Document:

denarii_ex101.htm

 

 

Corporate Acquisition Agreement

 

By and Between: 

 

Touchstone Precious Metals Inc, 

 

Touchstone Ventures Ltd. 

 

and

 

Denarii Resources Inc.

 

June 3, 2010

 

Touchstone Precious Metals Inc. B.C. Corporate Free Miner #216910 of North Vancouver, British Columbia, Canada hereby declares that it has an agreement to purchase the Lucky Thirteen Placer mineral Claim ("Lucky") (BC#52082") owned by Peter Osha. The claim is located near Hope, British Columbia Canada.

 

Touchstone Precious Metals Inc. will be the Joint Venture Corporation and has authorized 25,000,000 shares to represent 100% of the shares of the company. Under the terms of the Joint Venture, Touchstone Ventures Ltd. will retain 20% (twenty percent) equity in exchange for its assignment of the full benefit and obligation of its option to acquire the claims to be purchased from Peter Osha as defined under an agreement dated June 3, 2010. (Appendix A)

Lyle Wallace owns 100% of the shares of Touchstone Ventures Ltd.

 

Denarii Resources Inc. hereby declares that it offers to enter into a joint-venture to further explore, develop and operate a placer plant to extract, gold, platinum, palladium, rhodium and other commercial material that is covered by the placer claim agreement.

 

If either party wishes to sell their interest in the Joint Venture they must offer the other party the right of first refusal.

 

Denarii Resources Inc. will earn an 80% (Eighty per cent) equity interest in the shares of Touchstone Precious Metals Inc. under the following terms and conditions:

 

	
1.  

	
Denarii will pay Touchstone Precious Metals Inc. a $20,000 (Twenty Thousand Dollar) non refundable advance at the time all parties sign this agreement. The amount will form part of Denarii's funding obligation.

	
2.  

	
25% (Twenty-Five percent) of the 80% (Eighty percent) will be earned by Denarii as it funds an approved work program recommended by R. Gunter, P. Eng. (Appendix B). This approximately $400,000 (Four Hundred Thousand dollars) program will be approved, monitored and funds disbursed by a committee represented by 3 (Three) persons. Until Denarii pays Peter Osha $1,500,000.00 for the Lucky Thirteen claim the committee will consist of the following representatives; Stan Ford, Lyle Wallace and Peter Osha. After Peter Osha is paid in full the

 

 

Touchstone Precious Initial  Touchstone Ventures    Denarii   

  

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three person committee will have one representative appointed by Touchstone Ventures Ltd. and two by Denarii. Denarii will have 30 days from the signing of this agreement to fund $75,000 of the work program and 60 days from the signing of this agreement to place the remainder of the $400,000 into the Touchstone Precious Metals Inc. bank account.

	
3.  

	
Upon completion of the work program Peter Osha will transfer the placer claims to Touchstone Precious Metals Inc. and Denarii will then have a 25% (Twenty Five percent) of 80% (Eighty percent) interest in the shares of Touchstone Precious Metals Inc.

	
4.  

	
Once Touchstone Precious Metals Inc. has received a B.C. Mining Permit, Denarii will receive a 50% (Fifty percent) of 80% (Eighty percent) equity interest in the Touchstone Precious Metals Inc. The mining permit is to be procured within 12 months of the signing of this agreement.

	
5.  

	
Once the project is in production Denarii will receive a full 80% (Eighty percent) equity interest in Touchstone Precious Metals Inc.

 

Upon suitable notice, the shareholders of Touchstone Precious Metals Inc., can individually elect to receive dividends as precious metals or a combination of money and precious metals from the property. The following minimum payments totaling $1,500,000 to Peter Osha, must be met before any dividend payments are made to the shareholders.

 

	
The following minimum payments will be paid on or before the specified dates: 

 

o   The Minimum Placer Claim Payments to Peter Osha are:

 

●   $50,000 upon completion of the Work program (Effective Date) 

 

●   $50,000 within 6 months of Effective Date

 

●   $100,000 within 12 months of Effective Date

 

●   $100,000 within 18 months of Effective Date

 

●   $150,000 within 24 months of Effective Date 

 

●   $150,000 within 30 months of Effective Date

 

●   $200,000 within 36 months of Effective Date

 

●   $200,000 within 42 months of Effective Date

 

●   $250,000 within 48 months of Effective Date

 

●   $250,000 within 54 months of Effective Date

 

●   $1,500,000 Total

 

If any Return Royalty payment as described below is greater than the minimum amount then that amount must be paid to Peter Osha on or before the specified dates:

At such time that net profits are realized from production, Peter Osha shall be entitled to a Return Royalty to be paid as a percentage on any and all placer products production, to be based on the average settlement price for gold as determined by the London Bullion Metals Association (LBMA) (I.E. $500 / oz - 5.0% Return Royalty, $750 / oz = 7.5% Return Royalty). Once Peter Osha has received payment of $1,500,000, Peter Osha's interest will automatically convert to a 3% Net Smelter Royalty (NSR). For a period of no longer than 1 year after payment of $1,500,000, the 3% NSR can be reduced to 1% in exchange for a $1,000,000 payment for each 1% of the NSR total 2% (Two percent) Leaving Peter Osha with a 1% NSR.

 

Touchstone Precious Initial  Touchstone Ventures    Denarii   

  

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Operator

 

	
•

	
Touchstone Precious Metals Inc. is the Operator Security

 

	
•

	
Touchstone Precious Metals Inc. will agree that Denarii can use the mining claim (EO52082) as security if Denarii advances the gross funds required to place the Lucky Thirteen lease into production and completes the full acquisition of the lease if a gold loan is used to fund the production costs.

Tax Liabilities

 

	
•

	
The parties agree that final documentation will take into consideration appropriate adjustments to minimize each party's tax liability provided such adjustments do not materially negatively impact the other parties.

Monthly Reporting

 

	
•

	
The Operator must submit monthly reports including: financial statements within 30 days of the end of each month together with proof of production.

Due Diligence

 

	
•

	
Touchstone Ventures Ltd. agrees to make available to Denarii within 14 days of the signing of this agreement any documents or information reasonably required as part of due diligence or required to properly effect the funding. These documents shall include but not be limited to:

 

> Copy of claim

> Current status of claim can be viewed at https://www.mtonline.Rov.bc.ca

> Historic engineering reports

>  Budget & Use of $10,000,000(ten million dollar) funding commitment as show in Appendix C.

> Project overview

> Any other relevant reports or information held by Touchstone Ventures Ltd.

> Proposed management team together with an overview of experience.

 

Warranties

	
•  

	
Touchstone Ventures Ltd. warrants that all information provided is, to the best of its knowledge, complete and current.

	
•  

	
Touchstone Ventures Ltd. warrants that there are no outstanding liabilities or any outstanding legal action against the mining claim (BC#52082) and that in fact the mining claim is free and clear of any liability or legal action.

 

Touchstone Precious Initial  Touchstone Ventures    Denarii    

  

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Regulatory

 

	
  

	
•

	
The parties agree to follow all regulatory requirements for their respective jurisdictions. Currency

 

	
  

	
•

	
All amounts are in Canadian Dollars Legal Fees

 

	
  

	
•

	
Each party shall be responsible for its own legal and professional fees Time is of the Essence

 

	
  

	
•

	
The parties agree that time is of the essence and shall act accordingly and Touchstone undertakes to provide all materials as and when requested.

 

Validity

 

	
  

	
•

	
This agreement is not binding upon the parties until signed by all parties. Governing Law

 

	
  

	
•

	
The Agreement and the terms set forth herein shall be governed by the laws of the province of British Columbia, Canada.

Agreed to by the following:

 

	 	 	 	 	 
	
Touchstone Precious Metals, Inc.

		 	
Dated:

	June 3, 2010
	
 

 

 

	 	 	
 

	 
	
Touchstone Ventures, Ltd.

		 	
Dated:

	June 3, 2010
	 	 	 	 	 
	 	 	 	 	 
	 Denarii Resources, Inc.		 	Dated:	June 14, 2010

 

 

 

 

Touchstone Precious Initial  Touchstone Ventures    Denarii  

  

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APPENDIX A

Letter Agreement (the "Agreement") between Touchstone Precious Metals Inc. ("the Optionee") and Peter Osha (the "Optionor") for the Option to Purchase the Lucky Thirteen Placer Mineral Claim - B.C. Placer Mineral Tenure # 5230820 (the "Property") which is located in the New Westminster Mining Division, in the Province of British Columbia, Canada.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Touchstone Precious Initial  Touchstone Ventures    Denarii   

  

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Touchstone Precious Metals Inc. 

308-1612 St Georges Avenue 

North Vancouver, British Columbia 

Canada V7L 3J7

Phone/Fax (604) 983-0634                                                 TouchstonePreciousMetals@telus.net

 

May 15, 2010 Peter Osha

1654 Baker Creek Road Quesnel, British Columbia V2J 7H5

Phone/Fax (250) 992-5750 Dear Sir:

 

	Re:  	Letter Agreement (the "Agreement") between Touchstone Precious Metals Inc.("the Optionee') and Peter Osha (the "Optionor") for the Option to Purchase the Lucky Thirteen Placer Mineral Claim - B.C. Placer Mineral Tenure # 5230820 (the "Property") which is located in the New Westminster Mining Division, in the Province of British Columbia, Canada.

 

Further to our earlier conversations and understandings respecting this matter, this Agreement describes the terms and conditions under which the Optionee will have the right to earn a 100% interest in the Lucky Thirteen Claim - B.C. Placer Mineral Tenure # 523082 (the "Property"), as more particularly described in Schedule "A".

 

1. The Optionor hereby grants to the Optionee the exclusive right and option (the "Option") to acquire one hundred (100%) percent of the Optionor's interest in the Property free and clear of all liens, encumbrances, claims, rights or interests of any person in accordance with terms of this Agreement. Optionee will earn a 100% interest in the Property, subject only to minimum annual payments or a Production Return Royalty in favour of the Optionor (collectively, the "Royalty Interests"), by making payments totaling $1,500,000 (the "Option Exercise Amount") to the Optionor on or before 54 months from the Effective Date (as defined below), the payment of which is as described in the following paragraphs.

 

2. In order to maintain the Option in good standing and earn a one hundred (100%) percent of the Optionor's interest in the Property (subject only to the Royalty Interests), the Optionee shall, subject to section 4, make payments to the Optionor totalling $1,500,000 according to the following:

 

  

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	Payments	 	Due On or Before
	$	10,000	 	Payable Upon Execution (the "Effective Date")
	$	40,000	 	within 90 days of Execution
	$	50,000	 	Within 6 months of Effective Date
	$	100,000	 	Within 12 months of Effective Date
	$	100,000	 	Within 18 months of Effective Date
	$	150,000	 	Within 24 months of Effective Date
	$	150,000	 	Within 30 months of Effective Date
	$	200,000	 	Within 36 months of Effective Date
	$	200,000	 	Within 42 months of Effective Date
	$	250,000	 	Within 48 months of Effective Date
	$	250,000	 	Within 54 months of Effective Date
	$	1,500,000	 	Total

 

Until the Optionee has earned its 100% interest in the Property, the parties agree that any and all payments (whether a payment on account of any payment made in accordance with the table set out above, or on account of an Excess Payment) made by the Optionee to the Optionor pursuant to this Agreement shall constitute payments towards the Option Exercise Amount.

The parties agree that for the purposes of determining the amount of the Floating Rate Royalties (as defined herein) due to the Optionor for a particular Returns Realized Period (as defined herein) pursuant to section 3, all option payments made by the Optionee during that Returns Realized Period shall also be deemed to be payments made towards any Floating Rate Royalty due.

Upon payment of the Option Exercise Amount by the Optionee to the Optionor, the Optionee will have earned its 100% interest in the Property and the Optionor shall deliver the property free and clear of all encumbrances, subject only to the Royalty Interest.

3. Subject to section 4, the Optionor shall be entitled to receive a royalty on Production Returns once the Optionee achieves commercial production on the Property, to be paid as follows:

 

	
(a)  

	
Unless this Agreement has been terminated, the parties agree that until the Option is exercised in full, if any returns are realized from production, a floating rate production return royalty (the "Floating Rate Royally") will be paid to the Optionor on any and all placer mineral revenues. The Floating Rate Royalty percentage shall be the London Metals Bullion Association (LBMA) afternoon price for gold expressed as a percentage (ie $500/oz: 5%, $750/oz = 7.5%, $l,000/oz = 10% etc.) for the revenue period, for all placer mineral products. The Floating Rate Royalty shall be paid in accordance with this section 5. Prior to the Optionee earning its 100% interest in the Property (subject only to the Royalty Interests), within 30 days of the end of each semiannual period in which Production Returns are realized, the Optionee shall determine the amount of the Floating Rate Royalty due to the Optionor for the semiannual period (the "Returns Realized Period"). If the amount of the Floating Rate Royalty is greater than the sum of all payments paid or deemed to be paid by the Optionee to the Optionor during the Returns Realized Period towards the exercise of the Option, the Optionee shall pay the excess amount (the "Excess Payment") to the Optionor. If the amount of the Floating Rate Royalty is equal to or less than the sum of all payments paid or deemed to be paid by the Optionee to the Optionor during the Returns Realized Period towards the exercise of the Option, the parties agree that the Optionee is not required to pay the Floating Rate Royalty to the Optionor for such semi-annual period.

 

  

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(b) 

	
Prior to and after the Optionee has earned its 100% interest in the Property (subject only to the Royalty Interests), the Optionee shall pay the Production Return Royalties to the Optionor and Touchstone Ventures Ltd. in accordance with the terms set out in Schedule B.

In this Agreement, "Production Returns" means the gross proceeds received from the sale or disposition of any and all placer mineral products produced from the Property.

4.   This is an option only and except as specifically provided otherwise, nothing herein containedshall be construed as obligating the Optionee to do any act or acts or make any payments hereunder. Any act or acts, or payment or payments as shall be made hereunder shall not be construed as obligating the Optionee to do any further act or make any further payment. If this Agreement is terminated before the Optionee has earned its 100% interest in the Property, the Optionee shall not be bound thereafter in debt, damages or otherwise under this Agreement and all payments theretofore paid by the Optionee shall be retained by the Optionor as the sole consideration for entering into this Agreement and for the rights conferred on the Optionee thereby. Notwithstanding any other provision in this Agreement, the Optionor shall remain liable and the Optionee shall have no obligation in respect of environmental liabilities incurred orarising as a result of the state or condition of the Property prior to the effective date of this Agreement. The Optionee shall, however, be liable for all environmental liabilities and reclamation costs incurred or arising as a result of the activities of the Optionee during the term of the Option.

5.  The Optionor represents and warrants to the Optionee that:

 

(a) it is the beneficial owner of a one hundred (100%) per cent interest in the Property,;

 

	
(b)  

	
the Property is presently in good standing under the laws of British Columbia and is free and clear of any liens or encumbrances;

 

	
(c)  

	
the Optionor has the sole and complete power to grant the Option and otherwise deal with the Property as contemplated herein;

 

	
(d)  

	
no hazardous or toxic materials, substances, pollutants, contaminants or wastes have been released into the environment, or deposited, discharged, placed or disposed of at, on, under or near the Property as a result of the Optionor's operations carried out on the Property, nor, to the best of the Optionor's knowledge, have any of the above occurred nor has the Property been used at any time by any person as a landfill or waste disposal site;

 

  

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(e)  

	
it is in compliance with all environmental laws, permits and licenses; and

 

	
(f)  

	
there are no pending or threatened suits or actions relating to the presence of hazardous or toxic materials, substances, pollutants or contaminants on the Property or in respect of the migration of hazardous or toxic materials, substances, pollutants or contaminants from the Property.

6. The Optionee shall be the operator on the Property during the term of this Agreement. The Operator shall have the right and authority to do everything necessary or desirable in accordance with good mining practice in connection with the exploration and development of the Properly, including and without limiting the generality of the foregoing, the right, power and authority to employ and engage such employees, agents, and independent contractors as it may' consider necessary or advisable to carry out its duties and obligations hereunder and in this connection to delegate any of its powers and rights to perform its duties and obligations hereunder.

 

7. This Agreement will terminate and the claim shall be returned to the Optionor if the Optionee fails to make any payments by the dates set out in paragraph 2 provided that the Optionee will have a 30 day period to correct such default.

 

8. If, at any time during the term of this Agreement, the Optionor or any of its Affiliates (the "Acquiring Party") stakes or otherwise acquires, directly or indirectly, any right to or interest in any mining claim, license, lease, grant, concession, permit, patent, or other mineral property located wholly or partly within the Area of Mutual Interest, the Acquiring Party shall forthwith give notice to the Optionee of that staking or acquisition, the total cost thereof and all details in the possession of the Acquiring Party with respect to the details of the acquisition, the nature of the property and the known mineralization, if any. The Optionee may, within 30 days of receipt of the Acquiring Party's notice, elect, by notice to the Acquiring Party, to require that the mineral properties and the right or interest acquired be included in and thereafter form part of the Properly for all purposes of this Agreement. If the election aforesaid is made, the Optionee shall reimburse the Acquiring Party for the costs of the acquisition. If the Optionee does not make the election aforesaid within that period of 30 days, the right or interest acquired by the Acquiring Party shall not form part of the Property and the Acquiring Party shall be solely entitled thereto.

If, at any time during the term of this Agreement, the Optionee or any of its Affiliates stakes or otherwise acquires, directly or indirectly, any right to or interest in any mining claim, license, lease, grant, concession, permit, patent, or other mineral property located wholly or partly within the Area of Mutual Interest, it shall automatically form part of the Properly for all purposes of this Agreement.

In this section "Affiliates" has the meaning ascribed to "Affiliate" under the Business Corporations Act (British Columbia). In this Agreement, "Area of Mutual Interest" means any part of the lands lying within two and one-half (2.5) kilometers from the external perimeter of the Property.

9.    During the term of the Option, the Optionee, its directors, officers, employees, agents, advisors and contractors shall have full and free right to enter in, under or upon the Property; to conduct mining work as it may, in its sole discretion, consider advisable; bring upon the Property and erect thereon such mining facilities as the Optionee deems advisable; and remove from the Property and sell or otherwise dispose of any and all placer minerals.

 

  

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10. There is no partial vesting in the Property.

 

11. The Optionee agrees to keep the claim in good standing, to apply all exploration work as assessment to the maximum allowable and to notify Optionor at least six months in advance of its intention to allow the claim to lapse. Upon termination of this Agreement, Optionee is obligated to ensure that any claims comprising the Property are in good standing for at least one year.

 

12. The Optionee will work in a good minerlike manner at all times and will conform to all applicable Acts and Regulations and directives from regulatory authorities.

 

13. The Optionee will provide to the Optionor copies of all exploration data collected on the property and will provide an annual report at the end of each calendar year on the results of that year's activities.

 

14. Neither the Optionor nor Optionee may transfer its interest in this Agreement without the written consent of the other party, such consent not to be unreasonably withheld, provided the transferee agrees to abide by all the terms and conditions of this Agreement.

 

15. If necessary, the parties agree to negotiate a formal option agreement incorporating the terms of this Agreement in a timely manner.

 

16. Each party shall bear its own expenses and costs with regard to all due diligence, negotiations, evaluations and other activities relating to this letter agreement, including without limitation, their own legal costs and other expenses.

 

17- The Optionor and Optionee agree to execute any other documents necessary to carry out or to clarify the intent of this agreement.

 

If you agree with the terms outlined above, please sign where indicated below and return by e-mail, or registered mail, to the Optionee.

 

Sincerely,

 

	
Touchstone Precious Metals Inc.

 

	 	Agreed to this 15,h day of May, 2010.	 
	Per	

	 	By:	

	 
	 	
Lyle Wallace, President

	 	 	
Peter Osha

	 
	 	
 

	 	 	
 

	 

 

  

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SCHEDULE A 

 

THE CLAIM

 

The Claim is located in the New Westminster Mining Division, British Columbia, Map Number 092H:

 

	 Claim Name	 Area  	 Tenure Type	 Tenure Number	 Expiry Date
	 	 	 	 	 
	 Lucky Thirteen	 168.157 ha	 Placer 	 523082 	 November 10, 2010

 

The Claim is owned 100% by Mr. Peter Osha (B.C. Free Miner #120343) and the Claim is in Good Standing.

 

 

 

 

 

 

 

 

 

 

 

 

 

  

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SCHEDULE B

 

PRODUCTION RETURNS ROYALTIES RETAINED

1.    The Optionor shall be entitled to receive:

 

(a)   the Optionor a royalty equal to 3% of Production Returns;

 

2.    Payments of Production Returns Royalties shall be made within 30 days after the end of each semi annual period in which Production Returns, as determined on the basis of final adjusted invoices, are received by the Optionee. All such payments shall be made in Canadian dollars.

 

3.    For the purposes of determining Production Returns, all receipts in currency other than Canadian shall be converted into Canadian currency on the day of receipt.

 

4.    Each payment of Production Returns Royalties shall be accompanied by a statement indicating the calculation of Production Returns Royalties paid. The Optionor shall be entitled to audit, during normal business hours, such books and records as are necessary to determine the correctness of the payments, provided however, that such audit shall be made only on an annual basis and within 12 months of the end of the fiscal period in respect of which such audit is made.

 

5.    Payment of Production Return Royalties shall be made to the Optionor at such place or places in Canada as they shall advise the Optionee from time to time.

 

 

 

  

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SCHEDULE C

 

RECOMMENDED EXPLORATION WORK & BUDGET

 

	
1.  

	
The seismic survey; sample program; screen analysis; and assays; to confirm depth to bedrock, sand and gravel strata, previous workings, and placer mineral continuity.

 

	
2.  

	
All work will be conducted by local qualified independent professional engineers, mine operators, accountants and administrators.

 

Development Budget 

Time to Complete 90 days

 

	 Placer Mineral Tenure #52082 Option Deposit 	 	 	50,000	 
	 Placer Mineral Tenure # 523082 Claim to Lease	 	 	5,000	 
	 Seismic Survey - Frontier GeoScience Ltd.- Russell Hillman P.Eng	 	 	33,380	 
	 Road Upgrade to CPR Track - Triple O Contracting	 	 	10,000	 
	 CPR Track Crossing - Triple O Contracting + CPR	 	 	10,000	 
	 Bonding & Insurance	 	 	10,000	 
	 Survey-12 Trenches (40' ea) 10' sample increments = 48 samples - Triple O	 	 	36,000	 
	 48 Samples Processed - Triple O Contracting	 	 	36,000	 
	 48 Assays	 	 	10,000	 
	 Pit Design - P.Eng (Mining)	 	 	5,000	 
	 Process Design -P.Eng (Metallurgical)	 	 	5,000	 
	 43-101 Compliant Development Report - P.Eng	 	 	10,000	 
	 Contingency Reserve	 	 	79,620	 
	 Development Budget Total  	 	$	300,000	 
	 	 	 	 	 

 

The 43-101 Compliant Report and Budget is anticipated to recommend the immediate property acquisition, and development in accordance with the Operational Budget. The Operational Budget reflects the current estimated Property Acquisition and Capital and Operating Costs to place the property into production at the earliest possible date. The operational budget detail may be modified as a result of the current recommended work program, however, no increase in estimated costs are anticipated.

Property Acquisition Budget Estimate

 

	 Property Acquisition Total 	 	$	5,145,000	 
	 	 	 	 	 
	 Operational Budget Estimate	 	 	 	 
	     Road	 	$	300,000	 
	     Operating Equipment & Buildings	 	$	3,477,126	 
	     Working Capital	 	$	552,290	 
	     Professional Fees	 	$	225,584	 
	       Operational Budget Total	 	$	4,555,000	 
	       Total Capitalization Required I	 	$	10,000,000	 

 

  

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SCHEDULE D

 

TRIPLE O CONTRACTING

 

BULK TESTING PROGRAM 

TIME AND COST ESTIMATE DRAFT

 

The following is an estimate to conduct a bulk sampling program on the Hope Placer Property. The test program to consist of a series of 12 test pits to a depth of 40' minimum. A 10 cu yd bulk sample to be taken every 5'. All pits to be backfilled upon completion of test.

At each test site the pit line will be widened to allow for room to work. The test plant will be set up on one side, with room on the other side to pile overburden, as well as the gravels that are not being processed.

NOTE; Approximately 500 cu yds will need to be excavated from each pit in order to obtain the 10 cu yd test sample at each 10' depth. This amount will depend on the stability of the gravel wall and the amount of sluffage that occurs.

The long reach excavator will start removing the pit trench in 10' layers. Every 10', a 10 cu yd sample will be processed through the pilot plant. Upon completion of the ten cu yd sample the pilot plant will then be cleaned up. Each 10 cu yd test will provide 2 samples, one is sluice concentrate and the second being jig concentrate

NOTE; On this scale not much free gold should be in the jig concentrate as the volume being processed should not plug the sluice box. It would be very different on a production plant.

While the plant is being cleaned up the long reach excavator will finish removing the rest of the layer just tested as well as remove the next 10' layer that is being set aside. This process will be repeated until depth is reached or the pit is lost due to sluffage or cave ins. The test plant is then moved to the next test pit site and then the same process is repeated. The standard excavator will then backfill the finished pit doing the reclamation on a continuous basis.

 

  

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EQUIPMENT REQUIRED

 

	Excavator 	
200 size

C/W thumb, 2 buckets, rake 

bush guarding

	-repair road 

-clear test pit roads

-reclamation work

	 	 	 
	 Excavator 	350 size long reach	
-digging to depth 40' 

-feed test plant

	 	 	 
	 	 	 
	
Wash Plant 

Screen or Trommel

	 	
-Must be able to classify a minimum 

-of 10 cu yd / hr to 1/8 minus 

-to have appropriate sluice system

	Slurry Pump 

system to jig

	2'	-to pump 1/8 minus from sluice
	 Duplex Jig 	24"X24"	- to recover all heavies
	 Gen Set 	25 - 50 KW	- exact size required to be 

determined upon knowing power 

requirements of the washing system

	 Water Pump	3"X 4" 

C/W suction,

1000 ft. lay flat hose repair road

	 - water system
	 Pickups	 2	 
	 Quad	 1	 
	 Miscellaneous	Pails for samples (100) 

Tools

Powersaw

Etc.

	 
	 Personnel Required 	
2 excavator operators 

Plant operator/laborer 

supervisor

	 

 

  

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TEST PROGRAM SCHEDULE

 

	Apply for mines permits 

- will require bond to be posted

- begin conversion to lease

	 
	 	 
	Apply for CP crossing 

       -Bond? 

         Insurance?

	 
	 	 
	
While waiting for permits

- lay out test pit lines

- 30m green belt

- establish CP right of way

- find and locate equipment required

	 
	 	 
	Upon receiving permits 

- begin road upgrade

- CP crossing

	 
	 	 
	NOTE: May be delay as CP must install crossing 

 

- clear & brush out test pit lines

- move testing equipment to site

- begin bulk testing program

do reclamation

	 
	 	 

 

  

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TIME AND COSTS

 

 

	 Apply for	- mines permits (could be 60 days) 5 days 

- CP crossing

- Claim to lease

	 	 
	 Layout 	- test pit lines                            3 days x two people 

-   30 m green belt

establish CP right of way

	 	 

 

	Road Upgrade 

CP Crossing

	
10,000.00 

10,000.00

 

 

  

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LEASED EQUIPMENT

 

	Long reach excavator	 12 days - 1100.00/day/8 hrs/day 	13,200.00
	    fuel 	 12 days - 300.00/day  	3,600.00
	    operator	 12x8hrx25.00/hr + 30%	3,120.00
	 	 	 
	 Excavator standard 	 1 month lease 200 hrs	10,000.00
	    operator 	 20 x 10x25.00 + 30% 	6,500.00
	    fuel	 20x400.00	6,000.00
	 	 	 
	Gen Set 	 50 KW / month	 5,000.00 
	Jig	  month 	 2,500.00 
	Pump	 3x4 month	 5,000.00
	 	 	 
	 PURCHASED OR BUILT (RENT IF POSSIBLE)	 
	 	 	 
	Small trommel 

Modifications

Slurry pump

1000' layflat hose & fittings 

Miscellaneous

	 (if still available)	20,000.00 

5,000.00 

4,500.00 

2,500.00 

5,000.00

	 	 	 
	MISCELLANEOUS	 	 
	 	 	 
	Fuel for Gen Set, pumps etc 

 

Pickup Rental            1 - 75.00/day x 20 days

          1 - 75.00/dayX30days

Gas for pickups

Quad        30 days @ 50.00

Mobilization Excavators    2 @ 2000.00

       wash equipment in & out

	 	2,000.00 

 

3,750.00 

2,000.00

 

1,500.00 

4,000.00 

4,000.00

 

 

  

19

  

 

	 Labor Plant operator/laborer 20days X 8hr - 25.00+30%	 	 5,200.00
	 	 	 
	Supervisor 

 

    -Permits

    -Layout

    -CP Crossing

    -Lease conversion

    -Locate Equipment -Etc.

	 30 days - 500.00/day including LOA	 15.000.00

 

Amount required to do testing program (Taxes not included) $139,370.00 

 

TIME REQUIRED

 

Upon receiving permits, the testing program should be able to be completed in less than 60 days or 2 calendar months. This estimate does not include Bonding Insurance Lab work Engineering Etc.

 

  

20

  

 

SCHEDULE E

OPERATING AGREEMENT DRAFT

 

 

 

Made as of the__________ day of _____________ in the year Two Thousand and Ten.

 

Between:

Touchstone Precious Metals Inc. (the "Owner")

and

Triple "O" Contacting (The Contractor)

Regarding: Development of Placer Claims registered with the British Columbia Mineral Titles Branch as Mineral Tenure Number 523082, Located on the Fraser River (49.25' N. Lat 121.25' N, Long) in the New Westminster Mining Division of British Columbia, Canada.

 

The Owner and Contractor Agree as follows:

 

The Contractor covenants with the Owner to further the interests of the Owner by furnishing the Contractor's skills, judgment, cooperation and services; to perform in an expeditious manner consistent with the interests of the Owner.

 

1.0     Preproduction Phase

 

1.1     Provide preliminary evaluation of the program and project requirements. Provide evaluations of alternative materials, systems and equipment.

 

1.2     Advise on site use and improvements, selection of equipment, systems and methods of Project delivery. Provide recommendations on relative feasibility of contracting methods, time requirements for site development, production, concentration, refining, and shipping of precious metals and aggregates.

 

1.3     Provide for the Owner's review and acceptance a Project Schedule that coordinates and integrates the Contractor's services and the Owner's responsibilities with anticipated contracting schedules.

 

1.4     Coordinate Purchase Contracts with the Owner.

 

1.5     Provide recommendations and information to the Owner regarding the assignment of responsibilities for safety precautions and programs; temporary Project facilities; and equipment, and services for the common use of the contractor.

 

1.6     Provide recommendations and information to the Owner regarding the security arrangements for the project.

 

  

21

  

 

3.0     Additional Services.

 

3.1     The following additional services shall be performed upon authorization in writing from the Owner and shall be paid for as provided in this agreement.

 

3.2     Services related to investigations, appraisals or evaluations of existing conditions, facilities or equipment, or verification of accuracy of information furnished by Contractor.

 

3.3     Services related to the construction of access to the site.

 

3.4     Services related to the delivery and installation of utilities to the site.

 

3.5     Services related to the acquisition and installation of equipment, machinery and materials necessary to the processing and production of the precious metals at the site.

 

3.6     Preparing to serve or serving as a witness in connection with any public hearing, arbitration proceeding or legal proceeding,

 

3.7     Providing any other services not otherwise included in this Agreement.

4.0     Primary Service.

 

4.1     Contractor shall operate the Placer Claims as a Placer Mine.

 

4.2     Contractor shall provide all extracting, processing, refining, shipping, security and any and all services necessary to operate the Site as a Placer Mining operation.

 

5.0     Term.

 

5.1     The Contractor shall perform all Services as expeditiously as is consistent with reasonable skill and care and the orderly progress of the Project,

 

5.2     The term of the contract is for five years from the date of execution.

 

6.0     Owners Responsibilities.

 

6.1     The Owner shall provide a budget for the Project. The Owner shall provide a statement of funds available for the Project.

 

6.2     The Owner shall designate a representative authorized to act in the Owner's behalf with respect to the Project. The Owner, or such authorized representative, shall examine documents submitted by the Contractor.

 

6.3     The Owner shall furnish such legal and accounting services as may be necessary for the Project, including such auditing services as the Owner may require to verify the Contractor's application for payment.

 

  

22

  

 

2.0    Contracting Phase.

 

2.1     The Construction phase will commence with Contractor's obligation to provide Basic Services under the Agreement in a timely and efficient manner,

 

2.2     Provide administration, management and related services as required to coordinate work of the contractor to complete the Project in accordance with the Owner's objectives for cost, time and quality. Provide sufficient organization, personnel and management to carry out the requirements of this Agreement.

 

2.3     Endeavor to achieve satisfactory performance for each Phase of the Program.

 

2.4     Develop cash flow reports and forecasts as needed by Owner.

 

2.5     Maintain records on authorized work performed.

 

2.6     Coordinate the safety programs for the Project.

 

2.7     Verify all permits and approvals necessary for the Project.

 

2.8     Verify that all application fees and assessments have been paid by Owner.

 

2.9     Obtained approvals from authorities having jurisdiction over the Project.

 

2.10     Select and retain the professional services of surveyors, special consultants and testing laboratories. Coordinate their services.

 

2.11     The Contractor shall be responsible for contracting means, methods, techniques, sequences and procedures employed by Contractor in the performance of the Contract, and shall be responsible for determining the failure to carry out work in accordance with the Agreement.

 

2.12     Record the progress of the project. Submit in writing progress reports to the Owner, Keep a daily log containing a record of weather, Contractor's work on site, work accomplished, problems encountered, and other similar relevant data as the Owner may require. Make the log available to the Owner.

 

2.13     Maintain at the Project site, on a current basis all records for the project in good order. Make all records available to the owner. At the Completion of the Agreement, deliver all such records to the Owner.

 

2.14     The extent of the duties, responsibilities and limitations of authority of the Contractor as a representative of the Owner during the Project shall not be modified or extended without the written consent of the Owner.

 

2.15     Coordinate the Security programs for the Project.

 

  

23

  

 

6.4     If the Owner observes or otherwise becomes aware of any fault or defect in the Project, or non conformance with the Contract, prompt written notice thereof shall be given by the Owner to the Contractor.

 

6.5     The Owner reserves the right to enter into contracts for the sale of precious metals and aggregates in connection with the Project.

 

6.6     The Owner shall furnish the required information and services and shall render approvals and decisions as expeditiously as necessary for the orderly progress of the Contractor's services.

7.0     Project Costs.

 

7.1     Costs other than those agreed to as fees for Contractor's services shall be paid for by the Owner. Those costs shall include but not be limited to: surveys, tests, permits, bonding, Owner's insurance responsibilities, and any other Owner's responsibilities.

 

7.2     The Owner shall advance in behalf of the Contractor a sum of money to cover certain costs. Those costs shall include but not be limited to equipment down payments, screening equipment, crushing equipment, weight scales, service trucks, loader, GST & PST, setup costs & Operational capital. The Owner reserves the right to purchase equipment on behalf of the Contractor, to approval all purchases of the Contractor, to bid all contracts or purchases on behalf of the Contractor, to make all final decisions as to which vendors to use, to purchase from, to receive bids from, and to do business with. Those sums advanced by the Owner on the behalf of the Contractor shall be repaid to the Owner in five annual adjustments of the Contractor's monthly fees for the first five years of the project. If for cause this contract is terminated prior to its term, all amounts owed by the contractor to the Owner shall be due and payable at the time of termination.

 

7.3  The Owner shall pay the Contractor $0.35 per Ton for a fee for services rendered in the processing of the Placer Minerals, plus $2.00 per ton for a fee for services rendered in the excavation and processing of sand and gravel, for the five year term of the contract. At any time during the life of the contract the Contractor may report to the Owner that at no fault of the contractor, costs covered by the Contractor's fees have increased, and that the Contractor's ability to perform under the contract is in peril. The Owner may at its discretion review the Contractor's fee and make whatever adjustments the Owner determines are in the best interest of the project.

7.4    From the Contractor's fee, the contractor shall pay all costs related to the operation of the Project as a Placer Mining operation with Sand and Gravel by-products. Such costs shall include but not be limited to materials, labor, utilities, insurance, contractor's fees, administration, leases, and carrying costs.

 

  

24

  

 

8.0     Reimbursable Costs

8.1    The terms reimbursable costs shall mean costs necessarily incurred in the proper performance of services and agreed to by the Owner in writing to be the Owner's cost and paid by the Contractor.

8.2    Trade discounts, rebates and refunds, and returns shall accrue to the Owner, and the Contractor shall make provisions so that they can be secured.

 

9.0  Payments to the Contractor.

 

9.1  Payments of the Contractor's basic fee shall be made on a monthly basis; Payment shall be made on the fifteenth day of every month of the contract for the preceding month. All payments shall be made based upon the volume of tonnage for the prior month as determined by sand and gravel excavation. All adjustments for funds advanced by the Owner on behalf of the Contractor shall be deducted for payments owed prior to payment to the Contractor.

 

9.2  Payments for additional services performed by the Contractor as agreed to by the Owner shall be made on or within 30 days of services being rendered.

 

9.3  No deductions shall be made from the Contractor's compensation other than those for which the Contractor is held legally liable.

10.0  Arbitration.

 

10.1  All Claims, disputes and other matters in question between the parties to the Agreement arising out of or relating to this Agreement or the breach thereof, shall be decided by arbitration in accordance prevailing arbitration law.

 

10.2  Notice of demand for arbitration shall be filed in writing with the other party to this Agreement. The demand shall be made within a reasonable time after the claim dispute or other matter in question arisen, in no event shall the demand for arbitration be made after the date when the institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statute of limitations.

 

10.3 The award rendered by the arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof.

11.0  Termination of Agreement.

 

11.1  This Agreement may be terminated by either party upon thirty days written notice should the other party fail substantially to perform in accordance with its terms through no fault of the party initiating the termination.

 

  

25

  

 

11.2  This Agreement may be terminated by the Owner upon thirty days written notice to the Contractor in the event that the Project is permanently abandoned.

 

11.3  In the event of termination not the fault of the Manager, the Manager shall be compensated for all services performed to the termination date.

12.0  Miscellaneous Provisions.

 

12.1  Unless otherwise specified, this Agreement shall be governed by the law in effect at the location of the Project.

 

12.2  Terms in this Agreement shall have the same meaning as governed by common business practices and by the law in effect at the location of the Project.

 

12.3  The Owner and the Contractor waive all right against each other for damages covered by any insurance in place during the Life of the Project.

13.0  Successors and Assigns.

 

13.1 The Owner and the Contractor, respectively, bind themselves, their partners, successors, assigns and legal representatives to the other party to this Agreement, and to the partners, successors, assigns and legal representatives of such other party with respect to all covenants of this Agreement. Neither the Owner nor Contractor shall assign, sublet or transfer any interest in this Agreement without the written consent of the other.

14.0  Extent of Agreement.

 

14.1  This Agreement represents the entire and integrated agreement between the Owner and the Contractor and supersedes all prior negotiations, representations or agreements, either written or oral. This Agreement may be amended only by written instrument signed by both the Owner and the Contractor.

 

14.2  Nothing contained herein shall be deemed to give any third party any claim or right of action against the Owner or the Contractor which does not otherwise exist without regard to this Agreement.

15.0  Insurance.

 

15.1  The Contractor shall purchase sad maintain insurance for protection from claims, under workers' or workmen's compensation acts, claims for damage because of bodily injury, including personal injury, sickness, disease or death of any of the Contractor's employees or of any person from claims for damages because of injury to or destruction of tangible property including loss of use resulting there from, and from claims arising out of the performance of this Agreement and caused by negligent acts for which the

 

15.0     Contractor is legally liable. The Contractor shall purchase and maintain any and all insurance deemed necessary by common business practices. The Contractor shall provide certificates of said Insurance to the Owner. Cost of the Insurance shall be paid for by the Owner.

 

  

26

  

16.0    Notice.

16.1    Any notice required to be given hereunder shall be deemed properly given upon delivering the same to the party to be notified, or upon mailing the notice by registered or certified mail at the address hereinafter set forth, respectively, or such other address as the party to be notified may have designated prior thereto by written notice to the other.

 

	 Owner:  	Touchstone Precious Metals Inc. 

c/o Lyle Wallace, President 

308-1612 St Georges Avenue 

North Vancouver, British Columbia, 

Canada VTL 3J7 

604-983-0634

TouchstonePreciousMetals@telus.net

	 	 
	 Contractor: 	Triple "O" Contacting 

c/o Peter Osha, President 

1654 Baker Creek Road 

Quesnel, British Columbia 

Canada V2J 7H5 

250-992-5750 ano@telus.net

 

IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement on the day and year first above written.

Touchstone Precious Metals Inc. (Owner)   Triple "O" Contacting (Contractor)

 

  

27

  

APPENDIX B

 

Work program recommended by R. Gunter, P. Eng.

 

	
Min Ten # 523082 Claim to Lease - Survey and Paperwork

	 	 	5,000	 
	
Seismic Survey - Frontier GeoScience Ltd.- Russell Hillman P.Eng

	 	 	26,680	 
	
Road Upgrade to CPR Track - Triple O Contracting Ltd - P.Osha

	 	 	29,500	 
	
CPR Track Crossing - Triple O Contracting Ltd + CPR

	 	 	5,000	 
	
12 Trenches (50' ea) sampled at 10' increments = 120 samples

	 	 	80,000	 
	
120 Screen Analysis

	 	 	10,000	 
	
20 Assays

	 	 	20,000	 
	
Pit Design - P.Eng (Mining)

	 	 	5,000	 
	
Process Design -P.Eng (Metallurgical)

	 	 	5,000	 
	
43-101 Compliant Development Report - P.Eng

	 	 	10,000	 
	
Project Management

	 	 	100,000	 
	
Project Financial Management- C.A.

	 	 	10,000	 
	
Contingency Reserve - includes $50,000 Claim Lease Payment

	 	 	93,820	 
	
Development Budget Total

	 	$	400,000	 

 

 

 

 

 

 

 

Touchstone Precious Initial  Touchstone Ventures    Denarii    

 

  

28

  

 

	
  APPENDIX C

 

 Project Funding Budget

 

 

	
Upgrade road to hauling standards

	  	 	$	300,000	 
	
Operating Equipment & Buildings

	  	 	$	3,477,126	 
	
Working Capital

	  	 	$	552,290	 
	
Professional Fees

	 	 	$	225,584	 
	Operational Budget	
 

	 	$	4,555,000	 
	 	 	 	 	 	 
	 Property Acquisition Budget	 	 	$	5,145,000	 
	 Total Estimated Acquisition, Capital and Operating Cost 	 	 	$	10,000,000	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Touchstone Precious Initial   Touchstone Ventures    Denarii   

  

29exhibit_10-1.htm

Exhibit 10.1

 

 

Separation and Release Agreement for Stanley B. Blaylock

 

This Separation and Release Agreement (“Agreement”) is entered into between the undersigned employee (“Employee”) and Walgreen Co., its parents, subsidiaries, affiliated companies, predecessors, successors and assigns (“Walgreens” or the “Company”), who agree as follows:

 

1. Termination Date.  

 

The parties agree that Employee’s employment with the Company is terminated effective April 2, 2010 (the “Termination Date”).

 

2. General Waiver & Release.

 

(a)  Employee waives and releases any and all claims, known or unknown, arising on or before the date Employee signs this Agreement, that Employee has or might have against the Company, its parents, subsidiaries, affiliated companies, predecessors, successors, and assigns, as well as all of its and their past and present officers, directors, managers, employees, attorneys, and agents (collectively “Released Parties”), subject only to the exceptions identified in paragraph 3 below.  These waived and released claims include but are not limited to: (i) claims that in any way relate to Employee’s employment, separation from employment and other dealings of any kind with any Released Party or Parties; (ii) claims of unlawful discrimination, harassment, retaliation or other alleged violations arising under federal, state, local or others laws and regulations, including but not limited to claims arising under the federal Age Discrimination in Employment Act (ADEA); Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1866; the Employee Retirement Income Security Act (ERISA); the Americans with Disabilities Act (ADA); the Fair Labor Standards Act (FLSA); the Worker Adjustment and Retraining Notification Act (WARN); and the Family and Medical Leave Act (FMLA); (iii) claims of wrongful discharge, emotional distress, defamation, misrepresentation, fraud, detrimental reliance, breach of alleged contractual obligations, promissory estoppel, negligence, assault and battery, and violation of public policy; and (iv) claims for monetary damages, other personal recovery or relief, costs, expenses, and attorneys’ fees of any kind.

 

(b)  Walgreens is not currently aware of any claims or causes of action it may have against Employee.

 

Claims and Rights Not Waived or Released.  

 

The only claims not waived and not released by Employee under paragraph 2 are (i) claims arising after the date that Employee signs this Agreement; (ii) any claim that as a matter of law cannot be waived; and (iii) claims for vested benefits and all benefits that are specifically described and provided for in this Agreement.  In addition, nothing in this Agreement shall affect or interfere with Employee’s right to participate, cooperate, initiate or assist in an investigation or proceeding conducted within the Company or by any government agency, oversight board, commission or other regulatory or investigative body.  Again, however, Employee is waiving and releasing all rights to recover money or other individual relief in connection with any investigation or proceeding related to claims covered by paragraph 2 above (General Waiver & Release).

 

3. No Disparagement.  

 

Employee will not make derogatory statements, either written or oral, or otherwise disparage any Released Party or Walgreens products or services, except as may be required to be permitted by law.  Nor shall Employee direct, arrange or encourage others to make any such derogatory or disparaging statements on Employee’s behalf.  Walgreens CEO and  Corporate Officers will not make, and will cause others not to make on their behalf, derogatory statements, either written or oral, or otherwise disparage Employee, except as may be required or permitted by law.

 

4. Return of Company Property.  

 

Employee agrees that he has returned all Company property, and no Company property has been retained by the Employee, regardless of the form in which it was acquired or held by Employee; provided, however, that the Company acknowledges and agrees that Employee’s cellular phone and cellular phone number (410-336-9236) are the property of Employee and not the property of Walgreens and that Walgreens will take all reasonable action to assist Employee to transfer Employee’s cellular phone number from a corporate account owned by the Company to Employee’s personal account.

 

5. Restrictive Covenants.  

 

Employee is subject to the Non-Competition, Non-Solicitation and Confidentiality provisions attached hereto as Exhibit B (the “Walgreens Non-Compete”).

 

6. Non-Admissions.  

 

Nothing in this Agreement constitutes or shall be portrayed or regarded as an admission of any wrongdoing, fault, violation, liability, or unlawful activity by the Company, Employee or any Released Party.

 

7. Cooperation.  

 

Subject to paragraph 3 above and upon reasonable prior notice, Employee agrees to fully and completely cooperate with the Company and its agents and representatives during and in connection with all litigation, potential litigation, and internal or external investigations in which the Company is involved or may become involved, subject to reimbursement of reasonable travel expenses if travel is requested.; provided, however, that the Company acknowledges that the application of Section 3 and this Section 7 shall be subject to any future employment of Employee and that the Company acknowledges and agrees that it will endeavor to accommodate Employee in such regard.  During the 18-month severance period Employee’s assistance hereunder shall be without additional compensation. Thereafter, the Company shall provide reasonable compensation to Employee for time required providing litigation assistance except for litigation matters where Employee is a named party to the litigation.  In such cases, no additional compensation will be provided to Employee.

 

8. Non-Inducement.  

 

Employee agrees that he will not directly or indirectly assist or encourage any person or entity in carrying out any activity that would be prohibited by the provisions of this Agreement if such activity were carried out by Employee.

 

9. Separation Payments.   

 

In exchange for Employee’s obligations to Walgreens under this Agreement, including the Release and Waiver, Walgreens agrees to pay Employee the Separation Benefits set forth in the attached Exhibit A.  Employee acknowledges that these Separation Benefits are in full settlement of any severance rights he may have under the Medmark Severance Agreement.  

 

10. Indemnification.  

 

Walgreens agrees to indemnify Employee, to the fullest extent permitted by law, for any and all acts occurring during the course of his employment, including for any and all claims brought after the Termination Date.  Walgreens acknowledges that Employee is and will remain covered by the Company’s director and officer insurance policy for any and all acts up to and through the Termination Date.

 

11. Alternative Employment.  

 

Employee’s benefits hereunder shall not be subject to offset or reduction in the event Employee obtains alternate employment or income, nor shall Employee be under any obligation of mitigation in connection with the benefits to be paid under this Agreement.

 

12. [Reserved]

 

13. No Assignment by Employee.  

 

Employee represents and warrants that Employee has not sold, assigned, transferred, conveyed, or otherwise disposed of any claim covered by paragraph 2 above (General Waiver Release) and that Employee has the sole right and exclusive authority to execute this Agreement on Employee’s behalf.

 

14. Severability.  

 

In the event that any portion of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, the invalid or unenforceable portion shall be construed or modified in a manner that gives force and effect, to the fullest extent possible, to all other portions and provisions of this Agreement.  If any invalid or unenforceable portion of any provision in this Agreement cannot be construed or modified to render it valid and enforceable, that portion shall be construed as narrowly as possible and shall be severed from the remainder of this Agreement, and the remainder of this Agreement (including the remainder of the section, paragraph, subparagraph or sentence containing any invalid or unenforceable words) shall remain in effect to the fullest extent possible.

 

15. OWBPA Provisions – Additional Understandings.  

 

In compliance with the Older Workers Benefit Protection Act (“OWBPA”), the Company and Employee agree to the following:

 

	
(a)  

	
Understandability.  This Agreement is written in a manner calculated to be understood by the Employee, and Employee understands all terms of this Agreement;

 

	
(b)  

	
Age Discrimination (ADEA) Waiver.  This Agreement includes a waiver and release of claims under the Age Discrimination in Employment Act (ADEA) as described in paragraph 2 above;

 

	
(c)  

	
No Future Waiver.  This Agreement only waives and releases claims and rights arising prior to the date Employee signs this Agreement;

 

	
(d)  

	
Valid Consideration.  In exchange for Employee’s release and waiver as part of this Agreement, Employee acknowledges that he/she is receiving adequate consideration in the form of Separation Payments as described herein that exceed those to which Employee is entitled apart from this Agreement.

 

	
(e)  

	
Employee Advised to Consult with an Attorney.  By this Agreement, the Company advises Employee to consult with an attorney before signing this Agreement;

 

	
(f)  

	
Period to Consider this Agreement.  Employee has been given a period of 21 calendar days in which to consider this Agreement, and to decide whether he wishes to sign it;

 

	
(g)  

	
Period to Revoke Agreement.  After Employee signs this Agreement, Employee has 7 calendar days in which Employee can change his mind and revoke this Agreement.  Walgreens and Employee agree that, to revoke this Agreement, Employee must notify Walgreens in writing that Employee is revoking this Agreement.  Any such notice of revocation must be received by Mark Wattley, Divisional Vice President, within the 7-day period;  Mail: 1411 Lake Cook Road M.S. #L414, Deerfield, Illinois 60015 Fax: (847) 964-6492 Email: mark.wattley@walgreens.com

 

	
(h)  

	
Effective Date.  This Agreement shall not become effective or enforceable until the 7-day revocation period described above has expired with no revocation by Employee.

 

16. Governing Law.  

 

The laws of the State of Illinois shall govern the validity, performance, enforcement, interpretation and any other aspect of this Agreement, notwithstanding any state’s choice of law provisions to the contrary.

 

17. Binding Effect.   

 

This Agreement shall be binding upon and inure to the benefit of Employee and the Company and his and its respective heirs, executors, successors, agents and representatives.

 

18. Counterparts and Facsimile Signatures.   

 

This Agreement may be executed in counterparts which, taken together, constitute a single, enforceable instrument.

 

19. Complete Agreement.  

 

This Agreement (including without limitation the Walgreens Non-Compete which is attached hereto as Exhibit B) constitutes the parties’ entire agreement and cancels, supersedes, and replaces any and all prior proposals, understandings, and agreements (written, oral or implied) regarding all matters addressed herein, including without limitation the Medmark Severance Agreement and any other Non-Competition, Non-Solicitation and Confidentiality Agreement Employee may have executed with the Company.  The terms of this Agreement (including without limitation the Walgreens Non-Compete which is attached hereto as Exhibit B) may not be altered or modified except by written agreement of the Employee and the Company.  In connection with this Agreement’s acceptance and execution, neither Employee nor the Company is relying on any representation or promise that is not expressly stated in this Agreement.

 

20. Full Knowledge and Authority to Sign.  

 

Other than as stated herein, Employee and Walgreens attest that each of them has the authority to enter into this Agreement (including the provisions set forth on Exhibit A and Exhibit B hereto), that no promise or inducement other than as stated herein has been offered for this Agreement, that they are legally competent to execute this Agreement, and that they accept the full responsibility therefor.  Walgreens further acknowledges that the individual set forth below has full corporate power and authority to execute this Agreement on behalf of the Company and to bind the Company in all respects.

 

Entered and Agreed to:

 

 

 

	Dated:_________________	 	 _______________________	 
	 	 	Stanley B. Blaylock	 
	 	 	 	 
	 	 	Walgreen Co.	 
	 	 	 	 
	 	 	By: 	 ___________________	 
	 	 	 	 Mark A. Wattley	 
	 	 	 	 Divisional Vice President	 

 

  

  

 

EXHIBIT A

Summary of Separation Benefits for Stanley B. Blaylock

	
Last Day in Office

	
April 2, 2010

	
Paid Through Date

	
June 23, 2010 (the “PTD”)

	
Vacation

	
$131,818.19, paid within 30 days after April 2, 2010

	
Severance

	
$900,000 (less tax withholdings and benefit deductions); represents 18 months of base salary; paid in monthly installments, in accordance with the Company’s normal payroll processes, over the course of the 18-month severance period beginning after April 2, 2010.

	
Fiscal 2010 Bonus

	
Pro-rated bonus for the portion of the fiscal year ending on the PTD, to be paid when FY2010 bonuses are paid (the “Bonus”); provided, however, that the Bonus shall be calculated in the same manner as it is calculated for other comparable senior executives who remain employed by the Company; provided, further, that if the Company pays a bonus to a majority of the Corporate Officers of the Company for FY2010, then the Company shall be required to pay the Bonus to Employee.

	
Benefits

	
If Blaylock, his spouse and all dependent children enroll in COBRA, all medical, prescription and/or dental, premiums will be subsidized such that Blaylock only pays the premium rates that are in effect for all other active employees who select the same coverage as Blaylock and his family.   The Company acknowledges that even upon the death of Blaylock, it will continue the coverage for Blaylock’s spouse and all dependent children on the same terms and conditions.

	
Long-Term Incentives

	
A pro-rated portion of the not yet vested long-term incentive awards listed below will become vested and distributed based on service through the PTD as set forth on Exhibit C. All other long-term incentive awards will be forfeited as of the PTD.

	
·  

	
Restricted stock awards granted in April 2007 and April 2008.

	
·  

	
Restricted cash and restricted stock granted for fiscal years 2007 and 2008 under the former Restricted Performance Share Program.

	
·  

	
Restricted stock units granted on September 1, 2008 and September 1, 2009.

	
Outplacement

	
Up to 12 months of executive-level outplacement with Challenger, Gray and Christmas.

 

EXHIBIT B

 

WALGREEN CO. NON-COMPETITION, NON-SOLICITATION AND CONFIDENTIALITY AGREEMENT

 

This Exhibit forms a part of the Separation and Release Agreement (the “Separation Agreement”) between Stanley B. Blaylock and  Walgreen Co. or one of its subsidiary companies (hereinafter referred to as “Employee’’ and the “Company”).

 

WHEREAS, the Company develops and/or uses valuable business, technical, proprietary, customer and patient information it protects by limiting its disclosure and by keeping it secret or confidential;

 

WHEREAS, Employee acknowledges that during the course of employment, he has or will receive, contribute, or develop such confidential information; and

 

WHEREAS, the Company desires to protect from its competitors such confidential information and also desires to protect its legitimate business interests and goodwill in maintaining its employee and customer relationships.

 

NOW THEREFORE, in consideration of his initial employment offer with the Company, the restricted stock unit awards issued to Employee and the compensation and benefits provided pursuant to the Separation Agreement to which this is attached as Exhibit B, Employee agrees to the following:

 

1.Non-Disclosure And Non-Use.  

 

Employee agrees not to disclose any Confidential Information, as defined below, to any person or entity other than the Company, either during or after Employee’s employment, without the Company’s prior written consent.  Employee further agrees not to use any Confidential Information, either during or at any time after his employment, without the Company’s prior written consent, except as may be necessary to perform his job duties during employment with the Company.  In the event Employee is required to disclose any Confidential Information by law, Employee will provide the Company with prompt written notice of any such requirement and provide reasonable cooperation to the Company so that the Company may seek a protective order or other appropriate remedy.  The Company acknowledges and agrees that any disclosure of Confidential Information by Employee as required by law shall not be a breach of the Separation Agreement, including this Exhibit B, provided that Employee has provided the required notice to the Company, if possible.

 

Confidential Information means information not generally known by the public about processes, systems, products, services, including proposed products and services, business information, know-how, or trade secrets of the Company.  Confidential Information includes, but is not limited to, the following:

 

	 	 (a)	  Customer records, identity of vendors, suppliers, or landlords, profit and performance reports, prices, selling and pricing procedures and techniques, and financing methods of the Company;
	 	 (b)	  Customer lists and information pertaining to identities of the customers, their special demands, and their past, current and anticipated requirements for the products or services of the Company;
	 	 (c)	  Specifications, procedures, policies, techniques, manuals, databases and all other information pertaining to products or services of the Company, or of others for which the Company has assumed an obligation of confidentiality;
	 	 (d)	  Business or marketing plans, accounting records, financial statements and information, and projections of the Company;
	 	 (e)	  Software developed or used by the Company;
	 	 (f)	  Information related to the Company’s retailing, distribution or administrative facilities; and
	 	 (g)	  Any other information identified or defined as confidential information by Company policy.

 

Notwithstanding anything to the contrary contained herein, Confidential Information does not include, the following:

 

	 	 (a)	  information which becomes available to the public from a source other than the Employee and through no fault of Employee;
	 	 (b)	  information that is legally obtained by the Employee at any time from other sources who are not subject to confidentiality restrictions;
	 	 (c)	  information that came into Employee’s possession prior to or independent of his employment relationship with the Company; and
	 	 (d)	  information that consists of general industry knowledge.

 

2.Non-Competition and Non-Solicitation.  

 

In order to protect the legitimate business interests and goodwill of the Company, and to protect Confidential Information, Employee covenants and agrees that for the entire period of his employment with the Company, and for a period of 18 months commencing on April 3, 2010, (the “Non-Compete Period”), Employee will not:

 

 

	 	 (a)	  contact any Customer of the Company for the benefit of a Competing Business or interfere with, or attempt to disrupt the relationship, contractual, or otherwise, between the Company and any of its Customers.
	 	 (b)	  hire employees of the Company. This restriction includes without limitation a prohibition on Blaylock directly or indirectly employing, or knowingly permitting any Person or business directly or indirectly controlled by Blaylock, regardless of whether such Person or business is a Competing Business, from employing, any person employed by the Company as of January 1, 2010.
	 	 (c)	  solicit employees of the Company.  This restriction includes without limitation a prohibition on directly or indirectly (i) interfering with, or attempting to disrupt the relationship, contractual, or otherwise, between the Company and any of its employees, and (ii) soliciting, inducing, or attempting to induce employees of the Company to terminate employment with the Company.  The foregoing non-solicitation provision shall not be applicable to general solicitations in newspapers, trade magazines, internet job sites or other similar media not specifically targeting employees of the Company, and any hiring resulting therefrom.
	 	 (d)	  compete with the Company.  This restriction includes without limitation a prohibition on directly or indirectly engaging or investing in, owning, managing, operating, financing, controlling, participating in the ownership, management, operation, financing or control of, or being associated or in any manner connected with, any Competing Business, whether as a consultant, independent contractor, agent, employee, officer, partner, director, shareholder (except (i) limited partnership investments in private equity funds which may invest in venture capital-backed companies (where Employee's investment represents less than 1% percent ownership interest of any such company) or (ii) investments of less than 1% ownership interest of the outstanding securities of a corporation or other entity whose securities are listed on a stock exchange or quotation system and such entity files periodic reports with the Securities and Exchange Commission), distributor, representative, or otherwise, alone or in association with any other Person(s).  Notwithstanding the foregoing, Employee may render services for a Competing Business if:  such service does not conflict with any other restrictions noted in this Paragraph 2; the Competing Business is diversified, and Employee becomes employed in a part of the business that is not in direct or indirect competition with Company; and, prior to the Employee beginning employment with the Competing Business, the Company receives written assurances from Employee, that Employee will not render services directly or indirectly in connection with any product, system, service, or process of any person or organization which is the same as, comparable to, or competes directly or indirectly with a product, system, service, or process of the Company.

 

 

Employee further acknowledges and agrees that for a 12 month period commencing after the Non-Compete Period, Employee shall not consult with, or accept employment with (a) CVS/Caremark, (b) Express Scripts, or (c) Medco Health Solutions, or any successors thereto of the foregoing corporations, nor shall Employee provide services on behalf of the foregoing corporations with respect to the pricing or negotiation of network pharmacy contracts.

Employee agrees that the restrictions contained in paragraphs 2(a), 2(b) and 2(c) have no geographic limitation.  Employee agrees that the restrictions contained in Paragraph 2(d) are geographically limited to (a) the entirety of the United States and (b) any other country if the Company conducts business within such country at any time during Employee's employment with the Company.

Employee acknowledges that (i) the Company's business is and following the date hereof will be national in scope, (ii) the Company's products and services are and following the date hereof will be marketed throughout the United States and (iii) the Company has competed and following the date hereof will compete with other businesses that are or could be located in any part of the United States.  Employee further covenants and agrees that restrictive covenants contained in this Agreement are reasonable and necessary to protect the legitimate business interests of the Company because of the nature and scope of the Company's business.

If a court or arbitrator of competent jurisdiction determines that one or more of the provisions of this Paragraph 2 are invalid, illegal, or unenforceable for any reason, then such provision or provisions shall be deemed to be reduced in scope or length, as the case may be, to the extent required to make this Paragraph enforceable.  If Employee violates the provisions of this Paragraph 2, the periods described therein shall be extended by that number of days which equals the aggregate of all days during which at any time any such violations occurred.

For purposes of this Paragraph 2, the following definitions shall apply:

 

 

	 	 (1)	  “Competing Business” means any business engaged in by any Person that is in competition with any business engaged in by the Company (“Company Business”) during the term of Employee’s employment with the Company; provided that the foregoing shall only apply to any Company Business with respect to which Employee possesses Confidential Information and was substantially engaged or was active in the management of such business during Employee’s employment with the Company.
	 	 (2)	  “Customer” means any patient or other customer or prospective customer of any Company business unit with respect to which Employee was substantially engaged or was active in the management of such business during Employee’s employment with the Company.
	 	 (3)	  “Person” means any individual, corporation, partnership, limited liability company or other entity.

 

 

3.Non-Inducement.  

 

Employee agrees that during the term of his employment and for one year following the Employee’s termination of employment, Employee will not directly or indirectly assist or encourage any Person or entity in carrying out any activity that would be prohibited by the provisions of this Agreement if such activity were carried out by Employee.

 

4. [Reserved].

 

5.Consideration and Acknowledgments.  

 

Employee acknowledges and agrees that the covenants described in Paragraphs 1 through 3 of this Agreement are essential terms, and the underlying restricted stock unit award and the Separation Payments under the Separation and Release Agreement would not be provided by the Company in the absence of these covenants.  Employee further acknowledges that these covenants are supported by adequate consideration as set forth in this Agreement, that full compliance with these covenants will not prevent Employee from earning a livelihood following the termination of his employment, and that these covenants do not place undue restraint on Employee and are not in conflict with any public interest.  Employee further acknowledges and agrees that Employee fully understands these covenants, has had full and complete opportunity to discuss and resolve any ambiguities or uncertainties regarding these covenants before signing this Agreement, that these covenants are reasonable and enforceable in every respect, and has voluntarily agreed to comply with these covenants for their stated term.  Employee agrees that in the event he is offered employment with a Competing Business at any time in the future, Employee shall immediately notify the Competing Business of the existence of the covenants set forth in Paragraphs 1 through 3 above.

 

6.Enforcement of This Agreement.  

 

Employee acknowledges that compliance with the covenants set forth in Paragraphs 1 through 4 of this Agreement is necessary to enable the Company to maintain its competitive position, and that any actual or threatened breach of these covenants will result in irreparable and continuing damage to the Company for which there will be no adequate remedy at law.  In the event of any actual or threatened breach of these covenants, the Company shall be entitled to injunctive relief, including the right to a temporary restraining order, and other relief.  The foregoing stipulated remedies of the Company are in addition to, and not to the exclusion of, any other damages the Company may be able to prove.  In addition, if any court shall at any time hold these covenants to be unenforceable or unreasonable in scope, territory or period of time, then the scope, territory or period of time of the covenants shall be that determined by the court to be reasonable.  Employee consents to the jurisdiction of the Circuit Court of Lake or Cook County, Illinois for purposes of the enforcement of this agreement.

 

7.Notification.  

 

Employee further agrees that the Company may notify anyone later employing him of the existence and provisions of this Agreement; provided, however, that prior to any notification, the Company shall be required to provide Employee with an advance copy of such correspondence.

 

Exhibit C

	
Stan Blaylock

	  	  	  	  	 	  	  	  	 	  
	
Last day Worked

	
4/2/2010

	  	  	  	 	  	  	  	 	  
	
Paid-Through Date

	
6/23/2010

	  	  	  	 	  	  	  	 	  
	  	  	  	  	  	 	  	  	  	 	  
	  	  	  	
Initial Grants

	 	  
Prorate Based on Paid-Through Date

	 	
 

	  	
Grant Date

	
Vest Date

	
 Shares

	
Cash

	 	
 #

	
Stk Price

	
 Value

	 	  
	
RSU Grant

	
9/1/2008

	
8/31/2011

	
       8,303

	  	 	
                   5,074

	
$ 35.00

	
$ 177,592

	 	
Vests over 36 months

	  	
9/1/2009

	
8/31/2012

	
     10,374

	  	 	
                   2,882

	
$ 35.00

	
$ 100,858

	 	
Vests over 36 months

	  	  	  	  	  	 	  	  	  	 	  
	
Restricted Stock

	
4/13/2007

	
4/13/2010

	
       2,000

	  	 	
                   2,000

	
$ 35.00

	
$ 70,000

	 	
 Grant distributed before paid-through date

	  	
4/13/2007

	
4/13/2011

	
       2,000

	  	 	
                   1,583

	
$ 35.00

	
$ 55,417

	 	
vests over 48 months

	  	
4/13/2007

	
4/13/2012

	
       2,000

	  	 	
                   1,267

	
$ 35.00

	
$ 44,333

	 	
Vests over 60 months

	  	  	  	  	  	 	  	  	  	 	  
	  	
4/9/2008

	
4/9/2011

	
       1,333

	  	 	
                      963

	
$ 35.00

	
$ 33,695

	 	
Vests over 36 months

	  	
4/9/2008

	
4/9/2012

	
       1,333

	  	 	
                      722

	
$ 35.00

	
$ 25,271

	 	
Vests over 48 months

	  	
4/9/2008

	
4/9/2013

	
       1,334

	  	 	
                      578

	
$ 35.00

	
$ 20,232

	 	
Vests over 60 months

	  	  	  	  	  	 	  	  	  	 	  
	
RPSP            Cash

	
Fiscal 2007

	
8/31/2010

	  	
$ 7,994

	 	  	  	
$ 7,550

	 	
Vests over 36 months

	
Stock

	
Fiscal 2007

	
8/31/2010

	
           161

	  	 	
                      152

	
$ 35.00

	
$ 5,322

	 	
Vests over 36 months

	
Cash

	
Fiscal 2007

	
8/31/2011

	  	
$ 7,994

	 	  	  	
$ 5,662

	 	
Vests over 48 months

	
Stock

	
Fiscal 2007

	
8/31/2011

	
           162

	  	 	
                      114

	
$ 35.00

	
$ 3,991

	 	
Vests over 48 months

	  	  	  	  	  	 	  	  	  	 	  
	
Cash

	
Fiscal 2008

	
8/31/2010

	  	
$ 10,359

	 	  	  	
$ 9,496

	 	
Vests over 24 months

	
Stock

	
Fiscal 2008

	
8/31/2010

	
           229

	  	 	
                      210

	
$ 35.00

	
$ 7,347

	 	
Vests over 24 months

	
Cash

	
Fiscal 2008

	
8/31/2011

	  	
$ 10,359

	 	  	  	
$ 6,331

	 	
Vests over 36 months

	
Stock

	
Fiscal 2008

	
8/31/2011

	
           230

	  	 	
                      141

	
$ 35.00

	
$ 4,919

	 	
Vests over 36 months

	
Cash

	
Fiscal 2008

	
8/31/2012

	  	
$ 10,359

	 	  	  	
$ 4,748

	 	
Vests over 48 months

	
Stock

	
Fiscal 2008

	
8/31/2012

	
           230

	  	 	
                      105

	
$ 35.00

	
$ 3,690

	 	
Vests over 48 months

	  	  	  	  	  	 	  	  	  	 	  
	
Totals

	  	  	
     29,689

	
$ 47,065

	 	
                15,791

	  	
$ 586,455

	 	
 (1)

	  	  	  	  	  	 	  	  	  	 	  
	
(1) Dollar value of shares is an estimate based on the indicated stock price.

	  	 	  
	  	  	  	  	  	 	  	  	  	 	  
	  	  	  	  	  	 	  	  	  	 	  
	  	  	  	  	  	 	  	  	  	 	  
	  	  	  	  	  	 	  	  	  	 	  
	  	
Grant Date

	
Vest Date

	
 # Shares

	 	  	  	  	 	  
	
Stock Options

	
8/1/2006

	
8/1/2009

	
           534

	
    Option Price is $46.78

	  	
9/1/2006

	
9/1/2009

	
       6,065

	
    Option Price is $49.46

	  	
10/31/2006

	
10/31/2008

	
           572

	
    Option Price is $43.68

	  	
1/8/2007

	
1/8/2010

	
           697

	
    Option Price is $45.50

	  	
9/1/2007

	
9/1/2010

	
     13,545

	
    Option Price is $45.07

	  	
10/9/2007

	
10/9/2010

	
       4,325

	
    Option Price is $39.19

	  	
9/1/2008

	
8/31/2011

	
     33,214

	
    Option Price is $36.43

	  	
9/1/2009

	
8/31/2012

	
     41,497

	
    Option Price is $34.04

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00175-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00175-of-00352.parquet"}]]