AGREEMENT OF PURCHASE AND SALE OF
ASSETS Aurelio Resource Corporation and C3 Resources,
Inc.
This Agreement is made as of the date indicated
above between Aurelio Resource Corporation (Buyer), a Nevada
corporation, having its principal office at 12345 West Alameda
Parkway, Suite 202 Lakewood, Colorado 80228 and C3 Resources, Inc.,
Delaware Corporation (Seller), having its principal office at Suite
9, 275 Third Street, Elko, Nevada 89803 with a Mailing Address: C3
Resources, Inc., P.O. Box 1450, Elko, Nevada 89803-1450.
WHEREAS, Buyer and Seller entered into a Letter
of Intent dated May 19, 2009 concerning the purchase by Buyer of
certain assets of Seller, reference to said Letter of Intent is
hereby made for all purposes; and
WHEREAS, Buyer desires to purchase from Seller
and Seller desires to sell to Buyer, on the terms and subject to
the conditions of this agreement, certain properties and assets of
Seller records, exploration data and information, drill results and
other similar and dissimilar information related thereto;
and
NOW THEREFORE, in consideration of the mutual
covenants, agreements, representations, and warranties contained in
this agreement, the parties agree as follows:
ARTICLE ONE
PURCHASE AND SALE OF ASSETS AND LEASE OF REAL
PROPERTY
1.01 Sale of Assets. Subject to the terms
and conditions set forth in this Agreement, Seller agrees to sell,
quitclaim, convey, transfer, assign, deliver and otherwise conveys
to Buyer and its successors and assigns, and Buyer agrees to
purchase from Seller all of those certain assets and rights of
Seller of every kind, character, and description, whether tangible,
intangible, personal, or mixed, and wherever located, all of which
are collectively referred to as the Assets For purposes hereof,
these Assets are further described and defined in Exhibit A, which
Exhibit is attached hereto and incorporated herein for all
purposes, and shall include including, but without limitation to,
the interests of Seller in the real property described on Exhibit A
(Premises), free and clear of all liens and encumbrances, TOGETHER
WITH (a) all ores, minerals, materials and mineral rights
(including all gold, silver, platinum group metals, iron, copper,
molybdenum, lead, zinc, chalcopyrite, galena, sphalerite, bauxite,
kaolin and all other materials or substances of any nature
whatsoever, (excepting only oil, gas, and coal, found in natural
deposits, whether similar or dissimilar in character to the
foregoing) within the Premises (Mineral Substances), whether or not
such Mineral Substances were given any commercial consideration by
the Parties at the time of execution of this Agreement; (b) all
options, contracts, easements, leases and rights-of-way reserved
or, subsequent to the effective date of the Agreement, granted in
or upon and pertaining to the Premises; (c) all dips, spurs and
extralateral rights thereon or therefrom; (d) all dumps, severed
ore, fixtures and improvements thereon; (e) all exploration data
and other information related to the Premises, including, but not
limited to, all maps, drill results (in electronic and other
format), all title information and related location notices and
certificates, all interpretive memoranda prepared by Seller
concerning the Premises, all third party reports relating to the
Premises, all notes concerning negotiations concerning transactions
relating to the Premises, etc.; and (f) all and singular, the
tenements, hereditaments and appurtenances belonging to or in any
way appertaining to the Premises, including (i) the right to
sample, map, survey, or conduct any other exploration or
investigatory activities and (ii) all information regarding any
exploration or development of the Premises that is in the
possession of or available to the Seller. This Article shall be
liberally construed in favor of Buyer and the ambiguities, if any,
shall be construed and resolved in favor of Buyer.
1.02 Consideration. As full consideration
for the transfer of the Assets by Seller to Buyer, Buyer shall
deliver at the closing, 47,750,000 Common Shares of the Buyer, in
accordance with the provisions of paragraph 8.03. Seller
acknowledges that the Common Shares to be received from Buyer as
the Purchase Price consideration have not been, and may not be,
registered under the Securities Act of 1933, as amended (the 1933
Act), nor under any state
securities
or blue sky laws of any state of the United States, and, unless so
registered, may not be offered or sold in the United States or,
directly or indirectly, to U.S. Persons, as that term is defined in
Regulation S under the 1933 Act (Regulation S), except in
accordance with the provisions of Regulation S, pursuant to an
effective registration statement under the 1933 Act, or pursuant to
an exemption from, or in a transaction not subject to, the
registration requirements of the 1933 Act and in each case in
accordance with applicable securities laws. The Common Shares to be
issued to Seller will be restricted common stock with hold periods
under applicable securities laws, and contain a restrictive legend
evidencing same.
1.03 Assumption of Liabilities. Buyer
shall not assume any liabilities, obligations, or duties of the
Seller by virtue of this Agreement, other than those set forth
specifically in this Agreement.
The parties acknowledge, however,
that all cash proceeds due to or received by the Seller prior to or
subsequent to Closing (the Cash Proceeds) from any agreements,
joint ventures, lease assignments or farm-outs signed or at an
advanced stage of negotiations prior to the signing this Agreement
(more specifically, the North Sleeper, Cortez-Carlin Corridor /
Safford Canyon, Robinson Creek / Indian Creek, Veta Grande and Iron
Butte) which are approved by Buyer will accrue to Seller, in an
amount of up to three hundred seventy-five thousand dollars
($375,000) for the purposes of paying any outstanding documented
bills of Seller related to the C3 Nevada Assets, said bills to be
paid in the following order: first, outstanding bills generated by
contractors, technical services, and supplies for work done in
Nevada pertaining to the C3 Nevada Assets will be paid; secondly,
payment of 2009 – 2010 BLM claim maintenance fees; and,
thirdly, any other documented bills generated in Nevada pertaining
to the C3 Nevada Assets. Both parties agree that any and all Cash
Proceeds in excess of three hundred seventy-five thousand dollars
($375,000) paid from any such agreements, joint ventures, lease
assignment or farm- outs or any portion of the $375,000 not needed
to pay documented expenses, as well as any and all payments in
shares, royalty interests and/or other forms of
consideration , will be for the benefit of the Buyer.
1.04 Taxes. Buyer shall pay any and all
sales and use taxes arising out of the transfer of the Assets and
Seller shall pay its portion, prorated as of the closing date, of
state and local personal property taxes and assessments relating to
the Assets transferred
ARTICLE TWO
REPRESENTATIONS AND WARRANTIES OF
SELLER
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2.01
Warranties. Seller represents and warrants that:
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2.011 Title. Seller has good and
marketable title to all the Assets and Premises, and is the owner
of record. All these Assets are free and clear of restrictions on
or conditions to transfer or assignment, and free and clear of
mortgages, liens, pledges, charges, encumbrances, security
agreements, options, charges, equities, claims, easements, rights
of way, covenants, conditions, or restrictions, except for those
disclosed in Exhibits to this agreement. Seller further covenants
and warrants to Buyer, which covenants and warranties shall survive
any expiration or termination of this Agreement, that Seller is
lawfully seized of the indefeasible estates in the Premises as
further set forth in Exhibit A; that Seller has the right and power
to convey the same for the purposes of this Agreement; and, with
respect to any unpatented federal mining claims, subject only to
the paramount title of the United States; that Buyer shall have
quiet and peaceable possession of the Premises; that Seller will
defend its title to the Premises against all persons who may claim
the same; that Seller has not committed, nor will Seller in the
future commit, any act or acts which will encumber or cause a lien
to be placed against the Premises except subject and subordinate to
the terms of this Agreement; that Seller has received no notice of
violation of any environmental law, regulation or permit; that
Seller has no knowledge of the occurrence of any violation of any
environmental law, regulation or permit; and that Seller has
received no notice of claim or demand by any person relating to the
Premises. Seller agrees to make available to Buyer all instruments
of title, or other data relating to or containing information with
respect to the status of ownership of the Premises. In addition, in
the event of any dispute or legal proceeding between Seller and
third parties, with respect to title or ownership of the Premises,
Buyer shall have the right at its sole discretion either to suspend
the performance of its obligations under this Agreement until such
dispute or legal
proceeding
has been settled, or, in the alternative, to make such payments due
Seller hereunder to an escrow agent to hold pending the resolution
of the dispute.
2.012 Lesser Interest . If Sellers title
to the Premises (or any portion thereof) is less than the interest
as described in Exhibit A, Buyer shall have the right, without
waiving any other rights it may have, to reduce all payments to be
made to Seller hereunder by the same proportion as the undivided
right and title actually owned by Seller bears to the entire
undivided right and title to the Premises as described in Exhibit
A. Any improvement in or enhancement of Sellers title to or
interest in the Premises shall inure to the benefit of Buyer,
without additional consideration to Seller.
2.013 Tax Liabilities. Seller has paid
all taxes, or will pay all taxes, which could result in a lien
against any of the Assets being conveyed by this
Agreement.
2.014 Litigation. There is no suit,
action, arbitration, or legal, administrative, or other proceeding,
or governmental investigation pending or, to the best knowledge of
Seller threatened, against or affecting the Assets. There is no
suit, action, arbitration or other legal proceeding against Seller
which, if determined adverse to Seller, would affect Sellers
ability to compensate Buyer for Sellers breach, if any, of the
warranties and covenants in this agreement. Seller is not in
default with respect to any order, writ, injunction, or decree of
any federal, state, local, or foreign court, department, agency, or
instrumentality. There is no order from environmental or other
agencies respecting the Premises, nor has the Seller had notice
from any governmental agency of any requirements respecting the
Premises, other than payment of annual maintenance fees.
2.015 No Breach or Violation. The
consummation of the transactions contemplated by this Agreement
will not result in or constitute any of the following: (i) a breach
of any term or provision of this Agreement; (ii) a default or an
event that, with notice or lapse of time or both, would be a
default, breach, or violation of the articles of incorporation or
bylaws of Seller or any lease, license, promissory note,
conditional sales contract, commitment, indenture, mortgage, deed
of trust, or other agreement, instrument, or arrangement to which
Seller is a party or by which the property of Seller is bound;
(iii) an event that would permit any party to terminate any
agreement or to accelerate the maturity of any indebte
