PUBC 8-K
Purebase Corp (PUBC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): May 27, 2021
PUREBASE CORPORATION
(Exact name of registrant as specified in its charter)
| Nevada | 000-55517 | 27-2060863 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
8631 State Hwy, 124
Ione, CA 95640
(Address of principal executive offices)
(209) 274-9143
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Securities registered pursuant to Section 12(b) of the Act: |
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| None | N/A | N/A |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
| Item 1.01 | Entry into a Material Definitive Agreement. |
On May 27, 2021, Purebase Corporation, a Nevada corporation (the “Company”), entered into a Materials Extraction Agreement (the “Agreement”) with US Mine, LLC, a California limited liability company (“US Mine”), pursuant to which the Company acquired the rights to extract up to 100,000,000 tons of metakaolin supplementary cementitious materials (“SCM”) from property owned by US Mine in Ione, California (the “Property”), for a purchase price $50,000,000, which was paid through the Corporation’s issuance to US Mine of a convertible promissory note (the “Note”). In addition, under the terms of the Agreement, the Company will pay US Mine a production royalty of $5.00 per ton of SCM extracted from the Property. The Agreement shall remain in effect until such time as 100,000,000 tons of SCM have been extracted from the Property, or the Agreement is sooner terminated, as provided for therein.
The Note matures on May 27, 2031 and bears interest at a rate of 2.5% per annum, which is also payable on maturity. Amounts due under the Note may be converted into shares (“Conversion Shares”) of the Company’s common stock, $0.001 par value per share (“Common Stock”), at the option of the holder, at a conversion price of $0.43 per share, which was the closing sale price of the Corporation’s common stock on the OTCQB marketplace on the date of issuance of the Note; provided, however, that: (i) up to 50% of the outstanding balance due under the Note (the “Outstanding Balance”) may be converted on or after the Company is listed for trading on a national securities exchange (such date hereinafter referred to as the “Listing Date”); (ii) up to an additional 25% of the Outstanding Balance may be converted on or after the 6-month anniversary of the Listing Date; and (iii) the remainder of the Outstanding Balance may be converted on or after the 12-month anniversary of the Listing Date. The number of Conversion Shares issuable upon conversion of the Note is subject to adjustment from time to time for any subdivision or consolidation of the Company’s shares.
A. Scott Dockter, the principal executive officer and a director and shareholder of the Company, and John Bremer, a director and
shareholder of the Company, are also manager-members of US Mine. The Company’s board of directors approved the transaction
described in this Report, with Mr. Dockter and Mr. Bremer abstaining from providing consent due to their interest in the transaction.
The foregoing descriptions of the Agreement and the Note are qualified in their entirety by reference to the full text of such documents, copies of which are attached to this Current Report on Form 8-K (“Report”) as Exhibit 10.14 and 4.2, respectively, which are incorporated herein by reference.
| Item 2.03 | Creation of Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
Reference is made to the disclosure set forth under Item 1.01 above, which disclosure is incorporated herein by reference.
On May 27, 2021, the Company issued the Note to US Mine in the principal amount of $50,000,000, with a maturity date of May 27, 2031.
| Item 3.02 | Unregistered Sales of Equity Securities. |
Reference is made to the disclosure set forth under Item 1.01 and 2.03 above, which disclosure is incorporated herein by reference.
The issuance of the Note was and, upon conversion of the Note, the issuance of the Conversion Shares will be, exempt from registration under Section 4(a)(2) and/or Rule 506(b) of Regulation D as promulgated by the Securities and Exchange Commission (“SEC”) under of the Securities Act of 1933, as amended (the “Securities Act”), as transactions by an issuer not involving any public offering.
| Item 7.01. | Regulation FD Disclosure. |
On May 28, 2021, the Company issued a press release with respect to its entry into the Agreement with US Mine. A copy of the press release is filed as Exhibit 99.1 to this Report and incorporated herein by reference. The information in this Item 7.01 of this Report, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any of the Company’s filings under the Securities Act, or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference to this Report in such filing.
Forward Looking Statements
This filing includes “forward-looking statements.” All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Actual results could vary significantly from those expressed or implied in such statements and are subject to a number of risks and uncertainties. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company can give no assurance that such expectations will prove to be correct. The forward-looking statements involve risks and uncertainties that affect the Company’s operations, financial performance, and other factors as discussed in the Company’s filings with the SEC. Among the factors that could cause results to differ materially are those risks discussed in the periodic reports the Company files with the SEC, including the Company’s Annual Report on Form 10-K for the fiscal year ended November 30, 2020, filed with the SEC on March 16, 2021. You are urged to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading “Risk Factors.” The Company does not undertake any duty to update any forward-looking statement except as required by law.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
| PUREBASE CORPORATION | ||
| Dated: June 3, 2021 | By: | /s/ A. Scott Docker |
| A. Scott Dockter | ||
| Chief Executive Officer | ||
Exhibit 4.2
NEITHER THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE. THESE SECURITIES HAVE BEEN SOLD IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
CONVERTIBLE PROMISSORY NOTE
PUREBASE CORPORATION
DUE: May 27, 2031
This Convertible Promissory Note (the “Note”) is a duly authorized and issued convertible promissory note (the “Note”) of PUREBASE CORPORATION, a Nevada corporation (the “Company”), which has been issued in accordance with exemptions from registration under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to that certain Materials Extraction Agreement, dated May 27, 2021 (the “Agreement”), among the Company, US Mine, LLC, a California limited liability company (the “Holder”). Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Agreement.
Article I.
Section 1.1 Principal and Interest. FOR VALUE RECEIVED, the Company hereby promises to pay to the order of the Holder, in lawful money of the United States of America and in immediately available funds, the principal sum of Fifty Million Dollars (US$50,000,000) on May 27, 2031 (the “Maturity Date”). The Company further promises to pay interest in cash on the unpaid principal amount of this Note at a rate per annum equal to 2.5%, commencing to accrue on the date hereof and payable on the Maturity Date or earlier conversion as provided herein. Interest will be computed on the basis of a 360-day year of twelve 30-day months for the actual number of days elapsed.
Section 1.2 Conversion.
(a) The Holder may, in its sole discretion, determine to convert (each, a “Conversion”) the outstanding principal amount of this Note, together with accrued and unpaid interest due thereon (together, the “Outstanding Balance”), into shares of common stock (“Common Stock”) of the Company (the “Conversion Shares”) at the conversion rate of $0.43 per share (the “Conversion Price”); provided, however, that (i) up to fifty percent (50%) of the Outstanding Balance may be converted on or after such date (the “Listing Date”) as the Company is listed for trading on the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, or any other national securities exchange; (ii) up to an additional twenty-five percent (25%) of the Outstanding Balance may be converted on or after the six (6) month anniversary of the Trading Date; and (iii) the remainder of the Outstanding Balance may be converted on or after the twelve (12) month anniversary of the Trading Date. The number of Conversion Shares issuable upon a Conversion shall be determined by the quotient obtained by dividing (i) the outstanding principal amount of this Note plus accrued interest thereon on the conversion date for the Conversion by (ii) the Conversion Price. The calculation by the Company of the number of Conversion Shares to be received by the Holder upon conversion hereof, shall be conclusive absent manifest error. The Company shall not issue any fraction of a Conversion Share upon any such conversion; if the issuance would result in the issuance of a fraction of a Conversion Share, the Company shall round such fraction of a Conversion Share up to the nearest whole Conversion Share.
(b) To convert any portion of this Note into Conversion Shares on any date (an “Conversion Date”), the Holder shall (i) transmit by facsimile (or otherwise deliver), for receipt on or prior to 12:00 noon., New York time, on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit A (the “Conversion Notice”) to the Company and (ii) return this Note to the Company via a nationally recognized overnight delivery service (or provide an indemnification undertaking with respect to this Note in the case of its loss, theft or destruction). On or before the fifth trading day for the Common Stock following the date of receipt of an Conversion Notice, the Company shall cause its transfer agent to issue and deliver to the Holder at the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder, for the number of Conversion Shares to which the Holder shall be entitled. If the outstanding principal amount of this Note is greater than the principal portion being converted, then the Company shall as soon as practicable after receipt of this Note, at its own expense, issue and deliver to the Holder a new Note representing the outstanding principal amount not converted. Such new Note (i) shall be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the principal amount remaining outstanding, (iii) shall have an issuance date, as indicated on the face of such new Note, which is the same as the date of this Note, and (iv) shall have the same rights and conditions as this Note.
(c) The Holder shall not have rights as a shareholder of the Company with respect to unconverted portions of this Note. However, the Holder will have all the rights of a shareholder of the Company with respect to the Conversion Shares as of the date of delivery to the Company of a completed Notice of Conversion.
(d) In the event that the Company shall, after the date of issuance of this Note: (i) pay a stock dividend or make a distribution in shares of its capital stock (whether shares of its Common Stock or of capital stock of any other class); (ii) subdivide its outstanding shares of Common Stock; (iii) combine its outstanding shares of Common Stock into a smaller number of shares; or (iv) issue by reclassification of its shares of Common Stock any shares of capital stock of the Company, the number of shares issuable upon conversion of this Note shall be adjusted so that the Holder shall be entitled to receive the number of shares of capital stock of the Company which the Holder would have owned immediately following such action had this Note been converted immediately prior thereto, and the number of shares issuable upon conversion of this Note shall thereafter be subject to further adjustment pursuant to this Section. An adjustment made pursuant to this Section shall become effective retroactively immediately after the record date in the case of a dividend or distribution and shall become effective immediately upon the effective date in the case of a subdivision, combination or reclassification.
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If any recapitalization, reclassification or reorganization of the capital stock of the Company, or any consolidation or merger of the Company with another corporation, or the sale of all or substantially all of its assets or other transaction shall be effected in such a way that holders of Common Stock shall be entitled to receive stock, securities or other assets or property (an “Organic Change”), then lawful and adequate provisions shall be made by the Company whereby the Holder hereof shall thereafter have the right to purchase and receive (in lieu of the Conversion Shares of the Company immediately theretofore purchasable and receivable upon the conversion of this Note) such shares of stock, securities or other assets or property as may be issued or payable with respect to or in exchange for a number of outstanding shares of such Common Stock equal to the number of shares of such stock immediately theretofore purchasable by reason of the Conversion Shares and receivable assuming the full conversion of this Note. In the event of any Organic Change, appropriate provision shall be made by the Company with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions for adjustments of the conversion price and of the number of Conversion Shares purchasable and receivable upon the exercise of this Note) shall thereafter be applicable, in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise hereof. To the extent necessary to effect the foregoing provisions, the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets shall assume by written instrument reasonably satisfactory in form and substance to the Holder executed and mailed or delivered to the registered Holder hereof at the last address of such Holder appearing on the books of the Company, the obligation to deliver to such Holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, such Holder may be entitled to purchase. In any event, the successor corporation (if other than the Company) resulting from such consolidation or merger or the corporation purchasing such assets shall be deemed to assume such obligation to deliver to such Holder such shares of stock, securities or assets even in the absence of a written instrument assuming such obligation to the extent such assumption occurs by operation of law.
Section 1.3 Absolute Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and liquidated damages (if any) on, this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company.
Section 1.4 Security; Other Rights. The obligations of the Company to the Holder under this Note are unsecured. However, in addition to the rights and remedies given it by this Note and the Agreement, the Holder shall have all those rights and remedies allowed by applicable law.
Section 1.5 Reservation of Common Stock. The Company shall reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of conversion of this Note, that number of shares of Common Stock equal to the number of Conversion Shares into which the Note is convertible based upon the Conversion Price.
Article II.
Section 2.1 Events of Default. Each of the following events shall constitute a default under this Note (each, an “Event of Default”):
| (a) | failure by the Company to pay any outstanding principal amount and accrued but unpaid interest due on the Maturity Date; | |
| (b) | the Company or any subsidiary of the Company shall: (i) make a general assignment for the benefit of its creditors; (ii) apply for or consent to the appointment of a receiver, trustee, assignee, custodian, sequestrator, liquidator or similar official for itself or any of its assets and properties; (iii) commence a voluntary case for relief as a debtor under the United States Bankruptcy Code; (iv) file with or otherwise submit to any governmental authority any petition, answer or other document seeking: (A) reorganization, (B) an arrangement with creditors or (C) to take advantage of any other present or future applicable law respecting bankruptcy, reorganization, insolvency, readjustment of debts, relief of debtors, dissolution or liquidation; (v) file or otherwise submit any answer or other document admitting or failing to contest the material allegations of a petition or other document filed or otherwise submitted against it in any proceeding under any such applicable law, or (vi) be adjudicated a bankrupt or insolvent by a court of competent jurisdiction; |
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| (c) | any case, proceeding or other action shall be commenced against the Company or any subsidiary of the Company for the purpose of effecting, or an order, judgment or decree shall be entered by any court of competent jurisdiction approving (in whole or in part) anything specified in Section 2.1(b) hereof, or any receiver, trustee, assignee, custodian, sequestrator, liquidator or other official shall be appointed with respect to the Company, or shall be appointed to take or shall otherwise acquire possession or control of all or a substantial part of the assets and properties of the Company, and any of the foregoing shall continue unstayed and in effect for any period of sixty (60) days; | |
| (d) | any material breach by the Company of any of its representations or warranties contained in this Note; or | |
| (e) | any default, whether in whole or in part, shall occur in the due observance or performance of any obligations or other covenants, terms or provisions to be performed by the Company under this Note which is not cured within ten (10) business days after receipt of written notice thereof. |
If any Event of Default specified in Section 2.1(b) or Section 2.1(c) occurs, then the full principal amount of this Note, together with any other amounts owing in respect thereof, to the date of the Event of Default, shall become immediately due and payable without any action on the part of the Holder, and if any other Event of Default occurs, the full principal amount of this Note, together with any other amounts owing in respect thereof, to the date of acceleration shall become, at the Holder’s election, immediately due and payable in cash. All Notes for which the full amount hereunder shall have been paid in accordance herewith shall promptly be surrendered to or as directed by the Company.
Article III.
Section 3.1 Covenants. So long as this Note shall remain in effect and until any outstanding principal and interest and all fees and all other expenses or amounts payable under this Note have been paid in full, unless the Holder shall otherwise consent in writing (such consent not to be unreasonably withheld), the Company shall:
| (a) | Notice of Default. Promptly advise the Holder in writing of the occurrence of any Event of Default of which the Company is aware. | |
| (b) | Entry into Certain Transactions. Not, directly or in directly, (i) liquidate, dissolve or wind up the Company; or (ii) amend, alter or repeal any provision of the Company’s Articles of Incorporation or Bylaws. |
Article IV.
Section 4.1 Representations of the Company. The Company hereby represents and warrants to the Holder that:
| (a) | The Company has the requisite corporate power and authority to enter into and perform its obligations under this Note, (ii) the execution and delivery of this Note by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by the Company’s Board of Directors, and no further consent or authorization is required by the Company or its Board of Directors, (iii) this Note has been duly executed and delivered by the Company, (iv) this Note constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies. |
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| (b) | The execution, delivery and performance of this Note by the Company, and the consummation by the Company of the transactions contemplated hereby, will not (i) result in a violation of the Articles of Incorporation or bylaws (or equivalent constitutive document) of the Company or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company is a party, or result in a violation of any law, rule, regulation, order, judgment or decree (including U.S. federal and state securities laws and regulations) applicable to the Company or by which any property or asset of the Company is bound or affected, except for those which could not reasonably be expected to have a material adverse effect on the assets, business, condition (financial or otherwise), or results of operations of the Company. | |
| (c) | There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending against or affecting the Company or any subsidiary, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of, or the authority or ability of the Company to perform its obligations under, this Note. | |
| (d) | The Conversion Shares, when issued in accordance with the terms of this Note, shall be duly and validly authorized, fully paid and non-assessable. |
Section 4.2 Representations of the Holder. The Holder hereby represents and warrants to the Company that:
| (a) | Investment Purpose. The Holder is acquiring this Note, and, upon conversion of this Note, the Holder will acquire the Conversion Shares into which this Note may be converted (the Conversion Shares together with the Note, the “Securities”), for its own account for investment only and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the Securities Act of 1933, as amended (the “Securities Act”); provided, however, that by making the representations herein, such Holder reserves the right to dispose of the Securities at any time in accordance with or pursuant to an effective registration statement covering such Securities, or an available exemption under the Securities Act. The Holder agrees not to sell, hypothecate or otherwise transfer the Securities unless such Securities are registered under the federal and applicable state securities laws or unless, in the opinion of counsel satisfactory to the Company, an exemption from such law is available. | |
| (b) | Accredited Investor Status. The Holder meets the requirements of at least one of the suitability standards for an “Accredited Investor” as that term is defined in Rule 501(a)(3) of Regulation D under the Securities Act. | |
| (c) | Investor Qualifications. The Holder was not formed for the specific purpose of acquiring this Note, is duly organized, validly existing and in good standing under the laws of the state of its organization, the consummation of the transactions contemplated hereby is authorized by, and will not result in a violation of state law or its charter or other organizational documents, has full power and authority carry out the provisions hereof and thereof and to purchase and hold this Note. | |
| (d) | Solicitation. The Holder is unaware of, is in no way relying on, and did not become aware of the offering of this Note through or as a result of, any form of general solicitation or general advertising including, without limitation, any article, notice, advertisement or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, in connection with the offering and sale of this Note and is not subscribing for this Note and did not become aware of the offering of this Note through or as a result of any seminar or meeting to which the Holder was invited by, or any solicitation of a subscription by, a person not previously known to the Holder in connection with investments in securities generally. |
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| (e) | Brokerage Fees. The Holder has taken no action that would give rise to any claim by any person for brokerage commissions, finders’ fees or the like relating to this Note or the transaction contemplated hereby. | |
| (f) | Knowledge and Experience. The Holder has such knowledge and experience in financial, tax, and business matters, and, in particular, investments in securities, so as to enable it to utilize the information made available to it in connection with this Note to evaluate the merits and risks of an investment in this Note and the Company and to make an informed investment decision with respect thereto. | |
| (g) | Liquidity. The Holder has adequate means of providing for such Holder’s current financial needs and foreseeable contingencies and has no need for liquidity of its investment in this Note for an indefinite period of time, and after purchasing this Note the Holder will be able to provide for any foreseeable current needs and possible personal contingencies. The Holder must bear and acknowledges the substantial economic risks of the investment in this Note including the risk of illiquidity and the risk of a complete loss of this investment. | |
| (h) | High Risk Investment. The Holder is aware that an investment in this Note, and upon conversion of this Note, the Conversion Shares, involves a number of very significant risks and has carefully researched and reviewed and understands the risks of, and other considerations relating to, the purchase of this Note, and, upon conversion of this Note, the Conversion Shares. | |
| (i) | Reliance on Exemptions. The Holder understands that this Note is being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and such Holder’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Holder set forth herein in order to determine the availability of such exemptions and the eligibility of such Holder to acquire such securities. | |
| (j) | Information. The Holder has been furnished with all documents and materials relating to the business, finances and operations of the Company and its subsidiaries and information that Holder requested and deemed material to making an informed investment decision regarding its purchase of this Note. The Holder has been afforded the opportunity to review such documents and materials and the information contained therein. The Holder has been afforded the opportunity to ask questions of the Company and its management. The Holder understands that such discussions, as well as any written information provided by the Company, were intended to describe the aspects of the Company’s and its subsidiaries’ business and prospects which the Company believes to be material, but were not necessarily a thorough or exhaustive description, and except as expressly set forth in this Note or the Agreement, the Company makes no representation or warranty with respect to the completeness of such information and makes no representation or warranty of any kind with respect to any information provided by any entity other than the Company. Additionally, Holder understands and represents that it is purchasing this Note notwithstanding the fact that the Company and its subsidiaries, may disclose in the future certain material information Holder has not received, including the financial results of the Company and its subsidiaries for the current fiscal quarter. Neither such inquiries nor any other due diligence investigations conducted by such Holder shall modify, amend or affect such Holder’s right to rely on the Company’s representations and warranties contained herein. The Holder has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its investment in this Note. |
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| (k) | No Other Representations or Information. In evaluating the suitability of an investment in this Note, the Holder has not relied upon any representation or information (oral or written) with respect to the Company or its subsidiaries, or otherwise, other than as stated in this Note or the Agreement. | |
| (l) | No Governmental Review. The Holder understands that no United States federal or state agency or any other government or governmental agency has passed on or will pass on, or has made or will make, any recommendation or endorsement of this Note (or the Conversion Shares), or the fairness or suitability of the investment in this Note (or the Conversion Shares), nor have such authorities passed upon or endorsed the merits of the offering of this Note (or the Conversion Shares). | |
| (m) | Transfer or Resale. The Holder understands that: (i) this Note, and, upon conversion of the Note, the Conversion Shares, have not been and are not being registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, or (B) such Holder shall have delivered to the Company an opinion of counsel, in a generally acceptable form, to the effect that such securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration requirements; (ii) any sale of such securities made in reliance on Rule 144 under the Securities Act (or a successor rule thereto) (“Rule 144”) may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of such securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the Securities and Exchange Commission (the “SEC”) thereunder; and (iii) neither the Company nor any other person is under any obligation to register such securities under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder. There can be no assurance that there will be any market for this Note or the Conversion Shares, nor can there be any assurance that this Note will be freely transferable at any time in the foreseeable future. | |
| (n) | Legends. The Holder understands that the certificates representing the Conversion Shares shall bear a restrictive legend in substantially the following form (and a stop transfer order may be placed against transfer of such stock certificates): |
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NEITHER THIS NOTE NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE. THESE SECURITIES HAVE BEEN SOLD IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
| (o) | Confidentiality. The Holder acknowledges and agrees that certain of the information received by it in connection with the transactions contemplated by this Note is of a confidential nature and may be regarded as material non-public information under Regulation FD promulgated by the SEC and that such information has been furnished to the Holder for the sole purpose of enabling the Holder to consider and evaluate an investment in this Note. The Holder agrees that it will treat such information in a confidential manner, will not use such information for any purpose other than evaluating an investment in this Note, will not, directly or indirectly, trade or permit the Holder’s agents, representatives or affiliates to trade in any securities of the Company while in possession of such information and will not, directly or indirectly, disclose or permit the Holder’s agents, representatives or affiliates to disclose any of such information without the Company’s prior written consent. The Holder shall make its agents, affiliates and representatives aware of the confidential nature of the information contained herein and the terms of this section including the Holder’s agreement to not disclose such information, to not trade in the Company’s securities while in the possession of such information and to be responsible for any disclosure or other improper use of such information by such agents, affiliates or representatives. Likewise, without the Company’s prior written consent, the Holder will not, directly or indirectly, make any statements, public announcements or other release or provision of information in any form to any trade publication, to the press or to any other person or entity whose primary business is or includes the publication or dissemination of information related to the transactions contemplated by this Note. | |
| (p) | No Legal Advice. The Holder acknowledges that it has had the opportunity to review this Note and the transactions contemplated by this Note with its own legal counsel and investment and tax advisors. The Holder is relying solely on such advisors and not on any statements or representations of the Company or any of its affiliates, employees, representatives or agents for legal, tax, economic and related considerations or investment advice with respect to this investment, the transactions contemplated by this Note or the securities laws of any jurisdiction. | |
| (q) | No Group Participation. The Holder and its affiliates are not a member of any group, nor is any Holder acting in concert with any other person, including any other Holder, with respect to its acquisition of this Note (and the Conversion Shares). |
| 8 |
Article V.
Section 5.1 Notice. Notices regarding this Note shall be sent to the parties at the following addresses, unless a party notifies the other parties, in writing, of a change of address:
If to the Company:
|
Purebase Corporation 8631 Highway 124 P.O. Box 757 lone, California 95640 Attention: A. Scott Dockter, CEO Telephone: (888) 791-9474
|
| With a copy to: | The Crone Law Group, P.C. 500 Fifth Avenue, Suite 938 New York, New York 10110 Attn: Eric Mendelson, Esq. Telephone: (917) 398-5082
|
| If to the Holder: | US Mine, LLC 8625 Highway 124 P.O. Box 580 lone, California 95640 Attn: John Bremer, Member Telephone: _______________ |
Section 5.2 Governing Law; Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Note (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of this Note), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby. If either party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
Section 5.3 Severability. The invalidity of any of the provisions of this Note shall not invalidate or otherwise affect any of the other provisions of this Note, which shall remain in full force and effect.
Section 5.4 Entire Agreement and Amendments. This Note together with the Agreement represents the entire agreement between the parties hereto with respect to the subject matter hereof and there are no representations, warranties or commitments, except as set forth herein. This Note may be amended only by an instrument in writing executed by the Company and the Holder.
[Remainder of Page Intentionally Left Blank]
| 9 |
IN WITNESS WHEREOF, with the intent to be legally bound hereby, the Company as executed this Note as of the date first written above.
| PUREBASE CORPORATION | ||
| By: | /s/ A. Scott Dockter | |
| Name: | A. Scott Dockter | |
| Title: | Chief Executive Officer | |
| US MINE, LLC | ||
| By: | /s/ John Bremer | |
| Name: | John Bremer | |
| Title: | Member | |
EXHIBIT A
NOTICE OF CONVERSION
(To be executed by the Holder in order to convert the Note)
| TO: Purebase Corporation |
The undersigned hereby irrevocably elects to convert the unpaid principal amount and accrued interest amount indicated below of the Convertible Promissory Note due _______, 2031 (the “Note”) into Conversion Shares of Purebase Corporation, according to the conditions stated therein, as of the Conversion Date written below.
| Conversion Date: | ||
| Applicable Conversion Price (per Conversion Shares): | $ | |
| Principal amount of Note to be converted: | $ | |
| Principal amount of Note unconverted: | $ | |
| Interest amount to be converted | $ | |
| Number of Conversion Shares to be issued: | ||
| Issue the Conversion Shares in the following name and to the following address: | ||
| Issue to the following account of the Holder: | ||
| Authorized Signature: | ||
| Name: | ||
| Title: | ||
| Telephone Number: |
Exhibit 10.14
MATERIALS EXTRACTION AGREEMENT
This Materials Extraction Agreement (“Agreement”) is entered into and effective as of May 27, 2021 (“Effective Date”), by and between Purebase Corporation (“Purebase”), a corporation organized under the laws of the State of Nevada with offices located at 8631 State Highway 124, P.O. Box 757, lone, California 95640, and US Mine, LLC (“US Mine”), a California limited liability company with offices located at 8625 State Highway 124, lone, P.O. Box 580 California 95640. Purebase and US Mine are collectively referred to herein as the “Parties” and individually as a “Party.”
RECITALS
A. WHEREAS US Mine owns properties (the “Properties”) located at 8625 State Highway 124, lone, P.O. Box 580 California 95640, which contain metakaolin supplementary cementitious material (“SCM” and certain raw clay materials collectively, the “Materials”.)
B. WHEREAS Purebase desires to acquire the right to access the Properties to extract up to 100,000,000 tons of Materials from the Properties, to construct a metakaolin processing plant (“Metakaolin Plant”) and to process Materials (“collectively “Mining Activities”) for sale or for use in its business.
NOW, THEREFORE, in consideration of the premises and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
TERMS OF AGREEMENT
1. Incorporation of Recitals. The Recitals set forth above are a material part of this Agreement and are incorporated herein by this reference.
2. Purchase Price. Purebase shall pay $50,000,000.00 to US Mine through the issuance of a convertible note in the principal amount of $50,000,000.00 (the “Note”), a copy of which is attached hereto as Exhibit A. In addition, Purebase shall pay to US Mine a royalty (the “Production Royalty”) equal to $5.00 per ton of Materials extracted from the Properties. The Production Royalty shall be estimated on a monthly basis and paid to US Mine for each calendar month by the 20th of the following month. Failure to pay the Production Royalty in a timely manner shall be considered a material breach of this Agreement, and any Production Royalty not timely paid shall be subject to 15% annual interest, compounded monthly. A “Monthly Production Report” shall be submitted along with payment of the Production Royalty to the US Mine’s address, as set forth above for each month that the Agreement is in effect. This report shall be sent to the US Mine no later than the 20th of the following month in which the Materials were removed from the Properties. The monthly payment of the Production Royalty to US Mine for Materials removed from the Properties shall be based initially on the material quantities reported monthly by the Purebase as set forth in the Monthly Production Reports. Production shall be verified each year following the anniversary date of the contract or at the contract’s termination in the Annual Production Report. Upon submittal of the Annual Production Report to US Mine, Purebase shall pay US Mine the Production Royalty for the amount of Valuable Minerals removed as indicated in the Annual Production Report to the extent that it exceeds the amount of Valuable Minerals indicated in the Monthly Production Reports applicable to the period covered by the Annual Production Report. Purebase shall retain at its place of business records of all production from Mining Activities on the Properties including records of all removal and processing of Materials from the Properties (“Records”). US Mine may inspect the Records at any time upon reasonable notice to Purebase.
3. Weighing of Materials. In order to accurately determine the net total tonnage of each of the Materials provided, the Parties agree to use the existing certified truck platform scale located at the Properties. All Materials shall be weighed on a truckload basis for bulk Material.
4. Term. The initial term of this Agreement shall commence on the Effective Date and shall remain in effect until 100,000,000 tons of Materials have been extracted or the Agreement is terminated as provided below. This Agreement may be terminated:
(a) by US Mine in the event that Purebase fails to make any payments due under this Agreement when due and fails to cure such non-payment within ninety (90) days after receiving written notice from US Mine.
(b) by either Party in the event that the other Party materially breaches or fails to comply with any other material provision of this Agreement, and fails to cure such breach within ninety (90) days after written notice is received from the nonbreaching Party (or if such breach cannot be cured within ninety (90) days, fails commence to cure within such time or fails to diligently pursue the cure after such ninety (90) day period); or
(c) by either Party in the event that the other Party ceases doing business or is otherwise unable to fulfill its obligations pursuant to this Agreement, or is adjudicated a bankrupt, or makes a general assignment for the benefit creditors, or has a receiver or liquidator appointed, such termination to be effective immediately upon written notice from the terminating Party.
(d) Upon termination Purebase shall not have any right to enter the Properties or to remove any Materials. In addition all facilities, including but not limited to the Metakaolin Plant shall immediately and without further documentation become the property of US Mine.
5. Use of Properties
(a) Maintenance. Purebase shall use commercially reasonable efforts to keep the Properties free from debris and waste arising from its Mining Activities. Purebase shall remove from the Properties all refuse, litter and debris created by Purebase or any contractor, successor, agent or employee of Purebase.
(b) Compliance with Laws and Permits. Purebase shall comply and bear all costs associated with all governmental permits, licenses and other approvals (“Entitlements”). Purebase shall bear all costs associated with compliance with or alleged violation of any of the Entitlements and conditions associated therewith. Purebase shall promptly reimburse US Mine for any costs, fees, or reasonable attorney’s fees associated with its alleged non-compliance with the Entitlements. Purebase shall comply with all applicable federal, state and local law with regard to its use and occupation of the Properties.
(c) Access to Technical Reports. If Purebase commissions or otherwise obtains any technical reports (“Technical Reports”) regarding the Properties, it must provide a full copy, including all attachments and exhibits, of any such report to the US Mine. Purebase agrees that US Mine may disclose the details of this Agreement and the Technical Reports to its advisors and to governmental, regulatory agencies.
(d) Roads. Purebase, at its sole cost and expense shall maintain the existing roads on the Properties in good working order during all Mining Activities. Purebase may construct new roadways upon obtaining written consent from US Mine.
6. Force Majeure. Neither Party shall be deemed to be in default of its obligations hereunder (other than the obligation to make payments arising prior to the date of the applicable Force Majeure) to the extent any delay in its performance is caused by or is the result of factors beyond its reasonable control, including, without limitation, fire, explosion, accident, riot, terrorism, flood, drought, storm, earthquake, lightning, frost, civil commotion, sabotage, vandalism, smoke, hail, embargo, pandemic, loss of power, act of God or of a public enemy, other casualty, strike or lockout (collectively, an event of “Force Majeure
7. Indemnification
(a) Indemnification of US Mine. Purebase agrees to defend, indemnify, and hold harmless US Mine from and against any liability, claims, fines, losses, damages, injuries, or expenses (the “Claims”) by governmental entities or third parties against US Mine caused by Purebase’s activities on the Properties and arising out of the following:
| (i) | Death or injury of any person, including, without limitation, Purebase’s employees, officers, contractors, consultants, agents, and customers; | |
| (ii) | Loss of or damage to real or personal property; |
| (iii) | Claims directly or indirectly arising out of, or in any way connected with, the use, release, generation, storage, or disposal of Hazardous Materials on, in, under, or above the Properties by Purebase; and |
| (iv) | Actions brought by any governmental agency or third Party arising out of Purebase’s failure to comply with applicable laws, including, without limitation, any conditions of approval, permits, and Environmental Laws defined in Section 6(d) herein, governing Purebase’s activities. | |
| (v) | This indemnification shall only apply to the proportional extent of the negligence or other fault of Purebase (and all other persons and entities for whom Purebase is legally responsible) when compared with the negligence or fault of US Mine (and all other persons and entities for whom US Mine is legally responsible). |
(b) Indemnification of Purebase. US Mine hereby agrees to defend, indemnify, and hold harmless Purebase and its shareholders, directors, officers, and employees from and against any Claims by third parties against Purebase or its shareholders, directors, officers, and employees caused by US Mine’s activities on the Properties, including, without limitation, any Claims arising by reason of the following:
| (i) | Any acts, occurrences, or matters arising out of the Properties and not specifically excepted herein that took place prior to the Effective Date (including Claims directly or indirectly arising out of, or in any way connected with, the use, release, generation, storage or disposal of Hazardous Materials on, in, under or above the Properties by any person prior to the Effective Date, including, without limitation, the cost of any required or necessary repair, cleanup, disposal, encapsulation or detoxification and the preparation of any closure or other required plans, whether such action is required or necessary prior to or following the Effective Date); | |
| (ii) | Any acts, occurrences or matters, the existence or occurrence of which constitute violations of one or more representation, warranty, or covenant of US Mine hereunder. This indemnification shall only apply to the proportional extent of the negligence or other fault of US Mine (and all other persons and entities for whom US Mine is legally responsible) when compared to the negligence or other fault of Purebase (and all other persons and entities for whom Purebase is legally responsible). |
(c) Hazardous Materials. The term “Hazardous Materials” as used in this Agreement, shall include, without limitation, any solid, liquid, or gas material or substance that is (i) defined or listed as a “hazardous waste,” “acutely hazardous waste,” “extremely hazardous waste,” “restrictive hazardous waste,” “toxic substance,” “hazardous substance” or “hazardous material” or considered a waste, condition of pollution, or nuisance under an Environmental Law (as defined in Section 6(d) below); (ii) gasoline, diesel fuel, oil, used oil, petroleum, or a petroleum product or fraction thereof; (iii) asbestos and asbestos-containing construction materials that contain more than 0.1 percent, by weight, of asbestos; (iv) substances known by the State of California or the United States to cause cancer and/or reproductive toxicity; (v) toxic, corrosive, flammable, infectious, radioactive, mutagenic, explosive, or otherwise hazardous substances that are, or become, regulated by any governmental agency or instrumentality of the United States, or any state or any political subdivision thereof; (vi) materials that cause the Properties to be in violation of any Environmental Law; (vii) urea formaldehyde foam insulation, transformers or other equipment that contains dielectric fluid containing levels of polychlorinated biphenyls (PCB’s) in excess of 50 parts per million; (viii) all hazardous air pollutants or materials known to cause serious health effects (including, without limitation, volatile hydrocarbons and industrial solvents); (ix) any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any governmental authority; and (x) underground or aboveground tanks, whether empty, filled or partially filled with any substance.
(d) Environmental Law. The term “Environmental Law,” as used in this Agreement, means any federal, state, regional, or local law, statute, ordinance, regulation, or policy pertaining to health, safety, industrial hygiene, or the environmental conditions on or under the Properties, including, without limitation: (i) the Comprehensive Environmental Response Compensation and Liability Act of 1980 (“CERCLA”), 42 U.S.C. section 9601 et seq.; (ii) the Resource Conservation and Recovery Act of 1976 (“RCRA”), 42 U.S. C. sections 6901 et seq.; (iii) the Federal Water Pollution Control Act, 33 U.S.C. sections 1251 et seq.; (iv) the Toxic Substances Control Act of 1976 (“TSCA”) 15 U.S.C. sections 2601 et seq.; (v) the Federal Insecticide, Fungicide and Rodenticide Act of 1982 (“FIFRA”), 7 U.S.C. sections 136 et seq.; (vi) the Federal Clean Air Act, 42 U.S.C. section 7401 et seq.; (vii) California Health and Safety Code sections 25915 et seq. (asbestos); (viii) the Porter-Cologne Water Quality Control Act, California Water Code sections 13000 et seq.; (ix) the Safe Drinking Water and Toxic Enforcement Act of 1986, California Health and Safety Code sections 25249.5 et seq.; (x) the Hazardous Waste Control Law, California Health and Safety Code sections 25100 et seq.; (xi) the Carpenter Presley-Tanner Hazardous Substance Account Act, California Health and Safety Code sections 25300 et seq.; (xii) the Hazardous Materials Release Response Plans and Inventory, California Health and Safety Code sections 25500 et seq.; (xiii) the Underground and Aboveground Storage Tank Acts, California Health and Safety Code sections 25270 et seq. and 25280 et seq.; (xiv) Federal and California OSHA requirements; (xv) the Hazardous Materials Transportation Act, 49 U.S.C. sections 1801 et seq.; (xvi) any other applicable federal, state, regional, county, city or local laws, statutes, rules, regulations or ordinances concerning public health, safety or the environment; and (xvii) any similar federal, state, or local law enacted after the date of this Agreement that pertains to hazardous waste, hazardous material or hazardous substances; as all of the above laws are amended, and the regulations and publications applicable thereto.
(e) Survival After Termination. The provisions of this Section shall survive the termination of this Agreement.
8. Insurance
(a) Generally. Purebase shall procure and maintain, at its sole expense with respect to its use of the Properties, the following insurance throughout the entire term of the Agreement:
| (i) | Worker’s Compensation Insurance. Worker’s Compensation and employer’s liability insurance as prescribed by applicable law; and | |
| (ii) | Liability Insurance. Comprehensive general liability insurance subject to the following limits: |
| (1) | $2,000,000 for the bodily injury or death of any person per occurrence; and | |
| (2) | $2,000,000 for the damage or destruction of property. |
(b) Additional Insured Endorsement. The comprehensive general liability insurance procured and maintained by Purebase under this Section shall name, by endorsement, US Mine as an additional insured.
(c) Certificates of Insurance. Before commencing any activities on the Properties, Purebase shall furnish US Mine with a certificate from each insurance carrier evidencing that the above insurance is in force, stating policy numbers, dates of expiration, and limits of liability thereunder, and further providing that the insurance will not be canceled or materially changed until at least thirty (30) days after the insurance carrier has sent such other Party written notice of such cancellation or change by certified or registered mail.
(d) Adjustments to Policy Limits. Upon US Mine’s written request, Purebase shall increase the limits of liability of insurance required by this Section, not more than once every five (5) years, and only to the extent of commercially available incremental increases in limits, if the amount of insurance then required under this Agreement does not provide insurance coverage comparable to the insurance coverage provided by Purebase at the Effective Date. Any requirements regarding the limits or type of insurance coverage required to be procured and maintained by Purebase under this Section shall not limit any liability of Purebase.
(e) Waiver of Subrogation. Neither US Mine nor Purebase shall have any claim against the other or the employees, officers, directors, managers, agents, shareholders, partners or other owners of the other for any loss, damage or injury which is covered by insurance carried by either Party and for which recovery from such insurer is made, notwithstanding the negligence of either Party in causing the loss. This waiver and release shall be valid only if the insurance policy in question permits waiver of subrogation or if the insurer agrees in writing that such waiver of subrogation will not affect coverage under said policy. Each Party agrees to use its best efforts to obtain a policy which expressly permits a waiver of subrogation. If any Party cannot obtain such a policy, then such Party agrees to use its best efforts to obtain from its insurer an agreement in writing that such waiver of subrogation will not affect coverage under its policy. The forgoing waiver and release shall not apply, however, to any damage caused by intentionally wrongful actions or omissions.
9. Removal of Equipment. Upon the termination or expiration of the Agreement Purebase shall have both the right and the obligation to remove all stockpiles, equipment, machinery, buildings, fixtures, and other improvements under its ownership from the Properties within sixty (60) days after such expiration or termination. In the event that Purebase does not remove any such improvements or materials that are owned by Purebase by the end of such time period, US Mine, in its sole and absolute discretion, may either take possession of such improvements and materials (in which case such improvements and materials shall become the sole property of US Mine) or enforce its right to have Purebase remove such improvements and materials.
10. Miscellaneous Provisions.
(a) Notices. Any notice to be given or to be served upon either Party hereto in connection with this Agreement must be in writing and shall be deemed to have been given and received (i) when personally delivered, (ii) when verified received if sent by fax or email, (iii) two (2) days after it is sent by Federal Express or similar overnight courier, postage prepaid and addressed to the Party for whom it is intended, at that Party’s address specified below, or (iv) three (3) days after it is sent by certified or registered United States mail, return receipt requested, postage prepaid and addressed to the Party for whom it is intended, at that Party’s address specified below:
| PUREBASE: | Purebase Corp | ||
| Attention: A. Scott Dockter, Chairman, CEO | |||
| 8631 Highway 124 | |||
| P.O. Box 757 | |||
| lone, California 95640 | |||
| US MINE, LLC: | US Mine, LLC | ||
| Attention: John Bremer, Member | |||
| 8625 Highway 124 | |||
| P.O. Box 580 | |||
| lone, California 95640 |
Either party may change the place for the giving of notice to it by thirty (30) days prior written notice to the other party as provided herein.
(b) Binding Effect. This Agreement is binding upon, and inures to the benefit of, each Party hereto and its directors, officers, employees, agents, representatives, affiliates, assigns, and successors.
(c) Non-Waiver. Neither Party shall be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by that Party, and then only to the extent specifically set forth in writing. A waiver with reference to one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent event.
(d) Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions of this Agreement will continue in full force and effect without being impaired or invalidated
in any way and will be construed in accordance with the purposes and intent of this Agreement as set forth by the Parties.
(e) Interpretation. Each Party acknowledges that it has participated in the drafting of this Agreement, and any applicable rule of construction to the effect that ambiguities are to be resolved against the drafting Party will not be applied in connection with the construction or interpretation of this Agreement.
(f) Opportunity to Consult Counsel. Each Party represents to the other that it has had an opportunity to have this Agreement reviewed by legal counsel of its choosing and has done so to its satisfaction, that it has had a full opportunity to review the terms of this Agreement, that it fully understands the legal effect of each provision of this Agreement, and that it has willingly consented to the terms of this Agreement. Purebase has obtained a fairness opinion from independent counsel confirming this Agreement represents a fair agreement based on an arms-length third party negotiated agreement comparison.
(g) Further Acts. Each party agrees to perform any further acts and to execute and deliver any documents which may be reasonably necessary to carry out the provisions of this Agreement.
(h) Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of California, excluding any choice of law provisions.
(i) Jurisdiction; Venue. Any action taken to enforce this Agreement shall be maintained in the Superior Court of Amador County, California. The parties expressly consent to the jurisdiction of said court and agree that said court shall be a proper venue for any such action.
(j) Attorney’s Fees. In the event any action, including arbitration, shall be brought to interpret or enforce any provision of this Agreement, the prevailing party shall be entitled to reasonable costs, including attorney’s fees, in addition to any other recovery to which they may be entitled.
(l) Mutual Representations. Each Party hereby represents and warrants to the other: that it has full corporate power and authority and is duly authorized under applicable law, its articles of incorporation and its by-laws, to own its properties and to conduct its business as presently conducted and as herein contemplated, and to enter into and perform this Agreement in accordance with the terms hereof; and that neither such entering into nor such performance violates or will violate such articles of incorporation or by-laws or any agreement or other instrument, or any federal, state or local law, regulation or ordinance applicable to such Party or by which it is bound. Purebase acknowledges that certain members of its board of directors hold an ownership interest in each Party and as a result have a personal financial interest in the transaction contemplated by this Agreement. Purebase has obtained the approval or unanimous consent of the transactions contemplated by this Agreement from its disinterested directors, each of whom have been fully advised of and provided with the details concerning the nature of the common ownership and personal interests of the interested directors in accordance with Section 78.140 of the Nevada Revised Statutes. Purebase has obtained a fairness opinion from independent counsel opining that the transactions contemplated by this Agreement are fair to Purebase.
(m) Modifications Must Be Made in Writing. This Agreement may not be modified, altered, or changed in any manner whatsoever except by a written instrument duly executed by authorized representatives of the Parties.
(n) Entire Agreement. This Agreement and the documents and Agreements referred to herein or executed pursuant hereto, constitute the entire agreement of the Parties as to the subject matters addressed by this Agreement, and supersede any prior written or oral agreements between them concerning the subject matter contained herein. There are no representations, agreements, arrangements, or understandings, oral or written, between and among the Parties, relating to the subject matter contained in this Agreement, which are not fully referred to or expressed herein.
(o) Counterparts. This Agreement may be executed in two or more counterparts, each of which is an original, but all of which together will be deemed to be one and the same instrument. Electronically reproduced and/or transmitted signatures are equivalent to original signatures for all purposes hereof.
[The remainder of this page is left blank intentionally. Signature page follows.]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
| US MINE, LLC., a California limited liability company | ||
| By: | /s/ John Bremer | |
| Name: | John Bremer | |
| Its: | Member | |
| PUREBASE CORP., a Nevada corporation | ||
| By: | /s/ A. Scott Dockter | |
| Name: | A. Scott Dockter | |
| Its: | Chairman, CEO | |
EXHIBIT A
PROMISSORY NOTE
Exhibit 99.1
Purebase acquires right to access 100M tons of clay for SCM project
IONE, CA – (May 28 2021) – Purebase Corporation (OTCQB:PUBC) (“Purebase” or the “Company”), a diversified resource company, headquartered in Ione, California, announced today that it has entered into an agreement with U.S. Mine LLC to acquire the right to access up to 100M tons of certain raw clay materials. These clay materials will be targeted for use as a supplementary cementitious material (SCM) for use in the production of lower carbon cements.
In consideration for this right to access these raw clay materials, Purebase shall pay $50M to U.S. Mine LLC through delivery of a convertible promissory note.
Purebase’s CEO, Scott Dockter, stated, “Acquiring the rights to this amount of material is the next step towards bringing our SCM products to market, at a time when this country and many other countries are demanding products that will help lower carbon emissions. We believe the demand for greener cements justifies the need for Purebase to obtain the rights to access up to 100M tons of clay materials from US Mine LLC.”
Newbridge Securities Corporation served as a financial advisor on the transaction and The Crone Law Group acted as the Company’s legal counsel.
About Purebase Corporation
Purebase Corporation (OTCQB: PUBC) is a diversified resource company that acquires, develops and markets minerals for use in the agriculture, construction and other specialty industries.
Contacts
Emily Tirapelle - Purebase Corporation | [email protected], and please visit our corporate website and subscribe to our upcoming Newsletter – www.purebase.com/newsletter
Safe Harbor
This press release contains statements, which may constitute “forward-looking statements.” Those statements include statements regarding the intent, belief, or current expectations of Purebase and members of its management team, as well as the assumptions on which such statements are based. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that may cause actual results to differ from those anticipated are discussed throughout the Company’s reports filed with Securities and Exchange Commission which are available at www.sec.gov, as well as the Company’s web site at www.purebase.com. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events, or changes to future operating results.