EXHIBIT 10.01
DEBENTURE PAYOFF AND ROYALTY TERMINATION
AGREEMENT DATED MAY 12, 1997, BETWEEN
ALTA GOLD CO. AND STARTRONIX INTERNATIONAL, INC.
DEBENTURE PAYOFF AND ROYALTY TERMINATION
AGREEMENT
This Debenture Payoff and Royalty Termination
Agreement (this "Agreement") is made and entered
into as of this 12th day of May, 1997, by and
between Alta Gold Co., a Nevada corporation ("Alta
Gold"), and StarTronix International, Inc., a
Delaware corporation ("StarTronix") and the
successor in interest to Gold Express Corporation,
a Washington corporation ("Gold Express").
R E C I T A L S
In connection with the purchase of certain
assets from Gold Express, Alta Gold (i) issued a
zero coupon debenture to Gold Express dated June
14, 1994, in the maturity amount of $4,000,000,
which debenture was subsequently amended and
replaced with a debenture dated June 28, 1996 (the
"Debenture"), a copy of which is attached hereto
as Exhibit A, and (ii) granted a royalty right to
Gold Express pursuant to a certain Provisional
Copper Production Royalty Agreement (the "Royalty
Agreement") dated June 14, 1994, a copy of which
is attached hereto as Exhibit B.
Pursuant to the terms of the Debenture and
the Royalty Agreement, any payment made by Alta
Gold under the Royalty Agreement was to be
credited toward Alta Gold's obligations under the
Debenture.
The parties desire that the Debenture be paid
off and canceled and that the Royalty Agreement be
terminated, under the terms and conditions set
forth herein.
Now, Therefore, for and in consideration of
the premises and mutual covenants, agreements,
understandings, undertakings, representations,
warranties and promises, and subject to the
conditions hereinafter set forth, and intending to
be legally bound thereby, the parties do hereby
covenant and agree that the Recitals set forth
above are true and accurate, and further covenant
and agree as follows:
ARTICLE I
DEBENTURE AND ROYALTY AGREEMENT
1.1 Debenture Payoff
As of the Closing Date (defined below),
the Debenture shall be deemed paid in full and
canceled, and all of the rights and obligations of
Alta Gold and StarTronix under the Debenture shall
terminate.
1.2 Royalty Agreement Terminated
As of the Closing Date, the Royalty
Agreement shall be null and void and of no further
force and effect, and all of the rights and
obligations of Alta Gold and StarTronix under the
Royalty Agreement shall terminate.
1.3 Consideration From Alta Gold
At the Closing (defined below), Alta Gold
shall pay to StarTronix the amount of $750,000
(the "Payment Amount").
ARTICLE II
CLOSING
2.1 Closing Date
The closing (the "Closing") under this
Agreement shall be at the offices of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, 3800 ▇▇▇▇▇▇ ▇▇▇▇▇▇
Parkway, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇,
on May 8, 1997 (the "Closing Date") at 10:00 a.m.
2.2 Alta Gold's Closing Documents
At the Closing, Alta Gold shall deliver to
StarTronix (i) the Payment Amount, and (ii) a
certificate of the corporate secretary of Alta
Gold as to the incumbency of the officer executing
this Agreement on behalf of Alta Gold.
2.3 StarTronix's Closing Documents
At the Closing, StarTronix shall deliver to
Alta Gold (i) the Debenture, marked "Paid in Full"
across the face of the Debenture and signed by
StarTronix, (ii) a certified copy of the
resolutions of the board of directors of
StarTronix authorizing the execution and delivery
of this Agreement and the performance by
StarTronix of its obligations hereunder, and (iii)
a certificate of the corporate secretary of
StarTronix as to the incumbency of the officers
executing this Agreement on behalf of StarTronix.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ALTA GOLD
Alta Gold hereby makes the following
representations and warranties to StarTronix, and
Alta Gold warrants that the following are true and
accurate on the Closing Date:
3.1 Authority
Alta Gold has the full right, power, legal
capacity and authority to enter into, and perform
its obligations under this Agreement.
3.2 Binding Nature of Agreement
This Agreement constitutes the valid and
binding obligation of Alta Gold, enforceable
against Alta Gold in accordance with its terms.
3.3 No Violation
Neither the execution and delivery of this
Agreement, the consummation of the transactions
contemplated hereby, nor the fulfillment of the
terms hereof by Alta Gold will conflict with, or
result in a breach of or default under, any of the
terms or provisions of (i) any agreement, note,
indenture, mortgage, deed of trust, instrument,
lease or franchise to which Alta Gold is a party
or by which it or any of its assets or properties
is bound, or (ii) any law, judgment, order,
arbitration award, rule, regulation, ordinance,
writ, injunction or decree of any governmental
agency or instrumentality or court applicable to
or having jurisdiction over Alta Gold or any of
its assets or properties.
3.4 Valid Corporate Organization and Good
Standing
Alta Gold is a corporation duly organized,
validly existing and in good standing under the
laws of the State of Nevada, and has the corporate
power and authority necessary and appropriate to
own its properties and to engage in the business
in which it is presently engaged.
3.5 Legal Representation
Alta Gold acknowledges the receipt of the
advice of independent legal counsel prior to the
execution of this Agreement; that the legal nature
and effect of this Agreement has been fully
explained to it by counsel; and that Alta Gold
fully understands the terms and provisions of this
Agreement and its nature and effect. Alta Gold
further represents that it is relying solely on
the advice of its own counsel in executing this
Agreement and has not relied on the representation
of any other party, except as expressly set forth
herein, or of the counsel for any other party.
Alta Gold further represents that this Agreement,
and the terms hereof, were arrived at after
negotiations between the parties, and each
provision hereof shall be construed as having been
drafted by each and both of the parties hereto.
3.6 No Representations Untrue
No representation made by Alta Gold in this
Agreement contains any untrue statement of a
material fact or omits to state any material fact
known to Alta Gold necessary to make any
statement, warranty or representation not
misleading to StarTronix. Except as set forth in
this Agreement, Alta Gold does not make any
representations or warranties to StarTronix.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF STARTRONIX
StarTronix hereby makes the following
representations and warranties to Alta Gold, and
StarTronix warrants that the following are true
and accurate on the Closing Date:
4.1 Holder of Debenture
StarTronix is the sole and complete successor
in interest to Gold Express and, in such capacity
owns and holds all of the rights and has all of
the obligations of Gold Express under the
Debenture and the Royalty Agreement, free and
clear of all liens, encumbrances, security
agreements, assignments, charges, restrictions or
any other claims of any type, kind or nature
whatsoever.
4.2 No Liens
StarTronix has not caused any lien,
encumbrance, security agreement, charge,
restriction, or any other claim of any type, kind
or nature whatsoever, to be recorded or filed
against any of the property or assets of Alta
Gold, including, without limitation, the Copper
Flat project in Sierra County, New Mexico.
4.3 Authority
StarTronix has the full right, power, legal
capacity and authority to enter into, deliver and
perform its obligations under this Agreement,
including the termination of the Debenture and the
Royalty Agreement.
4.4 Binding Nature of Agreement
This Agreement constitutes the valid and
binding obligation of StarTronix, enforceable
against StarTronix, and as applicable, against
Gold Express, in accordance with its terms.
4.5 No Violation
Neither the execution and delivery of this
Agreement, the consummation of the transactions
contemplated hereby, nor the fulfillment of the
terms hereof by StarTronix will conflict with, or
result in a breach of or default under, any of the
terms or provisions of (i) the articles of
incorporation or bylaws of StarTronix or any
agreement, license, note, indenture, mortgage,
deed of trust, instrument, lease or franchise to
which StarTronix is a party or by which it or any
of its assets or properties is bound, or (ii) any
law, judgment, order, arbitration award, rule,
regulation, ordinance, writ, injunction or decree
of any governmental agency or instrumentality or
court applicable to or having jurisdiction over
StarTronix or any of its assets or properties.
4.6 Valid Corporate Organization and Good
Standing
StarTronix is a corporation duly organized,
validly existing and in good standing under the
laws of the State of Delaware, and has the
corporate power and authority necessary and
appropriate to own its properties and to engage in
the business in which it is presently engaged.
4.7 Approval
No authorization, approval or consent of any
court, governmental body, regulatory agency, self-
egulatory organization or stock exchange or
market, or the stockholders of StarTronix, or any
third party, is required to be obtained by
StarTronix, for the execution and delivery of this
Agreement and the transactions as contemplated by
this Agreement.
4.8 Legal Representation
StarTronix acknowledges the receipt of the
advice of independent legal counsel prior to the
execution of this Agreement; that the legal nature
and effect of this Agreement has been fully
explained to it by counsel; and that each party
fully understands the terms and provisions of this
Agreement and its nature and effect. StarTronix
further represents that it is relying solely on
the advice of its own counsel in executing this
Agreement and has not relied on the representation
of any other party, except as expressly set forth
herein, or of the counsel for any other party.
StarTronix further represents that this Agreement,
and the terms hereof, were arrived at after
negotiations between the parties, and each
provision hereof shall be construed as having been
drafted by each and both of the parties hereto.
4.9 Fair Value
The Payment Amount represents a fair present
sale value of the Debenture and the Royalty
Agreement based on the relevant risks, the long-
term nature of the Debenture and the unsuccessful
efforts of StarTronix to secure better terms from
other potential purchasers of the Debenture and
the Royalty Agreement.
4.10 No Representations Untrue
No representation made by StarTronix in this
Agreement contains any untrue statement of a
material fact or omits to state any material fact
known to StarTronix necessary to make any
statement, warranty or representation not
misleading to Alta Gold. StarTronix knows of no
material facts or conditions adversely affecting
the Debenture or the Royalty Agreement which have
not been disclosed to Alta Gold. Except as set
forth in this Agreement, StarTronix does not make
any representations or warranties to Alta Gold.
ARTICLE V
RELEASE AND INDEMNIFICATION
5.1 Release
StarTronix, on behalf of itself, its agents,
successors, predecessors, assigns and all
affiliated or related persons or entities, both
past and present, hereby waives, discharges and
releases Alta Gold, it agents, successors,
predecessors, assigns and all affiliated or
related persons or entities, both past and
present, from any and all liabilities, debts,
demands, contracts, promises, agreements, claims,
causes of action, injuries, costs, attorneys'
fees, or damages of any kind or character, both
known and unknown, which may now exist or later be
discovered, arising from related to, or connected
with any and all disputes and relationships
between the parties including, without limitation,
all claims directly or indirectly related to or
arising out of (i) the Debenture and the Royalty
Agreement, and (ii) any lien, encumbrance,
security agreement, assignment, charge,
restriction or any other claim caused to be
recorded or filed by StarTronix against any
property or assets of Alta Gold.
5.2 Indemnification
StarTronix shall indemnify, defend and hold
harmless Alta Gold against any and all claims,
demands, losses, expenses, costs, obligations,
defenses and liabilities, including interest,
penalties, and reasonable attorneys' fees, that
Alta Gold may incur by reason of (i) any breach
of, or failure by StarTronix to perform, any of
its obligations, covenants, or agreements in this
Agreement, (ii) any inaccuracy in the
representations and warranties of StarTronix in
Article IV of this Agreement, (iii) the failure of
StarTronix to release fully and effectively Alta
Gold from its obligations under the Debenture and
the Royalty Agreement, and (iv) the failure of
StarTronix to release any lien, encumbrance,
security agreement, charge, restriction or other
claim on the property or assets of Alta Gold.
ARTICLE VI
COSTS
StarTronix and Alta Gold shall each pay all
costs and expenses incurred or to be incurred by
each of them respectively in negotiating and
preparing this Agreement and in taking whatever
actions may be necessary or appropriate to
consummate the transactions contemplated by this
Agreement, including the costs of obtaining any
consents or approvals.
ARTICLE VII
MISCELLANEOUS
7.1 Further Acts
StarTronix, at any time before or after the
Closing, will execute, acknowledge, and deliver
any assignments, releases, conveyances, and other
assurances, documents, and instruments of
transfer, reasonably requested by Alta Gold, and
will take any other action consistent with the
terms of this Agreement that may reasonably be
requested by Alta Gold. If requested by Alta
Gold, StarTronix further agrees to prosecute or
otherwise enforce in its own name for the benefit
of Alta Gold any claims, rights or other benefits
that are transferred to Alta Gold under this
Agreement and that require prosecution or
enforcement in StarTronix's name. In the event
that StarTronix does not execute, acknowledge or
deliver any such instruments of transfer or
otherwise fails to perform in accordance with this
Section 7.1 within two business days following the
receipt of notice, StarTronix hereby grants to
Alta Gold an irrevocable power of attorney,
coupled with an interest, to sign, execute,
acknowledge, deliver, release any and all
instruments or documents necessary to release Alta
Gold from any liens, claims or encumbrances
against the property or assets of Alta Gold
pursuant to this Agreement, or to otherwise
perform the obligations of StarTronix under this
Agreement.
7.2 Captions
The subject headings or captions of the
sections and subsections of this Agreement are
included only for purposes of convenience and
shall not affect the construction or
interpretation of any provisions contained herein.
7.3 Entire Agreement
This Agreement (together with all exhibits,
documents, agreements and instruments executed or
furnished in connection herewith) constitutes the
entire agreement between the parties pertaining to
the subject matter hereof, and supersedes any and
all prior or contemporaneous written or oral
negotiations, agreements, representations, and
understandings of the parties with respect to such
subject matter.
7.4 Expenses
If any legal action or any arbitration or
other proceeding is brought for the enforcement of
this Agreement, or because of an alleged dispute,
breach, default, or misrepresentation in
connection with any of the provisions of this
Agreement, the successful or prevailing party or
parties shall be entitled to recover reasonable
attorneys' fees and other costs incurred in that
action or proceeding, in addition to any other
relief to which it or they may be entitled.
7.5 Notice
Any and all notices required under this
Agreement shall be in writing and shall be either
(i) hand-delivered, (ii) mailed, first-class
postage prepaid, certified mail, return receipt
requested, or (iii) delivered via a nationally
recognized overnight courier service, addressed
to:
Alta Gold: Alta Gold Co.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
StarTronix: StarTronix International, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
All notices hand-delivered or delivered via
overnight courier shall be deemed delivered as of
the date actually delivered. All notices mailed
shall be deemed delivered as of three business
days after the date postmarked. Any changes in
any of the addresses listed herein shall be made
by notice as provided in this Section 7.5.
7.6 Modification, Amendment or Waiver
This Agreement may not be amended,
supplemented or otherwise modified, and none of
its terms may be waived, unless such amendment,
supplement, modification or waiver is in writing
and executed by the party or parties to be bound
thereby. The failure of any party at any time or
times to require performance of any provision
hereof shall not affect the right of such party at
a later time to enforce the same, and no waiver of
any term or provision hereof on any one occasion
shall be deemed to be a waiver of the same or any
other provision hereof at any subsequent time or
times.
7.7 Binding Effect; Assignment
This Agreement shall be binding upon, and
shall enure to the benefit of and be enforceable
by, the parties hereto, and their respective
heirs, successors, assigns and legal
representatives; provided, however, that no
assignment of any rights or delegation of any
obligations provided for herein may be made by
either party to this Agreement without the prior
written consent of the other party.
7.8 Construction
This Agreement shall be construed in
accordance with its intent and without regard to
any presumption or any other rule requiring
construction against the party causing the same to
be drafted.
7.9 Governing Law
The laws of the State of Nevada shall govern
the validity, performance and enforcement of this
Agreement and the courts of Nevada shall have the
sole and exclusive jurisdiction over any matter
brought under or by reason of this Agreement.
7.10 Counterparts
This Agreement may be executed in
counterparts, each of which shall be deemed an
original and all of which taken together shall
constitute the same instrument.
7.11 No Third Parties Benefited
This Agreement is made and entered into for
the sole protection and benefit of Alta Gold and
StarTronix, their successors and assigns, and no
other person or persons shall have any right of
action hereon.
7.12 Severability
If any provision of this Agreement, or any
portion of any provision, shall be deemed invalid
or unenforceable for any reason whatsoever, such
invalidity or unenforceability shall not affect
the enforceability and validity of the remaining
provisions hereof.
7.13 Time of the Essence
At all times stated herein, time shall be of
the essence.
In Witness Whereof, the parties hereto have
duly executed this Agreement on the date first set
forth above.
"Alta Gold"
Alta Gold Co., a Nevada corporation
By
--------------------
: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President and Chief Executive Officer
"StarTronix"
StarTronix International, Inc., a Delaware
corporation
By
--------------------
:
Its: