EXHIBIT 10.1
CONTRACT OF SALE
----------------
X. X. XXXXX & ASSOCIATES, INC., a Nevada corporation, herein called
"Seller,"agrees to sell to NEWGOLD, INC., a Nevada corporation, herein called
"Buyer," and Buyer agrees to purchase from Seller the mining property, located
in Pershing County, Nevada, commonly known as the "Relief Canyon Mine," and more
particularly described in attached Exhibit "A" (the "Property"), including the
equipment described in attached Exhibit "B," on the terms and conditions set
forth in this Agreement.
1. Purchase Price and Payment.
The purchase price for the property shall be the sum of Five
Hundred Thousand Dollars ($500,000.00), payable by Buyer to Seller as follows:
(a) Upon closing, on or before January 10, 1995, Buyer shall pay
Seller $100,000.00;
(b) The balance of the purchase price shall be paid in 12 equal
payments of $35,166.36, which includes interest for one year at 10 percent.
$35,166.36 on February 10, 1995.
$35,166.36 on March 10, 1995.
$35,166.36 on April 10, 1995.
$35,166.36 on May 10, 1995.
$35,166.36 on June 10, 1995.
$35,166.36 on July 10, 1995.
$35,166.36 on August 10, 1995.
$35,166.36 on September 1, 1995.
$35,166.36 on October 10, 1995.
$35,166.36 on November 10, 1995.
$35,166.36 on December 10, 1995.
$35,166.36 on January 10, 1996.
2. Bonds and Santa Fe Lease.
All bonds relating to the operation of the Property will be
transferred to Buyer. In further consideration of the purchase price, Seller
shall assign the Santa Fe Lease which affects the property to Buyer and obtain
Santa Fe's consent to such assignment before November 1, 1994. Upon assignment,
Buyer agrees to make a collateral assignment of said lease to Seller to secure
Buyer's obligation to perform all of the Lessee's obligations under the lease
which accrue after the date of this agreement, and Buyer's obligations under
this agreement.
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3. Equipment.
Upon execution of this agreement, Seller shall deliver to Buyer a xxxx
of sale for the equipment described in Exhibit "B" and Buyer shall execute and
deliver to Seller a security agreement grant to Seller a security interest in
the equipment to secure Buyer's obligations under this agreement.
4. Covenants of Buyer.
4.1. Insurance. Buyer shall at all times keep the property and
improvements on the property insured against loss or damage by fire or other
casualty to the amount of the reasonable value of improvements on the Property
by an insurance company or companies approved by Seller. The insurance policies
shall be made payable, in case of loss, to Seller.
4.2 Taxes. Buyer shall pay when due all taxes and assessments of every
nature, levied, assessed, or accruing on the Property after the execution of
this Contract, and shall timely pay any Proceeds on Minerals Tax attributable to
Buyer's operations at the Property.
4.3 Indemnification. Buyer shall indemnify and save and hold Seller
and its employees, representatives, agents and principals harmless from and
against any and all costs, losses, liabilities, damages, lawsuits, claims and
expenses incurred in connection with or arising out of or resulting from or
incident to the condition of the Property or Buyer's activities on the Property,
which occur or arise after the date of this Contract. Buyer's indemnity shall
include without limitation all reasonable and necessary costs and expenses of
defending any claim arising (and any lawsuit instituted asserting such claim)
with respect to any matter as to which Buyer's indemnity is applicable, and
reasonable attorneys' fees and costs incurred in connection therewith, whether
or not such claim is ultimately defeated, and any amounts paid incident to any
compromise or settlement of any such claim.
4.4 Liens and Encumbrances. Buyer shall pay when due all claims for
labor performed and materials furnished for any construction, alteration, repair
or mining operation upon the Property, and shall comply with all laws affecting
the Property or relating to any alterations or improvements that may be made
thereon. Should any lien or encumbrance be placed against the Property by reason
of any act or thing done by Buyer, then within 30 days of the date of filing or
recording of the lien, Buyer shall cause the same to be discharged or shall
deliver to Seller a corporate surety bond or other security approved by Seller
indemnifying Seller against any loss or damage by reason thereof.
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4.5 Notice of Non-Responsibility. Except for work of improvement
resulting from emergency, before any work or improvement is commenced, Buyer
shall give written notice thereof to Seller to enable Seller to record a notice
that Seller is not responsible for such work.
4.6 Protection of Property. Buyer promises to properly care for and
keep the Property in good condition, order and repair; to care for, protect and
repair all buildings and improvements situate thereon; and otherwise to protect
and preserve the Property and the improvements thereon and not commit or permit
any waste or deterioration of the Property.
4.7 Hazardous Waste. Buyer shall comply with all federal, state and
local laws, ordinances, regulations, rules, and orders relating to health,
safety, environmental protection, and storage, discharge or disposal of harmful,
toxic or hazardous waste, and water and air quality with respect to the Property
and Buyer's use of the Property. Buyer shall not cause any deposit, disposal,
release, discharge, treatment, process, work, leakage, spillage, emission of or
pollution by any harmful, toxic, hazardous, or noxious materials or substances
on the Property. Buyer agrees to indemnify and hold Seller and the Property free
and harmless, from and against any and all claims, demands, fines, penalties,
settlements, suits, losses, liabilities, damages, injuries, costs or expenses,
including attorney's fees.
5. Possession and Legal Title.
Buyer shall be entitled to enter into possession of the Property on
the date of this Contract and to continue in possession of the Property sq long
as Buyer is not in default in the performance of this Contract. Seller shall
retain legal title as a security interest in the Property until Buyer has paid
the balance of the purchase price as required by this Contract.
6. Default.
6.1 Events of Default. Buyer shall be in default under this Contract
of Sale in the event that Buyer shall fail, neglect, or refuse to make any
payment at the time provided herein, fail to comply with any of the other
provisions set forth in this Contract of Sale, make a general assignment for the
benefit of creditors, or become insolvent, or upon the filing of a petition by
or against Buyer under any state or federal law relating to the relief of
debtors, to the extent that such law allows a default hereunder resulting from
the filing of such petition.
6.2 Seller's Remedies. In the event of Buyer's default in the
performance of any of the provisions contained in this Contract of Sale, then
Seller may at any time thereafter, without limiting Seller in the exercise of
any right or remedy which Seller
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may have by reason of such default, exercise any or all of the following
remedies:
6.2.1 Buyer agrees that all moneys paid to Seller by virtue of this
Contract of Sale shall immediately become the property of Seller. In
the event of Buyer's default in the performance of any of the
provisions contained in this Contract of Sale, and this Contract of
Sale is terminated pursuant to Section 7, then (a) Seller shall be
released from any and all obligations, either at law or in equity, to
transfer the property to Buyer; (b) Buyer shall relinquish all rights
under this Contract of Sale; and (c) all moneys theretofore paid by
Buyer shall be. retained by Seller as liquidated damages for the
breach of this Contract of Sale. The parties agree that in the event
of Buyers default, it would be difficult to fix or estimate the actual
damage to Seller. On the basis of the facts now known to the parties,
the parties agree that the moneys theretofore paid by Buyer to Seller
at the time of Buyer's breach shall compensate Seller for damages
which would accrue by reason of such default.
6.2.2 Seller may, at Seller's option, after the expiration of the 35
day notice described in Section 6.3., below, declare the unpaid
balance of the purchase price immediately due and payable; and Buyer
agrees to immediately pay such amount to Seller.
6.2.3 Seller may institute an appropriate action against Buyer for
specific performance or this Contract of Sale or to terminate Buyer's
rights under this Contract of Sale and for damages sustained by
Seller; including but not limited to all payments required by Buyer
pursuant to this Contract of Sale plus the amount necessary to restore
the property to the condition it was in at the date Buyer received
possession by reason of this Contract of Sale, reasonable use
excepted.
6.2.4. Seller may pursue any other remedy now or hereafter available
to Seller under the laws of judicial decisions of the State of Nevada.
6.2.5 In the event of termination of Buyer's right to purchase by
reason of such default, (a) Buyer will become a tenant at will of
Seller; (b) Buyer will peaceably vacate the Property; and (c) Seller
may re-enter the property and take possession thereof and remove all
persons therefrom, using any and all lawful means to do so, including
the remedies for unlawful detainer pursuant to NRS Chapter 40.
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6.2.6. It is understood and agreed that any failure on the part of
Seller to exercise any of Seller's rights or remedies in the event of
default, at any particular time, shall not constitute a waiver of
Seller's option to exercise such rights or remedies at any other time.
7. Default Procedure
In the event of Buyer's default, if Seller shall desire to terminate
the right of Buyer to purchase the property pursuant to this Contract of Sale,
then Seller shall file with the escrow holder designated by Seller, in
duplicate, a notice and demand for termination of the rights of Buyer.
Thereupon, the escrow holder shall promptly mail, by certified or registered
mail, return receipt requested, one copy of such notice to Buyer. Unless the
default is cured within 35 days following the date of mailing of Seller's
notice, then the escrow holder is specifically authorized by Buyer, without
further instructions, to comply with Seller's demand for delivery of the
underlying Quitclaim Deed, and to terminate the escrow upon payment of the
escrow holder's charges for the termination of the escrow. Buyer agrees that
upon, and as a condition to, curing of any default following preparation of
Seller's notice with respect to default, Buyer shall pay or reimburse Seller for
all reasonable costs and expenses, including attorney's fees incurred in
connection with such default, termination of this Contract of Sale or cure of
such default.
8. Quitclaim Deed.
Buyer shall deposit with the escrow holder a Quitclaim Deed executed
by Buyer in favor of Seller for the Property, to be held by the escrow holder
until such time as this Contract of Sale is paid in full by Buyer. At such time
the escrow holder shall return the Quitclaim Deed to the Buyer. In the event,
however, the buyer breaches this contract by nonpayment or any other material
breach, the escrow holder shall at the direction of the Seller deliver the
Quitclaim Deed to Seller in accordance with Section 6 of this Contract.
9. Grant, Bargain, and Sale Deed.
Seller agrees to deposit with escrow holder a Grant Bargain and Sale
Deed executed by Seller to Buyer. It shall be recorded as soon as Seller has
received the payments as herein provided to be made by Seller. Escrow holder is
instructed that in the event of default by Buyer, that said deed shall be
returned to Seller upon demand.
10. Acceleration/Due on Sale.
In the event Buyer shall sell, transfer or convey, or contract to
sell, transfer or convey, the Property, or any portion
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thereof, or any interest therein, then, at the option of Seller, the then unpaid
balance of this Contract of Sale shall forthwith become due and payable although
the time of maturity otherwise expressed shall not have arrived. Consent to one
such transaction shall not be deemed to be a waiver of the right to require
consent to future or successive transactions
11. Prepayment.
Buyer reserves the right to prepay this Contract of Sale at any time.
12. Miscellaneous.
12.1. Attorney's Fees. Should any litigation be commenced between the
parties hereto concerning the Property, this Contract, or the rights and duties
of either in relation thereto, the party, Buyer or Seller, prevailing in such
litigation shall be entitled, in addition to such other relief as may be
granted, to a reasonable sum as and for his attorney's fees in such litigation
which shall be determined by the court in such litigation or in a separate
action brought for that purpose.
12.2. Entire Agreement. This instrument contains the entire agreement
between Buyer and Seller respecting the Property, and any other agreement or
representation respecting the Property or the duties of either Buyer or Seller
in relation thereto not expressly set forth in this instrument is null and void.
12.3. Notices. Unless otherwise provided herein, any notice, tender,
or delivery to be given hereunder by either party to the other may be effected
by personal delivery in writing or by registered or certified mail. Mailed
notices shall be addressed as set forth below, but each party may change its
address by written notice in accordance with this paragraph. Notices shall be
addressed as follows:
If to Seller:
Xx. Xxxx X. Xxxxx
X.X. Xxxxx & Associates, Inc.
000 Xxxxxxxx Xxxx.
Xxxxxx, XX 00000
If to Buyer:
Xx. Xxxxx Xxxxxxx
Newgold, Inc.
X.X. Xxx 000
Xxxxxxxxxx, XX 00000
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12.4. Binding Effect This Agreement shall bind and inure to the
benefit of the respective successors and assigns of the parties.
12.5. Choice of Law. This Contract of Sale shall be governed by the
laws of the State of Nevada.
12.6. Time of Essence. Time is of the Essence for purposes of this
Agreement.
12.7. Additional Documents. Buyer and Seller agree to execute such
additional documents, including escrow instructions , as may be reasonably
required by the escrow holder to carry out the terms of this Contract.
12.8. Corporate Authority. The undersigned president of Seller
represents that Seller corporation has taken all action necessary to authorize
the execution and performance of this agreement.
Execution IN WITNESS WHEREOF, the parties hereto have executed this
Option Agreement the day and year first above written.
SELLER:
X. X. XXXXX & ASSOCIATES, INC.
By /S/ XXXX X XXXXX 1/10/95
------------------------
XXXX X. XXXXX, President
BUYER:
NEWGOLD, INC.
By /S/ XXXXX XXXXXXX 1/10/95
XXXXX XXXXXXX, President
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EXHIBIT "A"
A. The following described unpatented lode mining claims situated in Section
18, Township 27 North, Range 34 East, MDB&M, Pershing County Nevada:
Assessor's Parcel No. 00-000-00
NAME OF CLAIM ROLL PAGE BLM NMC
------------- ---- ---- -------
L 1 152 220 266846
L 2 152 222 266847
L 3 152 224 266848
L 4 152 226 266849
L 5 152 228 266850
L 6 152 230 266851
L 7 152 232 266852
L 8 152 234 266853
L 9 152 236 266854
L 10 152 238 266855
L 11 152 240 266856
L 12 152 242 266857
L 13 152 244 266858
L 14 152 246 266859
L 15 152 248 266860
L 16 152 250 266861
L 17 152 252 266862
L 18 152 254 266863
L 25 152 268 266870
L 27 152 272 266872
L 29 152 276 266874
L 31 152 280 266876
B. Those certain unpatented lode mining claims situate in Section 16, Township
27 North, Range 34 East, MDB&M, Pershing County, Nevada:
Assessor's Parcel No. 00-000-00
NAME OF CLAIM ROLL PAGE BLM NMC
------------- ---- ---- -------
R 1 141 444 260031
R 2 141 445 260032
R 3 141 446 260033
R 4 141 447 260034
R 5 141 448 260035
R 6 141 449 260036
R 8 141 451 260038
C. Those certain unpatented lode mining claims situate in Section 20, Township
27 North, Range 34 East, MDB&M, Pershing County, Nevada.
Assessor's Parcel No. 00-000-000
NAME OF CLAIM ROLL PAGE BLM NMC
------------- ---- ---- -------
PEG #1 194 543 415010
PEG #2 194 544 415011
PEG #3 194 567 415012
PEG #4 194 545 415013
R 17 141 460 260047
R 19 141 462 260049
R 21 141 464 260051
R 23 141 466 260053
R 25 141 468 260055
RF 7 141 478 260065
APPURTENANT RIGHTS
I. Improvements
All buildings, fixtures, xxxxx pads and other facilities and
improvements now on the unpatented mining claims described in Exhibit
"A" to the Agreement not previously transferred to X.X. Xxxxx &
Associates, Inc. pursuant to the Reclamation Contract.
II. Water Rights
The water and water rights owned by Sellers under State of Nevada
Appropriation Number 47334.
III. Permits
All permits and approvals held by Sellers with respect to operations
at the Relief Canyon Mine, including all surface disturbance permits,
air quality permits, state mining facilities permits, BLM plans of
operation, water discharge permits, industrial pond permits, dam
safety, reclamation permits or other similar permits or approvals or
applications-for such permits or approvals related to operations at
the mine.
EXHIBIT B
Relief Canyon Inventory
Installed Pumps
Pump - Allis Chalmers
Serial No. 841-5160-302-1
Motor - U.S. Electric 60 HP
Serial No. R 6308-06-605-S
Pump - Allis Chalmers
Serial No. 841-5160-502-2
Motor - U.S. Electric 60 HP
Serial No. R 6302-05-624-S
Pump - Allis Chalmers
Serial No. 00-00-000-000
Motor - Toshiba 15 HP
Serial No. B0154FLF2U2H
Pump - Allis Chalmers
Serial No. P3821-2
Motor - Dayton 10 HP
Serial No. RB215TTFS8032APL
Pump - Allis Chalmers
Serial No.52288
Motor - Baldor 7.5 HP
Serial No. M3769T
Pump - Allis Chalmers
Serial No. P3346-3 A480L25 1CE
Motor - General Electric 5 HP
Serial No. 26BC02XP
Pump - Xxxxxxxxx
Serial No.133088 7.75
Motor - Baldar 5 HP
Serial No. JPM3615T
Relief Canyon Inventory
Installed Pumps (cont'd)
Pump - Xxxxxx Pump
Serial No. F841 11 82
Motor - Teco 3 HP
Serial No. Unknown
Pump - Allis Chalmers
Serial No. P3310-CL80
Motor - U.S. Electric 1.5 HP
Serial No. FA883-00-965 K137R018
Pump - Allis Chalmers
Serial No.841-51603-07-1
Motor - Kingmotor 1 HP
Serial No.13206350505
Pump - Allis Chalmers
Serial No.641-51603-04-1
Motor - U.S. Electric 1 HP
Serial No. F-A876-00-974-K157R05
Pump - U.S. Electric .75 HP (Jet)
Serial No. P55BGT-606
Pumps - 2 Submersible
Extra Motors
U.S. Electric 60 HP
Serial No. 6301/P03N364R0-3GR
American Standard 1.5 HP
Serial No. TH41451F2
Dayton .75 HP
Serial No. 46606372543-2A
Marathon Electric 3 HP
Serial No. RVK 184TTCF7358 ANL
Xxxxxx Electric
Serial No. 214116 AA
Reliance Electric
Serial No. 079383-20-T
Relief Canyon Inventory
Tanks
Alaskan Copper Brass Co.
8 ft x 24 ft.
Stainless Steel
Serial No. Unknown
Manufacture - Unknown
8ft x 8ft
Steel
Serial No. Unknown
Fiber-Dyne Corp
12 ft. x 12 ft
Fiberglass
Serial No. J2046
Poly Cal Plastics Corp.
100 gal.
Serial No. Unknown
Manufacture - Unknown
300 gal.
Plastic
Serial No. Unknown
Mix Tank
300gal.
Mixer Serial No. Unknown
Motor - Westinghouse 2 HP
Serial No. 78-5B752
Tank
16 ft x 16 ft-
Steel
Serial No. Unknown
Equipment
5 7' x 7' Carbon Absorption Columns
2 Tyler Vibrating Screens
Serial No.55-832 and 55-833
Relief Canyon Inventory
Equipment (cont'd.)
2 - Dewatering Screens
Manufacture - Unknown
Serial No. Unknown
Lighting Mixer 1.5 HP
Mixer Serial No.841217103
Motor Serial No. 5KS182FL233AP
Air Compressor
Receiver Tank
Serial No. TF 129267
Motor - Dayton 5 HP
Serial No. F346 09-E84K09 00014
Boiler- Xxxxxx Boiler
Serial No.35115
Water Softener
Manufacture - Water Refining
Serial No. Unknown
Bag House
Ultra-Kleen Corp.
Serial No. BV-36-100
Over-Head heaters
Reznor Co.
Serial No. Unknown
Roll Crusher
Xxxxxxx Corp.
Serial No. K7545
Motor - Dayton 5 HP
Serial No. R92102M831
Water Softening Equipment - Complete
Relief Canyon Inventory
Equipment (cont'd.)
Jaw Crusher
Xxxxx Brothers, Inc.
Serial No. J04-564
Motor - Baldar 2 HP
Serial No. WM 3558T
Pressure Vessels
Talman Steel Corp.
Serial No. A-5931
Xxxxxxx Engineering
Serial No. Unknown
Manufacture - Unknown
Serial No. 200-3311
XxXxxx Xxxxxx
Serial No. 85266
Electrical Equipment
Sierra Transformer
Serial No. 500TUL22GE
Toshhiba/Houston Control Panel
Serial Xx. Xxxxxxx
Xxxxxxxxxxxx Xxxxxxxxxxx
Xxxxxx Xx. X00X00000
2 - Transformer Winding Sets
Serial No. M8NL16
Acme Electric Corp. Transformer
Serial No. T-1-53312-3
Asco Delta Pump Control
Serial No. Unknown
Selectric Electric Pump Control
Serial No. Unknown
Relief Canyon Inventory
Buildings
Xxxxxx - Steel
40 ft- x 60 ft. x 12 f:. hgt. (Disassembled)
Xxxxxx - Steel/Cinder Block
60 ft. x 90 ft. x 30 ft. hgt
Fully equipped with electrical, water, heating,
ventilation, and Sewage Systems
2 - Wood/Frame Construction
10 ft. x 20 ft.
Single Pitch Roof
2 - Wood/Frame Construction
8 ft. x 10 ft.
Fencing
1920 ft. of chain link with posts, top-rail, and
fittings 4 miles of 5 strand barbed wire and posts
Pipe
2,260 ft. of 6" Yellomine
13,380 ft. of 2" Yellomine
6,480 of 10" HDPE
7,700 ft. of 6" HDPE
3,400 ft of 2" HDPE
1,000 ft. of 10" Steel
500 ft. of 6" Flex Plastic
200 ft- of 2" Rubber/Quick Couplers
Vehicles 1989 Ford F250 VIN FTEF26N1KPB42497
