-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GGYIAK1t9a23MaaSCr3tvUjBTV2RxfU7Y0n1oLeZzPryM/Q+28w2Fn1DTgPbOq3R P49Z2txmum7zizxBi2bUug== 0001096906-03-000432.txt : 20030807 0001096906-03-000432.hdr.sgml : 20030807 20030807085357 ACCESSION NUMBER: 0001096906-03-000432 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20030723 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030807 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ATLAS MINERALS INC CENTRAL INDEX KEY: 0000008302 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 841533604 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-02714 FILM NUMBER: 03827684 BUSINESS ADDRESS: STREET 1: 10920 W. ALAMEDA AVENUE STREET 2: SUITE 205 CITY: LAKEWOOD STATE: CO ZIP: 80226 BUSINESS PHONE: 3033060823 MAIL ADDRESS: STREET 1: 10920 W. ALAMEDA AVENUE STREET 2: SUITE 205 CITY: LAKEWOOD STATE: CO ZIP: 80226 FORMER COMPANY: FORMER CONFORMED NAME: ATLAS CORP DATE OF NAME CHANGE: 19920703 8-K 1 atlas8kjuly232003.txt 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): July 23, 2003 ATLAS MINERALS INC. ------------------- (Exact name of registrant as specified in its charter) COLORADO 1-02714 84-1533604 - ---------------------------- ---------------------- --------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 10920 West Alameda Avenue, Suite 205, Lakewood, Colorado 80226 ------------------------------------------------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (303) 292-1299 - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) ITEM 2: ACQUISITION OR DISPOSITION OF ASSETS On July 23, 2003, Atlas Minerals Inc., a Colorado corporation ("AMI"), through a wholly owned subsidiary, Atlas Precious Metals Inc., a Nevada corporation, ("APMI" or the "Company") consummated the transactions contemplated under a definitive Amended Agreement and Plan of Merger dated as of June 30, 2003, (the "Agreement") between the Company and Western Gold Resources, Inc., a Florida corporation, ("WGR" or "Seller"), pursuant to which WGR was merged with and into the Company, with the Company remaining as the surviving entity (the "Merger"). Prior to consummation of the Merger, WGR's primary asset was the Estrades polymetallic mine located approximately 120 miles northwest of Val-d'Or in northwestern Quebec (the "Property"). AMI had originally been granted an option to acquire WGR, and, as a result, the Property, under the terms of an option agreement executed and entered into by AMI and WGR (the "Option Agreement"). In January 2003, AMI assigned all of its rights under the Option Agreement to APMI in anticipation of a possible future corporate restructuring. As a result of the Merger, the Company acquired all of the assets and liabilities of WGR, including, but not limited to, the Property, cash on hand of $398,172.00, inventories, accounts receivable and payable, furniture, fixtures, machinery and equipment and other tangible property, all leasehold improvements and fixtures, prepaid expenses, contracts, licenses and permits, development assets and intangible assets. In consideration of the shares of WGR, the Company paid the sum of $23,750 in cash, together with the Merger Consideration, as defined in the Agreement. The Merger Consideration consisted of: (i) 17,399,640 shares of Company common stock (1.2 Company shares for each of the 14,499,700 shares of Seller); and (ii) a promissory note ("Note 1") payable to Harold R. and Eileen A. Shipes (the "Shipes'") in the amount of $64,431.18 that was given to the Shipes' to evidence certain repayment obligations for shareholder loans to Seller ("Debt Repayment"). Note 1 is repayable over a period of 7 months, without interest, in six installments of $10,000.00 and one final installment of $4,431.18. Note 1 contains an acceleration clause that will cause Note 1 to become immediately due and payable upon the occurrence of a "Change in Control" of the Company, as that term is defined in Note 1. In addition to the foregoing, under the terms of the Agreement the Company and the Shipes' entered into a separate agreement (the "Repurchase Agreement") regarding the repurchase of 2,400,000 shares of Company common stock (the "Repurchase Shares") from the Shipes'. The Repurchase Shares were acquired by the Shipes', both of whom were former shareholders of WGR, in conjunction with the Merger. As consideration for the Repurchase Shares, the Company delivered its promissory note ("Note 2") payable to the Shipes' in the amount of $1,135,568.82. Note 2 is repayable, without interest, as follows: (a) On January 1, 2004 the Company shall pay to the Shipes' the sum of $5,568.82. (b) Commencing February 1, 2004, and on the first day of each month thereafter through and including June 1, 2013, the Company shall pay to the Shipes' monthly installments of $10,000.00. (c) If not sooner paid, the entire principal amount of Note 2, without interest, shall be due and payable on June 1, 2013. The Repurchase Shares will be held by the Company as treasury stock and have been pledged as collateral to secure the Company's repayment obligation under Note 2. Note 2 contains an acceleration clause that will cause Note 2 to become immediately due and payable upon the occurrence of a "Change in Control" of the Company, as that term is defined in Note 2. Following consummation of the Merger, the Company had a total of 20,964,743 shares of common stock issued and outstanding. Of the 20,964,743 issued and outstanding shares of Company common stock, AMI owns 5,965,103, or approximately 28%. The remaining 14,999,640 issued and outstanding shares of Company common stock, or approximately 72%, are owned by the former shareholders of WGR. Additionally, following consummation of the Merger, Mr. Shipes, who is CEO of AMI and was CEO and President of WGR, became CEO and President of the Company. It is anticipated that the Company will conduct the majority of its day-to-day activities from its Tucson, Arizona office. As part of those continuing operations, the Shipes' have agreed to continue in the employ of the Company for a period of ten years at no base salary. Under the terms of their employment agreements, the Shipes' will be entitled to participate in any benefit plans offered by the Company to its employees. ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements Pursuant to Item 7(a)(4), the Registrant declares that it is impracticable to provide the required audited financial statements relative to the acquired business at the time of this Report. Such audited financial statements required by Item 7(a) shall be filed not later than sixty (60) days after the filing of this Current Report on Form 8-K. (b) Pro Forma Financial Information Pursuant to Item 7(b) and Item 7(a)(4), the Registrant declares it is impracticable to provide the required pro forma financial information relative to the acquired business at the time of this Report. Such pro forma financial information required by Item 7(b) shall be filed not later than sixty (60) days after the filing of this Current Report on Form 8-K. (c) Exhibits Item Title - ---- ----- 1.1 Amended Agreement and Plan of Merger dated as of June 30, 2003. 1.2 Repurchase Agreement dated as of June 30, 2003. 1.3 Employment Agreement of Harold R. Shipes. 1.4 Employment Agreement of Eileen A. Shipes. 1.5 Promissory Note made payable to Harold R. Shipes and Eileen A. Shipes in the original principal amount of $64,431.18. 1.6 Promissory Note made payable to Harold R. Shipes and Eileen A. Shipes in the original principal amount of $1,135,568.82. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ATLAS MINERALS, INC. Dated: August 5, 2003 By: /s/ Gary E. Davis ---------------------- ------------------------------ Gary E. Davis, President EX-1.1 3 atlas8kjuly232003ex1-1.txt Exhibit 1.1 AMENDED AGREEMENT AND PLAN OF MERGER by and among WESTERN GOLD RESOURCES, INC. a Florida corporation, and ATLAS PRECIOUS METALS INC a Nevada corporation AMENDED AGREEMENT AND PLAN OF MERGER THIS AMENDED AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated and effective this 30th day of June, 2003, is by and among WESTERN GOLD RESOURCES, INC., a Florida corporation ("Seller"), whose address is 8040 S. Kolb Road, Tucson, AZ 85706 and ATLAS PRECIOUS METALS INC., a Nevada corporation ("Buyer"), whose address is 10920 W. Alameda, Suite 205, Lakewood, Colorado 80226. RECITALS: WHEREAS, on or about September 4, 2002, Seller and Atlas Minerals Inc., a Colorado corporation and the parent corporation of Buyer executed and entered into an agreement (the "Option Agreement") pursuant to which Atlas Minerals Inc. and Seller agreed to execute and enter into an agreement and plan of merger that, upon consummation, would result in the merger of Seller with and into Atlas Minerals Inc. (the "Plan of Merger"); and WHEREAS, on or about January 3, 2003, Atlas Minerals Inc. assigned all of its right, title and interest in and under the Option Agreement to its wholly-owned subsidiary, Buyer; and WHEREAS, subsequent to the above referenced assignment, Buyer and Seller have agreed to modify the terms of the Plan of Merger, which modifications are contained herein; and WHEREAS, the respective Boards of Directors of Buyer and Seller have approved the acquisition of Seller by Buyer in accordance with the terms and conditions hereof; and WHEREAS, to complete such acquisition the respective Boards of Directors of Buyer and Seller have approved the merger of Seller with and into Buyer (the "Merger"), pursuant to and subject to the terms and conditions of this Amended Agreement and Plan of Merger; and WHEREAS, following consummation of the Merger Atlas Minerals Inc. plans to distribute the shares of Buyer now held by Atlas Minerals Inc. to its shareholders. NOW, THEREFORE, in consideration of the mutual covenants, representations and warranties made herein and of the mutual benefits to be derived herefrom, Buyer and Seller hereby agree as follows: 1. Merger. 1.1. Plan of Merger. Subject to the terms and conditions of this Agreement, including the receipt of all requisite shareholder approvals, the Merger will be carried out in the following manner: (a) Merger Approval. Seller and Buyer hereby warrant and represent that each has duly called, noticed and held a meeting of their respective shareholders entitled to vote to approve the Merger under the Nevada corporation law ("Nevada Law") and the Florida Business Corporation Act, as amended (the "Florida Law") respectively. (b) Merger. At the Effective Time (as defined in Section 1.1(c)), Seller shall merge with and into Buyer, the separate existence of Seller shall cease and Buyer shall continue as the surviving corporation (Buyer, in its capacity as the corporation surviving the Merger, is referred to as the "Surviving Corporation"). (c) Certificate of Merger. Subject to the provisions of this Agreement, a Certificate of Merger in the form attached as Exhibits A and B hereto shall be duly executed and, on the Closing Date (as defined in Section 2) filed with the Nevada Secretary of State in accordance with Nevada Law and filed with the Florida Secretary of State in accordance with Florida Law. The Merger shall become effective upon the latest filing of the Certificate of Merger (the "Effective Time"). (d) Treatment of Common Stock. At the Effective Time, each share of common stock, ($0.00) par value per share, of Seller (the "Common Stock or Seller Stock") issued and outstanding immediately prior to the Effective Time, other than shares of Dissenting Shareholders, if any, shall, by virtue of the Merger and without any action on the part of the holder thereof, be converted into the right to receive an amount equal to the Merger Consideration (as hereinafter defined and adjusted) divided by the Aggregate Number of Fully Diluted Shares (as hereinafter defined) immediately prior to the Effective Time ("Per Share Consideration"). Such shares of Seller Stock shall no longer be outstanding, shall automatically be cancelled and retired and shall cease to exist, and each holder of a certificate or certificates which immediately prior to the Effective Time represented outstanding shares of Common Stock shall cease to have any rights with respect thereto, except the right to receive the Per Share Consideration, without interest. For purposes of the foregoing, the "Aggregate Number of Fully Diluted Shares" shall be equal to 14,499,700. (e) Taking of Necessary Action Further Action. If, at any time after the Effective Time, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest the Surviving Corporation with full right, title and possession to all assets, property, rights, privileges, powers and franchises of Seller, the officers and directors of the Surviving Corporation shall be fully authorized in the name of Seller, or otherwise to take, and Buyer and Seller shall cause such officers and directors to take, all such lawful and necessary action, so long as such action is not inconsistent with the Agreement. (f) Stock Plans. Except as may be otherwise agreed to by Buyer and Seller or as otherwise contemplated or required to effectuate this Section 1.1, Seller's stock plans shall terminate as of the Effective Time and the provisions in any other plan, program or arrangement providing for the issuance or grant of any other interest in respect of the capital stock of Seller shall be deleted as of the Effective Time. 1.2. Merger Consideration. The aggregate merger consideration (the "Merger Consideration") shall be payable as follows: (a) 17,399,640 shares of common stock of Buyer (1.2 Buyer shares for each of the 14,499,700 shares of Seller). (b) A promissory note ("Note 1") payable to Harold R. and Eileen A. Shipes, JTWROS, (the "Shipes") in the amount of $64,431.18 which shall be given to the Shipes to evidence certain repayment obligations for shareholder loans to Seller ("Debt Repayment"). (c) The parties agree Note 1 will be interest free and will be paid over a period of 7 months as follows: Months 1-6 $10,000 per month Month 7 $ 4,431.18 (d) The parties agree Note 1 shall contain an acceleration clause in the event of a change in control of Buyer. Such clause shall cause Note 1 to become immediately due and payable upon the occurrence of Change of Control (as that term is defined in Note 1). 1.3. Repurchase Agreement. At Closing, Buyer and the Shipes will enter into a separate agreement regarding the repurchase of 2,400,000 shares of Buyer's common stock from the Shipes (the "Repurchase Agreement"). A copy of the Repurchase Agreement is attached hereto as Exhibit 1.3. The terms and conditions of the Repurchase Agreement are incorporated herein by this reference. 1.4. No Further Rights of Transfer. At and after the Effective Time, each holder of a certificate formerly representing one or more shares of Seller Stock or the right to obtain same pursuant to any instrument includable within those making up the Aggregate Number of Fully Diluted Shares as defined in Section 1.1(d) (a "Certificate") shall cease to have any rights as a shareholder of Seller, except for the right to surrender such Certificate in exchange for the Per Share Consideration deliverable in respect thereof or Appraisal Rights (as defined in Section 1.6), and no transfer of shares of Seller Stock shall be made on the stock transfer books of Seller. Certificates presented to the Surviving Corporation after the Effective Time shall be canceled and exchanged for the Per Share Consideration as provided in this Section 1. At the close of business on the day of the Effective Time, the stock ledger of Seller with respect to the shares of Seller Stock shall be closed. The foregoing shall also apply to all subsidiary entities of Seller. 1.5. Surviving Corporation. The Certificate of Incorporation and Bylaws of Buyer, as in effect immediately prior to the Effective Time, shall be the Articles of Incorporation and Bylaws of the Surviving Corporation, except as amended in Buyer's discretion as part of the Certificate of Merger. At the Effective Time, the directors of Buyer immediately prior to the Effective Time shall be the directors of the Surviving Corporation, each to hold office, subject to the applicable provisions of the Certificate of Incorporation and Bylaws of the Surviving Corporation, until the next annual shareholders' meeting of the Surviving Corporation and until their respective successors shall be duly elected or appointed and qualified. At the Effective Time, Harold R. Shipes shall be named President and CEO of the Surviving Corporation. 1.6. Dissenting Seller Shareholders. Any shares of Seller Stock held by persons who have satisfied the requirements of Section 607.1302 of the Florida Law related to the rights of appraisal for dissenting shareholders ("Appraisal Rights"), and have not effectively withdrawn or lost such Appraisal Rights (such persons being referred to as "Dissenting Seller Shareholders"), shall not be converted pursuant to this Agreement. Instead, Dissenting Seller Shareholders shall be entitled only to such Appraisal Rights. Each Dissenting Seller Shareholder who is entitled to payment for his or her shares of Seller Stock pursuant to such Appraisal Rights shall receive payment from the Surviving Corporation in an amount as determined pursuant to such Appraisal Rights. The Surviving Corporation shall not pay any amount to the Dissenting Seller Shareholders in an amount per share in excess of the Per Share Consideration unless directed to do so by a court of competent jurisdiction. If the holders of more than five percent (5%) of the total outstanding shares of Seller Stock exercise their Appraisal Rights in accordance with Section 607.1320 of the Florida Law, Seller shall immediately give Buyer written notice of such fact and Buyer shall have the right, in its sole discretion, to terminate this Agreement at any time within five (5) days from the receipt of such notice. The Per Share Consideration which would otherwise be payable to Dissenting Seller shareholders will be retained by the Buyer or Surviving Corporation in a separate account and not paid to the shareholders. 2. Closing. Subject to satisfaction of the terms and conditions of this Agreement, the closing of the purchase and sale of the Seller's Shares provided for by this Agreement (referred to throughout this Agreement as the "Closing") shall take place at a time and place mutually agreeable to the parties. The time, place and date of the Closing are referred to throughout this Agreement as the "Closing Date". 3. Representations and Warranties. 3.1. Representations and Warranties of Seller. The Seller represents and warrants to the Buyer that: 3.1.1. Ownership of Seller Shares. The persons listed on Exhibit 3.1.1 are the only record and beneficial owners of the Seller's shares. The persons listed on Exhibit 3.1.1 possess good and merchantable title to the Seller's shares, and own the Seller's shares free and clear of any and all security interests, agreements, restrictions, claims, liens, pledges and encumbrances of any nature or kind. The person listed on Exhibit 3.1.1 have the absolute and unconditional right to sell, assign, transfer and deliver the Seller's shares to the Buyer in accordance with the terms of this Agreement. 3.1.2. Due Organization; Good Standing; Authority of Seller. Seller is a corporation duly organized, validly existing as a stock corporation, and in good standing under the laws of the State of Florida. Seller has full right, power, and authority to own its properties and assets, and to carry on its business. Seller is duly licensed, qualified and authorized to do business as a foreign corporation, and is in good standing, in each jurisdiction in which the properties and assets owned by it or the nature of the business conducted by it makes such licensing, qualification and authorization legally necessary. A complete and correct copy of each of Seller's Articles of Incorporation, as amended to the date of this Agreement, (the "Charter") certified by the Secretary of State of the State of Florida and bylaws, as amended to the date of this Agreement, (the "Bylaws"), have been delivered to Buyer. The Charter and the Bylaws are in full force and effect, and Seller is not in breach or violation of any of the provisions thereof. The minute books of Seller containing the minutes of the meetings of the stockholders of Seller and the Board of Directors of Seller, which were or will be made available to the Buyer for examination, are complete and correct and accurately reflect all proceedings of the stockholders of Seller and the Board of Directors of Seller. 3.1.3. Validity of Agreement. The Seller has the legal capacity and authority to enter into this Agreement. This Agreement is a valid and legally binding obligation of the Seller and is fully enforceable against the Seller in accordance with its terms, except as such enforceability may be limited by general principles of equity, bankruptcy, insolvency, moratorium and similar laws relating to creditors' rights generally. 3.1.4. Capitalization; the Seller Stock; Related Matters. Seller's authorized capital stock consists of 100,000,000 shares of common stock, of which 14,499,700 shares are issued and outstanding and owned of record and beneficially by the persons listed on Exhibit 3.1.1. The Seller's shares have been duly, legally and validly issued, and are fully paid and non-assessable. Delivery of the Seller's shares by the Seller to the Buyer at the Closing on the Closing Date pursuant to this Agreement will transfer to the Buyer full and entire legal and equitable title to 100% of the issued and outstanding capital stock of Seller, except for rights of Dissenting shareholders under Section 1.6. 3.1.5. Options, Warrants and Other Rights and Agreements Affecting Seller Capital Stock. Seller has no authorized or outstanding options, warrants, calls, subscriptions, rights, convertible securities or other securities as defined in the federal Securities Act of 1933, as amended, (hereinafter "Securities"), or any commitments, agreements, arrangements or understandings of any kind or nature obligating Seller, in any such case, to issue shares of Seller capital stock or other securities or securities convertible into or evidencing the right to purchase shares of Seller capital stock or other securities. Seller is not a party to any agreement, understanding, arrangement or commitment, or bound by any Articles of Incorporation or bylaw provision which creates any rights in any Person with respect to the authorization, issuance, voting, sale or transfer of any shares of Seller's capital stock or other securities. 3.1.6. Subsidiaries. Seller's subsidiaries are set forth on Exhibit 3.1.6. Such subsidiaries are incorporated in the states indicated, are in good standing in each state where such qualification is necessary. Seller does not have any subsidiaries, other than those set forth on Exhibit 3.1.6. and does not, directly or indirectly, own any interest in or control any corporation, partnership, joint venture, or other business entity. 3.1.7. Agreement Not in Conflict with Other Instruments; Required Approvals Obtained. The execution, acknowledgement, sealing, delivery, and performance of this Agreement by the Seller and the consummation of the transactions contemplated by this Agreement will not (a) violate or require any registration, qualification, consent, approval, or filing under, (i) any law, statute, ordinance, rule or regulation (hereinafter collectively referred to as "Laws") of any federal, state or local government (hereinafter collectively referred to as "Governments") or any agency, bureau, commission or instrumentality of any Governments (hereinafter collectively referred to as "Governmental Agencies"), or (ii) any judgment, injunction, order, writ or decree of any court, arbitrator, Government or Governmental Agency by which Seller or any of its assets or Properties is bound; (b) conflict with, require any consent, approval, or filing under, result in the breach or termination of any provision of, constitute a default under, result in the acceleration of the performance of Seller's obligations under, or result in the creation of any claim, security interest, lien, charge, or encumbrance upon any of Seller's properties, assets, or businesses pursuant to, (i) Seller's Charter or Bylaws, (ii) any indenture, mortgage, deed of trust, license, permit, approval, consent, franchise, lease, contract, or other instrument or agreement to which Seller is a party or by which Seller or any of Seller's assets or properties is bound, or (iii) any judgment, injunction, order, writ or decree of any court, arbitrator, Government or Governmental Agency by which Seller or any of its assets or properties is bound. 3.1.8. Conduct of Business in Compliance with Regulatory and Contractual Requirements. Seller has conducted and is conducting Seller's business in compliance with all applicable Laws of all Governments and Governmental Agencies. Neither the real or personal properties owned, leased, operated or occupied by Seller, nor the use, operation or maintenance thereof, (i) violates any Laws of any Government or Governmental Agency, or (ii) violates any restrictive or similar covenant, agreement, commitment, understanding or arrangement. 3.1.9. Licenses; Permits; Related Approvals. Seller possesses all licenses, permits, consents, approvals, authorizations, qualifications, and orders ("hereinafter collectively referred to as "Permits") of all Governments and Governmental Agencies lawfully required to enable Seller to conduct Seller's business as a mining project in all jurisdictions in which it owns properties. All of the Permits are in full force and effect, and no suspension, modification or cancellation of any of the Permits is pending or threatened. A list of the Permits is attached hereto as Exhibit 3.1.9 and incorporated by reference herein. 3.1.10. Legal Proceedings. There is no action, suit, proceeding, claim, arbitration, or investigation by any Government, Governmental Agency or other Person (i) pending to which Seller is a party, (ii) threatened against or relating to Seller or any of Seller's assets or businesses, (iii) challenging Seller's right to execute, acknowledge, seal, deliver, perform under or consummate the transactions contemplated by this Agreement, or (iv) asserting any right with respect to any of the Seller Shares, and there is no basis for any such action, suit, proceeding, claim, arbitration or investigation. 3.1.11. Financial Statements; Undisclosed Liabilities. As soon as practicable following the execution of this Agreement Seller shall provide to Buyer copies of Seller's audited balance sheets as of December 31, 2002, Seller's audited Statement of Operations and Retained Earnings for the years ended as of December 31. 2001 and December 31, 2002, and Seller's audited Statement of Changes in Financial Position for the years ended as of, December 31, 2001 and December 31, 2002, (hereinafter collectively referred to as the "Financial Statements"), together with the unqualified opinion thereon of Horwath Gelfond Hochstadt Pangburn, P.C., independent certified public accountants, all of which shall be attached hereto as Exhibit 3.1.11.1 and shall be incorporated by reference herein. The Financial Statements shall be in accordance with the books and records of Seller, shall be true, correct and complete and accurately present Seller's financial position as of the dates set forth therein and the results of Seller's operations and changes in Seller's financial position for the periods then ended, all in conformity with generally accepted accounting principles applied on a consistent basis during each period and on a basis consistent with that of prior periods. Except (i) as disclosed in the Financial Statements, and (ii) as disclosed in this Agreement, Seller has no liabilities or obligations of any nature or kind, known or unknown, whether accrued, absolute, contingent, or otherwise. There is no basis for assertion against Seller of any claim, liability or obligation not fully disclosed in the Financial Statements. All prepaid items set forth in Seller's Financial Statements have been properly accrued. 3.1.12. Tax Matters. Seller has paid in full all taxes (including taxes withheld from employees' salaries and other withholding taxes and obligations), interest, penalties, assessments and deficiencies owed by Seller to all taxing authorities. All claims by the IRS or any state taxing authorities for taxes due and payable by Seller have been paid by Seller. The provisions for the Accrued Taxes are adequate for the payment of all of Seller's liabilities for unpaid taxes (whether or not disputed). Seller has not adopted a plan of complete liquidation under the Internal Revenue Code of 1954, as amended (the "Code"), or filed a consent pursuant to Section 341(f) of the Code. Seller is not a party to, and is not aware of, any pending or threatened action, suit, proceeding, or assessment against it for the collection of taxes by any Governmental Agency. 3.1.13. Accounts Receivable. Seller's accounts receivable reflected on Seller's Balance Sheet as of December 31, 2002 (the "Balance Sheet") and all accounts receivable arising after the date of the Balance Sheet (collectively, the "Accounts Receivable") are bona fide accounts receivable, the full amount of which is actually owing to Seller. The Accounts Receivable will be fully collectible by the Buyer within 90 days of the Closing Date, without offset, recoupment, counterclaim, claim or diminution. Seller's accounts payable reflected on the Balance Sheet and all accounts payable arising after the date of the Balance Sheet arose from bona fide transactions in the ordinary course of Seller's business. 3.1.14. Real Property. As set forth on Exhibit 3.1.14 attached hereto and incorporated by reference herein is the real property owned or leased by Seller. Seller has sole good and merchantable title to, or a valid leasehold interest in, the real property, on Exhibit 3.1.14. Seller does not own or have any interest in any other real property. 3.1.14.1 Mining Property. With respect to the mining properties held by Seller, Seller has good and merchantable title to the fee interests in, or a valid leasehold interest in the leases in, or valid claims (patented or unpatented) in, the mineral properties or interests, including royalty interests and other legal or beneficial interests in minerals, subject to minor defects in title which do not, individually or in the aggregate, cause a material adverse impact on the use, development and/or operation as a mine and enjoyment of the property and the operation of a mine on such property. 3.1.14.2 Mining Operations. During the period of Seller's ownership of the mining properties, and to the best of Seller's knowledge during the period of prior ownership of the mining properties: i. neither Seller nor its Affiliates has incurred any liability, nor does a state of facts exist which could give rise to a liability for damages, fines or levies as a result of any subsidence, water, air or other environmental contamination, conduct of mining development and operations, or similar occurrences, which individually or in the aggregate, would constitute a material adverse effect on the properties or business of Seller. ii. the mining operations conducted on the mining properties have been conducted in accordance with good miner/mining practices, and in compliance with all applicable laws, regulations, ordinances, decrees and directives affecting the property or the business of Seller. 3.1.15. Condition of Personal Property. Attached hereto as Exhibit 3.1.15 and incorporated by reference herein is a true, correct and complete list of all personal property, owned by Seller or used by Seller in the conduct of its business, including, but not limited to, all equipment, machinery and fixtures, (collectively, the "Personal Property"), indicating whether it is owned or the manner in which the Personal Property is otherwise utilized by Seller. Seller has sole and exclusive, good and merchantable title to all of the Personal Property owned by it, free and clear of all pledges, claims, liens, restrictions, security interests, charges and other encumbrances. All of the Personal Property is in good repair and good operating condition, fit for its intended purposes, and is adequate for the continuation of Seller's business. 3.1.18. Contracts, Licenses, and Permits. Attached hereto and incorporated by reference herein are the following: 3.1.18.1 Exhibit 3.1.18.1 is a true, correct and complete list and copy (or where they are oral, true, correct and complete written summaries) of all leases of Seller relating to real property. 3.1.18.2. Exhibit 3.1.18.2, is a true, correct and complete list and copy (or where they are oral, true, correct and complete written summaries) of all leases of Seller relating to Personal Property. 3.1.18.3. Exhibit 3.1.18.3, is a true, correct and complete list and copy (or where they are oral, true, correct and complete written summaries) of all licenses, franchises, assignments or other agreements of Seller relating to trademarks, trade names, patents, copyrights and service marks (or applications therefor), unpatented designs or styles, know-how and technical assistance. 3.1.18.4. Exhibit 3.1.18.4, is a true, correct and complete list and copy (or where they are oral, true, correct and complete written summaries) of all Permits, other than those listed in Exhibit 3.1.9, relating to the operation of the business of Seller. 3.1.18.5. Exhibit 3.1.18.5 is a true, correct and complete list and copy (or where they are oral, true, correct and complete written summaries) of all employment, compensation and consulting agreements, contracts, understandings or arrangements of Seller with any officer, director, employee, broker, agent, consultant, salesman or other Person, including the names, starting dates of employment, term of employment, functions and aggregate compensation (including salary, bonuses, commissions and other forms of compensation). 3.1.18.6. Exhibit 3.1.18.6, is a true, correct and complete list and copy (or where they are oral, true, correct and complete written summaries) of all agreements of Seller for the purchase, sale or lease of goods, materials, supplies, machinery, equipment, capital assets and services having a cost in excess of $1,000 in any one instance or in the aggregate. 3.1.18.7. Exhibit 3.1.18.7, is a true, correct and complete list and copy (or where they are oral, true, correct and complete written summaries) of all agreements and arrangements, other than those listed in Exhibit 3.1.18.6, which Seller has with any supplier, distributor, dealer, sales agent, broker, or representative. 3.1.18.8. Exhibit 3.1.18.8, is a true, correct and complete list and copy (or where they are oral, true, correct and complete written summaries) of all agreements and arrangements of Seller for the borrowing or lending of money, on a secured or unsecured basis, other than the obligations represented by Note 1, or guaranteeing, indemnifying or otherwise becoming liable for the obligations or liabilities of any other Person. 3.1.18.9. Exhibit 3.1.18.9, is a true, correct and complete list and copy (or where they are oral, true, correct and complete written summaries) of all agreements and arrangements of Seller for the construction, modification or improvement of any building or structure, or the incurrence of any other capital expenditure, involving payments in excess of $5,000. 3.1.18.10. Exhibit 3.1.18.10, is a true, correct and complete list and copy (or where they are oral, true, correct and complete written summaries) of all agreements and understandings of Seller other than those listed in Exhibits 3.1.18.1 through 3.1.18.9 which are material in nature, involve the payment or receipt, in any 12 month period, of more than $5,000, or have a term of more than 3 months. Each of the agreements, arrangements and understandings listed in Exhibits 3.1.18.1 through 3.1.18.10 (hereinafter collectively referred to as the "Commitments") is in full force and effect, is valid and binding upon each of the parties thereto and is fully enforceable by Seller against the other party thereto in accordance with its terms. Seller has no notice of, or any reason to believe that there is or has been any actual, threatened or contemplated termination or modification of any of the Commitments. No party to any of the Commitments is in breach of or in default thereunder, nor has any event occurred which, with the lapse of time, notice or election, may become a breach or default by Seller or any other party to or under any of the Commitments. Seller has the right to quiet enjoyment of all real properties leased to it for the full term of the lease thereof. The execution, acknowledgement, sealing, delivery, and performance of this Agreement by the Seller and the consummation of the transactions contemplated by this Agreement (i) will not result in the breach or termination of or constitute a default under any Commitment, (ii) does not require the consent of any party to any of the Commitments, and (iii) will not give any such party the right to terminate any of the Commitments. All payments required to be made by Seller or any other party to any of the Commitments pursuant to any of the Commitments have been paid in full in accordance with the terms and conditions of the Commitments. The Commitments are in compliance with all applicable Laws of all Governments and Governmental Agencies and there are no Laws of any Government or Governmental Agencies, actions, suits, proceedings, arbitrations, orders, writs, or decrees in any such case existing or proposed, which adversely affect or might adversely affect Seller's rights under any of the Commitments. 3.1.19. Insurance. Attached hereto as Exhibit 3.1.19.1 and incorporated by reference herein is a list of all insurance policies of Seller, setting forth with respect to each policy the name of the insurer, a description of the policy, the dollar amount of coverages, the amount of the premium, the date through which all premiums have been paid, and the expiration date. Each insurance policy relating to the insurance referred to in Exhibit 3.1.19.1 is in full force and effect, is valid and enforceable, and Seller is not in breach of or in default under any such policy. Seller has no notice of or any reason to believe that there is or has been any actual, threatened, or contemplated termination or cancellation of any insurance policy relating to the insurance referred to in Exhibit 3.1.19.1. Attached hereto as Exhibit 3.1.19.2 and incorporated by reference herein is a true, correct and complete list and summary of all claims which have been made under each insurance policy relating to the insurance referred to in Exhibit 3.1.19.1. Seller has not failed to give any notice or to present any claim under any insurance policy in a due and timely fashion. 3.1.20. Benefit Plans. For purposes of the representations and warranties set forth in this Section 3.1.20, the term "Benefit Plans" is defined broadly to include all plans, programs, or arrangements (whether or not insured) which provide to employees pension, profit sharing, ESOP, stock option, incentive bonus, surgical or other physician, hospitalization, major medical, dental, optical, prescription drug, health insurance, life insurance, accidental death and dismemberment, short-term disability, long-term disability, sick leave, vacation, severance, supplemental unemployment, layoff, automobile, apprenticeship and training, day care, scholarship, or group legal benefits. No Benefit Plans are presently in effect with respect to Seller or are required to be offered by Seller either at the present time or in the future, under any current agreement, arrangement or understanding. 3.1.21. Employee Relations and Employment Agreements. 3.1.21.1. None of Seller's employees is represented by a labor organization. No petition for representation has ever been filed with the National Labor Relations Board (the "NLRB") with respect to Seller's employees. Seller are not aware of any union organizational activity with respect to Seller and have no reason to believe that any such activity is being contemplated. 3.1.21.2. Seller is not in violation of applicable equal employment opportunity laws, wage and hour laws, occupational safety and health laws, federal labor laws, or any other Laws of any Government or Governmental Agency relating to employment. Seller has disclosed to the Buyer the status of all investigations, claims, charges, and employment-related suits or controversies which have occurred with respect to Seller within the last 3 years or which are presently pending or threatened with respect to Seller under any employment-related Law of any Government or Governmental Agency (including common law). Seller has satisfied and performed fully all judgments, decrees, conciliation agreements, or settlement agreements by which it is bound or to which it is subject concerning employment-related matters and each such judgment, decree, or agreement is disclosed on Exhibit 3.1.21.1. 3.1.21.3. Seller has not entered into any employment agreement and all employees can be terminated at will. Seller has no contractual obligation or special termination or severance arrangement in respect of any employee. 3.1.21.4. Seller has paid all wages due (including all required taxes, insurance, and withholding thereon) through the Closing Date. Exhibit 3.1.21.4 attached hereto and incorporated by reference herein sets forth all accrued vacation, accrued sick leave, and accrued bonuses (including pro rata accruals for a period of a year) due to employees of Seller as of the Closing Date. 3.1.21.5. Exhibit 3.1.21.5 attached hereto and incorporated by reference herein sets forth each Seller employee's date of hire, position, present salary, amount of bonus paid in the past year, and announced termination date (if any). The Seller has provided to the Buyer access to the personnel files and employment records of all Seller employees. 3.1.22. Patents; Trademarks; Related Contracts. Attached hereto as Exhibit 3.1.22 and incorporated by reference herein, is a true, correct and complete list of all of Seller's patents, trademarks, tradenames, or trademark or tradename registrations, service marks, and copyrights or copyright registrations (the "Proprietary Rights"). All of Seller's Proprietary Rights are valid, enforceable, in full force and effect and free and clear of any and all security interests, liens, pledges and encumbrances of any nature or kind. Seller has not licensed, leased or otherwise assigned, transferred or granted any right to use any of its Proprietary Rights to any other Person, and no Person is infringing upon Seller's Proprietary Rights. Seller has not infringed and is not infringing upon any patent, trademark, tradename, or trademark or tradename registration, service mark, copyright, or copyright registration of any other Person. 3.1.23. Books and Records; Fiscal Year; Method ofAccounting. Seller has made available to the Buyer all of its tax, accounting, corporate and financial books and records. The books and records pertaining to Seller's business made available to the Buyer are true, correct and complete, have been maintained on a current basis, and fairly reflect the basis for Seller's financial condition and results of operations as set forth in the Financial Statements and the Interim Statements. Seller has consistently used the fiscal year ended December 31 as its taxable year, and has consistently used the cash method as its method of accounting for tax purposes. 3.1.24 Bank Accounts and Safe Deposit Arrangements. At Closing on the Closing Date, Seller's Bank Accounts shall reflect cash on hand of no less then $398,172.00. 3.1.25. Absence of Certain Changes or Events. Since 2002 except as set forth in Exhibit 3.1.25 attached hereto and incorporated by reference herein, Seller has not: 3.1.25.1. Incurred any indebtedness, obligation or liability (contingent or otherwise), except normal trade or business obligations incurred in the ordinary course of its business, none of which was entered into for inadequate consideration and none of which exceeds $1,000 in amount. 3.1.25.2. Discharged or satisfied any security interest, lien or encumbrance or paid any indebtedness, obligation or liability (contingent or otherwise), except (A) current liabilities and (B) scheduled payments pursuant to obligations under contracts, agreements, or leases listed in Exhibits 3.1.18.6 through 3.1.18.10. 3.1.25.3. Mortgaged, pledged, or subjected to lien, charge, security interest, or other encumbrance any of its assets or properties. 3.1.25.4. Sold, assigned, transferred, leased, disposed of, or agreed to sell, assign, transfer, lease, or dispose of, any of its assets or properties. 3.1.25.5. Acquired or leased any assets or property of any other Person. 3.1.25.6. Cancelled or compromised any debt or claim. 3.1.25.7. Waived or released any rights. 3.1.25.8. Transferred or granted any rights with respect to know-how or any rights existing under any leases, licenses, agreements, inventions, or any of the Proprietary Rights. 3.1.25.9. Granted or made any contract, agreement, promise or commitment to grant any wage, salary or employee benefit increase to, or entered into any employment contract, bonus, stock option, profit sharing, pension, incentive, retirement or other similar arrangement or plan with, any officer, employee or other Person. 3.1.25.10. Entered into any collective bargaining agreement or made any commitment or incurred any liability to any labor organization. 3.1.25.11. Made any capital expenditure in excess of $5,000 or entered into any commitment therefor. 3.1.25.12. Suffered any casualty loss or damage, whether or not such loss or damage is or was covered by insurance. 3.1.25.13. Suffered any adverse change in its operations, earnings, assets, liabilities, properties, or business or in its condition (financial or otherwise). 3.1.25.14. Changed the nature of its business or its method of accounting. 3.1.25.15. Other than in the ordinary course of business, entered into any transaction, contract, or commitment. 3.1.25.17. Suffered a loss of any supplier or suppliers, which loss (individually or in the aggregate) has had, or may have, an adverse effect on its financial condition, results of operations, business, or prospects. 3.1.25.18. Suffered any material adverse change in its assets or liabilities, in its condition, financial or otherwise, or in its business, properties, earnings or net worth. 3.1.26. Insider Transactions. Attached hereto as Exhibit 3.1.26 and incorporated by reference herein is a true, correct and complete list of the following: 3.1.26.1. The amounts and other essential terms of indebtedness or other obligations, agreements, undertakings, liabilities or commitments (contingent or otherwise) of Seller to or from any past or present officer, director, member, stockholder or any Person related to, controlling, controlled by or under common control with any of the foregoing (collectively, "Control Persons"). 3.1.26.2. All transactions between each Control Person and Seller since Seller's date of incorporation, and all proposed or contemplated transactions with each Control Person, together with the essential terms thereof. 3.1.27. Adverse Conditions. Seller has no knowledge of any present or future condition, state of facts or circumstances which has affected or may affect adversely the business of Seller or prevent Seller from carrying on its business. 3.1.28. Full Disclosure. This Agreement (including the Exhibits hereto) does not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements contained herein not misleading. There is no fact known to Seller that is not disclosed in this Agreement which materially adversely affects the accuracy of the representations and warranties contained in this Agreement or Seller's financial condition, results of operations, business, or prospects. 3.1.29. Negotiations with Other Persons. Seller will not, and will not permit others to, initiate, encourage the initiation by others, or participate in any discussions or negotiations with any other Persons relating to the sale or other disposition of any of the capital stock of Seller or any assets of Seller, and will promptly notify the Buyer if any Person initiates such discussions or negotiations with them or Seller. 3.1.30. No Brokerage. Seller has not incurred any obligation or liability, contingent or otherwise, for brokerage fees, finder's fees, agent's commissions, or the like in connection with this Agreement or the transactions contemplated hereby. 3.2. Representations and Warranties of the Buyer. The Buyer represents and warrants to Seller that: 3.2.1. Due Organization; Good Standing; Power. The Buyer is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada. The Buyer has all requisite corporate power to enter into this Agreement and to perform its obligations hereunder. 3.2.2. Authorization and Validity of Documents. The execution, acknowledgement, sealing, delivery, and performance of this Agreement by the Buyer, and the consummation by the Buyer of the transactions contemplated hereby, have been duly and validly authorized by the Buyer. This Agreement has been duly executed, acknowledged, sealed and delivered by the Buyer and is a legal, valid, and binding obligation of the Buyer, enforceable against the Buyer in accordance with its terms, except as such enforceability may be limited by general principles of equity, bankruptcy, insolvency, moratorium and similar laws relating to creditors' rights generally. 3.2.3. Investment Intent. The Buyer is acquiring the Seller's shares by way of merger for investment only, for the Buyer's own account, and not with a view to, for offer for sale or for sale in connection with, the distribution or transfer thereof. The Seller's Shares are not being purchased for subdivision or fractionalization thereof; and the Buyer has no contract, undertaking, agreement or arrangement with any Person to sell, hypothecate, pledge, donate or otherwise transfer (with or without consideration) to any such Person any of the Seller's Shares which the Buyer is acquiring hereunder, and the Buyer has no present plans or intention to enter into any such contract, undertaking, agreement or arrangement. 3.2.4. No Brokerage. The Buyer has not incurred any obligation or liability, contingent or otherwise, for brokerage fees, finder's fees, agent's commissions, or the like in connection with this Agreement or the transactions contemplated hereby. 4. Additional Covenants of the Parties--At the Closing on the Closing Date. 4.1. Release by Directors. The Buyer shall receive the release (the "Release"), in the form attached hereto as Exhibit 4.1 and incorporated by reference herein, executed, acknowledged, sealed and delivered by each of the individuals currently serving on the Seller's Board of Directors (the "Directors"). 4.2. Resignations of Officers and Directors of Seller. The resignation of each of Seller's officers and directors effective at the Closing on the Closing Date in the form attached hereto as Exhibit 4.2 and incorporated by reference herein shall have been executed and delivered to Buyer by each such officer and director. 5. Indemnification. 5.1. Indemnification by Seller. The Seller shall defend, indemnify and hold harmless the Buyer, its officers, directors, stockholders, agents, servants and employees, and their respective heirs, personal and legal representatives, guardians, successors and assigns, from and against any and all claims, threats, liabilities, taxes, interest, fines, penalties, suits, actions, proceedings, demands, damages, losses, costs and expenses (including attorneys' and experts' fees and court costs) of every kind and nature arising out of, resulting from, or in connection with: 5.1.1. Any misrepresentation or breach by Seller of any representation or warranty contained in this Agreement. 5.1.2. Any nonfulfillment, failure to comply or breach by Seller of or with any covenant, promise or agreement of the Seller contained in this Agreement. 5.2. Indemnification by Buyer. Buyer shall defend, indemnify and hold harmless the Seller and its respective heirs, personal and legal representatives, guardians, successors and assigns, from and against any and all claims, threats, liabilities, taxes, interest, fines, penalties, suits, actions, proceedings, demands, damages, losses, costs and expenses (including attorneys' and experts' fees and court costs) of every kind and nature arising out of, resulting from, or in connection with: 5.2.1. Any misrepresentation, omission or breach by Buyer of any representation or warranty contained in this Agreement. 5.2.2 Any nonfulfillment, failure to comply or breach by the Buyer of or with any covenant, promise or agreement of the Buyer contained in this Agreement. 6. Termination of Agreement. This Agreement may be terminated as follows: 6.1 By Buyer: -------- 6.1.1 Breach. If Seller shall have breached any covenant, representation, warranty or agreement herein, Buyer shall have the right to terminate this Agreement if Seller is unable to cure such breach within 5 days after written notice of such breach is given to Seller by Buyer. 6.2 By Seller: 6.2.1 Breach. If Buyer shall have breached any covenant, representation, warranty or agreement herein, Seller shall have the right to terminate this Agreement if Buyer is unable to cure such breach within 5 days after written notice of such breach is given to Buyer by Seller. 6.3 By Either Party: If mutually agreed or if the transaction contemplated hereby is not closed by July 31, 2003. 6.4 Effects of Termination. Upon termination, this Agreement shall be of no further force and effect, the parties shall have no further duties to each other, and any proprietary or confidential information will be delivered to the Party which delivered it. 7. Miscellaneous. 7.1. Survival of Representations, Warranties, and Agreements. All of the representations, warranties, covenants, promises and agreements of the parties contained in this Agreement (or in any document delivered or to be delivered pursuant to this Agreement or in connection with the Closing) shall survive the execution, acknowledgement, sealing and delivery of this Agreement and the consummation of the transactions contemplated hereby. 7.2 Definitions. As used throughout this Agreement, the following terms have the following meanings: "Affiliate" has the meaning ascribed to such term in Rule 405 promulgated under the Securities Act, as such rule is in effect on the date hereof. "Person" means an individual, partnership, corporation, trust, unincorporated organization, government, or agency or political subdivision of a government. "SEC" means the Securities and Exchange Commission, or any other Federal agency at the time administering the Securities Act or the Exchange Act. "Securities Act" means the Securities Act of 1933, as amended, or any similar Federal statute, and the rules and regulations of the SEC promulgated thereunder, all as the same shall be in effect at the relevant time. 7.3 Notices. All notices, requests, demands, consents, and other communications which are required or may be given under this Agreement (collectively, the "Notices") shall be in writing and shall be given either (a) by personal delivery against a receipted copy, or (b) by certified or registered U.S. mail, return receipt requested, postage prepaid or (c) by facsimile transmission to a party's fax number listed below, to the following addresses: (i) If to Seller: Western Gold Resources, Inc. Attn: Roy Shipes 8040 S. Kolb Road, Tucson, AZ 8570 (ii) If to the Buyer: Atlas Precious Metals Inc. Attn: Gary Davis 10920 W. Alameda, Suite 205 Lakewood, Colorado 80226 with a copy to: Nathan L. Stone, Esq. Jackson Kelly PLLC 1099 18th Street, Suite 2150r Denver, Colorado 80202 or to such other address of which written notice in accordance with this Section 7.3 shall have been provided by such party. Notices may only be given in the manner hereinabove described in this Section 7.3 and shall be deemed received when given in such manner. 7.4. Entire Agreement. This Agreement (including the Exhibits hereto) constitutes the full, entire and integrated agreement between the parties hereto with respect to the subject matter hereof, and supersedes all prior negotiations, correspondence, understandings and agreements among the parties hereto respecting the subject matter hereof. 7.5. Assignability. This Agreement shall not be assignable by any party hereto without the prior written consent of the other parties hereto; provided, however, that the Buyer may, without the prior written consent of any other party, assign its interest in this Agreement to any Affiliate of the Buyer if such Affiliate undertakes to perform the Buyer's obligations hereunder that shall have been so assigned, and upon, from and after such assignment the Buyer shall have no further liabilities, obligations or duties in respect of the rights, obligations and duties so assigned. 7.6. Binding Effect; Benefit. This Agreement shall inure to the benefit of and be binding upon the parties hereto, each other Person who is indemnified under any provision of this Agreement, and their respective heirs, personal and legal representatives, guardians, successors and, in the case of Buyer, its permitted assigns. Nothing in this Agreement, express or implied, is intended to confer upon any other Person any rights, remedies, obligations, or liabilities. 7.7. Severability. Any provision of this Agreement which is held by a court of competent jurisdiction to be prohibited or unenforceable shall be ineffective to the extent of such prohibition or unenforceability, without invalidating or rendering unenforceable the remaining provisions of this Agreement. 7.8. Amendment; Waiver. No provision of this Agreement may be amended, waived, or otherwise modified without the prior written consent of all of the parties hereto. No action taken pursuant to this Agreement, including any investigation by or on behalf of any party, shall be deemed to constitute a waiver by the party taking such action of compliance with any representation, warranty, covenant or agreement herein contained. The waiver by any party hereto of a breach of any provision or condition contained in this Agreement shall not operate or be construed as a waiver of any subsequent breach or of any other conditions hereof. 7.9. Section Headings. The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. 7.10. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument. 7.11. Applicable Law. This Agreement is made and entered into, and shall be governed by and construed in accordance with, the laws of the State of Colorado. 7.12. Remedies. The parties hereto acknowledge that the Seller's Shares are unique; that any claim for monetary damages may not constitute an adequate remedy; and that it may therefore be necessary for the protection of the parties and to carry out the terms of this Agreement to apply for the specific performance of the provisions hereof. It is accordingly hereby agreed by all parties that no objection to the form of the action or the relief prayed for in any proceeding for specific performance of this Agreement shall be raised by any party, in order that such relief may be expeditiously obtained by an aggrieved party. All parties may proceed to protect and enforce their rights hereunder by a suit in equity, transaction at law or other appropriate proceeding, whether for specific performance or for an injunction against a violation of the terms hereof or in aid of the exercise of any right, power or remedy granted hereunder or by law, equity or statute or otherwise. No course of dealing and no delay on the part of any party hereto in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice its rights, powers or remedies, and no right, power or remedy conferred hereby shall be exclusive of any other right, power or remedy referred to herein or now or hereafter available at law, in equity, by statute or otherwise. 7.13. Further Assurances. The Seller hereby agrees to execute, acknowledge, seal and deliver, after the date hereof, without additional consideration, such further assurances, instruments and documents, and to take such further actions, as the Buyer may request in order to fulfill the intent of this Agreement and the transactions contemplated hereby. The parties have executed and delivered this Agreement under seal, with the intention of making it a sealed instrument, on the date first above written. Seller: Buyer: WESTERN GOLD RESOURCES, INC. ATLAS PRECIOUS METALS INC. By: _____________________________ By:____________________________ Harold R. Shipes, President Gary Davis, President EX-1.2 4 atlas8kjuly232003ex1-2.txt Exhibit 1.2 STOCK REPURCHASE AGREEMENT This Stock Repurchase Agreement (the "Agreement") is entered into effective as of the 30th day of June, 2003, by and between ATLAS PRECIOUS METALS INC., a Nevada corporation (hereinafter referred to as the "Buyer") and HAROLD R. SHIPES and EILEEN A. SHIPES (hereinafter collectively referred to as "Seller"); Buyer and Seller may from time-to-time be referred to individually as a "Party" or collectively as the "Parties". WHEREAS, Seller currently owns 11,400,000 shares of the issued and outstanding shares of common stock, no par value, of Atlas Precious Metals Inc., a Nevada corporation; and WHEREAS, subject to the terms and conditions set forth below, Seller desires to sell to Buyer, and Buyer desires to acquire from Seller, 2,400,000 shares of common stock, no par value, of Atlas Precious Metals Inc. owned by Seller. NOW, THEREFORE, in consideration of the premises, the mutual benefits to be derived from this Agreement and the representations, warranties, and covenants contained hereinafter, Buyer and Seller hereby agree as follows: 1. Purchase and Sale of Shares. Subject to the terms and conditions herein stated, Seller does hereby sell, assign, transfer and convey, and Buyer does hereby purchase from Seller, 2,400,000 shares of common stock, no par value, of Atlas Precious Metals Inc. owned by Seller (the "Shares"). 2. Purchase Price. Buyer shall pay at the time of Closing (defined below) the aggregate sum of $1,135,568.82 for the Shares. 3. Closing. The closing of the transaction, including, without limitation, the purchase and sale of the Shares, shall occur immediately following consummation of the merger of Western Gold Resources, Inc. a Florida corporation, with and into Atlas Precious Metals Inc. (the "Closing"), or such later date as the Parties shall mutually agree. 4. Deliveries at Closing. (a) At the Closing, Seller shall deliver the following to Buyer: (i) a duly issued certificate of Atlas Precious Metals Inc. for Two Million Four Hundred Thousand (2,400,000) shares of no par value common stock of Atlas Precious Metals Inc.; and (ii) an executed stock power covering the Shares, which stock power shall be Medallion Guaranteed. (e) At the Closing, Buyer shall deliver the following to Seller: (i) Buyer's Promissory Note, substantially in the form of Exhibit A attached hereto, in the original principal amount of One Million One Hundred Thirty-five Thousand Five Hundred Sixty-eight and 82/100 Dollars ($1,135,568.82) payable, without interest, in 114 monthly installments, the first such installment shall be in the amount of $5,568.82 and the remaining 113 installments shall be in the amount of $10,000.00 each. Stock Repurchase Agreement Atlas Precious Metals Inc. Page 2 (ii) Buyer's Promissory Note shall be secured by that certain Stock Pledge Agreement attached hereto as Exhibit B and incorporated herein by this reference. 5. Representations and Warranties of Seller. Seller hereby represents and warrants to Buyer as follows: (a) Seller owns the Shares, both beneficially and of record, subject to no liens, encumbrances or rights of others, and has the right to transfer to Buyer the entire right, title and interest in and to the Shares. Buyer shall have no liability for any lien, encumbrances, charges or claims associates with the Shares, and Seller will indemnify and hold harmless Buyer, its officers directors and agents from the same. (b) Seller is not a party to any voting trust or voting agreement, stockholder's agreement, pledge agreement, buy-sell agreement, or first refusal agreement relative to the Shares. 6. Attorney's Fees for Claims. In the event that a claim is brought by one party hereto against the other party hereto for breach of any provision hereof or otherwise arising out of the transaction to which this Agreement relates, the prevailing party shall be entitled to payment or reimbursement of the expenses incurred by it in connection with the litigation or the portion thereof as to which it prevails, including, but not limited to, attorneys' fees and costs. 7. Waiver. Any of the terms or conditions of this Agreement may be waived at any time and from time to time in writing by the party entitled to the benefits thereof without affecting any other terms or conditions of this Agreement. The waiver by any party hereto of any condition or breach of any provision of this Agreement shall not operate as a waiver of any other condition or other or subsequent breach. 8. Amendment. This Agreement may be amended or modified only by a written instrument executed by the Parties hereto. 9. Severability. In case any provision in this Agreement shall be held invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby. 10. General. This Agreement shall be construed and enforced in accordance with the laws of the State of Colorado; may not be transferred or assigned by any party hereto, other than by operation of law, and shall inure to the benefit of and be binding upon the Parties and their respective heirs, legal representatives, successors and assigns; and may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. (THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK) Stock Repurchase Agreement Atlas Precious Metals Inc. Page 3 IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date and year first above written. BUYER: ATLAS PRECIOUS METALS INC. By: -------------------------------------------- Gary E. Davis, President SELLER: By: -------------------------------------------- Harold R. Shipes By: -------------------------------------------- Eileen A. Shipes EX-1.3 5 atlas8kjuly232003ex1-3.txt Exhibit 1.3 EMPLOYMENT AGREEMENT This Employment Agreement, dated this 30th day of June, 2003, is by and among ATLAS PRECIOUS METALS INC., a Nevada corporation (hereinafter referred to as the "Company") and HAROLD R. SHIPES (hereinafter referred to as "Employee"). For the definition of certain terms used in this Agreement, see Section 7 below. Section 1. Employment. 1.1 Engagement. The Company will employ Employee, and Employee will accept employment, as an Employee of Company for the Term, subject to and in accordance with the provisions of this Agreement. 1.2 Duties. During the Term, Employee shall serve the Company and perform such services as may reasonably be assigned from time to time by the President or the Board. 1.3 Attention and Effort. Employee shall devote fifty percent (50%) of his time to the affairs of the Company. Section 2. Compensation. 2.1 Base Salary- Benefits. During the Term Employee shall receive no base salary and shall forego any remuneration for services as a member of the Company's Board of Directors or any committee thereof, but shall, instead, be entitled to participate in such fringe benefit programs (e.g., medical, dental, disability, life insurance and vacation programs) as may be provided from time to time to employees of the Company by the Board or any person or committee appointed by the Board to determine fringe benefit programs, all subject to and in accordance with the eligibility and other requirements of such programs. 2.2 Expenses. During the Term, Company will reimburse Employee for reasonable out-of-pocket expenses incurred by Employee in performance of service for Company under this Agreement (e.g., transportation, lodging and food expenses incurred while traveling on Company business), all subject to such policies and other requirements as Company may from time to time establish for its Employees generally. 2.3 Withholding and Offset. Payment of amounts to Employee will be subject to such withholding and offset as may be provided by applicable law (e.g., for income tax purposes) or consented to by Employee. 2.4 Indemnification. Subject to applicable law, the Company shall defend, indemnify and hold Employee harmless from any and all loss, judgments or claims Employee may suffer in the discharge of Employee's duties hereunder, including, but not limited to attorney's fees and court costs; provided, however, that the Company shall not be liable to defend, indemnify or hold harmless Employee for any loss, judgments or claims arising or resulting from Employee's intentional malfeasance or actionable non-feasance. Section 3. Term and Termination. 3.1 Commencement. The Term will commence on the date of this Agreement. 3.2 Expiration Date. The Term will expire ten years from the date of this Agreement unless earlier terminated in accordance with the provisions set forth below. 3.3 Termination. The Term will terminate upon the first of the following to occur: (a) Company's termination of Employee's Employment for Cause pursuant to paragraph 3.4; (b) Employee's termination of Employee's employment for Cause pursuant to paragraph 3.5; (c) the death of Employee; (d) the disability of Employee resulting from injury, illness or disease, whether of a mental or physical nature, which substantially impairs or prevents the ability of Employee to satisfactorily perform Employee's duties and obligation under this Agreement for a continuous period of ninety (90) days; or (e) the Expiration Date. If the Employee is terminated pursuant to subparagraphs (a), (c) or (e), the Employee shall be entitled to no additional compensation under Section 2.1 herein. 3.4 Termination by Company for Cause. Company may at any time terminate Employee's employment for Cause subject to the notice provisions of Section 7.2(a). 3.5 Termination by Employee for Cause. Employee may at any time terminate Employee's employment for Cause without prior notice. 3.6 Disability. If in the event of a disability described in paragraph (d) and Company decides not to terminate Employee's employment and Employee is entitled to receive payments (i.e., in lieu of any other compensation for employment) on account of such disability under any fringe benefit program provided by Company. 3.7 Return of Company Property. Upon termination of the Term, Employee will deliver to Company any and all property of Company which is in Employee's possession or control (including, but not limited to, any and all Materials). 3.8 Survival. Sections 4 and 5, together with all other provisions of this Agreement that may reasonably be interpreted or construed to survive any termination of the Term, will survive any termination of the Term. Section 4. Confidentiality. 4.1 Confidential Information. In the course of Employee's employment with Company, Employee will have access to certain Confidential Information. Employee will use and disclose Confidential Information solely for the purposes for which it is provided and will take reasonable precautions to prevent any unauthorized use or disclosure of the same. Employee will not use or disclose any Confidential Information (a) other than as required in the course of Employee's employment with Company, (b) for Employee's own personal gain, or (c) in any manner contrary to the best interests of Company. 4.2 Proprietary Information of Others. Employee will not use in the course of Employee's employment with Company, or disclose or otherwise make available to Company any information, documents or other items which Employee may have received from any other person (e.g., a prior employer) and which Employee is prohibited from so using, disclosing or making available (e.g., by reason of any contract, court order, law or obligation by which Employee is bound). 4.3 Work Product. All Work Product which Employee conceives, develops or first reduces to practice, either alone or with others, during the Term will be the sole and exclusive property of Company, together with any and all related Intellectual Property Rights. The foregoing applies to all Work Product which relates to Employee's performance of services under this Agreement. 4.4 Disclosure and Protection of Work Products. Employee will disclose all Work Products described in paragraph 4.3 to Company, promptly and in writing. At Company's request and at Company's expense, Employee will assist Company or its designee in efforts to protect such Work Products. Such assistance may include, but is not necessarily limited to, the following: (a) making application in the United States and in foreign countries for a patent or copyright on any Work Products specified by Company; (b) executing documents of assignment to Company or its designee of all Employee's right, title and interest in and to any Work Product and related Intellectual Property Rights; and (c) taking such additional action (including, but not limited to, the execution and delivery of documents) to perfect, evidence or vest in Company or its designee all rights, title and interest in and to any Work Product and any related Intellectual Property Right. 4.5 Materials. All Materials and related Intellectual Property Rights will be the sole and exclusive property of Company, whether or not such Materials are marked with any Intellectual Property Right notice of Company or Employee. All such Materials authored, made, conceived or developed by Employee in connection with services rendered hereunder or made available to Employee (or any copies or extracts thereof) will be held by Employee in trust solely for the benefit of Company. Employee will use such Materials only as required in the course of Employee's employment with Company or as otherwise authorized in writing by Company. 4.6 Notice. This Agreement does not apply to any invention for which no equipment, supplies, facility or trade secret information of Company was used, and which was developed entirely on Employee's own time, unless: (a) the intangible property or invention relates (i) directly to the services rendered to the Company hereunder or (ii) to Company's actual or demonstrable anticipated research or development; or (b) the invention results from any work performed by Employee for Company. Section 5. Non-Interference. 5.1 The Employee covenants with the Company that employees of or consultants to the Company and employees of and consultants to firms, corporations or entities affiliated with the Company have, of necessity, been exposed to and have acquired certain knowledge, understandings, and know-how concerning the Company's business operations which is confidential information and proprietary to the Company. 5.2 In order to protect the Company's confidential information and to promote and insure the continuity of the Company's contractual relations with its employees and consultants, the Employee covenants and agrees that for so long as the Employee is affiliated with the Company as an officer, director, employee, consultant, agent or contractor, and for a period of twelve (12) months from the date the Employee ceases to hold any such position or status with the Company, he will not directly, or encourage others to directly (i) interfere in any manner whatsoever with the Company's contractual or other relations with any or all of its employees or consultants, or (ii) induce or attempt to induce any employee or consultant to the Company to cease performing services for or on behalf of the Company, or (iii) solicit, offer to retain, or retain, or in any other manner engage or employ the services of, or conduct any business activity in cooperation or association with, any person or entity who at any time was employed by the Company, or any firm, corporation or entity affiliated with the Company, except with the consent of the Company. 5.3 In the event any court of competent jurisdiction determines or holds that all or any portion of the covenants contained in this Section 5 are unlawful, invalid, or unenforceable for any reasons, then the parties hereto agree to modify the provisions of this Section 5 if and only to the extent necessary to render the covenants herein contained enforceable and otherwise in conformance with all legal requirements. Section 6. Clients and Customers. 6.1 In order to protect the Company's proprietary rights and to promote and ensure the continuity of the Company's contractual relations with its customers and clients, the Employee covenants and agrees that, for so long as the Employee is affiliated with the Company as an officer, director, employee, consultant, agent or contractor, and for a period of twelve (12) months from the date the Employee ceases to hold any such position or status with the Company, he will not directly, or encourage others to directly (i) interfere in any manner whatsoever with the Company's contractual or prospective relations with any clients or customers, or (ii) induce or attempt to induce any client or customer of the Company to cease doing business with the Company, or (iii) solicit, offer to retain, or retain, or in any other manner engage or enter into any business or other arrangement with any of the Company's customers or clients to provide any services or products to any of such customers or clients as they may from time to time exist or be constituted, except and unless such arrangement for the provision of products or services is not in any way competitive with the products or services actually provided by the Company to its clients or customers or proposed to be provided by the Company to its clients or customers, or except under circumstances to which the Company has consented in writing, which consent shall not be unreasonably withheld. 6.2 In the event any court of competent jurisdiction determines or holds that all or any portions of the covenants contained in this Section 6 are unlawful, invalid or unenforceable for any reason, then the parties hereto agree to modify the provisions of this Section 6 if and only to the extent necessary to render the covenants herein contained enforceable and otherwise in conformance with all legal requirements. Section 7. Definitions. Whenever used in this Agreement with initial letters capitalized, the following terms will have the following specified meanings: 7.1 "Board" means Company's Board of Directors. 7.2 "Cause," for purposes of paragraph 3.4, shall include the occurrence of any of the following: a. The Employee breaches or violates any of the material terms of this Agreement and fails to cure such breach or violation within thirty (30) days of receipt of written notice by Company, which notice shall specify in detail each alleged breach and specify in detail the actions necessary to cure; provided, further, that the specification for cure by the Company shall not obligate the Employee to effect the cure in the manner stated if cure is otherwise timely completed by or on behalf of Employee; b. The Employee is shown to have engaged in any material act of dishonesty or fraud upon the Company, any of its affiliated companies, or any of its customers or clients; c. Subject to Section 1.3, the Employee fails to devote his best efforts and attention to the business and affairs of the Company or its affiliated companies; provided that the Company shall have first provided the Employee with thirty (30) days' prior written notice specifying in detail the instance or instances in which Employee has failed to devote the time required, and Employee thereafter fails to cure and correct the conduct complained of within such thirty (30) day period; or d. The Employee has been grossly negligent in the performance of his employment duties or responsibilities; provided that the Company shall have first provided the Employee with thirty (30) days' prior written notice specifying in detail the instance or instances in which Employee has been grossly negligent, and Employee thereafter fails to cure and correct the conduct complained of within such thirty (30) day period. 7.3 "Cause," for purposes of paragraph 3.5, shall include the occurrence of any of the following: a. The breach or violation by the Company of the any of the material terms of this Agreement; b. The Company has shown to have engaged in any active material dishonesty or fraud upon the Employee. 7.4 "Confidential Information" means any information that is confidential, proprietary or trade secret information of Company or any of its customer or clients or any other information the use or disclosure of which by Company is prohibited or restricted (e.g., by reason of any contract, court order, law or other obligation by which Company is not bound). "Confidential Information" may include, but is not necessarily limited to, technology, computer programs, filing systems, business plans, marketing plans, manuals, speech guidelines, operational techniques, information as to existing or future products or services of Company, financial projections, unpublished works of original authorship, customer lists, financial information, and trade secrets. 7.5 "Intellectual Property Right" means any patent, copyright, trade secret, trade name, trademark or other intellectual property right which is owned by the Company. 7.6 "Materials" means tangible manifestations of any Confidential Information, Work Products, or Intellectual Property Rights including, without limitation, hardware, software, programs, manuals, drawings, designs, articles, writings, data, notes, memorandum, manuscripts, notebooks, proposals, work plans, interim and final reports, project files and client contract records. 7.7 "President" means Company's President. 7.8 "Term" means the term of Employee's employment as an Employee of Company pursuant to this Agreement. 7.9 "Work Product" means any invention, discovery, concept or idea (including, but not necessarily limited to, hardware, software programs, or processes, techniques, know-how, methods, systems, improvements, analytical reports, and other developments), developed by Employee in connection with services rendered hereunder. Section 8. Miscellaneous. 8.1 Compliance with Laws. In the performance of this Agreement, each party will comply with all applicable laws, regulations, rules, orders and other requirements of governmental authorities having jurisdiction. 8.2 Equitable Relief. Employee acknowledges that: the provisions of Sections 4, 5, 6 and 7 are essential to Company; Company would not enter into this Agreement if it did not include such provisions; the damages sustained by Company as a result of any breach of such provisions cannot be adequately remedied by damages; and, in addition to any other right or remedy that Company may have (e.g., under this Agreement, by law or otherwise), Company will be entitled to injunctive and other equitable relief to prevent or curtail any breach of any such provisions. 8.3 Nonwaiver. The failure of either party to insist upon or enforce strict performance by the other of any provision of this Agreement or to exercise any right, remedy or provision of this Agreement will not be interpreted or construed as a waiver or relinquishment to any extent of such party's right to consent or rely upon the same in that or any other instance; rather, the same will be and remain in full force and effect. 8.4 Entire Agreement. This Agreement constitutes the Entire Agreement, and supersedes any and all prior Agreements, between Company and Employee. No amendment, modification or waiver of any of the provisions of this Agreement will be valid unless set forth in a written instrument signed by the party to be bound thereby. 8.5 Applicable Law. This Agreement will be interpreted, construed and enforced in all respects in accordance with the local laws of the State of Colorado, without reference to its choice of law rules. 8.6 Attorneys Fees. In any action at law or in equity or in any arbitration proceeding, for declaratory relief or to enforce any of the provisions or rights or obligations under this Agreement, the unsuccessful party to such proceeding, shall pay to the successful party or parties all statutorily recoverable costs and expenses, and reasonable attorneys' fees incurred by the successful party or parties including without limitation costs, expenses, and fees on any appeals and the enforcement of any award, judgment or settlement obtained, such costs, expenses and attorneys' fees shall be included as part of the judgment. The successful party shall be that party who obtained substantially the relief or remedy sought, whether by judgment, compromise, settlement or otherwise. 8.7 Notices. Any notice, communication, offer, acceptance, request, consent, reply, or advice (herein severally and collectively, for convenience, called "Notice"), in this Agreement provided or permitted to be given, served, made, or accepted by any party or person to any other party or parties, person or persons, hereunder must be in writing, addressed to the party to be notified at the address set forth below, or such other address as to which one party notifies the other in writing pursuant to the terms of this Section, and must be served by (1) telefax or other similar electronic method, or (2) depositing the same in the United States mail, certified, return receipt requested and postage paid to the party or parties, person or persons to be notified or entitled to receive same, or (3) delivering the same in person to such party. Notice shall be deemed to have been given immediately when sent by telefax or other electronic method and seventy-two hours after being deposited in the United States mail, or when personally delivered in the manner hereinabove described. Notice provided in any manner not specified above shall be effective only if and when received by the party or parties, person or persons to be, or provided to be notified. All notices, requests, demands and other communications required or permitted under this Agreement shall be addressed as set forth below: If the Company, to: Atlas Precious Metals Inc. Attn: Gary Davis 10920 W. Alameda, Suite 205 Lakewood, Colorado 80226 With a copy to: Nathan L. Stone, Esq. Jackson Kelly PLLC 1099 18th Street, Suite 2150r Denver, Colorado 80202 If Employee, to: Harold R. Shipes 11251 E. Camino del Sahuaro Tucson, Arizona 85749 Any party receiving a facsimile transmission shall be entitled to rely upon a facsimile transmission to the same extent as if it were an original. Any party may alter the address to which communications or copies are to be sent by giving notice of such change of address in conformity with the provisions of this Section for the giving of notice. 8.8 Severability. If any of the provisions of this Agreement are held to be invalid or unenforceable, the remaining provisions shall nevertheless continue to be valid and enforceable to the extent permitted by law. Company: ATLAS PRECIOUS METALS INC. ------- By: --------------------------------------- Gary E. Davis, Director Employee: -------- By: --------------------------------------- Harold R. Shipes EX-1.4 6 atlas8kjuly232003ex1-4.txt Exhibit 1.4 EMPLOYMENT AGREEMENT This Employment Agreement, dated this 30th day of June, 2003, is by and among ATLAS PRECIOUS METALS INC., a Nevada corporation (hereinafter referred to as the "Company") and EILEEN A. SHIPES (hereinafter referred to as "Employee"). For the definition of certain terms used in this Agreement, see Section 7 below. Section 1. Employment. 1.1 Engagement. The Company will employ Employee, and Employee will accept employment, as an Employee of Company for the Term, subject to and in accordance with the provisions of this Agreement. 1.2 Duties. During the Term, Employee shall serve the Company and perform such services as may reasonably be assigned from time to time by the President or the Board. 1.3 Attention and Effort. Employee shall devote fifty percent (50%) of her time to the affairs of the Company. Section 2. Compensation. 2.1 Base Salary- Benefits. During the Term Employee shall receive no base salary and shall forego any remuneration for services as a member of the Company's Board of Directors or any committee thereof, but shall, instead, be entitled to participate in such fringe benefit programs (e.g., medical, dental, disability, life insurance and vacation programs) as may be provided from time to time to employees of the Company by the Board or any person or committee appointed by the Board to determine fringe benefit programs, all subject to and in accordance with the eligibility and other requirements of such programs. 2.2 Expenses. During the Term, Company will reimburse Employee for reasonable out-of-pocket expenses incurred by Employee in performance of service for Company under this Agreement (e.g., transportation, lodging and food expenses incurred while traveling on Company business), all subject to such policies and other requirements as Company may from time to time establish for its Employees generally. 2.3 Withholding and Offset. Payment of amounts to Employee will be subject to such withholding and offset as may be provided by applicable law (e.g., for income tax purposes) or consented to by Employee. 2.4 Indemnification. Subject to applicable law, the Company shall defend, indemnify and hold Employee harmless from any and all loss, judgments or claims Employee may suffer in the discharge of Employee's duties hereunder, including, but not limited to attorney's fees and court costs; provided, however, that the Company shall not be liable to defend, indemnify or hold harmless Employee for any loss, judgments or claims arising or resulting from Employee's intentional malfeasance or actionable non-feasance. Section 3. Term and Termination. 3.1 Commencement. The Term will commence on the date of this Agreement. 3.2 Expiration Date. The Term will expire ten years from the date of this Agreement unless earlier terminated in accordance with the provisions set forth below. 3.3 Termination. The Term will terminate upon the first of the following to occur: (a) Company's termination of Employee's Employment for Cause pursuant to paragraph 3.4; (b) Employee's termination of Employee's employment for Cause pursuant to paragraph 3.5; (c) the death of Employee; (d) the disability of Employee resulting from injury, illness or disease, whether of a mental or physical nature, which substantially impairs or prevents the ability of Employee to satisfactorily perform Employee's duties and obligation under this Agreement for a continuous period of ninety (90) days; or (e) the Expiration Date. If the Employee is terminated pursuant to subparagraphs (a), (c) or (e), the Employee shall be entitled to no additional compensation under Section 2.1 herein. 3.4 Termination by Company for Cause. Company may at any time terminate Employee's employment for Cause subject to the notice provisions of Section 7.2(a). 3.5 Termination by Employee for Cause. Employee may at any time terminate Employee's employment for Cause without prior notice. 3.6 Disability. If in the event of a disability described in paragraph (d) and Company decides not to terminate Employee's employment and Employee is entitled to receive payments (i.e., in lieu of any other compensation for employment) on account of such disability under any fringe benefit program provided by Company. 3.7 Return of Company Property. Upon termination of the Term, Employee will deliver to Company any and all property of Company which is in Employee's possession or control (including, but not limited to, any and all Materials). 3.8 Survival. Sections 4 and 5, together with all other provisions of this Agreement that may reasonably be interpreted or construed to survive any termination of the Term, will survive any termination of the Term. Section 4. Confidentiality. 4.1 Confidential Information. In the course of Employee's employment with Company, Employee will have access to certain Confidential Information. Employee will use and disclose Confidential Information solely for the purposes for which it is provided and will take reasonable precautions to prevent any unauthorized use or disclosure of the same. Employee will not use or disclose any Confidential Information (a) other than as required in the course of Employee's employment with Company, (b) for Employee's own personal gain, or (c) in any manner contrary to the best interests of Company. 4.2 Proprietary Information of Others. Employee will not use in the course of Employee's employment with Company, or disclose or otherwise make available to Company any information, documents or other items which Employee may have received from any other person (e.g., a prior employer) and which Employee is prohibited from so using, disclosing or making available (e.g., by reason of any contract, court order, law or obligation by which Employee is bound). 4.3 Work Product. All Work Product which Employee conceives, develops or first reduces to practice, either alone or with others, during the Term will be the sole and exclusive property of Company, together with any and all related Intellectual Property Rights. The foregoing applies to all Work Product which relates to Employee's performance of services under this Agreement. 4.4 Disclosure and Protection of Work Products. Employee will disclose all Work Products described in paragraph 4.3 to Company, promptly and in writing. At Company's request and at Company's expense, Employee will assist Company or its designee in efforts to protect such Work Products. Such assistance may include, but is not necessarily limited to, the following: (a) making application in the United States and in foreign countries for a patent or copyright on any Work Products specified by Company; (b) executing documents of assignment to Company or its designee of all Employee's right, title and interest in and to any Work Product and related Intellectual Property Rights; and (c) taking such additional action (including, but not limited to, the execution and delivery of documents) to perfect, evidence or vest in Company or its designee all rights, title and interest in and to any Work Product and any related Intellectual Property Right. 4.5 Materials. All Materials and related Intellectual Property Rights will be the sole and exclusive property of Company, whether or not such Materials are marked with any Intellectual Property Right notice of Company or Employee. All such Materials authored, made, conceived or developed by Employee in connection with services rendered hereunder or made available to Employee (or any copies or extracts thereof) will be held by Employee in trust solely for the benefit of Company. Employee will use such Materials only as required in the course of Employee's employment with Company or as otherwise authorized in writing by Company. 4.6 Notice. This Agreement does not apply to any invention for which no equipment, supplies, facility or trade secret information of Company was used, and which was developed entirely on Employee's own time, unless: (a) the intangible property or invention relates (i) directly to the services rendered to the Company hereunder or (ii) to Company's actual or demonstrable anticipated research or development; or (b) the invention results from any work performed by Employee for Company. Section 5. Non-Interference. 5.1 The Employee covenants with the Company that employees of or consultants to the Company and employees of and consultants to firms, corporations or entities affiliated with the Company have, of necessity, been exposed to and have acquired certain knowledge, understandings, and know-how concerning the Company's business operations which is confidential information and proprietary to the Company. 5.2 In order to protect the Company's confidential information and to promote and insure the continuity of the Company's contractual relations with its employees and consultants, the Employee covenants and agrees that for so long as the Employee is affiliated with the Company as an officer, director, employee, consultant, agent or contractor, and for a period of twelve (12) months from the date the Employee ceases to hold any such position or status with the Company, he will not directly, or encourage others to directly (i) interfere in any manner whatsoever with the Company's contractual or other relations with any or all of its employees or consultants, or (ii) induce or attempt to induce any employee or consultant to the Company to cease performing services for or on behalf of the Company, or (iii) solicit, offer to retain, or retain, or in any other manner engage or employ the services of, or conduct any business activity in cooperation or association with, any person or entity who at any time was employed by the Company, or any firm, corporation or entity affiliated with the Company, except with the consent of the Company. 5.3 In the event any court of competent jurisdiction determines or holds that all or any portion of the covenants contained in this Section 5 are unlawful, invalid, or unenforceable for any reasons, then the parties hereto agree to modify the provisions of this Section 5 if and only to the extent necessary to render the covenants herein contained enforceable and otherwise in conformance with all legal requirements. Section 6. Clients and Customers. 6.1 In order to protect the Company's proprietary rights and to promote and ensure the continuity of the Company's contractual relations with its customers and clients, the Employee covenants and agrees that, for so long as the Employee is affiliated with the Company as an officer, director, employee, consultant, agent or contractor, and for a period of twelve (12) months from the date the Employee ceases to hold any such position or status with the Company, he will not directly, or encourage others to directly (i) interfere in any manner whatsoever with the Company's contractual or prospective relations with any clients or customers, or (ii) induce or attempt to induce any client or customer of the Company to cease doing business with the Company, or (iii) solicit, offer to retain, or retain, or in any other manner engage or enter into any business or other arrangement with any of the Company's customers or clients to provide any services or products to any of such customers or clients as they may from time to time exist or be constituted, except and unless such arrangement for the provision of products or services is not in any way competitive with the products or services actually provided by the Company to its clients or customers or proposed to be provided by the Company to its clients or customers, or except under circumstances to which the Company has consented in writing, which consent shall not be unreasonably withheld. 6.2 In the event any court of competent jurisdiction determines or holds that all or any portions of the covenants contained in this Section 6 are unlawful, invalid or unenforceable for any reason, then the parties hereto agree to modify the provisions of this Section 6 if and only to the extent necessary to render the covenants herein contained enforceable and otherwise in conformance with all legal requirements. Section 7. Definitions. Whenever used in this Agreement with initial letters capitalized, the following terms will have the following specified meanings: 7.1 "Board" means Company's Board of Directors. 7.2 "Cause," for purposes of paragraph 3.4, shall include the occurrence of any of the following: a. The Employee breaches or violates any of the material terms of this Agreement and fails to cure such breach or violation within thirty (30) days of receipt of written notice by Company, which notice shall specify in detail each alleged breach and specify in detail the actions necessary to cure; provided, further, that the specification for cure by the Company shall not obligate the Employee to effect the cure in the manner stated if cure is otherwise timely completed by or on behalf of Employee; b. The Employee is shown to have engaged in any material act of dishonesty or fraud upon the Company, any of its affiliated companies, or any of its customers or clients; c. Subject to Section 1.3, the Employee fails to devote his best efforts and attention to the business and affairs of the Company or its affiliated companies; provided that the Company shall have first provided the Employee with thirty (30) days' prior written notice specifying in detail the instance or instances in which Employee has failed to devote the time required, and Employee thereafter fails to cure and correct the conduct complained of within such thirty (30) day period; or d. The Employee has been grossly negligent in the performance of his employment duties or responsibilities; provided that the Company shall have first provided the Employee with thirty (30) days' prior written notice specifying in detail the instance or instances in which Employee has been grossly negligent, and Employee thereafter fails to cure and correct the conduct complained of within such thirty (30) day period. 7.3 "Cause," for purposes of paragraph 3.5, shall include the occurrence of any of the following: a. The breach or violation by the Company of the any of the material terms of this Agreement; b. The Company has shown to have engaged in any active material dishonesty or fraud upon the Employee. 7.4 "Confidential Information" means any information that is confidential, proprietary or trade secret information of Company or any of its customer or clients or any other information the use or disclosure of which by Company is prohibited or restricted (e.g., by reason of any contract, court order, law or other obligation by which Company is not bound). "Confidential Information" may include, but is not necessarily limited to, technology, computer programs, filing systems, business plans, marketing plans, manuals, speech guidelines, operational techniques, information as to existing or future products or services of Company, financial projections, unpublished works of original authorship, customer lists, financial information, and trade secrets. 7.5 "Intellectual Property Right" means any patent, copyright, trade secret, trade name, trademark or other intellectual property right which is owned by the Company. 7.6 "Materials" means tangible manifestations of any Confidential Information, Work Products, or Intellectual Property Rights including, without limitation, hardware, software, programs, manuals, drawings, designs, articles, writings, data, notes, memorandum, manuscripts, notebooks, proposals, work plans, interim and final reports, project files and client contract records. 7.7 "President" means Company's President. 7.8 "Term" means the term of Employee's employment as an Employee of Company pursuant to this Agreement. 7.9 "Work Product" means any invention, discovery, concept or idea (including, but not necessarily limited to, hardware, software programs, or processes, techniques, know-how, methods, systems, improvements, analytical reports, and other developments), developed by Employee in connection with services rendered hereunder. Section 8. Miscellaneous. 8.1 Compliance with Laws. In the performance of this Agreement, each party will comply with all applicable laws, regulations, rules, orders and other requirements of governmental authorities having jurisdiction. 8.2 Equitable Relief. Employee acknowledges that: the provisions of Sections 4, 5, 6 and 7 are essential to Company; Company would not enter into this Agreement if it did not include such provisions; the damages sustained by Company as a result of any breach of such provisions cannot be adequately remedied by damages; and, in addition to any other right or remedy that Company may have (e.g., under this Agreement, by law or otherwise), Company will be entitled to injunctive and other equitable relief to prevent or curtail any breach of any such provisions. 8.3 Nonwaiver. The failure of either party to insist upon or enforce strict performance by the other of any provision of this Agreement or to exercise any right, remedy or provision of this Agreement will not be interpreted or construed as a waiver or relinquishment to any extent of such party's right to consent or rely upon the same in that or any other instance; rather, the same will be and remain in full force and effect. 8.4 Entire Agreement. This Agreement constitutes the Entire Agreement, and supersedes any and all prior Agreements, between Company and Employee. No amendment, modification or waiver of any of the provisions of this Agreement will be valid unless set forth in a written instrument signed by the party to be bound thereby. 8.5 Applicable Law. This Agreement will be interpreted, construed and enforced in all respects in accordance with the local laws of the State of Colorado, without reference to its choice of law rules. 8.6 Attorneys Fees. In any action at law or in equity or in any arbitration proceeding, for declaratory relief or to enforce any of the provisions or rights or obligations under this Agreement, the unsuccessful party to such proceeding, shall pay to the successful party or parties all statutorily recoverable costs and expenses, and reasonable attorneys' fees incurred by the successful party or parties including without limitation costs, expenses, and fees on any appeals and the enforcement of any award, judgment or settlement obtained, such costs, expenses and attorneys' fees shall be included as part of the judgment. The successful party shall be that party who obtained substantially the relief or remedy sought, whether by judgment, compromise, settlement or otherwise. 8.7 Notices. Any notice, communication, offer, acceptance, request, consent, reply, or advice (herein severally and collectively, for convenience, called "Notice"), in this Agreement provided or permitted to be given, served, made, or accepted by any party or person to any other party or parties, person or persons, hereunder must be in writing, addressed to the party to be notified at the address set forth below, or such other address as to which one party notifies the other in writing pursuant to the terms of this Section, and must be served by (1) telefax or other similar electronic method, or (2) depositing the same in the United States mail, certified, return receipt requested and postage paid to the party or parties, person or persons to be notified or entitled to receive same, or (3) delivering the same in person to such party. Notice shall be deemed to have been given immediately when sent by telefax or other electronic method and seventy-two hours after being deposited in the United States mail, or when personally delivered in the manner hereinabove described. Notice provided in any manner not specified above shall be effective only if and when received by the party or parties, person or persons to be, or provided to be notified. All notices, requests, demands and other communications required or permitted under this Agreement shall be addressed as set forth below: If the Company, to: Atlas Precious Metals Inc. Attn: Gary Davis 10920 W. Alameda, Suite 205 Lakewood, Colorado 80226 With a copy to: Nathan L. Stone, Esq. Jackson Kelly PLLC 1099 18th Street, Suite 2150r Denver, Colorado 80202 If Employee, to: Eileen A. Shipes 11251 E. Camino del Sahuaro Tucson, Arizona 85749 Any party receiving a facsimile transmission shall be entitled to rely upon a facsimile transmission to the same extent as if it were an original. Any party may alter the address to which communications or copies are to be sent by giving notice of such change of address in conformity with the provisions of this Section for the giving of notice. 8.8 Severability. If any of the provisions of this Agreement are held to be invalid or unenforceable, the remaining provisions shall nevertheless continue to be valid and enforceable to the extent permitted by law. Company: ATLAS PRECIOUS METALS INC. ------- By: ------------------------------ Gary E. Davis, Director Employee: -------- By: ------------------------------ Eileen A. Shipes EX-1.5 7 atlas8kjuly232003ex1-5.txt Exhibit 1.5 PROMISSORY NOTE (Note 1) $64,431.18 July 1, 2003 FOR VALUE RECEIVED, and intending to be legally bound, ATLAS PRECIOUS METALS INC., a Nevada Corporation ("Debtor") hereby promises to pay to the order of HAROLD R. SHIPES and EILEEN A. SHIPES, jointly or the survivor of them, or order ("Holder") at 11251 E. Camino del Sahuaro, Tucson, AZ 85749 the principal amount of Sixty-four Thousand Four Hundred Thirty-one and 18/100 Dollars ($64,431.18) ("Principal Amount") subject to the following terms and conditions: 1. Subject to the terms and conditions hereinbelow set forth, the Principal Amount shall be payable, without interest, as follows: (a) Commencing July 1, 2003, and on the first day of each month thereafter through and including December 1, 2003, Debtor shall pay to Holder monthly installments, without interest, of $10,000.00. (b) On January 1, 2004 Debtor shall pay to Holder a final installment, without interest, of $4,431.18. (c) If not sooner paid, the entire Principal Amount, without interest, shall be due and payable on January 1, 2004. 2. If Debtor shall default in the payment of principal hereunder when the same shall become due and payable, the unpaid principal sum of this Note shall immediately bear interest at the rate of ten percent (10%) per annum until paid in full, and shall be payable monthly or, at the option of Holder hereof, on demand. 3. Debtor may at any time, upon ten days advance notice, prepay the entire unpaid principal of this Note or any part thereof without additional interest or penalty. Any prepayment in part shall be applied first to accrued but unpaid interest hereunder, and second to installments of principal in the reverse order of maturity. 4. Payments of both principal and interest on this Note shall be made to Holder in immediately available funds in lawful money of the United States. 5. This Note is fully negotiable and may be assigned by Holder. Neither this Note nor the obligations of Debtor hereunder may be assigned or delegated by Debtor without the prior written consent of Holder. 6. The occurrence of any of the following events ("Events of Default") with respect to Debtor, shall constitute a default hereunder: (a) if any payment required hereunder shall not be paid in full when due, and shall continue unpaid for a period of thirty (30) days thereafter; or (b) the occurrence of a "Change in Control" of Debtor without Holder's express written consent. For purposes of this Note, "Change in Control" shall be defined as a change in the holding, either directly or indirectly, of shares of the Debtor as a result of which a person or a group of persons, or persons acting jointly or in concert, or persons associated or affiliated with any such person or group, are in a position to exercise effective control of the Debtor, provided that for the purposes of this Note a person or group of persons holding shares that would entitle the holders thereof to cast more than 51% of the votes attaching to all shares of the Debtor shall be deemed to be in a position to exercise effective control of the Debtor. 7. Upon the occurrence of a default hereunder, the entire principal balance of this Note plus accrued interest, if any, shall, at the option of Holder, become immediately due and payable without notice or demand, and Holder shall have all rights and remedies provided under all applicable laws and shall be deemed to have exercised the same immediately upon the occurrence of any such event without notice or further action, irrespective of when any record of the same may thereafter be noted by Holder. 8. Failure by Holder to declare a default hereunder shall not constitute a waiver of any subsequent default. Debtor further promises to pay a reasonable attorney's fee, court costs, and any other expenses, losses, charges, damages incurred or advances made by Holder in protection of its rights or caused by Debtor's default under the terms of this Note. 9. If Holder retains an attorney for collection of this Note, or if any suit or proceeding is brought for the recovery of all or any part of or for protection of the indebtedness, or any collateral, or to enforce Holder's rights under any agreement securing the Principal Amount, or other collateral agreement, then Debtor agrees to pay on demand all reasonable costs and expenses of the suit or proceeding, or any appeal thereof, incurred by Holder, including, without limitation, reasonable attorney's fees. 10. The terms of this Note shall not be varied, altered or modified except by a writing signed by Holder and Debtor. 11. Debtor hereby waives presentment for payment or acceptance, demand and protest, and notice of protest, dishonor and non-payment of this Note. 12. No delay on the part of Holder in exercising any power or right under this Note shall operate as a waiver of the power or right, nor shall any single or partial exercise of that power or right, preclude further exercise of that power or right. The rights and remedies specified in this Note are cumulative and not exclusive of any rights and remedies that Holder may otherwise possess. 13. The provisions of this Note shall be severable, so that if any provision hereof is declared invalid under the laws of any state where it is in effect, or of the United States, all other provisions of this Note shall continue in full force and effect. 14. This Note shall be binding upon Debtor and its successors and assigns, and shall inure to the benefit of and be enforceable by Holder, its successors and assigns. (THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK) IN WITNESS WHEREOF, and intending to be legally bound hereby, the undersigned has caused this Note to be executed on the date first above written. ATLAS PRECIOUS METALS INC. a Nevada corporation By: -------------------------------------------- Gary E. Davis, President EX-1.6 8 atlas8kjuly232003ex1-6.txt Exhibit 1.6 EXHIBIT A PROMISSORY NOTE $1,135,568.82 July 1, 2003 FOR VALUE RECEIVED, and intending to be legally bound, ATLAS PRECIOUS METALS INC., a Nevada Corporation ("Debtor") hereby promises to pay to the order of HAROLD R. SHIPES and EILEEN A. SHIPES, jointly or the survivor of them, or order ("Holder") at 11251 E. Camino del Sahuaro, Tucson, AZ 85749 the principal amount of One Million One Hundred Thirty-five Thousand Five Hundred Sixty-eight and 82/100 Dollars ($1,135,568.82) ("Principal Amount") subject to the following terms and conditions: 1. Subject to the terms and conditions hereinbelow set forth, the Principal Amount shall be payable, without interest, as follows: (a) On January 1, 2004 Debtor shall pay to Holder the sum of Five Thousand Five Hundred Sixty-eight and 82/100 Dollars ($5,568.82). (b) Commencing February 1, 2004, and on the first day of each month thereafter through and including June 1, 2013, the Debtor shall pay to the Holder monthly installments, without interest, of $10,000.00. (c) If not sooner paid, the entire Principal Amount, without interest, shall be due and payable on June 1, 2013. 2. If Debtor shall default in the payment of principal hereunder when the same shall become due and payable, the unpaid principal sum of this Note shall immediately bear interest at the rate of ten percent (10%) per annum until paid in full, and shall be payable monthly or, at the option of Holder hereof, on demand. 3. Debtor may at any time, upon ten days advance notice, prepay the entire unpaid principal of this Note or any part thereof without additional interest or penalty. Any prepayment in part shall be applied first to accrued but unpaid interest hereunder, and second to installments of principal in the reverse order of maturity. 4. Payments of both principal and interest on this Note shall be made to Holder in immediately available funds in lawful money of the United States. 5. This Note is fully negotiable and may be assigned by Holder. Neither this Note nor the obligations of Debtor hereunder may be assigned or delegated by Debtor without the prior written consent of Holder. 6. The occurrence of any of the following events ("Events of Default") with respect to Debtor, shall constitute a default hereunder: (a) if any payment required hereunder shall not be paid in full when due, and shall continue unpaid for a period of thirty (30) days thereafter; or (b) if a default shall occur under any covenant contained in any instrument relating to the rights of Holder hereunder including, but not limited to, that certain Stock Purchase Agreement A-1 of even date herewith and to which this Note is attached as Exhibit A, or the Stock Pledge Agreement referenced in said Stock Purchase Agreement; or (c) the occurrence of a "Change in Control" of Debtor without Holder's express written consent. For purposes of this Note, "Change in Control" shall be defined as a change in the holding, either directly or indirectly, of shares of the Debtor as a result of which a person or a group of persons, or persons acting jointly or in concert, or persons associated or affiliated with any such person or group, are in a position to exercise effective control of the Debtor, provided that for the purposes of this Note a person or group of persons holding shares that would entitle the holders thereof to cast more than 51% of the votes attaching to all shares of the Debtor shall be deemed to be in a position to exercise effective control of the Debtor. 7. Upon the occurrence of a default hereunder, the entire principal balance of this Note plus accrued interest, if any, shall, at the option of Holder, become immediately due and payable without notice or demand, and Holder shall have all rights and remedies provided under all applicable laws and shall be deemed to have exercised the same immediately upon the occurrence of any such event without notice or further action, irrespective of when any record of the same may thereafter be noted by Holder. 8. Failure by Holder to declare a default hereunder shall not constitute a waiver of any subsequent default. Debtor further promises to pay a reasonable attorney's fee, court costs, and any other expenses, losses, charges, damages incurred or advances made by Holder in protection of its rights or caused by Debtor's default under the terms of this Note. 9. If Holder retains an attorney for collection of this Note, or if any suit or proceeding is brought for the recovery of all or any part of or for protection of the indebtedness, or any collateral, or to enforce Holder's rights under any agreement securing the Principal Amount, or other collateral agreement, then Debtor agrees to pay on demand all reasonable costs and expenses of the suit or proceeding, or any appeal thereof, incurred by Holder, including, without limitation, reasonable attorney's fees. 10. The terms of this Note shall not be varied, altered or modified except by a writing signed by Holder and Debtor. 11. Debtor hereby waives presentment for payment or acceptance, demand and protest, and notice of protest, dishonor and non-payment of this Note. 12. No delay on the part of Holder in exercising any power or right under this Note shall operate as a waiver of the power or right, nor shall any single or partial exercise of that power or right, preclude further exercise of that power or right. The rights and remedies specified in this Note are cumulative and not exclusive of any rights and remedies that Holder may otherwise possess. 13. The provisions of this Note shall be severable, so that if any provision hereof is declared invalid under the laws of any state where it is in effect, or of the United States, all other provisions of this Note shall continue in full force and effect. 14. This Note shall be binding upon Debtor and its successors and assigns, and shall inure to the benefit of and be enforceable by Holder, its successors and assigns. A-2 IN WITNESS WHEREOF, and intending to be legally bound hereby, the undersigned has caused this Note to be executed on the date first above written. ATLAS PRECIOUS METALS INC. a Nevada corporation By: -------------------------------------------- Gary E. Davis, President A-3 -----END PRIVACY-ENHANCED MESSAGE-----