Exhibit 10.2
LEASE PURCHASE AGREEMENT
This Lease Purchase Agreement ("Agreement") dated effective June 1, 2009 is made
and entered into by and between Lithium Corp, (a Nevada corporation), ("Buyer")
and an association of mining claimants: Nevada Mining Co., Inc., (a Nevada
Corporation), Robert Craig, Barbara Craig and Elizabeth Dickman (formerly
Elizabeth Craig), (collectively, the "Seller").
This agreement is a lease agreement until final disbursement of stock and
transfer of quitclaim deed from Seller to Buyer.
RECITALS:
A. Seller owns the FL Claim Group, 80 unpatented association placer claims,
situated in T1N and T1S, R36E, MDB&M, Esmeralda County, Nevada, BLM NMC No.
1006701 through 1006780, respectively, see attached Schedule A.
B. Buyer desires to lease and purchase from Seller and Seller desires to lease
and sell to Buyer all of Seller's right, title and interest in and to the
unpatented mining claims subject to this Agreement on the terms and conditions
described below.
Now, therefore, in consideration of their mutual covenants and promises, and
other good and valuable consideration, the receipt and sufficiency of which are
acknowledged, the parties agree as follows:
1. DEFINITIONS.
1.1 "Agreement" means this Lease Purchase Agreement, including all amendments
and modifications, and all schedules and exhibits (each individually an
"Exhibit" and collectively the "Exhibits") attached to and by this reference
incorporated in this Agreement.
1.2 "Buyer" means Lithium Corp, a Nevada corporation, and its successors and/or
assigns.
1.3 "Closing" means the delivery of documents and other items to be delivered by
the parties, the exchange of final consideration, and the consummation of the
transactions contemplated under this Agreement.
1.4 "Closing Date" means the date on which the Closing shall occur. Closing is
defined by the final disbursement of stock to the Seller (individual claimant's
brokerage accounts).
1.5 "Property" means collectively the unpatented mining claims listed in
Schedule A and described as the 80 unpatented association placer mining claims,
the FL Claim Group, situated in Esmeralda County, Nevada, BLM NMC No. 1006701
though 1006780 respectively, and all amendments and relocations of the
unpatented mining claims, and all of Seller's right, title and interest in and
to any assay results, chip trays, core, data, digital data, drill cuttings,
information, imagery, maps, pulps, reports and samples acquired, created,
developed or possessed by Seller concerning the foregoing described unpatented
mining claims.
Any claims located by Buyer or Seller, over or contiguous to the FL Claim Group,
become subject to this agreement.
1.6 "Seller" means an association of mining claimants: Nevada Mining Co., Inc.,
(a Nevada Corporation), Robert Craig, Barbara Craig and Elizabeth Dickman
(formerly Elizabeth Craig); their successors and/or assigns.
1.7 "$" means United States dollars.
1.8 "Stock" means fully paid and non-assessable restricted common shares in the
capital of the Buyer or it's nominee or successor entity, issued pursuant to
exemptions from registration and prospectus requirements contained in the United
States Securities Act of 1933 and the rules and regulations promulgated
thereunder, which shares shall contain such restrictive legends regarding
applicable hold periods as required by such securities laws.
2. PURCHASE, SALE AND WORK COMMITMENT.
2.1 SALE OF PROPERTY. Subject to all the terms and conditions of this Agreement
and for the consideration described in this Agreement, Seller agrees to sell to
Buyer and Buyer agrees to buy the Property.
2.2 PURCHASE PRICE. The total lease purchase price for the Property shall be
Three Hundred Fifty Thousand Dollars ($350,000.00) worth of Stock. Title will be
transferred by quit claim deed from Seller to Buyer, when Buyer has made final
Stock disbursement.
Stock disbursements will be made quarterly to Seller, 8 disbursements of stock,
$43,750 in stock per disbursement. Buyer will be required to make the 1st stock
disbursement within 10 days of the date this agreement is executed, and within
10 days after the end of each quarter: March 31, June 30, September 30 and
December 31: All disbursements are construed as lease payment; the final is the
purchase payment.
1st Disbursement: Within 10 days after execution of this Lease Purchase
Agreement
2nd Disbursement: June 30, 2009 (or within 10 days)
3rd Disbursement: December 31, 2009 (or within 10 days)
4th Disbursement: March 31, 2010 (or within 10 days)
5th Disbursement: June 30, 2010 (or within 10 days)
6th Disbursement: September 30, 2010 (or within 10 days)
7th Disbursement: December 30, 2010 (or within 10 days)
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8th Disbursement: March 31, 2011 (or within 10 days)
2.3 STOCK VALUATION. The value of the stock will be determined by averaging the
closing price of the stock on the OTC Bulletin Board for the preceding 5 OTC
business days before the end of the quarter. The first disbursement, on written
consent of Seller, may be a negotiated value if stock has not traded.
2.4 STOCK DISBURSEMENT. The Buyer will issue the Stock pro rata to each Seller
of the Seller's association of claimants ($10,937.50):
Nevada Alaska Mining Co., Inc.
Robert Craig
Barbara Anne Craig
Elizabeth Dickman
The Seller each represents that they are currently, and prior to any Stock
issuances shall be, an "accredited" investor as that term is defined in Rule 501
of Regulation D promulgated under the United States Securities Act of 1933, as
amended, and acknowledges and agrees that the Stock will be issued in accordance
with all applicable securities laws and will be subject to hold periods and
restrictions on resale in accordance with applicable securities laws and it is
the Seller's responsibility to determine what those hold periods and
restrictions are before selling or otherwise transferring any Stock.
2.5 WORK COMMITMENT. Buyer will expend $250,000 on the property over the life of
the lease, and Buyer will all pay claim fees which count toward work commitment
expenditure. All new data and information obtained by buyer will be transmitted
bi-annually to Seller.
3. CLOSING.
3.1 CLOSING DATE. The close of this Agreement shall be on or before April 10,
2011, or such other extended date as the parties agree. Buyer, at its election,
exercisable in its sole and exclusive discretion, may accelerate the Closing by
delivering notice and disbursing stock totaling $350,000 to Seller (individual
claimants).
3.2 CLOSING COSTS. Buyer shall pay all expenses, including recording fees and
real property transfer taxes for the recording of the instruments necessary to
convey title to Buyer under this Agreement.
3.3 DELIVERY BY SELLER TO BUYER. On Closing, Seller shall execute and deliver to
Buyer a quitclaim deed conveying title to the Property, a declaration of value
and an affidavit that Seller is not a foreign person. Seller shall also deliver
to Buyer all of the data, information, and samples possessed by Seller
concerning or relating to the Property.
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3.4 BUYER'S DELIVERY TO SELLER. On Closing, Buyer shall deliver to Seller the
the final stock disbursement of not less than $43,750.00.
4. SELLER'S COVENANTS, REPRESENTATIONS AND WARRANTIES. Seller represents and
warrants to and in favor of Buyer as of the Effective Date to the Closing Date
as follows:
4.1 AUTHORITY. Seller has full power, legal right and authority to enter into
this Agreement and the instruments which it is obligated to execute and deliver
in accordance with the terms of this Agreement and to do all such acts and
things as are required to be done, observed or performed by Seller in accordance
with this Agreement.
4.2 VALID AUTHORIZATION OF THIS AGREEMENT. Seller has taken all necessary action
to authorize the execution, delivery and performance of this Agreement and the
instruments which it is obligated to execute and deliver in accordance with this
Agreement and to observe and perform the provisions of this Agreement and any
such instrument to which it is a party in accordance with its terms. This
Agreement and each instrument executed and delivered by Seller constitutes a
valid and legally binding obligation of Seller and, when executed and delivered,
of the instruments which Seller is obligated to execute and deliver in
accordance with this Agreement will constitute valid and legally binding
obligations of Seller, enforceable against it in accordance with their
respective terms, except to the extent that the enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws or events relating to or affecting creditors' rights generally
4.3 VALIDITY OF AGREEMENT AND NON-CONFLICT. Except as described in this Section,
none of the authorization, creation, execution, delivery of this Agreement or
any of the instruments which Seller is obligated to execute and deliver in
accordance with this Agreement requires Seller to obtain any approval or consent
of any governmental agency or authority having jurisdiction of Seller, nor is it
in conflict with or contravention of, as applicable, the provisions of any
material indenture, instrument, agreement or undertaking to which Seller is a
party or by which it or any of its respective properties or assets are bound,
including, without limitation, the Property.
4.4 TITLE. Seller represents and warrants that: (a) to the best of Sellers
knowledge the Property and mining claims were properly located in accordance
with applicable laws and regulations but Seller gives no express or implied
warranty as to title; (b) to the best of Sellers knowledge all assessment work
requirements for the mining claim have been performed and all Federal mining
claim rental and maintenance fees have been paid and all filings and recordings
of proof of performance and payment have been made properly and timely; (c) to
the best of Sellers knowledge the mining claims are in good standing; (d) to the
best of Sellers knowledge Seller has good title to and owns the entire undivided
legal and equitable interest in the mining claims, subject to the paramount
title of the United States; (e) to the best of Sellers knowledge title to the
Property and mining claims is free and clear of all liens, claims and
encumbrances. (f) Seller makes no representation or warranty concerning the
discovery or presence of valuable minerals on the unpatented mining claims which
comprise all or a portion of the Property. (g) A portion of the claims overlie
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geothermal leases. On March 1, 2009 Coast Mountain Geological, Ltd, a subsidiary
of TNR Gold, located claims over several claims formerly held by Seller. On or
about June 15, 2009, Randy Henkel, agent or consultant for First Lithium Corp.,
located several claims over the north end the FL claim group; on June 25th Mr.
Henkel verbally stated they would not record their claims. (h) Association
placer claims can potentially be challenged on the theory of the use of "dummy
locators" and other issues (association placer claims require a discovery on
each 20 acre aliquot part to be legally transferred to a single entity). (i)
Robert and Barbara Craig are husband and wife, Elizabeth Dickman (formerly
Elizabeth Craig) is their daughter. Elizabeth Dickman is 19 years old. All 3
individuals own stock in Nevada Alaska Mining Co., Inc.; Robert Craig is an
officer and director in Nevada Alaska Mining Co., Inc. (j) Seller represents
there is no underlying agreements, written or verbal, between claimants to
create dummy or fictitious locators for the benefit of any other claimant.
4.5 SELLER NOT A FOREIGN PERSON. Seller is not a "foreign person" as defined
under Section 1445(f) of the Internal Revenue Code of 1954, as amended.
4.6 PATRIOT ACT. Seller is not on the Specially Designated National & Blocked
Persons List of the Office of Foreign Assets Control of the United States
Treasury Department and is not otherwise blocked or banned by any foreign assets
office rule or any other law or regulation, including the USA Patriot Act or
Executive Order 13224.
5. BUYER'S COVENANTS, REPRESENTATIONS AND WARRANTIES. To induce Seller to enter
this Agreement, Buyer represents and warrants to and in favor of Seller as of
the Effective Date and as of the Closing Date, and covenants, as follows:
5.1 AUTHORITY. Buyer has full power, legal right and authority to enter into
this Agreement and the instruments which it is obligated to execute and deliver
in accordance with the terms of this Agreement and to do all such acts and
things as are required to be done, observed or performed by Buyer in accordance
with this Agreement.
5.2 VALID AUTHORIZATION OF THIS AGREEMENT. Buyer has taken all necessary action
to authorize the execution, delivery and performance of this Agreement and the
instruments which it is obligated to execute and deliver in accordance with this
Agreement and to observe and perform the provisions of this Agreement and any
such instrument to which it is a party in accordance with its terms.
5.3 TITLE. Buyer represents and warrants that: (a) Buyer has done due diligence
on title and value of the property, including a review of all documents and laws
concerning the claims, and Buyer represents they are a sophisticated acquirer of
mining properties. (b) Buyer agrees to defend and hold harmless Seller in
defense of all title actions or lawsuits by third parties including governmental
agencies against the FL Claim Group and/or Seller.
5.4 PATRIOT ACT. Buyer is not on the Specially Designated National & Blocked
Persons List of the Office of Foreign Assets Control of the United States
Treasury Department and is not otherwise blocked or banned by any foreign assets
office rule or any other law or regulation, including the USA Patriot Act or
Executive Order 13224.
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5.5 INSURANCE COVERAGE. Until closing, during operations Buyer will maintain
general liability insurance in the amount of no less than $500,000 per
occurrence and supply proof thereof. Contractors will be required to name
Sellers as additional insured on their policies for work on the property and
supply proof thereof. Failure to provide insurance under this clause will be
considered a material breach of contract.
6. NOTICES. Any notices required or authorized to be given by this Agreement
shall be in written form. Any notices required or authorized to be given by this
Agreement may be sent by registered or certified delivery, postage prepaid and
return receipt requested, addressed to the proper party at the following address
or such address as the party shall have designated to the other parties in
accordance with this paragraph. Any notice required or authorized to be given by
this Agreement shall be deemed to have been sufficiently given or served in
written form if mailed as provided herein, personally delivered to the proper
party, or sent by telex, telegraph, email or other means of electronic
transmission, and actually received by such party. Such notice shall be
effective on the date of receipt by the addressee party.
If to Seller:
P.O. Box 1148
Lovelock, NV 89419
(Physical address: 865 Franklin Ave, Lovelock, NV 89419)
(email nevadaalaska@sbcglobal.net)
If to Buyer:
9443 Axlund Road,
Lynden, Washington 98264
7. BINDING EFFECT OF OBLIGATIONS. This Agreement shall be binding upon and inure
to the benefit of the respective parties, and their personal representatives,
successors and/or assigns.
8. WHOLE AGREEMENT. The parties agree that the whole agreement between them is
written in this Agreement There are no terms or conditions, express or implied,
other than in this Agreement. This Agreement may be amended or modified only by
an instrument in writing, signed by the parties with the same formality as this
Agreement.
9. GOVERNING LAW. This Agreement shall be construed and enforced in accordance
with the laws of the State of Nevada.
10. MULTIPLE COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute the same Agreement.
11. SEVERABILITY. If any part, term or provision of this Agreement is held by
the courts to be illegal or in conflict with any law of the United States or the
State of Nevada, the validity of the remaining portions or provisions shall not
be affected, and the rights and obligations of the parties shall be construed
and enforced as if the Agreement did not contain the particular part, term or
provision held to be invalid.
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12. LEASE TERMINATION. This Lease Purchase Agreement can/will be terminated by:
- -On 60 Day notice to Seller by Buyer of intent to terminate the Lease Purchase
Agreement. If notice is given after August 1st, Buyer will be required to pay
claim rent for assessment year beginning September 1.
- -On 30 day notice by Seller to Buyer for non-transfer of listed stock to the
accounts of the claimants and/or other material breach of contract requirements.
All data and information will be transferred to Seller by Buyer at termination.
13. NON-REFUND. If the lease purchase agreement is terminated under Section 12.
or for any other reason or cause, Seller will not be required to refund any
stock, money, value of work on the property, or other consideration, to the
Buyer. Buyers interest in the property will not vest until final disbursement of
stock to Seller.
The parties have executed this Agreement effective on the date it is executed by
all parties.
Sellers: Date Signed
- ------------------------------- -----------
Nevada Alaska Mining Co., Inc.,
Locator/owner/claimant (By Robert Craig, President)
- ------------------------------- -----------
Robert Craig, Locator/owner/claimant
- ------------------------------- -----------
Barbara Anne Craig, Locator/owner/claimant
- ------------------------------- -----------
Elizabeth Dickman (formerly Elizabeth Craig), Locator/owner/claimant
Buyer:
- ------------------------------- -----------
Lithium Corp. By John Hiner, President
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Schedule A of Lease Purchase Agreement
Lithium Corp/Nevada Alaska et al, unpatented association placer mining claims
located in Esmeralda County, Nevada, June, 2009:
Claim BLM Number
- ----- ----------
FL #1 1006701
FL #2 1006702
FL #3 1006703
FL #4 1006704
FL #5 1006705
FL #6 1006706
FL #7 1006707
FL #8 1006708
FL #9 1006709
FL #12 1006710
FL #13 1006711
FL #14 1006712
FL #15 1006713
FL #16 1006714
FL #17 1006715
FL #18 1006716
FL #19 1006717
FL #21 1006718
Schedule A
Page 2
FL #22 1006719
FL #23 1006720
FL #24 1006721
FL #25 1006722
FL #63 1006723
FL #66 1006724
FL #68 1006725
FL #70 1006726
FL #200 1006727
FL #201 1006728
FL #202 1006729
FL #203 1006730
FL #204 1006731
FL #206 1006732
FL #207 1006733
FL #208 1006734
FL #209 1006735
FL #210 1006736
FL #211 1006737
FL #212 1006738
Schedule A
Page 3
FL #213 1006739
FL #214 1006740
FL #26 1006741
FL #27 1006742
FL #28 1006743
FL #29 1006744
FL #30 1006745
FL #31 1006746
FL #32 1006747
FL #33 1006748
FL #34 1006749
FL #35 1006750
FL #36 1006751
FL #37 1006752
FL #38 1006753
FL #39 1006754
FL #40 1006755
FL #41 1006756
FL #42 1006757
FL #43 1006758
Schedule A
Page 4
FL #44 1006759
FL #45 1006760
FL #47 1006761
FL #46 1006762
FL #48 1006763
FL #50 1006764
FL #51 1006765
FL #53 1006766
FL #79 1006767
FL #80 1006768
FL #83 1006769
FL #54 1006770
FL #55 1006771
FL #60 1006773
FL #61 1006774
FL #62 1006775
FL #64 1006776
FL #105 1006777
FL #107 1006778
FL #113 1006779
Schedule A
Page 5
FL #121 1006780