Amended and Restated Mineral Buy and Sell Agreement, dated as of March 26, 2012, by and between Russell B. Pace, Jr. and American Power Corp

1.  

a.  

Under the Mineral Agreement, Pace agreed to convey to APC by quit claim deed all of its right, title and interest in and to the mineral property it acquired from Giffen Coal Mines Company as described above, together with all easements, rights-of-way, tenements, hereditaments, appurtenances and surface use rights owned by Pace and used or connected with the beneficial use or enjoyment of the mineral property.

b.  

Pace conveyed the mineral property free and clear of all mortgages, liens, claims, charges, encumbrances, leases, security interests and pledges, of any kind or nature, except for the royalty interest retained by Pace as provided in paragraph 3.a. below.

c.  

Attached hereto as Exhibit A and by this reference made a part of this Agreement is a Map entitled “Mineral Rights Owned by Russell B. Pace, Jr. and JBM Energy Company, LLC, Judith Basin County, Montana” showing the location of all the coal and other minerals owned by Pace and JBM in Judith Basin County, Montana.

2.  

a.  

APC agreed to purchase the mineral property and all rights referred to in paragraph 1.a. above, for a total purchase price of One Million Nine Hundred Fifty Thousand U.S. Dollars ($1,950,000), payable to Pace in cash, at the times and in the amounts set forth in the following schedule of payments.

i.  

$200,000 was paid 180 days following the closing of the Mineral Agreement.

ii.  

$200,000 was paid 360 days following the closing of the Mineral Agreement.

iii.  

The balance of One Million Five Hundred Fifty Thousand U.S. Dollars ($1,550,000) was paid by APC executing and delivering to Pace, on the date hereof, a promissory note in the principal amount of Nine Hundred Fifty Thousand U.S. Dollars ($1,950,000), which promissory note is amended and restated in connection with this Agreement in substantially the form set forth as Exhibit B hereto (the “Promissory Note”).

b.  

All payments made by APC hereunder or pursuant to the promissory note shall be made by bank cashier’s checks or by bank wire to an account designated by Pace, as directed by Pace.

3.  

a.  

Pace will be paid a royalty equal to twenty percent (20%) of all royalties or other payments received by APC as a result of any lease of the mineral property being conveyed to APC hereunder, or any portion thereof, and twenty percent (20%) of all net cash proceeds and/or other considerations received by APC from the sale or other disposition of the mineral property being conveyed to APC hereunder, or any portion thereof.

b.  

APC will execute and deliver to Pace a document in form and substance acceptable to Pace establishing Pace’s right to the royalty described above, which document will be recorded in the office of the Judith Basin County Clerk and Recorder.  Upon any subsequent leasing, sale or other disposition of all or any part of the mineral property, APC will take all appropriate steps to notify the acquirer of any of the mineral rights of Pace’s royalty interest therein and to protect Pace’s royalty interest

c.  

Pace shall have the right to require APC, at APC’s expense, to give an accounting of all information needed to support Pace’s right to the royalty payments due hereunder.

d.  

If the minerals is sold by APC, other than after being mined by APC, Pace will receive ten percent (10%) of the net proceeds or other considerations received by APC after deducting APC’s total investment in the coal and a 15% annualized return on APC’s investment.

e.  

If the minerals are not sold but are transferred as an equity contribution in any development project, Pace will receive an equity interest equal to ten percent (10%) of the equity interest which APC receives in such projects as a result of the contribution of the minerals or any portion thereof, or ten percent (10%) of any other interests or considerations which APC receives as a result of such transfer of the minerals.

4.  

a.  

Pace has provided APC with certain documents, maps, reports and information concerning Pace’s coal and other mineral rights and its envisioned coal gasification facility in Montana, as well as other matters such as transmission possibilities, and CO2 use for enhanced oil recovery and sequestration.  APC agrees that it will conduct its own independent investigation of the mineral property and enters into this Agreement in full reliance thereon, and that there are no other agreements, verbal or otherwise modifying the terms of this Agreement, and that it has not relied upon any oral representations made by Pace.  Pace does not warrant the accuracy of any of the information or data contained in any of the documents or materials delivered, or to be delivered, by Pace to APC.

5.  

a.  

Pace had Stephan R. Granzow of Meadowlark Search search title on the mineral property.  Pace has delivered to APC title reports, abstracts and memoranda of title, prepared by Stephen R. Granzow, showing the chain of title to Pace’s coal and other minerals.  Pace has also delivered to APC a letter dated November 21, 2008 from Stephen R. Granzow, wherein Granzow states his opinion that under the Quit Claim Deed dated March 1, 1965, from Giffen Coal Mines Company to Russell B. Pace, Jr., recorded on October 15, 1969 in Book 156, page 186 in the Judith Basin Clerk and Recorder’s Office, Russell B. Pace, Jr. acquired 100% of all the coal and other mineral interests conveyed to him under said Quit Claim Deed, with the exception of 480 acres which may be owned by the Federal Government and 160.9 acres which may be owned by the State of Montana.

b.  

Pace has executed a quit claim deed to APC, of the mineral property being sold hereunder, conveying the coal property free and clear of all mortgages, liens, claims, charges, encumbrances, leases, security interests and pledges, of any kind or nature except for the royalty interest retained by Pace as provided in paragraph 3.a.  The quit claim deed was in the same form and substance as the quit claim deed which Pace received from Giffen Coal Mines Company, except that it included a provision reserving the royalties provided in paragraph 3.a.

c.  

APC has executed a mortgage on the coal property and the other mineral property being conveyed by Pace to APC, securing the payments due from APC to Pace under this Agreement and the other agreements referred to in subparagraph 9.c., and all of the obligations of APC under any such agreements.

d.  

The quit claim deed executed by Pace and the mortgage executed by APC, as referred to in subparagraphs 5.b. and 5.c., was placed in escrow under an escrow agreement containing terms and conditions acceptable to both Pace and APC.  When APC completes the drilling and produces the studies and mining plan as provided in paragraph 2 of the Coal Agreement (as defined below), makes timely all payments provided for in paragraphs 1.a., b., c. and d. of that certain Amended and Restated Promissory Note entered into pursuant to the Coal Agreement, and all payments due under this Agreement and the other related agreements referred to in subparagraph 9.c., the quit claim deeds will be delivered to APC and recorded, and the mortgage will be delivered to Pace and recorded.  If there is any breach or default by APC as provided in paragraph 9 below, the quit claim deeds will not be delivered to APC but will be delivered back to Pace and not recorded, and the mortgage will be delivered back to APC and not recorded.

6.  

a.  

The closing date of the Mineral Agreement was on April 9, 2010.  The closing occurred at Great Falls, Montana.  Pace paid the cost of preparing the deed, and the royalty document and the costs of recording the royalty document.  APC paid the cost of recording the deed and all other closing costs.

7.  

a.  

Pace is an individual who has the power to own his properties and to carry on his business as it is now being conducted.

b.  

There are no liabilities and there is no indebtedness of Pace which, in any way, would impair the right of Pace to enter into this Agreement or to perform under it.

c.  

There are no pending or threatened claims, made on behalf of anyone against Pace, or the mineral property, nor are there pending or threatened actions, suits, proceedings or investigations against or affecting Pace, or the mineral property, at law or in equity, before any federal, state or local court, board or other governmental or administrative agency.

d.  

Pace is not in violation of any law, regulation or rule, or of any writ, judgment, injunction, order or decree of any court or government authority.

e.  

Pace has the requisite authority to execute, deliver and perform this Agreement and all other agreements or instruments to be executed by Pace pursuant to this Agreement.  This Agreement constitutes, and such other agreements and instruments will constitute, the legal, valid and binding obligation of Pace which are or will be enforceable against Pace in accordance with their respective terms.

f.  

The execution, delivery and performance of this Agreement will not result in the violation of any statute, regulations, judgment, writ, injunction or decree of any court or other agency.

g.  

The representations and warranties contained in this Paragraph 7 shall survive and remain in effect following the date hereof.

8.  

a.  

APC was organized as a corporation under the laws of Nevada on August 7, 2007.  APC is qualified to do business in the following states: Nevada.

b.  

A list of the names of APC’s Directors and Officers is attached hereto as Exhibit C and by reference made a part hereof.

c.  

APC is in good standing under the laws of Nevada and has the power to own its properties and to carry on its business as it is now being conducted.

d.  

There are no liabilities and there is no indebtedness of APC which, in any way, would impair the right of APC to enter into this Agreement or to perform under it.

e.  

There are no pending or threatened actions, suits, proceedings or investigations against or affecting APC, at law or in equity, before any federal, state or local court, board or other governmental or administrative agency.

f.  

APC is not in violation of any law, regulation or rule, or of any writ, judgment, injunction, order or decree of any court or government authority.

g.  

APC has the requisite authority to execute, deliver and perform this Agreement and all other agreements or instruments to be executed by APC pursuant to this Agreement. This Agreement constitutes, and such other agreements and instruments will constitute, the legal, valid and binding obligation of APC which are or will be enforceable against APC in accordance with their respective terms.

h.  

The execution, delivery and performance of this Agreement will not result in the violation of any statute, regulations, judgment, writ, injunction or decree of any court or other agency.

i.  

The representations and warranties contained in this Paragraph 8 shall survive and remain in effect following the date hereof.

9.  

a.  

APC’s Breach:  In the event that APC fails to timely pay to Pace any installment payment of the purchase price as set forth in paragraph 2, or fails to perform any agreement, covenant, representation or warranty under this Agreement which failure (other than the failure to make timely payments where no notice is required) is not cured within thirty (30) days after written notice thereof by Pace to APC, Pace may at Pace’s option (i) deem this Agreement terminated, null, void and of no further force and effect at which time APC shall have no further rights or liabilities under this Agreement and all payments made by APC shall be deemed forfeited and non-refundable, or (ii) initiate action for any other remedy at law or in equity permitted under Montana law including, without limitations, an action for specific performance.  In the event APC defaults under or breaches this Agreement, it will deliver to Pace all of the drill hole records, maps, reports, core hole tests, feasibility studies, reserve studies and evaluations, mining plans, permits, applications, and all other information and data gathered or developed by APC or on its behalf with respect to the coal and other minerals.  Any permits, licenses or other authorizations obtained will be assigned or transferred from APC to Pace if permitted by law.  

b.  

Pace Breach: In the event the Pace fails to perform any agreement, covenant, representation or warranty under this Agreement, and APC is at that time ready, willing and able to perform all obligations by APC to be performed, APC may at APC’s option: (i) deem this Agreement terminated, null, void and of no further force or effect, at which time Pace shall have no further rights or liabilities under this Agreement, or (ii) initiate action for any other remedy at law or in equity permitted under Montana law including, without limitation, an action for specific performance.

c.  

i.  

JBM Energy Company, LLC (“JBM”) and Future Gas have entered into:

1.  

A Coal Buy and Sell Agreement (the “Coal Agreement”), dated as of February 4, 2010, whereby Future Gas is purchasing all the coal property owned by Pace and acquired under quit claim deed from Giffen Coal Mines Company dated March 1, 1965 (“Coal Property”);

2.  

a Consulting Agreement, dated as of February 4, 2010; and

3.  

a Stock Agreement, dated as of February 4, 2010.

ii.  

Future Gas, APC and JBM have also entered into:

1.  

Assignment and Assumption of Coal Buy and Sell Agreement, dated as of March 31, 2010, whereby Future Gas is assigning and APC is assuming all rights, title and interest in the Coal Agreement; and

2.  

Assignment and Assumption of Stock and Consulting Agreements, dated as of March 31, 2010, whereby Future Gas is assigning and APC is assuming all rights, title and interest in the Stock and Consulting Agreements.

iii.  

If APC fails to timely make the payments due under the Mineral Agreement and the Coal Agreement and the Consulting Agreement and make timely delivery of the stock under the Stock Agreement, or fails to perform any agreement, covenant, representation or warranty under any of these agreements, Pace hereunder has the option to (i) terminate this Agreement and all of the above-mentioned agreements, in which event they will be null, void and no further force or effect, at which time APC shall have no further rights or liabilities under any such agreements and all payments made by APC shall be deemed non-refundable and forfeited, or (ii) initiate action for any other remedy at law or in equity permitted under Montana law including, without limitation, an action for specific performance.

10.  

a.  

Unless otherwise agreed in writing, this Agreement represents the entire understanding of the Parties with respect to the subject matter referenced, and supersedes all prior understandings and agreements heretofore made by and between the Parties; provided that the Parties’ respective warranties and representations shall survive execution of this Agreement.  Neither this Agreement nor any provision hereof may be amended, waived, modified or discharged except by an agreement in writing signed by all Parties.

11.  

a.  

In the event of any litigation to construe and/or enforce the terms of this Agreement, the Party prevailing in such action shall be entitled to recover its reasonable attorney’s fees and costs in addition to any other damages or relief to which such Party may be entitled.

12.  

a.  

The Parties agree that facsimile signatures by any Party will be treated as original signatures for the purpose of this Agreement.

13.  

a.  

Any and all notices required under this Agreement shall be in writing and shall be served upon the respective Parties at the addresses shown below or to such other address as the Parties may designate by written notice to the other.

American Power Corp.

410 North Saint Asaph Street

16 Market Square Center

Alexandria, VA 22314

1400 16th Street, Suite 400

Denver, Co 80202

attn: Johannes Peterson

b.  

Any notice to be given under this Agreement shall be sent by:

i.  

Certified mail, return receipt requested, in which case notice shall be deemed delivered five (5) business days after deposit, postage prepaid in the United States Mail; or

ii.  

a nationally recognized overnight courier, in which case notice shall be deemed delivered three (3) business days after deposit with that courier.

14.  

a.  

This Agreement may be executed in multiple counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument; and the Parties may execute copies sent by telefacsimile, and return signed copies by telefacsimile.  Copies signed and returned by telefacsimile shall be deemed and considered executed counterparts, but a Party executing a copy and transmitting same by telefacsimile shall promptly mail or overnight to the other Parties copies bearing the transmitting party’s original signature.

15.  

a.  

Time is of the essence in this Agreement.