

 

Buyer has all requisite corporate power and authority to execute and deliver this Agreement and the Ancillary Agreements to which either of them is a party and to consummate the transactions contemplated hereby and thereby.

 

4.3           Execution and Binding Effect.

 

The execution and delivery of this Agreement and the Ancillary Agreements to which Buyer is a party and the consummation by Buyer of the transactions contemplated hereby and thereby, including the issuance of the Pershing Shares and the Pershing Warrant, and the reservation for issuance and the issuance of the Pershing Warrant Shares issuable upon exercise of the Pershing Warrant, have been duly authorized by all necessary corporate action on the part of Buyer.  This Agreement has been duly and validly executed and delivered by Buyer, and constitutes, and the Ancillary Agreements upon their execution and delivery by Buyer on or prior to the Closing Date will constitute (assuming, in each case, the due and valid authorization, execution and delivery thereof by the other parties thereto), legal, valid and binding agreements of Buyer, enforceable against Buyer in accordance with their respective terms, except as such enforceability may be limited by bankruptcy, insolvency or similar laws and by equitable principles generally.

 

4.4           No Violation; Consents and Approvals.

 

Neither the execution, delivery or performance of this Agreement or the Ancillary Agreements nor the consummation by Buyer of the transactions contemplated hereby or thereby will (a) conflict with, violate or result in any breach of the terms, conditions or provisions of Buyer’s articles of incorporation or by-laws, as amended and as currently in place, (b) conflict with, violate or result in any breach of, or constitute a default (or give rise to any right of termination, cancellation or acceleration) under, any of the terms, conditions or provisions of any agreement, lease, instrument, obligation, understanding or arrangement to which Buyer is a party or by which Buyer may be bound or subject, except for such defaults (or rights of termination, cancellation or acceleration) as to which requisite waivers or consents have been obtained, (c) violate any statute, ordinance or law or any rule, regulation, order, judgment, writ, injunction or decree of any court or of any public, governmental or regulatory body, agency or authority applicable to Buyer or by which any of their respective properties or assets may be bound or subject, or (d) other than providing the required notice to Newmont under Section 11 of the 2006 Mineral Lease or obtaining the consent of Newmont to the assignment of the 2006 Mineral Lease, and providing thirty (30) days notice to the lessor under the SFP Lease that Buyer will replace VRI as Sublessee thereunder, require any filing, declaration or registration with, or permit, consent or approval of, or the giving of any notice to, any person or entity, including any public, governmental or regulatory body, agency or authority.

 

  

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4.5           Litigation.

 

There are no claims, actions, suits, proceedings or investigations pending or, to Buyer’s knowledge, threatened by or against Buyer, at law or in equity or before or by any federal, state, municipal, foreign or other governmental department, commission, board, agency, instrumentality or authority which could reasonably be expected to have a material adverse effect on Buyer’s right or ability to consummate the transactions contemplated by this Agreement, except as set forth in that certain Complaint filed on February 7, 2012 as 12 CIV 0952 in the Southern District of New York, captioned Relief Gold Group, Inc. v Sagebrush Gold Ltd., Gold Acquisition Corp., Barry Honig and David Rector, whether the allegations contained therein are considered in the Southern District of New York or removed to the United States Bankruptcy Court for the District of Nevada, Case No. BK-N-10-50215-GWZ  (collectively, the “Relief Gold Complaint”) to the extent that the plaintiff’s claims are upheld.

 

4.6           The Securities.

 

The authorized capital of Buyer consists of (i) 500,000,000 shares of Common Stock, of which 147,460,616 are issued and outstanding as of the date of this Agreement, (ii) 2,250,000 shares of Series A Convertible Preferred Stock, par value $0.0001 per share, of which none (0) are issued and outstanding as of the date of this Agreement, (iii) 8,000,000 shares of Series B Convertible Preferred Stock, par value $0.0001 per share, of which none (0) are issued and outstanding as of the date of this Agreement, (iv) 3,284,396 shares of Series C Convertible Preferred Stock, par value $0.0001 per share, of which 3,284,396 are issued and outstanding as of the date of this Agreement, and (v) 1,000,000 shares of Series D Convertible Preferred Stock, par value $0.0001 per share, of which 1,000,000 are issued and outstanding as of the date of this Agreement.  The Pershing Shares are duly authorized and, upon issuance in accordance with the terms hereof, will be validly issued, fully paid and nonassessable and free from taxes and liens with respect to the issuance thereof, with the holders being entitled to all rights accorded to a holder of shares of Common Stock.  The Pershing Warrant is duly authorized and, upon issuance in accordance with the terms hereof, shall be (x) free from all taxes and liens with respect to the issuance thereof, and (y) entitled to the rights set forth in the Pershing Warrant.  Upon issuance in accordance with the Pershing Warrant upon exercise thereof, the Pershing Warrant Shares will be duly authorized, validly issued, fully paid and nonassessable and free from all taxes and liens with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock.

 

4.7           Recent SEC Reports; etc..

 

(a)           Since January 1, 2011 through the date this representation is made, Pershing has filed all SEC Reports required to be filed by Pershing pursuant to the Exchange Act and the rules thereunder (such SEC Reports filed pursuant to the Exchange Act and the rules thereunder, but excluding reports required to be filed pursuant to Section 16 of the Exchange Act, since January 1, 2011 through the date this representation is made being referred to herein as the “Recent SEC Reports”).  As of their respective dates, the Recent SEC Reports complied in all material respects with the Exchange Act and the rules and forms thereunder.  None of the Recent SEC Reports, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  Pershing has not received any written comments from the SEC staff that have not been resolved to the satisfaction of the SEC staff.

 

  

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(b)           Pershing is not, and has not since September 29, 2010 been, a “shell company” (as defined in Rule 12b-2 under the Exchange Act).  On October 5, 2010, Pershing filed a Form 8-K disclosing the consummation of the transaction that caused Pershing to no longer be a “shell company” and included all required information, including “Form 10 information” with respect to The Empire Sports & Entertainment Co.

 

4.8           Private Placement

 

Assuming the accuracy of the representations and warranties set forth in Section 3.11, no registration under the Securities Act is required for the offer and sale of the Pershing Shares and Pershing Warrant by Buyer to Seller as contemplated hereby.

 

4.9           Brokers and Finders.

 

Neither Buyer nor any of its officers, directors, employees or agents has employed any broker or finder or incurred any liability for any brokerage fees, commissions or finders’ fees which could in any way be deemed payable by Seller or VGC in connection with the transactions contemplated by this Agreement.

 

4.10           Representations.

 

No statements, warranties, or representations made by Buyer herein contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were or will be made, not misleading.

 

4.11           Survival of Representations and Warranties.

 

The representations and warranties contained in this Article 4 shall survive the execution and delivery of this Agreement and the Closing as well as any assignment hereof and the execution and delivery of the Deed, the Assignment and any other conveyance document, for a period of two (2) years following the Closing Date.

 

  

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ARTICLE 5

 

ADDITIONAL COVENANTS

 

5.1           Conduct of Business.

 

(a)           Between the Effective Date and the Closing Date, without the written consent of Buyer, which may be withheld by Buyer in its sole discretion, Seller shall not:

 

(i)           conduct any activities on the Properties except in the ordinary course of business and in compliance with the 2006 Mineral Lease, the Underlying Leases and applicable federal, state and local laws, rules and regulations;

 

(ii)           make any sale, transfer, lease, pledge or other disposition of any or all of its interest in the 2006 Mineral Lease or any of the other Assets, or mortgage, pledge or otherwise create an Encumbrance on any of the Assets;

 

(iii)           amend or consent to the termination of any of the 2006 Mineral Lease or the Underlying Leases, or waive any rights with respect thereto; or

 

(iv)           willfully commit or consent to do any act that would cause a breach of any covenant contained in this Agreement or would cause any representation or warranty contained in this Agreement to become untrue.

 

(b)           Between the Effective Date and the Closing Date, Seller shall:

 

(i)           timely and properly perform all obligations and timely and properly make all payments required under the 2006 Mineral Lease and the Underlying Leases, and provide to Buyer notice of the same having been performed or made at least five (5) days in advance of their respective due dates; and

 

(ii)           take all reasonable steps to ensure that all of the Assets remain in substantially the same condition as on the Effective Date.

 

5.2           Access to Records and Properties and Due Diligence.

 

(a)           During the period from the Effective Date to the Closing Date, subject to the terms of the Confidentiality Agreements (defined in Section 5.4), Seller shall furnish to Buyer and its representatives access (during regular business hours, on reasonable prior notice and subject to reasonable conditions as to confidentiality, safety and similar matters) to its activities on the Properties and shall furnish to Buyer and its designees all of the Data and Information as shall be reasonably requested by Buyer.

 

(b)           During the period from the Effective Date to the Closing Date, Buyer may continue to conduct such investigations as it deems necessary in its sole discretion with respect to (i) the Properties, the 2006 Mineral Lease and the Underlying Leases, (ii) surface rights pertaining to the Properties, (iii) Environmental Conditions at the Properties, (iv) mineral reserves and resources at the Properties, or (v) any other matter pertaining to the Assets, and Seller shall cooperate with Buyer in good faith with respect to such investigations.  Seller agrees that notwithstanding the provisions of Section 5.4, Buyer may engage in such discussions as it sees fit with representatives of Newmont, NNLC, and federal state or local governmental agencies or authorities, or other third parties, concerning the Properties, the 2006 Mineral Lease, the Underlying Leases, surface rights or any other matter.

 

  

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5.3           Consultation and Reporting.

 

During the period from the Effective Date to the Closing Date, Seller will, subject to any applicable legal or contractual restrictions, confer on a regular and frequent basis with Buyer to report on material matters pertaining to its activities under the 2006 Mineral Lease and the Underlying Leases and to report on the general status of its ongoing activities with respect to the Properties.  Seller will notify Buyer of any unexpected emergency, material change to the Assets or other material change in the normal course of its business or in the conduct of its activities under the 2006 Mineral Lease and the Underlying Leases and of any material governmental or third-party complaints, investigations, adjudicatory proceedings, or hearings (or communications indicating that the same may be contemplated) and will keep Buyer fully informed of such events and permit Buyer’s representatives prompt access to all materials served on Seller in connection therewith.  Each of Seller and Buyer shall further, upon obtaining knowledge of any of the following, promptly notify the other of Seller and Buyer of:

 

(a)           any notice or other communication from any person or entity alleging that the consent of such person is or may be required in connection with the transactions contemplated by this Agreement;

 

(b)           any notice or other communication from any governmental or regulatory agency or authority in connection with the transactions contemplated by this Agreement, the Properties, or Seller’s activities under the 2006 Mineral Lease or the Underlying Leases; and

 

(c)           any actions, suits, claims, investigations or other judicial proceeding commenced or threatened against Seller or Buyer which relate to the consummation of the transactions contemplated by this Agreement, the Properties, or Seller’s activities under the 2006 Mineral Lease or the Underlying Leases; provided, that the parties hereby acknowledge receipt of notice of the Relief Gold Complaint.

 

5.4           Confidentiality.

 

This Agreement is subject to (a) that Confidentiality Agreement between VGC and Buyer dated November 16, 2011, and (b) that Confidentiality Agreement between Buyer, Gold Acquisition Corp. and VGC dated January 5, 2012 (collectively, the “Confidentiality Agreements”), each of which shall remain in full force and effect through the Closing Date, and shall terminate as of the Closing; provided, however, that if this Agreement terminates prior to Closing, the Confidentiality Agreements shall remain in full force and effect in accordance with their respective terms.

 

  

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5.5           Consents; Pre-Closing and Post-Closing Efforts.

 

(a)           Seller confirms that on December 5, 2011 it gave notice to Newmont of the sale of the Assets to the Buyer as required under Section 11 of the 2006 Mineral Lease and that Newmont has informed the Seller that Newmont provided the 30 day notice to the lessor under the SFP Lease that Buyer will replace VRI as the sublessee thereunder pursuant to a letter dated February 22, 2012.  Seller further confirms that it has received that certain Estoppel Certificate and Consent to Assignment from Newmont dated March 15, 2012 attached hereto as Exhibit I (the “Estoppel”)

 

(b)           Prior to and after the Closing, each of the parties shall use its commercially reasonable efforts, and the parties shall cooperate with each other (including without limitation by exchange of information), to obtain all waivers, permits, consents and approvals and to effect all registrations, filings and notices with governmental or public bodies or authorities or other third parties (other than the consent of Newmont addressed by Section 5.5(a) above, which has already been obtained) that are in the reasonable opinion of Seller or Buyer necessary or reasonably necessary in connection with the transactions contemplated by this Agreement.  The parties will pay all fees due with respect to any government filings required to be made by them.

 

5.6           Satisfaction of Conditions Precedent.

 

Subject to the terms and conditions of this Agreement, each party will each use commercially reasonable efforts to satisfy or cause to be satisfied all the conditions precedent that are applicable to each of them, and to cause the transactions contemplated by this Agreement to be consummated, and, without limiting the generality of the foregoing, to obtain all consents and authorizations of third parties and to make filings with, and give all notices to, third parties that may be necessary or reasonably required on its part in order to effect the transactions contemplated hereby. If Newmont does not sign and deliver the Assignment on or before Closing, then Buyer agrees that on the Closing, Buyer will sign the Notice to Newmont of Assumption, substantially in the form of Exhibit J hereto, and deliver the same to Newmont and Seller, for the purpose of confirming that Buyer has assumed and agrees to be bound by the 2006 Mineral Lease, including Section 11 thereof, to the same extent as Seller with respect to the interest therein transferred or assigned to Buyer.

 

5.7           Transfer Taxes.

 

All excise, sales, value added, use, registration, stamp, transfer and similar taxes, levies, charges and fees, any fees required to record the Assignment, and any personal property transfer taxes relating to the Assets, incurred in connection with this Agreement and the transactions contemplated hereby shall be borne by Buyer.  Buyer and Seller shall cooperate in providing each other appropriate tax documentation.

 

5.8           Tax Allocations.

 

(a)           Schedule 5.8 sets forth an allocation of the Purchase Price (“Allocation”) among the Assets in accordance with the Code and the Treasury regulations thereunder (and any similar provision of state, local, or non-U.S. law, as appropriate), which Allocation shall be binding upon Buyer and Seller.  Buyer and Seller shall report, act and file all Tax Returns in all respects and for all purposes consistent with such Allocation.  Neither Buyer nor Seller shall take any position (whether in audits, Tax Returns or otherwise) that is inconsistent with such Allocation unless required to do so by applicable law.

 

  

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(b)           Seller shall be liable for and shall indemnify Buyer for Taxes attributable to the Assets for any taxable years or periods ending prior to or on the Closing Date (“Pre-Closing Tax Period”) and, with respect to any taxable years or periods beginning before and ending after the Closing Date (“Straddle Periods”), the portion of such taxable years or periods ending on and including the Closing Date.  Buyer shall be liable for and shall indemnify Seller for Taxes attributable to the Assets for any taxable years or periods following the Closing Date.

 

(c)           For purposes of Section 5.8(b) above, whenever it is necessary to determine the liability for Taxes attributable to the Assets for a Straddle Period, the determination of such Taxes for the portion of the year or period ending on, and the portion of the year or period beginning after, the Closing Date, shall be determined, for any real estate Taxes or other property or tangible asset-based Taxes, on a per-diem basis taking into account the number of days in such entire taxable year or period.

 

(d)           After the Closing Date, Seller, on the one hand, and Buyer on the other hand (each a “Party”), shall:

 

(i)           cooperate in all reasonable respects in preparing for any audits of, or disputes with, taxing authorities regarding Tax Returns pertaining to the Assets;

 

(ii)           make available to the other as reasonably requested all information, records and documents relating to Taxes pertaining to the Assets;

 

(iii)           provide timely notice to the other in writing of any pending or threatened Tax audits or assessments pertaining to the Assets for taxable periods for which the other may have liability under this Agreement, provided, that failure to comply with this provision shall not affect the other Party’s rights to indemnification hereunder except to the extent such failure results in actual prejudice to the other Party;

 

(iv)           furnish the other Party with copies of all correspondence received from any taxing authority in connection with any Tax audit or information request with respect to any Tax for which such other Party could be liable or required to indemnify the first Party; and

 

(v)           retain all books and records with respect to Tax matters pertinent to the Assets relating to any taxable period beginning before the Closing Date until the expiration of the statute of limitations of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority and give the other Party reasonable written notice prior to transferring, destroying or discarding any such books and records.

 

  

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5.9           No Obligation to Develop.

 

The parties acknowledge and agree that from and after the Closing, the timing, manner and scope of any prospecting, exploration, development, mining, production or marketing activities on or with respect to the Properties shall be in the sole discretion of Buyer.  Seller acknowledges and confirms that the Closing Date Payment, the Pershing Shares and the Pershing Warrant are sufficient consideration for the Assets and all of the rights granted to Buyer under this Agreement after the Closing Date.  Seller and Buyer agree that Buyer shall have no obligation after the Closing Date to maintain or keep in full force and effect any of the Owned Claims or the 2006 Mineral Lease or the Underlying Leases.

 

5.10           Form D and Blue Sky .

 

Pershing agrees to timely file a Form D with respect to the Securities as required under Regulation D under the Securities Act and to provide a copy thereof to VGC promptly after such filing.  Pershing shall make all filings and reports relating to the offer and sale of the Securities required under applicable securities or “Blue Sky” laws of the states of the United States following the Closing Date.

 

ARTICLE 6

 

CONDITIONS TO BUYER’S OBLIGATIONS

 

The obligations of Buyer under this Agreement are subject to the fulfillment, prior to or on the Closing Date, of each of the following conditions, all of which are for the benefit of Buyer and any of which may be waived in writing in whole or in part by Buyer as provided herein, except as otherwise provided by law.

 

6.1           Representations and Warranties of Seller to be True; Performance by Seller.

 

(a)           The representations and warranties of Seller and VGC contained in this Agreement and in any document delivered hereunder at Closing shall be true and correct in all material respects (except that the representations and warranties of Seller and VGC contained in this Agreement that are qualified by materiality shall be true and correct in all respects) as of the Closing Date with the same effect as though such representations and warranties had been made or given again at and as of the Closing Date, except for any representation or warranty expressly stated to have been made or given as of a specified date, which, at the Closing Date, shall be true and correct as of the date expressly stated.

 

(b)           Seller and VGC shall have performed and complied in all material respects with all of their respective agreements, covenants and conditions required by this Agreement to be performed or complied with by it prior to or at the Closing Date.

 

6.2           Deliveries.

 

Seller shall have duly executed and delivered to Buyer each of the deliveries set forth in Section 2.4(b); provided that it shall not be a condition to Closing that the Assignment include Section 3 thereof or that Newmont be a party thereto, in which event the Assignment will be amended accordingly.

 

  

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6.3           Consents.

 

All notices to, and declarations, filings and registrations with, consents, approvals and waivers from, and waiting periods required by, governmental and regulatory agencies to consummate the transactions contemplated hereby and/or required for the conveyance, assignment and/or transfer of the Assets to Buyer or to enable the conduct of activities by Buyer under the 2006 Mineral Lease (other than consents, approvals and waivers from governmental agencies that cannot be obtained until after the Closing, but which Buyer has determined in the reasonable exercise of its judgment will be available within a reasonable time subsequent to the Closing), shall have been made or obtained and the Estoppel shall remain in force and effect.

 

6.4           No Proceeding or Litigation.

 

(a)           No preliminary or permanent injunction or other order shall have been issued by any court or competent jurisdiction, whether federal, state or foreign, or by any governmental or regulatory body whether federal, state or foreign, nor shall any statute, rule, regulation or executive order be promulgated or enacted by any governmental authority, whether federal, state or foreign, which prevents the consummation of the transactions contemplated in this Agreement.

 

(b)           Except as set forth in the Relief Gold Complaint, no suit, action, claim, proceeding or investigation before any court, arbitrator or administrative, governmental or regulatory body, whether federal, state or foreign, shall have been commenced and be pending against Seller or Buyer or any of their respective Affiliates seeking to prevent the sale of the Assets or asserting that the sale of the Assets would be illegal.

 

ARTICLE 7

 

CONDITIONS TO SELLER’S OBLIGATIONS

 

The obligations of Seller under this Agreement are subject to the fulfillment, prior to or on the Closing Date, of each the following conditions, all of which are for the benefit of Seller and any of which may be waived in whole or in part by Seller as provided herein, except as otherwise provided by law:

 

7.1           Representations and Warranties of Buyer to be True; Performance by Buyer.

 

(a)           The representations and warranties of Buyer contained in this Agreement and in any document delivered hereunder at Closing shall be true and correct in all material respects (except that the representations and warranties of Buyer contained in this Agreement that are qualified by materiality shall be true and correct in all respects) as of the Closing Date with the same effect as though such representations and warranties had been made or given again at and as of the Closing Date, except for any representation or warranty expressly stated to have been made as or given as of a specified date, which, at the Closing Date, shall be true and correct as of the date expressly stated.

 

  

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(b)           Buyer shall have performed and complied in all material respects with all of their respective agreements, covenants and conditions required by this Agreement to be performed or complied with by it prior to or at the Closing Date.

 

7.2           Deliveries.

 

Buyer shall have duly executed and delivered to Seller each of the deliveries set forth in Section 2.4(c); provided that it shall not be a condition to Closing that the Assignment include Section 3 thereof or that Newmont be a party thereto, in which event the Assignment will be amended accordingly and Buyer will sign the Notice to Newmont of Assumption, substantially in the form of Exhibit J hereto, and deliver the same to Newmont and Seller, for the purpose of confirming that Buyer has assumed and agrees to be bound by the 2006 Mineral Lease, including Section 11 thereof, to the same extent as Seller with respect to the interest therein transferred or assigned to Buyer.

 

7.3           Consents.

 

All notices to, and declarations, filings and registrations with, consents, approvals and waivers from, and waiting periods required by, governmental and regulatory agencies to consummate the transactions contemplated hereby and/or required for the conveyance, assignment and/or transfer of the Assets to Buyer (other than consents, approvals and waivers from governmental agencies that cannot be obtained until after the Closing, but which Buyer has determined in the reasonable exercise of its judgment will be available within a reasonable time subsequent to the Closing), shall have been made or obtained.

 

7.4           No Proceeding or Litigation.

 

(a)           No preliminary or permanent injunction or other order shall have been issued by any court of competent jurisdiction, whether federal, state or foreign, or by any governmental or regulatory body, whether federal, state or foreign, nor shall any statute, rule, regulation or executive order be promulgated or enacted by any governmental authority, whether federal, state or foreign, which prevents the consummation of the transactions contemplated in this Agreement.

 

(b)           Except as set forth in the Relief Gold Complaint, no suit, action, claim, proceeding or investigation before any court, arbitrator or administrative, governmental or regulatory body, whether federal, state or foreign, shall have been commenced and be pending against Seller or Buyer or any of their respective Affiliates, associates, officers or directors seeking to prevent the sale of the Assets or asserting that the sale of the Assets would be illegal.

 

ARTICLE 8

 

INDEMNIFICATION

 

8.1           Indemnification by Seller.

 

Except as otherwise limited by this Article 8, VGC and VRI shall, jointly and severally, defend, indemnify and hold Buyer, its Affiliates and its directors, officers, employees, agents, successors and permitted assignees (collectively, the “Buyer Indemnitees”) harmless from any and all Losses actually suffered or incurred by any of them, arising out of or resulting from:

 

  

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(a)           the breach of any representation or warranty by Seller or VGC contained herein or in any document delivered hereunder at the Closing;

 

(b)           the breach of any covenant or agreement by Seller or VGC contained herein or in any document delivered hereunder at the Closing; and

 

(c)           liabilities or obligations relating to the Assets or the Properties required to be performed by, or that are otherwise the responsibility of, Seller prior to the Closing Date which are not Assumed Liabilities (including without limitation those Excluded Liabilities referred to in Section 2.2(b)).

 

8.2           Indemnification by Pershing.

 

Except as otherwise limited by this Article 8, Buyer shall defend, indemnify and hold VGC and VRI, their Affiliates and their respective directors, officers, employees, agents, successors and permitted assignees (the “Seller Indemnitees”) harmless from any and all Losses actually suffered or incurred by any of them, arising out of or resulting from:

 

(a)           the breach of any representation or warranty by Buyer contained herein or in any document delivered hereunder at the Closing;

 

(b)           the breach of any covenant or agreement by Buyer contained herein or in any document delivered hereunder at the Closing; and

 

(c)           the Assumed Liabilities.

 

8.3           General Indemnification Provisions.

 

(a)           For the purposes of this Article 8, the term “Indemnitee” shall refer to the person or persons indemnified, or entitled, or claiming to be entitled to be indemnified, pursuant to the provisions of Section 8.1 or 8.2, as the case may be; the term “Indemnitor” shall refer to the person having the obligation to indemnify pursuant to such provisions.

 

  

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(b)           An Indemnitee shall promptly give the Indemnitor notice of any matter which an Indemnitee has determined has given or would reasonably be expected to give rise to a right of indemnification under this Agreement, stating the amount of the Losses, if known, the method of computation thereof and the basis for the claim, all with reasonable particularity.  The obligations and liabilities of an Indemnitor under this Article 8 with respect to Losses arising from claims of any third party that are subject to the indemnification provided for in this Article 8 (“Third Party Claims”) shall be governed by and contingent upon the following additional terms and conditions.  If an Indemnitee shall receive notice of any Third Party Claim, the Indemnitee shall give the Indemnitor prompt notice of such Third Party Claim; provided, however, that an Indemnitee’s failure to notify does not release, reduce or otherwise affect the Indemnitor’s duty to indemnify, except to the extent of any actual prejudice suffered by the Indemnitor as a result of such failure to notify.  Provided that the Indemnitor acknowledges in writing that it is indemnifying the Indemnitee with respect to the Third Party Claim, the Indemnitor, at its option, may assume and control the defense and/or management of such Third Party Claim at its expense and through counsel of its choice if it gives prompt notice of intention to do so to the Indemnitee; provided that the Indemnitee may, at its election, participate in any such defense at its sole expense; and provided, further that when claims are asserted in the same proceeding against both the Indemnitee and the Indemnitor, the Indemnitee shall have the right to employ, at the Indemnitor’s expense, one firm of counsel of its choice to represent the Indemnitee if the Indemnitor (i) elects not to or is not entitled to defend, compromise of settle a Third Party Claim, (ii) having timely elected to defend a Third Party Claim, fails adequately to prosecute or pursue such defense or (iii) a defense exists for an Indemnitee that is not available to the Indemnitor.  In the event the Indemnitor exercises its right to undertake the defense against or management of any such Third Party Claim as provided above, the Indemnitee shall cooperate with the Indemnitor in such defense or management and make available to the Indemnitor all witnesses, pertinent records, materials and information in its possession or under its control relating thereto as is reasonably required by the Indemnitor.  Except as provided above, Indemnitor shall promptly reimburse Indemnitee for any expenses incurred in connection with such cooperation.  Similarly, in the event the Indemnitor does not exercise its right to undertake the defense or management of any Third Party Claim and the Indemnitee is, directly or indirectly, conducting the defense against or management of any such Third Party Claim, the Indemnitor shall cooperate with the Indemnitee in such defense or management and make available to it all such witnesses, pertinent records, materials and information in its possession or under its control relating thereto as is reasonably required by the Indemnitee.  Except for the settlement of a Third Party Claim which involves the payment of money only and for which the Indemnitee is totally indemnified by the Indemnitor, no Third Party Claim may be settled by the Indemnitor without the prior written consent of the Indemnitee, such consent not to be unreasonably withheld.  Similarly, no Third Party Claim may be settled by the Indemnitee without the prior written consent of the Indemnitor, such consent not to be unreasonably withheld.

 

8.4           Limits on Liability.

 

(a)           No Losses may be recovered by the Buyer Indemnitees from VGC or VRI under this Article 8 or otherwise under this Agreement unless and until the accumulated aggregate amount of Losses incurred by the Buyer Indemnitees exceeds $20,000 in which event, subject to (c) below, the accumulated aggregate amount of all such Losses incurred may be recovered.

 

(b)           No Losses may be recovered by the Seller Indemnitees from Buyer under this Article 8 or otherwise under this Agreement unless and until the accumulated aggregate amount of Losses incurred by the Seller Indemnitees exceeds $20,000 in which event, subject to (d) below, the accumulated aggregate amount of all such Losses incurred may be recovered.

 

(c)           Notwithstanding anything to the contrary contained in this Agreement, the obligations of VGC and VRI collectively to indemnify the Buyer Indemnitees in respect of any Losses incurred by the Seller Indemnitees, or to make any payment for any other claims that Buyer may make against VGC and/or VRI under this Agreement, is limited to $5,000,000 in the aggregate.

 

  

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(d)           Notwithstanding anything to the contrary contained in this Agreement, the obligations of Buyer to indemnify the Seller Indemnitees in respect of any Losses incurred by the Buyer Indemnitees, or to make any payment for any other claims that VGC or VRI may make against Buyer under this Agreement, is limited to $5,000,000 in the aggregate.

 

ARTICLE 9

 

TERMINATION, AMENDMENT AND WAIVER

 

9.1           Termination of Agreement.

 

This Agreement may be terminated at any time prior to the Closing;

 

(a)           by mutual written consent of Buyer and Seller; or

 

(b)           by either Seller or Buyer if there has been a breach by the other of any representation or warranty contained in this Agreement or of any covenant contained in this Agreement, which inaccuracy or breach has prevented the satisfaction of any condition to the obligations of Seller or Buyer to effect the Closing pursuant to Article 6 or Article 7, as applicable, and which cannot be, or has not been, cured within ten (10) days after written notice of such breach is given to the party committing such breach, provided that the right to effect such cure shall not extend beyond the date set forth in Section 9.1(c) below.

 

(c)           by either Seller or Buyer if all conditions to Closing required under Article 6 or Article 7, respectively, have not been met or waived by April 10, 2012 or such later date as may be agreed upon by Seller and Buyer; provided, however, that neither Seller nor Buyer shall be entitled to terminate this Agreement pursuant to this Section 9.1(c) if such party (i) has been in material violation of any of its representations, warranties or covenants in this Agreement and such violation has been a material factor in delaying the Closing, or (ii) is in willful and material violation of any of its representations, warranties or covenants in this Agreement;

 

(d)           by either Buyer or Seller if an order shall have been issued prohibiting the Closing hereunder by or from any governmental or regulatory agency or court of competent jurisdiction.

 

9.2           Procedure and Effect of Termination.

 

In the event of termination of this Agreement by either or both of the parties pursuant to Section 9.1 hereof, written notice thereof shall forthwith be given to the other party specifying the provision hereof pursuant to which such termination is made, and there shall be no further liability on the part of the parties hereto (or their respective employees, officers, directors, members, managers or Affiliates), except (a) as set forth in Sections 5.4 (Confidentiality), 10.1 (Expenses), 10.8 (Notices), 10.9 (Governing Law), 10.14 (Other Business Opportunities), 10.15 (Public Announcements), and Article 8 (Indemnification), which shall survive the termination and remain in full force and effect, and (b) nothing herein shall relieve either party from liability for any willful breach hereof.

 

  

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9.3           Amendment.

 

This Agreement may not be amended except by an instrument in writing signed by all the parties hereto.

 

9.4           Waiver.

 

Any failure of either of the parties to comply with any provision hereof may be waived by the party entitled to the benefit thereof only by a written instrument signed by the party granting such waiver, but such waiver or failure to insist upon strict compliance with such provision shall not operate as a waiver of or estoppel with respect to, any subsequent or other failure.

 

ARTICLE 10

 

MISCELLANEOUS

 

10.1           Expenses.

 

All costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses, whether or not the Closing shall have occurred.

 

10.2           Consents.

 

Whenever this Agreement requires a permit or consent by or on behalf of either party hereto, such consent shall be given in writing in a manner consistent with the requirements for a waiver of compliance as set forth in Section 9.4.

 

10.3           Assignment; Parties in Interest.

 

This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of and be enforceable by, the parties hereto and their respective successors and permitted assigns.  Prior to Closing, either Buyer or Seller may assign and delegate its interest in this Agreement to any third party reasonably qualified and financially and otherwise capable of complying with the terms and conditions of this Agreement, upon receiving the prior written consent of the other party, which such consent may not be unreasonably withheld or delayed. Notwithstanding such consent, the assigning party shall be jointly and severally liable with the assignee for any breach by the assignee of its obligations under this Agreement, including without limitation Article 8 hereof.  Any such assignment shall not be effective unless the assignee agrees in writing with the other parties hereto to be bound by all of the terms and conditions of this Agreement.  No party may assign this Agreement or its interest herein after Closing without the prior written consent of the other parties in their absolute discretion.

 

  

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10.4           Further Assurances.

 

Each of the parties hereto agrees that, from and after the Closing, upon the reasonable request of any other party hereto and without further consideration, such party will execute and deliver to such other party such documents and further assurances and will take such other actions as such other party may reasonably request in order to carry out the purpose and intention of this Agreement.

 

10.5           Title and Risk of Loss.

 

Legal title, equitable title and risk of loss with respect to the Assets and rights to be transferred hereunder shall not pass to Buyer until the Assets or rights are transferred at the Closing hereunder.

 

10.6           Entire Agreement.

 

This Agreement and Exhibits and other writings referred to herein or delivered pursuant hereto which form a part hereof contain the entire understanding and agreement of the parties with respect to the subject matter hereof.  This Agreement supersedes all prior agreements pertaining to the subject matter hereof, except that the obligations of the parties under the Confidentiality Agreements shall survive and be binding on the parties as set forth in Section 5.4.

 

10.7           Headings.

 

The Article and Section headings contained in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation of this Agreement.

 

10.8           Notices.

 

All notices, claims, certificates, requests, demands and other communications hereunder shall be in writing and will be deemed to have been duly given if personally delivered, or on the date of receipt if delivered by reputable overnight courier, as follows:

 

	
  

	
(a)

	
If to Seller or VGC:

 

	
  

	 	
Victoria Gold Corp.

	
  

	 	
80 Richmond Street West, Suite 303

	
  

	 	
Toronto, Ontario, M5H 2A4, Canada

	
  

	 	
Attention:  Marty Rendall

 

  

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(b)

	
If to Buyer:

 

	
  

	 	
Pershing Gold Corporation

1658 Cole Boulevard

Building 6 – Suite 210

Lakewood, Colorado 80401

Attention: Steve Alfers

 

or to such other address as the person to whom notice is to be given may have previously furnished to the other in writing in the manner set forth above.

 

10.9           Governing Law.

 

This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Nevada without regard to its provisions concerning conflicts or choice of law.

 

10.10           Counterparts.

 

This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which when taken together shall constitute one and the same agreement.  Such counterparts may be delivered by facsimile or electronic transmission and the receiving party is entitled to rely on the same to the same extent as if it had been an executed original.

 

10.11           Affiliate.

 

As used herein, an “Affiliate” of Buyer or Seller shall mean any corporation or other business entity or individual controlling, controlled by or under common control with, Buyer or Seller, as the case may be, and for this purpose “control” of any entity shall mean the direct or indirect beneficial ownership of a majority of the voting interest in such entity, or such other relationship as, in fact, constitutes actual control thereof.

 

10.12           Survival.

 

Except as specifically set forth herein and, as applicable, to the extent set forth herein, the provisions of this Agreement shall survive the Closing and the delivery of the conveyance documents at the Closing.

 

10.13           Interpretation.

 

Whenever the singular or masculine or neuter is used in this Agreement, the same will be construed as meaning plural or feminine or body politic or corporate or vice versa, as the context so requires.  Use of the word “including” in this Agreement means “including without limitation” or “including but not limited to.”  Each of the Exhibits attached to this Agreement is incorporated into the Agreement by this reference.  Any heading, caption or index contained herein will not be used in any way in construing any provision hereof.

 

  

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10.14           Other Business Opportunities.

 

This Agreement is, and the rights and obligations of the parties are, strictly limited to the subject matter hereof.  Except as expressly provided herein, the parties shall have the free and unrestricted right to independently engage in, and receive the full benefits of, any and all business ventures of any sort whatever, whether or not competitive with the 2006 Mineral Lease, without consulting the other or inviting or allowing the other to participate therein.  None of the parties shall be under any fiduciary or other duty to the other parties which will prevent it from engaging in or enjoying the benefits of, any competing venture or ventures outside the Owned Claims or the Leased Properties covered by the 2006 Mineral Lease.  The legal doctrines of “corporate opportunity” or “business opportunity” as developed or applied by any court or authority of any jurisdiction and sometimes applied to persons or legal entities occupying a joint venture or other fiduciary status shall not be applied to any other activity, venture, or operation of either party.

 

10.15           Public Announcements.

 

(a)           From and after the Closing Date, Seller and VGC agree to treat, subject as set out below, all Data and Information relating to the 2006 Mineral Lease, the Underlying Leases or the Properties, as confidential, and subject as set out below, such information shall not be disclosed to any other person or entity, without the prior written consent of Buyer, which such consent Buyer may withhold in its sole discretion.  In the event that Seller or VGC is required by any law, rule, regulation, or order to disclose to the public any of such information, it shall immediately notify Buyer of such requirement and the terms thereof, together with a copy of such release as may be contemplated, prior to such disclosure.  Buyer shall then have two (2) business days to review and comment upon such disclosure and to request, prior to disclosure, confidential treatment of any of the information under such terms as it shall, in its reasonable discretion, determine.  Seller and VGC shall each use its reasonable best efforts to comply with such request prior to making the required disclosure. Notwithstanding the foregoing, if Seller or VGC receives advice from its legal counsel that it should disclose such information within a timeframe that does not allow such review and comment by Buyer, Seller and/or VGC may do so without being in breach of its obligations hereunder.

 

(b)           Seller acknowledges that, based upon (i) information and data that may have been provided by Seller, or (ii) information and data derived or obtained by Buyer pertaining to adjacent or nearby properties which it owns or in which it holds a contractual interest, Buyer may have developed its own theories and interpretations regarding the potential for mineral development of the Properties that are regarded by Buyer as confidential and/or proprietary to Buyer and which have not been disclosed to Seller.  Seller agrees that in entering into this Agreement, it is not relying on Buyer, and Buyer has no obligation, to disclose any such information, data, theories or interpretations.

 

10.16           Joint and Several Liability.

 

All of the obligations and liabilities of Seller under this Agreement shall be the joint and several obligations and liabilities of VGC and VRI.

 

  

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10.17           Remedies.

 

If any party hereto fails to perform any of its respective obligations referred to under Subsection 6.1(b), Section 6.2, Section 6.3, Subsection 7.1(b) or 7.2, the other parties hereto shall be entitled to the remedy of specific performance with respect to such failure, in addition to all other legal or equitable remedies to which it may be entitled in connection with such failure.

 

10.18           Third Party Beneficiaries.

 

Except as otherwise specified in Section 8.1 and Section 8.2, this Agreement does not and is not intended to confer any rights or remedies upon any person other than the parties hereto and their respective successors and permitted assigns.  Except for the Buyer Indemnitees and Seller Indemnitees, no person other than the parties hereto will be entitled to rely on the provisions of this Agreement in any action, suit, proceeding, hearing or other forum.

 

[SIGNATURES FOLLOW ON NEXT PAGE]

 

  

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized representatives of the parties as of the date first above written.

 

VICTORIA GOLD CORP.,

a British Columbia corporation

 

By:

 

Name:

 

Title:

 

VICTORIA RESOURCES (US) INC.,

a Nevada corporation

 

By:

 

Name:

 

Title:

 

PERSHING GOLD CORPORATION,

a Nevada corporation

 

By:

 

Name:

 

Title:

 

	  

[Asset Purchase Agreement Signature Page]

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