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EXHIBIT 3A
ASSIGNMENT OF CONTRACTS AND SHARE PURCHASE AGREEMENT
THIS AGREEMENT made as of the 19th day of February, 1996.
BETWEEN:
MINCO MINING AND METALS CORPORATION, a company validly subsisting under
the laws of British Columbia with an office at Suite 1870, 000 Xxxx
Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
("Minco")
AND:
PACIFIC CANADA RESOURCES INC., a company validly subsisting under the
laws of Ontario with an office at 000 Xxx Xxxxxx, 0xx Xxxxx, Xxxxxxx,
Xxxxxxx, X0X 0X0
("PCR")
W H E R E A S:
A. PCR has entered into a letter of intent with Teck Exploration Ltd.
("Teck") and Baiyin Non-Ferrous Metals Company ("Baiyin") dated June 6, 1995
regarding the exploration and development of the Lijiagou lead-zinc deposit and
possible acquisition of the Changba open pit mine (the "CB-LG Property") located
in Chenxian, Gansu Province, Peoples Republic of China (the "CB-LG Agreement") a
copy of which is attached hereto as Schedule "A".
B. PCR is also party to a cooperation agreement between PCR, Patrician
Gold Mines Ltd. and the First Geoexploration Bureau of Ministry of Metallurgical
Industry dated October 4, 1994 regarding the formation of an equity joint
venture to explore, develop and produce certain mineral properties known as the
"Stone Lake", "Crystal Valley" and "Emperor's Delight" properties located,
respectively, in Lingshou County, Zhangjiakou District and Chende District all
in the Province of Hebei, Peoples Republic of China (the "FGEB Co-Operation
Agreement") a copy of which is attached hereto as Schedule "B".
C. Patrician Gold Mines Ltd. assigned its interests in the FGEB
Co-Operation Agreement to Orient Gold Mines Ltd. ("Orient") pursuant to an
assignment agreement dated September 8, 1994.
D. Pursuant to the terms of the FGEB Co-Operation Agreement, PCR entered
into a joint venture contract dated December 25, 1995 with FGEB in respect to
the exploration and development of the Emperor's Delight property, through PCR's
British Virgin Islands subsidiary Triple Eight Mineral Corporation ("Temco"),
(the "Emperor's Delight Joint Venture Contract") a copy of which is attached
hereto as Schedule "C".
E. Pursuant to an option agreement made between PCR and Orient dated
March 3, 1995, (the "Temco Option Agreement"), a copy of which is attached
hereto as Schedule "D", PCR granted to Orient the right to earn a forty (40%)
percent share interest in Temco.
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F. PCR has entered into an agreement (the "T-C Investment and
Participation Agreement") dated February 19, 1996 with Teck Corporation ("Teck")
and with Cominco Ltd. ("Cominco"), a copy of which is attached hereto as
Schedule "E". Under this T-C Investment and Participation Agreement, PCR has
granted certain rights to Teck and Cominco in exchange for them making a private
placement in a specified company which the parties have agreed will be Minco,
subject to the Closing of this Agreement.
G. For greater certainty, the CB-LG Agreement and the FGEB Co-Operation
Agreement do not contemplate that PCR will ever hold a direct interest in a
Chinese mineral property but rather will hold a right to acquire an interest in
a Chinese corporation which will hold all right, title and interest in and to
the relevant Chinese mineral properties.
H. Pursuant to a Cooperative Agreement made between Minco and the Sichuan
Bureau of Geology and Minerals Resources dated July 7, 1995 as amended by an
undated Supplementary Agreement (the "Chapuzi Agreement"), a copy of which is
attached hereto as Schedule "F", Minco holds the right to acquire an interest in
certain mineral properties known as the "Chapuzi Property" located in Sichuan
Province, Peoples Republic of China.
I. PCR has agreed to assign to Minco all its right, title and interest in
and to the CB-LG Agreement, FGEB Co-Operation Agreement, Emperor's Delight Joint
Venture Contract, Temco Option Agreement and Minco has agreed to assume all
liabilities under such agreements and PCR has also agreed to sell to Minco all
of the issued common shares of Temco owned by PCR, all on the terms and
conditions hereinafter set forth.
J. PCR and Minco have entered into a confidentiality agreement dated
January 2, 1996 (the "Confidentiality Agreement") relating to the
confidentiality obligations as between each other regarding the exchange of
information in contemplation of entering into this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
premises and the mutual promises, and agreements herein contained, the parties
hereto agree as follows:
1. INTERPRETATION
1.1 In this Agreement and in the recitals and Schedules hereto, unless the
context otherwise requires, the following expressions will have the following
meanings:
(a) "Act" means the Securities Act (British Columbia) and the
Regulations and Rules passed thereunder, as amended from time
to time;
(b) "Chapuzi Agreement" means the agreement pursuant to which
Minco holds an NCI (hereinafter defined) in the Chapuzi
property;
(c) "Closing Date" means the fifth business day following the date
upon which Minco receives written notification from the
Exchange that this Agreement has been accepted for filing.
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(d) "Exchange" means the Vancouver Stock Exchange;
(e) "PCR Agreements" means, collectively, the FGEB Co-operation
Agreement, the Temco Option Agreement and the Emperor's
Delight Joint Venture Contract;
(f) "PCR Properties" means all of PCR's rights and interests in
and to the Properties held pursuant to the PCR Agreements;
(g) "Property" or "Properties" means a mineral property or
properties in China by whatever instrument it may be held by
any interest, contractual right, or other right to acquire an
interest therein;
(h) "NCI", with respect to a Property, means a direct or indirect
interest in a Chinese mineral property which is available to
be held by foreigners or non-Chinese entities under Chinese
law including, without limitation, a share interest in a
Chinese company which holds title to a Chinese mineral
property, or a contractual right to acquire such share
interest;
(i) "Teck-Cominco Private Placement" means the agreement to be
negotiated between Minco, Teck and Cominco whereby each of
Teck and Cominco agree to subscribe for 1,250,000 treasury
shares of Minco at a price of $0.80 per share; and
(j) "Temco Shares" means 600 of the 1,000 fully paid and
non-assessable issued common shares of Temco in the capital
stock of Temco beneficially owned by PCR.
1.2 The following schedules are incorporated by reference into this
Agreement:
SCHEDULE DESCRIPTION
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A the CB-LG Agreement
B the FGEB Co-operation Agreement
C the Emperor's Delight Joint Venture Contract
D the Temco Option Agreement
E the T-C Investment and Participation Agreement
F the Chapuzi Agreement
G Minco's Unaudited December 31, 1995 Financial Statements
H Minco's Material Liabilities
I Rights to acquire Securities in Minco
J Temco's Unaudited December 31, 1995 Financial Statement
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SCHEDULE DESCRIPTION
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K Temco's Material Liabilities
L Rights to acquire Securities in Temco
M Escrow Agreement
N Shareholders Agreement
O the Confidentiality Agreement
P PCR's third-party liabilities
2. REPRESENTATIONS AND WARRANTIES
2.1 COMMON REPRESENTATIONS AND WARRANTIES
Each of Minco and PCR represents and warrants to the other, as
representations and warranties upon which each party has relied in entering into
this Agreement, which will be true at the Closing Date, and which will survive
the execution hereof, that:
(a) it is a body corporate duly formed, organized and validly
subsisting under the laws of its incorporating jurisdiction;
(b) it has full power and authority to carry on its business and
to enter into this Agreement and any agreement or instrument
referred to or contemplated by this Agreement;
(c) neither the execution and delivery of this Agreement, nor any
of the agreements referred to herein or contemplated hereby,
nor the consummation of the transactions hereby contemplated
will be in violation of its constating documents, or conflict
with, or will result the breach of, or accelerate the
performance required by, any agreement to which it is a party
and will not result in the creation or imposition of any lien,
encumbrance or restrictions of any nature whatsoever in favour
of a third party upon or against its assets;
(d) it is resident in Canada within the meaning of the Income Tax
Act (Canada); and
(e) no proceedings are pending for, and neither party is aware of
any basis for the institutions or any proceedings leading to
is dissolution or its winding-up, or the placing or it into
bankruptcy, or becoming subject to any other laws governing
the affairs of insolvent persons.
2.2 MINCO'S REPRESENTATIONS AND WARRANTIES
Minco represents and warrants to PCR, as representations and warranties
upon which PCR has relied in entering into this agreement, which will be true
at the Closing Date, and which will survive the execution hereof, that:
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(a) the authorized capital of Minco consists of 20,000,000 common
shares of which 3,223,373 common shares are validly issued,
fully-paid and non-assessable;
(b) no finder's fees, commissions or financial service fees of any
type whatsoever are payable by Minco in connection with
transactions contemplated by this Agreement other than a
finder's fee of up to 100,000 shares of Minco which may be
paid to a third party;
(c) the financial statements of Minco for the fiscal period ended
December 31, 1995 attached hereto as Schedule "G" delivered
to PCR present fairly, in all material respects, the financial
position of Minco as at December 31, 1995 and the results of
operations and the changes in financial position for the year
then ended in accordance with Canadian generally accepted
accounting principles applied on a consistent basis and do not
omit to state any material fact that is required by generally
accepted accounting principles, or by applicable law, to be
stated or reflected therein, or which is necessary to make the
statements contained therein not misleading;
(d) since December 31, 1995, Minco has carried on its business in
the ordinary and normal course of the routine daily affairs of
such business. Since such date, there has been no material
change in the business, operations, affairs or conditions of
Minco, financial or otherwise, including, without limitation.
any change arising as a result of any legislative or
regulatory change, modification, revocation, or suspension or
any material license or right to do business, fire, explosion,
accident, casualty, labour trouble, flood, drought, riot,
storm, expropriation, condemnation, act of God, or otherwise,
except changes occurring in the ordinary course of the routine
daily affairs of business, which changes have not materially
adversely affected the organization, business, properties,
prospects, or financial condition of Minco;
(e) no order prohibiting the issue and sale of securities by Minco
has been issued and no proceedings for this purpose have been
instituted, are pending, or, to the knowledge or Minco,
contemplated;
(f) this Agreement and any statement furnished to PCR by, or on
behalf of Minco, do not contain and will not contain an untrue
statement of material fact or omit or will omit to state a
material fact or circumstance necessary to make the statements
contained herein or therein not misleading, or which may be
material in PCR's decision to enter into this Agreement;
(G) Minco owns, as of the date hereof, the NCI or has rights to
acquire an NCI, in the Property as set out in the Chapuzi
Agreement;
(h) the Chapuzi Agreement is a valid and subsisting contract
enforceable in accordance with its terms and Minco has not
assigned, encumbered or otherwise disposed or any interest in
such agreement to any third parties;
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(i) to the best of its knowledge, there are no adverse claims,
challenges, actions, suits, disputes or proceedings regarding
the Chapuzi Agreement, and there are no such claims pending,
nor is there any basis therefor;
(j) there are no material liabilities, contingent or otherwise, of
Minco which are not disclosed in Schedule "H" attached hereto
and Minco has not guaranteed, or agreed to guarantee, any
debt, liability or other obligation of any person, firm or
corporation other than as described in Schedule "H";
(k) no person, other than PCR, or as set out in Schedule "I", has
any right, agreement, or option, present or future, contingent
or absolute, or any right capable of becoming a right,
agreement or option:
(i) to require Minco to issue any further or other shares
in its capital or any security or other instrument
convertible or exchangeable in to shares in its
capital, or to convert or exchange any security or
other instrument into, with or for shares in its
capital;
(ii) for the issue or allotment of any of the authorized
but unissued shares in its capital;
(iii) to require Minco to create any additional shares in
its capital;
(iv) to require Minco to purchase, redeem, or otherwise
acquire any of the issued and outstanding shares in
its capital;
(v) to require Minco to distribute any or all of its
assets, or to declare any dividends;
(vi) for the purchase of any assets or the acquisition or
any interest in a Property, or an NCI; or
(vii) to purchase or otherwise acquire any securities or
Minco;
(l) the Purchased Shares (as hereinafter defined) to be issued to
PCR pursuant to the provisions of paragraph 3, when issued,
will be validly issued as fully paid and non-assessable and
will be free of all resale restrictions other than any control
block restrictions which may apply and the one-year hold
period imposed by the Act;
(m) Minco has the corporate power to own the assets owned by it
and to carry out the business carried on by it and is duly
registered and qualified to carry on business in British
Columbia;
(n) Minco is not indebted to any affiliate or director or officer
of Minco other than is set out in the financial statements
attached hereto as Schedule "G";
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(o) no dividends or other distribution of any shares in the
capital of the Minco have been made, declared or authorized;
(p) Minco has not entered into any material contracts, agreements,
undertakings, or arrangements with third parties other as
referred to herein;
(q) there is no basis for and there are no actions, suits,
judgments, investigations or proceedings outstanding or
pending or to the knowledge of Minco threatened against or
affecting Minco at law or in equity or before or by any
governmental agency or authority having jurisdiction;
(r) Minco is not in breach of any laws, ordinances, statutes,
regulations, by-laws, orders or decrees to which it is subject
or which apply to it;
(s) all taxes, assessments, levies and other amounts which Minco
is required by law to pay, withhold or collect, will have been
duly paid, withheld or collected before the Closing Date;
provided, however, that none of the foregoing need be paid
while the same is being contested in good faith by appropriate
proceedings diligently conducted;
(t) no director of Minco is indebted or under obligation to Minco
on any account whatsoever;
(u) all material transactions of Minco have been promptly and
properly recorded or filed in or with its respective books and
records. The minute books of Minco contain all records of the
meetings and proceedings of shareholders and directors
thereof; and
(v) the performance of this Agreement will not be in violation of
the constating documents of Minco or of any agreement to which
Minco is a party and will not give any person or company any
right to terminate or cancel any agreement or any right
enjoyed by Minco and will not result in the creation or
imposition of any lien, encumbrance or restriction of any
nature whatsoever in favour of a third party upon or against
the assets of Minco.
2.3 PCR'S REPRESENTATIONS AND WARRANTIES
PCR represents and warrants to Minco, as representations and warranties
upon which Minco has relied in entering into this Agreement, which will be true
at the Closing Date, and which will survive the execution hereof, that:
(a) each of the PCR Agreements is a valid and subsisting contract
enforceable in accordance with its terms and PCR has not
assigned, encumbered or otherwise disposed of any interests in
any of the PCR Agreements to any third parties;
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(b) Temco has the corporate power to own the assets owned by it
and to carry out the business carried on by it and is duly
registered and qualified to carry on business in the British
Virgin Islands;
(c) Temco is not indebted to PCR or any affiliate or director or
officer of Temco other than is set out in the financial
statements attached hereto as Schedule "J" ;
(d) no dividends or other distribution of any shares in the
capital of the Temco have been made, declared or authorized;
(e) Temco has not discharged or satisfied or paid any lien or
encumbrance or obligation or liability other than current
liabilities in the ordinary course of business;
(f) the business of Temco has been carried on in the ordinary
course and the Company has not incurred new liabilities or
entered into any transactions outside of the ordinary course
of business of Temco since December 31, 1995;
(g) the constating documents of Temco have not been altered since
the incorporation of Temco;
(h) Temco has not entered into any contracts, agreements,
undertakings, or arrangements with third parties other than
(i) the Emperor's Delight Joint Venture Contract and a
preliminary version of such agreement which was entered into
as part of the process required to obtain approvals under
Chinese Law (ii) extension agreement relating to the extension
of the term of the FGEB Co-operation Agreement; and (iii) a
directorship of a company incorporated under the laws of the
British Virgin Islands;
(i) there is no basis for and there are no actions, suits,
judgments, investigations or proceedings outstanding or
pending or to the knowledge of PCR threatened against or
affecting Temco at law or in equity or before or by any
governmental agency or authority having jurisdiction;
(j) Temco is not in breach of any laws, ordinances, statutes,
regulations, by-laws, orders or decrees to which it is subject
or which apply to it;
(k) neither PCR nor any director of Temco are indebted or under
obligation to Temco on any account whatsoever except as
provided in the Temco Option Agreement;
(1) all material transactions of Temco have been promptly and
properly recorded or filed in or with its respective books and
records. The minute books of Temco contain all records of the
meetings and proceedings of shareholders and directors
thereof;
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(m) the performance of this Agreement will not be in violation of
the constating documents of Temco or of any agreement to which
Temco is a party and will not give any person or company any
right to terminate or cancel any agreement or any right
enjoyed by PCR or Temco and will not result in the creation or
imposition of any lien, encumbrance or restriction of any
nature whatsoever in favour of a third party upon or against
the assets of Temco;
(n) the authorized capital of Temco consists of 50,000 shares
having a par value of US$1.00 each of which the Temco Shares
and the 400 shares issued to Orient are the only shares that
are issued and outstanding;
(o) the Temco Shares are validly issued, fully-paid and
non-assessable common shares not subject to any trading
restrictions other than as set out in the constating documents
of Temco, and the Shares represent the total issued and
outstanding share capital of Temco;
(p) no finder's fees, commissions or financial service fees of any
type whatsoever are payable by Temco in connection with
transactions contemplated by this Agreement;
(q) the financial statements of Temco for the fiscal period ended
December 31, 1995 attached hereto as Schedule "J" delivered to
Minco present fairly, in all material respects, the financial
position of Temco as at December 31, 1995 and the results of
operations and the changes in financial position for the year
then ended in accordance with Canadian generally accepted
accounting principles applied on a consistent basis and do not
omit to state any material fact that is required by generally
accepted accounting principles, or by applicable law, to be
stated or reflected therein, or which is necessary to make the
statements contained therein not misleading;
(r) since December 31, 1995, Temco has carried on its business in
the ordinary and normal course of the routine daily affairs
of such business. Since such date, there has been no material
change in the business, operations, affairs or conditions of
Temco, financial or otherwise, including, without limitation,
any change arising as a result of any legislative or
regulatory change, modification, revocation, or suspension or
any material license or right to do business, fire, explosion,
accident, casualty, labour trouble, flood, drought, riot,
storm, expropriation, condemnation, act of God, or otherwise,
except changes occurring in the ordinary course of the
routine daily affairs of business, which changes have not
materially adversely affected the organization, business,
properties, prospects, or financial condition of Temco;
(s) there are no material liabilities, contingent or otherwise, of
Temco which are not disclosed in Schedule "K" attached hereto,
and Temco has not guaranteed, or agreed to guarantee, any
debt, liability or other obligation
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of any person, firm or corporation other than or described in
Schedule "K";
(t) no person, other than Minco, or as set out in Schedule "L",
has any right, agreement, or option, present or future,
contingent or absolute, or any right capable of becoming a
right, agreement or option:
(i) to require Temco to issue any further or other shares
in its capital or any security or other instrument
convertible or exchangeable in to shares in its
capital, or to convert or exchange any security or
other instrument into, with or for shares in its
capital;
(ii) for the issue or allotment of any of the authorized
but unissued shares in its capital;
(iii) to require Temco to create any additional shares in
its capital;
(iv) to require Temco to purchase, redeem, or otherwise
acquire any of the issued and outstanding shares in
its capital;
(v) to require Temco to distribute any or all of its
assets, or to declare any dividends;
(vi) for the purchase of any assets or the acquisition or
any interest in a Property, or an NCI; or
(vii) to purchase or otherwise acquire any securities of
Temco;
(u) no order prohibiting the issue and sale of securities by Temco
has been issued and no proceedings for this purpose have been
instituted, are pending, or, to the knowledge of PCR,
contemplated;
(v) this Agreement and any statement furnished to Minco by, or on
behalf of PCR and Temco, do not contain and will not contain
an untrue statement of material fact or omit or will omit to
state a material fact or circumstance necessary to make the
statements contained herein or therein not misleading, or
which may be material in Minco's decision to enter into this
Agreement;
(w) PCR or Temco owns, as of the date hereof, the NCI, or has
rights to acquire an NCI, in Property as set out in the PCR
Agreements;
(x) to the best of its knowledge, there are no adverse claims,
challenges, actions, suits, disputes or proceedings regarding
the PCR Agreements, and there are no such claims pending, nor
is there any basis therefor.
2.4 The representations, warranties, covenants and agreements by each of the
parties contained in this Agreement or any certificates or documents delivered
pursuant to the provisions
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hereof or in connection with the transaction contemplated hereby shall be true
at and as of the date of Closing of this Agreement as though such
representations and warranties were made at and as of such time.
Notwithstanding any investigations or inquiries made by a party prior to the
execution of this Agreement or the waiver of any condition by such party, the
representations, warranties, covenants and agreements of the other party shall
survive the execution and Closing of this Agreement and notwithstanding the
purchase and sale herein provided for, shall continue in full force and effect.
2.5 The representations and warranties hereinbefore set out are conditions
on which the parties have relied in entering into this Agreement and will
survive the acquisition of the PCR Agreements and the Temco Shares by Minco,
and each of Minco and PCR will indemnify and save the other harmless from all
loss, damage, costs, actions and suits arising out of or in connection with any
breach of any representation, warranty, covenant, agreement or condition made
by Minco or PCR, as the case may be, and contained in this Agreement.
3. ASSIGNMENT OF PCR AGREEMENTS
AND TRANSFER OF TEMCO SHARES
3.1 Upon and subject to the terms and conditions of the Agreement, PCR
hereby agrees to sell, transfer and assign to Minco and Minco agrees to
purchase from PCR the PCR Properties and the Temco Shares. Without limiting the
generality of the foregoing, as part of such sale, transfer and assignment, PCR
agrees to assign to Minco all its rights and interests in and to each of the
PCR Agreements and Minco Agrees to assume all liabilities under the PCR
Agreements.
3.2 The purchase price to be paid by Minco for the PCR Properties and the
Temco Shares (the "Purchase Price") will be:
(a) the allotment and issuance to PCR of Seven Million Two Hundred
and Eighty Thousand (7,280,000) common shares of Minco (the
"Purchased Shares"). The parties acknowledge and agree that the
total number of such shares to be issued is to be equal to
approximately two-thirds (2/3) of the total number of shares of
Minco outstanding on a fully-diluted basis as at the date of
this Agreement and before giving effect to the Teck-Cominco
Private Placement. Such Purchased Shares shall comprise:
(i) Two Million Four Hundred Thousand (2,400,000) free-
trading shares (the "Free Trading Shares") having a
deemed value of $0.97 per share. These Free Trading
Shares will be subject to the restrictions set out in
section 8.1(f) herein. The parties acknowledge and
agree that the number of Free Trading Shares to be
issued to PCR hereunder is to be based upon the value of
the interest in the Emperor's Delight Property which may
be earned by PCR pursuant to the Emperor's Delight Joint
Venture Contract; and
(ii) Four Million Eight Hundred and Eighty Thousand
(4,880,000) escrow shares (the "Escrow Shares"). These
Escrow Shares will
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be subject both to the restrictions set out in section
8.1(f) herein and to the terms and conditions of an
escrow agreement in the form attached hereto as Schedule
"M" (the "Escrow Agreement") and such Escrow Shares may
be released from escrow only in accordance with the
provisions of the Escrow Agreement and of this
Agreement; and
(b) the assumption by Minco of PCR's liabilities to third parties as
are set out in Schedule "P" attached hereto.
3.3 PCR acknowledges that it may be required to execute and deliver such
other documents as may reasonably be requested by Minco in order to obtain
necessary regulatory approval of the transactions herein contemplated and PCR
hereby agrees to execute and deliver any and all such documents forthwith at
such request of Minco.
3.4 Subject to section 5.1 herein, following the execution of this
Agreement by both parties, Minco will submit this Agreement to the Exchange and
request the acceptance for filing hereof and the purchase of the PCR Properties
and Temco Shares. Thereafter, both parties will diligently pursue obtaining
such acceptance for filing and regulatory approval and comply with all
reasonable requests of the Exchange in connection therewith, but neither party
will, in any event, be liable for failure to obtain such acceptance or
approval. Each party will cooperate with the other as reasonably necessary to
secure such acceptance for filing and other required approvals.
3.5 PCR acknowledges that the Purchased Shares to be allotted and issued to
it hereunder pursuant to exemptions from the registration and prospectus
requirements of the Act, and acknowledges, confirms to and covenants with Minco
that:
(a) it will comply with all requirements of applicable securities
legislation in connection with the issuance to it of the Shares
and the resale of the Shares including, without limitation,
entering into the Escrow Agreement if required; and
(b) it is not entering into this Agreement as result of any material
information about the affairs of Minco that, to its knowledge,
has not been publicly disclosed.
4. RELEASE OF ESCROW SHARES
4.1 The Escrow Shares issued to PCR hereunder shall be released to PCR on
the following basis:
(a) one escrow share for each $0.97 in the value of the interests to
be acquired by Minco from PCR hereunder in any of the PCR
Properties, based on a valuation report to be prepared by a
qualified independent consultant, less any expenditures
required to be made by Minco, pursuant to the PCR Agreements or
otherwise, in order to earn its interests in such Properties;
provided that all required Chinese governmental approvals in
order to perfect the interests to be acquired by Minco
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hereunder have been obtained for each of the Properties that are
the subject of the valuation report;
(b) one escrow share for each $0.97 in the value of the interest in
any New Projects (as defined in paragraph 6 herein) acquired by
Minco pursuant to this Agreement or the T-C Investment
Participation Agreement, such value to be determined on the same
basis and subject to the same provisions as described in sub-
paragraph 4.1(a) above, mutatis mutandis;
(c) one Escrow Share for every $1.81 expended by Minco, PCR, Teck,
Cominco, Temco or any other third party expending monies
(including PCR's joint venture partner in Temco, Orient) or on
exploration and development of the PCR Properties or of any New
Projects acquired by Minco pursuant to this Agreement or the T-C
Investment and Participation Agreement, exclusive of general and
administrative expenses, determined in accordance with the
provisions applicable to natural resources issuers under Local
Policy Statement #3-07 of the British Columbia Securities
Commission; and
(d) one Escrow Share for every $0.97 in cumulative Cash Flow, as
hereinafter defined, from the operations of Minco on the PCR
Properties and any New Projects as defined in paragraph 6 herein
and as determined in accordance with generally accepted
accounting principals and by reference to Minco's annual audited
financial statements, provided that each PCR Property and each
New Project will be considered separately without taking into
account any negative cash flow that may exist in any other PCR
Property or New Project.
4.2 For the purposes of subparagraph 4.1(d) herein, Cash Flow means net
profit for a fiscal year of Minco adjusted for the following add backs:
depreciation, amortization of goodwill, deferred income taxes, and amortization
of research and development costs, plus any other capitalization charges as may
be permitted by the Exchange. Cumulative Cash Flow, less any amounts used in
prior Escrow Share releases pursuant to subparagraph 4.1(d), divided by $0.97
per share, equals the total number of Escrow Shares which may be released in
any twelve-month period. During the currency of the Escrow Agreement, Minco
shall determine (i) the cumulative Cash Flow commencing after the Closing Date
(as defined in paragraph 1.1 herein), (ii) the total exploration and
development expenditures on the Properties pursuant to subparagraph 4.1(c), and
(iii) the number of Escrow Shares available for release to PCR, within One
Hundred Twenty (120) days from each fiscal year end of Minco.
4.3 Minco shall file its annual audited financial statements, prepared in
accordance with generally accepted accounting principles, with the Exchange and
the number of Escrow Shares to be released from escrow to PCR at any time shall
be subject to the prior written consent of the Exchange. Notwithstanding the
foregoing, in the event that not all of the Escrow Shares are released to PCR
within Ten (10) years of the Closing Date, as hereinafter defined, any Escrow
Shares not released shall be forfeited by PCR and cancelled and Minco shall
have no further obligation or liability to PCR with respect to such Escrow
Shares. For greater certainty the Escrow Shares shall not be forfeited for any
reason other than the expiration of the aforementioned Ten (10) year period.
14
- 14 -
5. CONDITIONS PRECEDENTS
5.1 This Agreement and the obligations of each party are in each case
subject to each of the following occurring on or before ten (10) days next
following the date on Which this Agreement is executed:
(a) the acceptance for filing of this Agreement by the Exchange;
(b) the execution of an investment and participation agreement
between Minco, Teck and Cominco under which Minco will have
rights and obligations substantially the same as those of PCR
under the T-C Investment and Participation Agreement;
(c) the execution of a subscription agreement between Minco, Teck
and Cominco relating to the Teck-Cominco Private Placement,
unless already included in the investment and participation
agreement referred to in section 5.1(b) above;
(d) all representations and warranties of each party made to the
other in this Agreement, or in any written statement delivered
by each party to the other under this Agreement, are true at
the Closing Date;
(e) each of the covenants and agreements of, conditions imposed
upon, and the deliveries set out herein, to be made,
satisfied, or compiled with by each party in favour of the
other on or before the Closing Date has been fully performed,
satisfied and complied with in all respects on or before the
Closing Date; and
(f) the execution by PCR of the T-C Investment and Participation
Agreement.
5.2 If the conditions set out in section 5.1 herein are not satisfied on
or before the date which is ten (10) days next following the date on which this
Agreement is executed, either party may, in its sole discretion, terminate this
Agreement at any time thereafter whereupon neither party shall have any further
obligation to the other party under this Agreement.
5.3 This Agreement shall also be subject to PCR making available to Minco
of the following on or before the Closing Date:
(a) all non-public data, agreements, evaluations, professional
reports and other information in the possession or control of
PCR with respect to the PCR Properties;
(b) written consent of Baiyin to the assignment of the CB-LG
Agreement hereunder.
5.4 PCR agrees to diligently pursue obtaining the written consent required
pursuant to section 5.3(b) hereunder, but PCR will in no event be liable for
failure to obtain such written consent.
15
- 15 -
6. EXCLUSIVE RIGHT OF ACQUISITION
6.1 For a period of time commencing on the date of this Agreement and
expiring on March 1, 2000, Minco shall have the exclusive right to acquire from
PCR, at cost and in the manner hereinafter described (the "Right of
Acquisition") all right, title and interest in and to any new base or precious
metal Property which PCR identifies and in respect to which PCR has acquired an
NCI (a "New Property") or in respect to which PCR has a reasonable expectation
of acquiring an NCI. The Right of Acquisition may be extended beyond March 1,
2000 upon agreement of the parties hereto.
6.2 Upon identification of a New Property, PCR shall deliver a notice to
Minco providing reasonable details regarding the New Property, including a
description of the NCI acquired or to be acquired by PCR therein, which notice
shall be accompanied by copies of all documentation in the possession of PCR
regarding the New Property, including but not limited to all underlying
agreements and geological reports regarding the New Property (the "New Property
Notice") Minco and PCR shall thereupon enter into a separate confidentiality
agreement relating to such New Property.
6.3 Upon receipt of the New Property Notice and in the event Teck and
Cominco have not yet exercised their "Earn-in Rights" in respect to two NCI's,
as defined in the T-C Investment and Participation Agreement, Minco shall
forthwith provide a complete copy of the New Property Notice to Teck and
Cominco in accordance with the provisions of Part 6 of the T-C Investment and
Participation Agreement, with a request that Teck and Cominco determine whether
the New Property is one that should be governed by the T-C Investment and
Participation Agreement.
6.4 In the event that after receiving a complete copy of the New Property
Notice Teck and Cominco determine that the New Property is one that should be
governed by the T-C Investment and Participation Agreement, then Minco shall be
deemed to have exercised the Right of Acquisition and PCR shall be deemed to
have assigned all its right, title and interest in the New Property to Minco.
6.5 In the event that Teck and Cominco determine that the New Property is
not one that should be governed by the T-C Investment and Participation
Agreement or in the event that Teck and Cominco have exercised their "Earn-in
Rights" in respect to two NCI's, as defined in the T-C Investment and
Participation Agreement, then Minco shall, as soon as practicable following the
determination of Teck and Cominco, if applicable, but in any event not later
than 30 days following receipt of the New Property Notice by Minco notify PCR
in writing of its decision to either exercise or decline to exercise its Right
of Acquisition.
6.6 If Minco elects not to exercise its Right of Acquisition, PCR will be
free to deal with the New Property as it sees fit, and the Property shall
thereafter not be subject to this Agreement. Failure by Minco to notify PCR of
its election within the time limit in section 6.5 will be deemed to be an
election that Minco has declined to exercise the Right of Acquisition.
6.7 If Minco elects or is deemed to have elected to exercise its Right of
Acquisition in respect to a New Property, PCR shall assign all its right, title
and interest in the New Property to Minco. PCR shall thereafter provide Minco
with copies of all documentation
16
- 16 -
reasonably necessary to substantiate PCR's out-of-pocket costs in respect to
the acquisition of its interests in such New Property and Minco shall forthwith
upon receipt of such documentation reimburse PCR for all such out-of-pocket
costs and in addition, Minco shall be responsible for payment of any finder
fees, commissions or other payments due to third parties in connection with the
acquisition of the New Property, the payment of which are in accordance with
regulatory requirements and have been approved by Minco's board of directors.
PCR furthermore agrees to execute and deliver to Minco any and all
documentation reasonably necessary to perfect such the assignment of its
interests in the New Property to Minco and to provide to Minco all such
reasonable assistance that Minco may require to secure the Property and the NCI
therein.
6.8 The rights of acquisition held by Minco under section 6 herein shall be
subject to any prior rights that Teck and Cominco may have under the T-C
Investment and Participation Agreement.
7. MINCO BOARD APPOINTMENTS
7.1 The parties agree that forthwith upon execution of this Agreement,
Minco shall take such steps as are necessary to change the constitution of the
board of directors of Minco in accordance with the Shareholders Agreement
attached hereto as Schedule "N".
8. CLOSING
8.1 On the Closing Date, the following events shall occur:
(a) Minco shall deliver to PCR a copy of the Exchange letter of
acceptance in respect to this Agreement;
(b) PCR shall deliver to Minco a deed of assignment in respect to each
of the PCR Agreements;
(c) PCR shall deliver to Minco the Temco Shares duly endorsed for
transfer, and make adequate provision for transfer of control of
all corporate records, registers and documents of Temco, including
the minute book and corporate seal of Temco;
(d) PCR shall cause to be delivered to Minco a legal opinion from a
qualified British Virgin Islands lawyer that the Temco Shares were
legally created, and are fully paid and non-assessable; and that
Temco has taken all necessary corporate actions to authorize and
approve the transfer of the Temco Shares to Minco, and that the
transfer will not breach or cause a breach of any terms of the
constating documents of Temco;
(e) Each of Minco and PCR shall execute and deliver to one another the
Escrow Agreement;
17
- 17 -
(f) Minco shall issue to PCR certificates representing the Free
Trading Shares and Escrow Shares, which certificates will be
endorsed with a legend indicating that they are held subject
to the one year hold period imposed by the Act and, in the
case of the Escrow Shares, that such shares may only be traded
in accordance with the terms of the Escrow Agreement;
(g) Minco and PCR shall cause the Shareholders Agreement (as
defined by paragraph 7.1 herein), fully executed, to be
delivered to one another;
(h) Minco shall cause to be delivered to PCR a legal opinion from
a qualified British Columbia lawyer that the Free Trading and
Escrow Shares were legally created, and are fully paid and
non-assessable; and that Minco has taken all necessary
corporate actions to authorize the issuance of the Free
Trading Escrow Shares to PCR, and that the transfer will not
breach or cause a breach of any terms of the constating
documents of Minco;
(i) The Teck-Cominco Private Placement shall be completed: and
(j) The payment by Minco to PCR of PCR's third party liability as
set out in Schedule "P".
9. NOTICE
9.1 Any notice, direction or other instrument required or permitted to be
given under this Agreement will be in writing and may be given by the delivery
of the same or by mailing the same by prepaid registered or certified mail or by
sending the same by telegram, telex. telecommunication or other similar form of
communication, in each case addressed as follows:
(a) if to Minco at:
Minco Mining and Metals Corporation
Xxxxx 0000, 000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Fax No.: 0-000-000-0000
Attention: Xx. Xxxxx Xxxxxxxx, Chairman & C.E.O.
(b) if to PCR at:
Pacific Canada Resources Inc.
Xxxxx 0000, 000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Fax No.: 0-000-000-0000
Attention: Xx. Xxx X. Xxx, Managing Director
18
-18-
9.2 Any notice, direction or other instrument aforesaid will, if delivered,
be deemed to have been given and received on the day it was delivered, and if
mailed, be deemed to have been given and received on the tenth business day
following the day of mailing, except in the event of disruption of the postal
services in which event notice will be deemed to be received only when actually
received and, if sent by fax, be deemed to have been given or received on the
next business day of the recipient party following the date on which it was so
sent.
9.3 Any party may at any time give to the other, notice in writing of any
change of address of the party giving such notice and from and after the giving
of such notice, the address or addresses therein specified will be deemed to be
the address of such party for the purposes of giving notice hereunder.
10. GENERAL
-------
10.1 This Agreement, other than the Confidentiality Agreement, constitutes
the entire agreement between the parties and replaces and supersedes all prior
agreements, memoranda, correspondence, communications, negotiations and
representations, whether verbal or written, express or implied, statutory or
otherwise between the parties with respect to the subject matter herein. For
greater certainty, the parties agree that, if this Agreement is terminated for
any reason, the Confidentiality Agreement will not be terminated and the rights
and obligations set out therein will continue to be in effect.
10.2 The parties hereto agree that they and each of them will execute all
documents and do all acts and things within their respective powers to carry
out and implement the provisions or intent of this Agreement.
10.3 The headings to the respective sections herein will not be deemed part
of this Agreement but will be regarded as having been used for convenience
only.
10.4 All references to monies hereunder will be in Canadian funds. All
payments to be made to any party hereunder will be made by cash, certified
cheque or bank draft mailed or delivered to such party at its address for
notice purposes as provided herein, or for the account of such part at such
bank or banks in Canada as such party may designate from time to time by
written notice. Said bank or banks will be deemed the agent of the designating
party for the purpose of receiving, collecting and receipting such payment.
10.5 This Agreement will enure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns.
10.6 This Agreement may be signed by facsimile and in one or more
counterparts and signed counterpart copies, when read together, shall be
irrevocably deemed to constitute a single binding Agreement signed by both
parties.
10.7 This Agreement will be governed and interpreted in accordance with the
laws of British Columbia (except for its conflict of laws provisions) and the
laws of Canada applicable therein. All actions arising from this Agreement will
be commenced and prosecuted in the courts of British Columbia, and the parties
hereby attorn to the jurisdiction thereof.
19
- 19 -
IN WITNESS WHEREOF the parties hereto have executed this Agreement as
of the day and year first above written.
THE CORPORATE SEAL OF MINCO )
MINING AND METALS CORPORATION )
was hereunto affixed in the presence of: )
)
)
/s/ )
_______________________________________ ) C/S
Authorized Signatory )
)
)
/s/ )
_______________________________________ )
Authorized Signatory )
THE CORPORATE SEAL OF PACIFIC )
CANADA RESOURCES INC. was hereunto )
affixed in the presence of: )
)
)
/s/ )
_______________________________________ ) C/S
Authorized Signatory )
)
)
/s/ )
_______________________________________ )
Authorized Signatory )
20
THIS IS SCHEDULE "A" OF THE ASSIGNMENT OF CONTRACTS AND
SHARE PURCHASE AGREEMENT DATED FOR REFERENCE FEBRUARY 19, 1996
BETWEEN MINCO MINING AND METALS CORPORATION AND
PACIFIC CANADA RESOURCES INC.
The CB-LG Agreement
(LETTER OF INTENT
REGARDING THE DEVELOPMENT OF THE LIJIAGOU LARGE Pb-Zn DEPOSIT)
The parties acknowledge having received a copy of the above-referenced
agreement.
21
THIS IS SCHEDULE "B" OF THE ASSIGNMENT OF CONTRACTS AND
SHARE PURCHASE AGREEMENT DATED FOR REFERENCE FEBRUARY 19, 1996
BETWEEN MINCO MINING AND METALS CORPORATION AND
PACIFIC CANADA RESOURCES INC.
The FGEB Co-Operation Agreement
(COOPERATION AGREEMENT REGARDING
CERTAIN MINERAL DEPOSIT PROPERTIES)
The parties acknowledge having received a copy of the above-referenced
agreement.
22
THIS IS SCHEDULE "C" OF THE ASSIGNMENT OF CONTRACTS AND
SHARE PURCHASE AGREEMENT DATED FOR REFERENCE FEBRUARY 19, 1996
BETWEEN MINCO MINING AND METALS CORPORATION, AND
PACIFIC CANADA RESOURCES INC.
The Emperor's Delight Joint Venture Contract
(GEOEXPLORATION CORPORATION OF THE FIRST GEOEXPLORATION BUREAU
and TRIPLE EIGHT MINERAL CORPORATION - JOINT VENTURE AGREEMENT)
The parties acknowledge having received a copy of the above-referenced
agreement.
23
THIS IS SCHEDULE "D" OF THE ASSIGNMENT OF CONTRACTS AND
SHARE PURCHASE AGREEMENT DATED FOR REFERENCE FEBRUARY 19, 1996
BETWEEN MINCO MINING AND METALS CORPORATION, AND
PACIFIC CANADA RESOURCES INC.
The Temco Option Agreement
(ORIENT GOLD MINES LTD. and PACIFIC CANADA RESOURCES INC. -
HEADS OF AGREEMENT)
The parties acknowledge having received a copy of the above-referenced
agreement.
24
THIS IS SCBEDULE "E" OF THE ASSIGNMENT OF CONTRACTS AND
SHARE PURCHASE AGREEMENT DATED FOR REFERENCE FEBRUARY 19, 1996
BETWEEN MINCO MINING AND METALS CORPORATION, AND
PACIFIC CANADA RESOURCES INC.
The T-C Investment and Participation Agreement
The parties acknowledge having received a copy of the above-referenced
agreement.
25
THIS IS SCHEDULE "F" OF THE ASSIGNMENT OF CONTRACTS AND
SHARE PURCHASE AGREEMENT DATED FOR REFERENCE FEBRUARY 19, 1996
BETWEEN MINCO MINING AND METALS CORPORATION, AND
PACIFIC CANADA RESOURCES INC.
The Chapuzi Agreement
(SUPPLEMENTARY AGREEMENT BETWEEN
MINCO MINING AND METALS CORPORATION
and
SICHUAN BUREAU OF GEOLOGY AND MINERAL RESOURCES)
The parties acknowledge having received a copy of the above-referenced
agreement.
26
THIS IS SCHEDULE "G" OF THE ASSIGNMENT OF CONTRACTS AND
SHARE PURCHASE AGREEMENT DATED FOR REFERENCE FEBRUARY 19, 1996
BETWEEN MINCO MINING AND METALS CORPORATION AND
PACIFIC CANADA RESOURCES INC.
MINCO MINING AND METALS CORPORATION
Financial Statements
December 31, 1995
Index
Auditors' Report
Balance Sheet
Statement of Loss and Deficit
Statement of Changes in Financial Position
Notes to Financial Statements
27
AUDITOR'S REPORT
To the Shareholders of
MINCO MINING AND METALS CORPORATION
We have audited the balance sheets of Minco Mining and Metals Corporation as at
December 31, 1995 and 1994 and the statements of loss and deficit and changes
in financial position for the years then ended. These financial statements are
the responsibility of the company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. These standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial presentation.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the company as at December 31, 1995 and
1994 and the results of its operations and changes in its financial position
for the years then ended in accordance with generally accepted accounting
principles.
Vancouver, Canada
February 12, 1996 Chartered Accountants
DRAFTED ON FEB. 16/96
28
MINCO MINING AND METALS CORPORATION
Balance Sheet
December 31, 1995
--------------------------------------------------------------------------------
1995 1996
--------------------------------------------------------------------------------
ASSETS
Current
Cash $ 229,304 $ 137,437
Marketable securities -- 600
Refundable tax credits 2,680 1,989
--------------------------------------------------------------------------------
231,984 140,026
Resource interests (Note 2) 100 --
Capital assets (Note 3) 25,102 --
--------------------------------------------------------------------------------
$ 257,186 $ 140,026
================================================================================
LIABILITIES
Current
Accounts payable and accrued liabilities $ 27,908 $ 10,550
Management fees payable 12,000 48,000
Due to a director 60,000 --
--------------------------------------------------------------------------------
99,908 58,550
--------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Share capital (Note 4) 3,026,474 2,526,474
Deficit (2,869,196) (2,444,998)
--------------------------------------------------------------------------------
157,278 81,476
--------------------------------------------------------------------------------
$ 257,186 $ 140,026
================================================================================
Approved by the Directors:
-------------------------- ----------------------
Director Director
DRAFTED ON FEB. 16/96
29
MINCO MINING AND METALS CORPORATION
Statement of Loss and Deficit
Year Ended December 31, 1995
--------------------------------------------------------------------------------
1995 1994
--------------------------------------------------------------------------------
Revenue
Interest income $ 8,754 $ 2,795
Gain on sale of marketable securities 535 --
--------------------------------------------------------------------------------
9,289 2,795
--------------------------------------------------------------------------------
Expenses
Accounting and audit 21,830 11,958
Amortization 3,587 --
Bank charges 852 230
Filing fees 7,840 4,171
Investor relations 19,863 3,683
Legal 18,409 4,746
Management and consulting fees 45,684 24,000
Office 19,625 1,075
Property investigation 146,081 51,287
Rent 38,443 --
Salaries and benefits 57,621 --
Telephone 15,678 --
Transportation 11,200 --
Transfer agent 4,392 4,119
Travel and conference 22,382 --
--------------------------------------------------------------------------------
433,487 105,269
--------------------------------------------------------------------------------
Net loss for the year (424,198) (102,474)
Deficit, beginning of year (2,444,998) (2,342,524)
--------------------------------------------------------------------------------
Deficit, end of year $(2,869,196) $(2,444,998)
================================================================================
Loss per share $(0.17) $(0.04)
================================================================================
DRAFTED ON FEB. 16/96
30
MINCO MINING AND METALS CORPORATION
Statement of Changes in Financial Position
Year Ended December 31, 1995
----------------------------------------------------------------------------------
1995 1994
----------------------------------------------------------------------------------
Cash provided by (used for) operating activities
Net loss for the year $(424,198) $(102,474)
Item not involving cash:
-amortization 3,587 --
----------------------------------------------------------------------------------
(420,611) (102,474)
Net change in non-cash working capital 41,267 91,705
----------------------------------------------------------------------------------
(379,344) ( 10,769)
----------------------------------------------------------------------------------
Cash provided by financing activities
Proceeds from issuance of shares 500,000 110,000
----------------------------------------------------------------------------------
Cash provided by investing activities
Acquisition of capital assets (28,689) --
Acquisition of resource interests (100) --
----------------------------------------------------------------------------------
(28,789) --
----------------------------------------------------------------------------------
Increase in cash position 91,867 99,231
Cash position, beginning of year 137,437 38,206
----------------------------------------------------------------------------------
Cash position, end of year $ 229,304 $ 137,437
==================================================================================
DRAFTED ON FEB. 16/96
31
MINCO MINING AND METALS CORPORATION
Notes to Financial Statements
December 31, 1995
--------------------------------------------------------------------------------
1. Significant Accounting Policies
a) Capital Assets
--------------
Amortization is provided on a declining-balance basis as
follows:
Computer equipment 30% per annum
Office equipment and furniture 20% per annum
b) Resource Interests
------------------
The Company follows the policy of deferring all acquisition,
exploration and development costs relating to the resource
interests. These costs will be amortized against revenue from
future production or written off if the interest is abandoned or
sold. At the present time, management has determined each
project to be a cost centre.
Depletion of cost capitalized on projects put into commercial
production will be recorded using the unit-of-production method
when estimated proven reserves are determined.
The amounts shown for resource interests represent acquisition
and exploration costs incurred to date less recoveries, and do
not necessarily reflect present or future values.
The Company does not resource the estimated costs of maintaining
its resource interest in good standing.
c) Option Agreements
-----------------
From time to time, the Company may acquire or dispose of
properties pursuant to the terms of option agreements. Due to
the fact that options are exercisable entirely at the discretion
of the optionee, the amounts payable or receivable are not
recorded. Option payments are recorded as resource property
costs or recoveries when the payments are made or received.
32
MINCO MINING AND METALS CORPORATION
Notes to Financial Statements
December 31, 1995
--------------------------------------------------------------------------------
2. Resource Interest
The Company has entered into a joint venture agreement with the Sichuan
Bureau of Geology and Mineral Resources ("SBGMR"). SBGMR is the holder
of exploration rights to the Chapuzi Gold Deposit in Sichuan Province,
China.
Pursuant to the agreement, the Company shall have the right to earn a
51% interest by spending CDN$5 million on exploration and development.
To date the Company has incurred $138,304 in connection with the
investigation and signing of the joint venture agreement. These costs
have been expensed together with other property investigation.
The resource interest is carried at a minimal amount of $100.
3. Capital Assets
1995 1994
--------------------------------------- --------
Accumulated Net book Net book
Cost amortization value value
--------------------------------------------------------------------------------
Computer equipment $14,358 $2,154 $12,204 $
Office equipment and
furniture 14,331 1,433 12,898
--------------------------------------------------------------------------------
$28,689 $3,587 $25,102 $
================================================================================
4. Share Capital
a) Authorized: 20,000,000 common shares without par value.
b) Issued:
Shares Amount
--------------------------------------------------------------------------------
Balance, December 31, 1993 1,785,873 $2,416,474
Issued pursuant to exercise of
warrants at $0.22 per share 500,000 110,000
--------------------------------------------------------------------------------
Balance, December 31, 1994 2,285,873 2,526,474
Issued pursuant to a private placement 500,000 500,000
--------------------------------------------------------------------------------
Balance, December 31, 1995 2,785,873 $3,026,474
================================================================================
33
MINCO MINING AND METALS CORPORATION
Notes to Financial Statements
December 31, 1995
--------------------------------------------------------------------------------
4. Share Capital (continued)
c) 125,000 of the shares are held in escrow, the release of which
is subject to the direction of the regulatory authorities.
d) The Company has granted incentive stock options to directors and
employees for 156,750 shares exercisable at $1.00 per share,
expiring June 2, 2000.
e) The Company has agreed to issue 437,000 additional escrow shares
to its directors at $0.01 per share. These shares were issued
subsequent to the year-end.
f) The Company has agreed to issue, subject to regulatory approval,
200,000 shares as finder's fees in connection with the
joint-venture as described in Note 2.
5. Remuneration of Directors and Senior Officers
During the year, the Company paid or accrued the following expenses to
its directors:
Accounting - $10,400
Management and consulting fees - $45,684
Salaries - $33,000
34
THIS IS SCHEDULE "H" OF THE ASSIGNMENT OF CONTRACTS AND
SHARE PURCHASE AGREEMENT DATED FOR REFERENCE FEBRUARY 19, 1996
BETWEEN MINCO MINING AND METALS CORPORATION AND
PACIFIC CANADA RESOURCES INC.
Minco's Material Liabilities
None other than as disclosed in Minco's financial statements for the year ended
December 31, 1995 which are attached to this Agreement as Schedule "G".
35
THIS IS SCHEDULE "I" OF THE ASSIGNMENT OF CONTRACTS AND
SHARE PURCHASE AGREEMENT DATED FOR REFERENCE FEBRUARY 19, 1996
BETWEEN MINCO MINING AND METALS CORPORATION AND
PACIFIC CANADA RESOURCES INC.
RIGHTS TO ACQUIRE SECURITIES IN MINCO
1. incentive stock options for an aggregate of 156,750 common shares,
still subject to the approval of the Exchange, and exercisable until
June 2, 2000 at a price of $1.00 per share;
2. an aggregate 60,241 additional performance escrow shares to be issued
to certain principals of Minco pursuant to the policies of the
Exchange, the issuance of which remains subject to the approval of the
Exchange; and
3. 200,000 finders fee shares to be issued to December Inc. pursuant to a
Finders Fee Agreement dated as of December 11, 1995 made between
December Inc. and Minco, the issuance of which remains subject to the
approval of the Exchange;
36
THIS IS SCHEDULE "J" OF THE ASSIGNMENT OF CONTRACTS AND SHARE PURCHASE
AGREEMENT DATED FEBRUARY 19, 1996 BETWEEN MINCO MINING AND METALS CORPORATION
AND PACIFIC CANADA RESOURCES INC.
TEMCO'S UNAUDITED FINANCIAL STATEMENTS
DATED DECEMBER 31, 1995
37
TRIPLE EIGHT MINERAL CORPORATION
BALANCE SHEET (U.S.$)
As At December 31, 1995
ASSET
PREPAID EXPENSE $ 28,635
---------
LIABILITY
DUE TO PACIFIC CANADA RESOURCES INC. $ 61,751
---------
SHAREHOLDER'S EQUITY
CAPITAL STOCK 1,000
CONTRIBUTED SURPLUS 377,025
DEFICIT (411,141)
--------
(33,116)
--------
$ 28,635
========
38
TRIPLE EIGHT MINERAL CORPORATION
STATEMENT OF LOSS AND DEFICIT (U.S.$)
FOR THE PERIOD FROM
SEPTEMBER 13, 1995 TO DECEMBER 31, 1995
EXPENSES
China negotiations $303,698
Geological 61,797
General and administrative 37,037
Incorporation cost 850
Professional fees 7,759
--------
NET LOSS, being DEFICIT, end of period $411,141
========
39
THIS IS SCHEDULE "K" OF THE ASSIGNMENT OF CONTRACTS AND
SHARE PURCHASE AGREEMENT (THE "AGREEMENT") DATED FEBRUARY 19, 1996
BETWEEN MINCO MINING AND METALS CORPORATION
AND PACIFIC CANADA RESOURCES INC.
TEMCO'S MATERIAL LIABILITIES
NOTES:
The only material liabilities of Temco are:
1. those liabilities imposed upon all corporations incorporated in the
British Virgin Islands under the relevant governing legislation;
2. those as are set out in its financial statements dated December 31,
1995 which are attached to this Agreement as Schedule "J"; and
3. those as are set out in the Emperor's Delight Joint Venture Contract.
40
THIS IS SCHEDULE "L" OF THE ASSIGNMENT OF CONTRACTS AND SHARE PURCHASE
AGREEMENT DATED FEBRUARY 19, 1996 BETWEEN MINCO MINING AND METALS CORPORATION
AND PACIFIC CANADA RESOURCES INC.
RIGHTS TO ACQUIRE SECURITIES IN TEMCO
NOTES:
1. No third party has any rights to acquire securities in Temco.
41
THIS IS SCHEDULE "M" OF THE ASSIGNMENT OF CONTRACTS AND
SHARE PURCHASE AGREEMENT DATED FOR REFERENCE FEBRUARY 19, 1996
BETWEEN MINCO MINING AND METALS CORPORATION AND
PACIFIC CANADA RESOURCES INC.
ESCROW AGREEMENT
----------------
THIS AGREEMENT is dated for reference the ___ day of February, 1996 and
made AMONG:
MONTREAL TRUST COMPANY OF CANADA, of 000 Xxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxx Xxxxxxxx, X0X 0X0
(the "Escrow Agent")
AND:
MINCO MINING AND METALS CORPORATION, a company validly subsisting under
the laws of British Columbia with an office at Suite 1870, 000 Xxxx
Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(the "Issuer")
AND:
PACIFIC CANADA RESOURCES INC., a company validly subsisting under the
laws of Ontario with an office at 000 Xxx Xxxxxx, 0xx Xxxxx, Xxxxxxx,
Xxxxxxx, X0X 0X0
("PCR")
WHEREAS PCR has acquired or is about to acquire 4,880,000 escrow shares
of the Issuer pursuant to an Assignment of Contracts and Share Purchase
Agreement between the Issuer and PCR dated February ___, 1996 (the "Assignment
Agreement") as more particularly described in Schedule "A" attached hereto:
AND WHEREAS the Escrow Agent has agreed to act as escrow agent in
respect of the shares upon the acquisition of the shares by PCR;
NOW THEREFORE in consideration of the covenants contained in this
Escrow Agreement and other good and valuable consideration (the receipt and
sufficiency of which is acknowledged), the Parties agree as follows:
1. INTERPRETATION
In this Escrow Agreement:
42
-2-
(a) "EXCHANGE" means the Vancouver Stock Exchange;
(b) "EXECUTIVE DIRECTOR" means the Executive Director of the
British Columbia Securities Commission appointed under the
Act; and
(c) "EXECUTIVE DIRECTOR OR THE EXCHANGE" means the Executive
Director, if the shares of the Issuer are not listed on the
Exchange, or the Exchange, if the shares of the Issuer are
listed on the Exchange.
(d) "SHARES" means the shares to be issued under escrow pursuant
to the Assignment Agreement and described in Schedule "A"
attached hereto;
2. PLACEMENT OF SHARES IN ESCROW
PCR shall place the Shares in escrow with the Escrow Agent and shall
deliver the certificates representing the Shares to the Escrow Agent as soon as
practicable.
3. VOTING OF SHARES IN ESCROW
Except as provided by section 4(a), PCR may exercise all voting rights
attached to the Shares.
4. WAIVER OF SHAREHOLDER'S RIGHTS
PCR waives the rights attached to the Shares:
(a) to vote the Shares on a resolution to cancel any of the Shares
in accordance with section 7 of this Agreement,
(b) to receive dividends, and
(c) to participate in the assets and property of the Issuer on a
winding up or dissolution of the Issuer.
43
-3-
5. TRANSFER WITHIN ESCROW
(a) PCR shall not transfer any of the Shares except with the
consent of the Executive Director or the Exchange.
(b) The Escrow Agent shall not effect a transfer of the Shares
within escrow unless the Escrow Agent has received;
(i) a copy of an acknowledgment agreeing to be bound by
the terms of this Escrow Agreement executed by the
person to whom the Shares are to be transferred, and
(ii) a letter from the Executive Director or the Exchange
consenting to the transfer.
(c) Upon the insolvency or bankruptcy of PCR, the Escrow Agent
shall hold the Shares subject to this Escrow Agreement for the
person that is legally entitled to become the registered owner
of the Shares.
6. RELEASE FROM ESCROW
(a) PCR irrevocably directs the Escrow Agent to retain the Shares
until the Shares are released from escrow pursuant to
subsection (b), or surrendered for cancellation pursuant to
section 7, of this Agreement.
(b) The Escrow Agent shall not release the Shares from escrow
unless PCR and the Issuer have complied with the provisions of
section 4 of the Assignment Agreement and the Escrow Agent has
received a letter from the Executive Director or the Exchange
consenting to the release.
(c) The approval of the Executive Director or the Exchange to a
release from escrow of any of the Shares shall terminate this
Escrow Agreement only in respect of the Shares so released.
44
-4-
7. SURRENDER FOR CANCELLATION
In the event of the cancellation of the Shares pursuant to the terms
of section 4.3 of the Assignment Agreement, PCR shall surrender the Shares and
the Escrow Agent shall deliver the certificates representing the Shares to the
Issuer for cancellation.
8. AMENDMENT OF AGREEMENT
This Escrow Agreement may be amended only by a written agreement among
the Parties and with the written consent of the Executive Director or the
Exchange.
9. INDEMNIFICATION OF ESCROW AGENT
The issuer and PCR, jointly and severally, release, indemnify
and save harmless the Escrow Agent from all costs, charges, claims, demands,
damages, losses and expenses resulting from the Escrow Agents compliance in good
faith with this Escrow Agreement.
10. RESIGNATION OF ESCROW AGENT
(a) If the Escrow Agent wishes to resign as escrow agent in
respect of the Shares, the Escrow Agent shall give notice to
the Issuer.
(b) If the Issuer wishes the Escrow Agent to resign as escrow
agent in respect of the Shares, the Issuer shall give notice
to the Escrow Agent.
(c) A notice referred to in subsection (a) or (b) shall be in
writing and delivered to
(i) the Issuer at 1870 - 000 Xxxx Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0: or
(ii) the Escrow Agent at 000 Xxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxx Xxxxxxxx, X0X 0X0
and the notice shall be deemed to have been received on the
date of delivery. The Issuer or the Escrow Agent may change
its address for notice by giving notice to the other party in
accordance with this subsection.
45
-5-
(d) A copy of a notice referred to in subsection (a) or (b) shall
concurrently be delivered to the Executive Director or the Exchange.
(e) The resignation of the Escrow Agent shall be effective and the
Escrow Agent shall cease to be bound by this Escrow Agreement on
the date that is 180 days after the date of receipt of the notice
referred to in subsection (a) or (b) or on such other date as the
Escrow Agent and the Issuer may agree upon (the "resignation date").
(f) The Issuer shall, before the resignation date and with the written
consent of the Executive Director or the Exchange, appoint another
escrow agent and that appointment shall be binding on the Issuer and
PCR.
11. FURTHER ASSURANCES
The Parties shall execute and deliver any documents and perform any
acts necessary to carry out the intent of this Escrow Agreement.
12. TIME
Time is of the essence of this Escrow Agreement.
13. GOVERNING LAWS
This Escrow Agreement shall be construed in accordance with and
governed by the laws of British Columbia and the laws of Canada applicable in
British Columbia.
14. COUNTERPARTS
This Escrow Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original and all of which shall
constitute one agreement.
46
-6-
15. LANGUAGE
Wherever a singular expression is used in this Escrow Agreement,
that expression is deemed to include the plural or the body corporate where
required by the context.
16. ENUREMENT
This Escrow Agreement enures to the benefit of and is binding on
the Parties and their heirs, executors, administrators, successors and
permitted assigns.
The Parties have executed and delivered this Escrow Agreement as of
the date of reference of this Escrow Agreement.
THE COMMON SEAL of MONTREAL )
TRUST COMPANY OF CANADA was )
hereto affixed in the presence of: )
)
----------------------------------- ) C/S
Authorized Signatory )
)
)
----------------------------------- )
Authorized Signatory )
)
)
THE CORPORATE SEAL OF MINCO )
MINING AND METALS CORPORATION was )
hereunto affixed in the presence of: )
)
----------------------------------- ) C/S
Authorized Signatory )
)
)
----------------------------------- )
Authorized Signatory )
47
-7-
THE CORPORATE SEAL OF PACIFIC )
CANADA RESOURCES INC. was hereunto )
affixed in the presence of: )
)
)
___________________________________ ) C/S
Authorized Signatory )
)
)
___________________________________ )
Authorized Signatory )
48
THIS IS SCHEDULE "A" OF THE ESCROW AGREEMENT
DATED FOR REFERENCE *, 0000
XXXXXXX XXXXXXXX XXXXX XXXXXXX XX XXXXXX,
MINCO MINING AND METALS CORPORATION
AND PACIFIC CANADA RESOURCES INC.
NAME OF ESCROW SHAREHOLDER NO. OF SHARES HELD IN ESCROW SHARE CERTIFICATE NO.
-------------------------- ---------------------------- ---------------------
Pacific Canada Resources Inc. 4,880,000 *
49
THIS IS SCHEDULE "N" OF THE ASSIGNMENT OF CONTRACTS AND
SHARE PURCHASE AGREEMENT DATED FOR REFERENCE FEBRUARY 19, 1996
BETWEEN MINCO MINING AND METALS CORPORATION AND
PACIFIC CANADA RESOURCES INC.
SHAREHOLDERS AGREEMENT
THIS AGREEMENT made as of the_______day of February, 1996.
BETWEEN:
PACIFIC CANADA RESOURCES INC., a company validly subsisting
under the laws of Ontario with an office at 000 Xxx Xxxxxx,
0xx Xxxxx, Xxxxxxx, Xxxxxxx, X0X 0X0
("PCR")
OF THE FIRST PART
AND:
XXXXX XXXXXXXX, Businessman, of Suite 1870, 000 Xxxx Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
("Tsaparas")
OF THE SECOND PART
AND:
XXXXX XxXXXXXXX, Businessman, of Suite 1870, 000 Xxxx Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
("XxXxxxxxx")
OF THE THIRD PART
(collectively, PCR, Tsaparas and XxXxxxxxx hereinafter called the
"Shareholders")
AND:
XXX XXX, Businessman, of 000 Xxx Xxxxxx, 0xx Xxxxx, Xxxxxxx,
Xxxxxxx, X0X 0X0
("Cai")
OF THE FOURTH PART
50
AND:
XXXXXX XXXXX, Businessman, of 000 Xxx Xxxxxx, 0xx Xxxxx,
Xxxxxxx, Xxxxxxx, X0X 0X0
("Xxxxx")
OF THE FIFTH PART
AND:
XXXXX XXXXXXXXX, Geologist, of 000 Xxxxxxx Xxxx, #00-00 Xxx
Xxx Xxxxxxxx, 0000 Xxxxxxxxx
("Xxxxxxxxx")
OF THE SIXTH PART
AND:
MINCO MINING AND METALS CORPORATION, a company validly
subsisting under the laws of British Columbia with an office
at Suite 1870, 401 West Georgia Street, Vancouver, British
Columbia, V6B 5Al
(the "Corporation")
OF THE SEVENTH PART
WHEREAS:
A. PCR and the Corporation have entered into an Assignment of Contracts and
Share Purchase Agreement dated February *, 1996 (the "Assignment Agreement")
pursuant to which certain interests in Chinese mineral properties were
transferred to the Corporation;
B. Pursuant to the Assignment Agreement a total of 7,280,000 common shares of
the Corporation were issued to PCR comprised of 2,400,000 free-trading shares
and 4,880,000 escrowed shares (the "PCR Escrow Shares"). The release of the
PCR Escrow Shares is governed by the terms of an Escrow Agreement dated
February *, 1996 entered into between PCR, the Corporation and the Montreal
Trust Company of Canada;
C. Pursuant to the terms of the Assignment Agreement, Teck Corporation ("Teck")
and Cominco Ltd. ("Cominco") have agreed to participate with PCR and the
Corporation in the exploration and development of Chinese mineral properties;
D. Each of PCR and Tsaparas represents that after giving effect to the
transactions contemplated by the Assignment Agreement, each of PCR and
Tsaparas is the beneficial owner, directly or indirectly, of or otherwise has
the right to vote or deal with fully paid and nonassessable common shares
without par value in the capital of the Corporation (the "Common Shares"), as
follows:
51
- 3 -
PCR - 7,280,000
Tsaparas - 279,167
XxXxxxxxx - 90,000
Xxxxx - None
Cai - None
Xxxxxxxxx - None
E. Each of the Shareholders represents that as of the date hereof they do
not beneficially own, directly or indirectly, or otherwise have direction and
control over or the right to deal with any other common shares of the
Corporation.
F. The parties desire to enter into this Agreement in order to record
their respective rights and obligations with respect to the certain corporate
matters pertaining to the Corporation.
NOW THEREFORE in consideration of the premises, the payment of the sum of One
($1.00) Dollar by each of the parties hereto to the other, and in further
consideration of the mutual covenants and the agreements herein contained and
of other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto covenant and agree with each other
as follows:
1. COMMON SHARES
1.1 "Common Shares" includes the Common Shares as set forth in the recitals
hereto and any common shares of the Corporation acquired by any Shareholders
(including any acquisitions of common shares of the Corporation by any
corporation, partnership, trust or other entity, in which any Shareholder or
all of the Shareholders together, owns beneficially, directly or indirectly 50%
or more of the voting rights attaching to the outstanding securities of such
entity (referred to herein as an "affiliate")) at any time after the date of
this Agreement.
1.2 Each of Xxxxx, Xxx and Xxxxxxxxx acknowledges and agrees that,
notwithstanding that they do not beneficially own common shares of the
Corporation as of the date hereof, they will be considered Shareholders for the
purposes of this Agreement in the same manner as if they had beneficially owned
shares of the Corporation as at the date of this Agreement.
2. VOTING OF COMMON SHARES
2.1 Immediately following the closing of the Assignment Agreement, the
Shareholders shall vote their Common Shares so that the Board of Directors of
the Corporation (the "Board") shall be comprised of five (5) directors and so
that two nominees of Tsaparas and XxXxxxxxx, collectively, two nominees of PCR
and one nominee of Teck and Cominco, collectively, are appointed directors of
the Corporation as follows:
52
- 4 -
SHAREHOLDER NOMINEE
Tsaparas/XxXxxxxxx Xxxxx Xxxxxxxx
Tsaparas/XxXxxxxxx Xxxxx XxXxxxxxx
PCR Xxxxxx Xxxxx
PCR Xxx Xxx
Xxxxxxxxx (Teck/Cominco) Xxxxx Xxxxxxxxx
The Shareholders further agree to vote their Common Shares to appoint each of
Tsaparas and Cai to the Board of Directors of the Corporation for a three year
term and each of XxXxxxxxx, Xxxxx and Xxxxxxxxx for a one year term.
Thereafter, the nominees of the respective Shareholders shall be as determined
from time to time by such Shareholders.
In the event that a person on the Board shall be open for any reason
whatsoever, the Shareholder whose nominee shall have formerly occupied such
position shall be entitled to nominate a new director to fill such vacancy.
2.2 If a nominee to the Board of one of the Shareholders should resign or
be removed, then the Shareholders agree to exercise their rights as
shareholders of the Corporation and in accordance with this Agreement and the
Articles of the Corporation to elect such individuals as is nominated by such
Shareholder or Shareholders whose original nominee it is that has resigned or
been removed
2.3 The Shareholders further agree that at the Corporation's next annual
general meeting following the date of this Agreement they shall vote their
Common Shares in such a manner as to:
(a) increase the size of the Corporation's Board of Directors to
seven (7) members, to appoint the five (5) individuals
specified in section 2.1 in the manner therein described (the
"Original Directors") and to appoint two (2) new directors, one
of whom shall be a nominee of PCR and the second of whom shall
be a nominee of the Original Directors, acting as a Board:
(b) approve the issuance of 60,241 additional performance escrow
shares as described in section 3.1(b) and
(c) cause the Corporation to change its corporate name to such new
name as may be approved by the Original Directors and the
regulatory authorities having jurisdiction.
2.4 During the term of this Agreement each of Shareholders shall, after
receipt of any notice of meeting of shareholders of the Corporation, either
attend such shareholder meeting to vote their Common Shares or shall complete
and deliver to the Corporation a proxy, duly completed and executed in such a
manner as to ensure that the votes of the Shareholders are
53
- 5 -
recognized and included in the voting at such shareholders meeting, all in
accordance with the provisions of this Agreement.
3. VOTING OF BOARD OF DIRECTORS
3.1 Each of the Original Directors agrees that, while a director of the
Corporation and during the term of this Agreement, they shall cast their
Director's votes in favour of the following:
(a) the appointment on an annual basis of the following officers
of the Corporation while such individuals are directors of
the Corporation and for the terms indicated:
OFFICE DIRECTOR TERM
Chairman Tsaparas 3 years
President and CEO Cai 3 years
Vice-President Xxxxx 1 year
Vice-President XxXxxxxxx 1 year
(b) the completion of all steps necessary to cause the issuance of
the balance of 60,241 additional performance escrow shares
pursuant to an application made to the Vancouver Stock Exchange
on January 17, 1996, upon approval by the shareholders of the
Corporation as described in section 2.3;
(c) the completion of all steps necessary to cause the issuance of
200,000 finder's fee shares to December Inc. pursuant to a
finder's fee agreement made between the Corporation and December
Inc. dated December 11, 1995;
(d) the grant of an aggregate 1,100,000 incentive stock options to
the Original Directors in accordance with the policies of the
Vancouver Stock Exchange and at the lowest exercise price
permitted under such policies, as follows:
Xxx Xxx - 350,000
Xxxxx Xxxxxxxx - 200,000
Xxxxxx Xxxxx - 200,000
Xxxxx Xxxxxxxxx - 200,000
Xxxxx XxXxxxxxx - 150,000
(e) the grant of an aggregate 200,000 incentive stock options to the
two new directors to be appointed pursuant to section 2 herein,
in accordance with the policies of the Vancouver Stock Exchange
and at the lowest exercise price permitted under such policies,
such grant to be made on or forthwith following the later of the
date of appointment of the new Director and the
54
- 6 -
completion of the Corporation's proposed initial round of
public financing offering of a minimum 2,000,000 shares
of the Corporation; and
(f) the change of the Corporation's name in accordance with
the regulatory authorities having jurisdiction.
3.2 Notwithstanding the provisions of this Agreement, the Shareholders
acknowledge and agree that, while acting in their capacity as directors of the
Board, they have a fiduciary obligation to act in the best interests of the
Corporation.
4. SHAREHOLDERS MEETINGS
4.1 The Corporation confirms that it is entering into this Agreement to
acknowledge notice of the provisions of this Agreement and that it will cause
the chairman of any meeting of shareholders of the Corporation to acknowledge
to the parties hereto the provisions of this Agreement and such chairman shall
not accept or recognize any ballot, proxy or vote by or on behalf of any of the
Shareholders, or any nominee thereof, which is not cast or exercised so as to
carry out the provisions of this Agreement.
5. SALE OF ESCROW SHARES
5.1 PCR agrees that it shall not sell, transfer or convey any of its Escrow
Shares to a third party until it first provides all parties to this Agreement
with a written acknowledgement of such third party under which it agrees to be
bound by the terms and conditions of this Agreement in the same manner as if
such third party was an original signatory hereto.
6. PLEDGED OR MARGINED COMMON SHARES
6.1 If any of the Common Shares are mortgaged, pledged, charged,
hypothecated, margined or held by any nominee at any time during the currency
of this Agreement, the holder thereof shall advise the other parties hereto
and, if requested by any of such parties, shall deliver to such other parties
prior to such mortgage, pledge, charge, hypothecation or margin, an
acknowledgment in substantially the form set out as Schedule "A" hereto,
whereby such mortgagee, pledgee, chargee, hypothecary, broker or nominee, as the
case may be, agrees to subject such Common Shares to the provisions of this
Agreement.
7. REORGANIZATION
7.1 In the event of the subdivision, consolidation, change, classification
or reclassification at any time of any Common Shares into a greater or lesser
number of common shares of the Corporation or in the event of the conversion of
such Common Shares or upon the amalgamation of the Corporation with any other
corporation or corporations any shares resulting from such subdivision,
consolidation, change, classification, reclassification, conversion or
amalgamation shall be subject to this Agreement.
55
56
- 7 -
8. REQUESTS
8.1 Each of the parties hereto shall have the right to request in writing that
any of the other parties disclose to them in writing the number of Common Shares
beneficially owned, directly or indirectly, by them and any of their affiliates
and such other parties shall provide such information in writing, within a
reasonable period of time.
9. FURTHER DOCUMENTS
9.1 The parties hereto agree to execute such further documents as may be
required to give effect to the foregoing
10. TERM
10.1 The term of this Agreement shall be for one (1) year commencing on the
date of execution hereof
11. SUCCESSORS
11.1 This Agreement shall not be assigned by any party hereto without the prior
written consent of the other parties hereto. Subject as aforesaid, this
Agreement shall be binding upon and enure to the benefit of the parties hereto
and their respective heirs, executors, administrators, successors and permitted
assigns, as the case may be.
12. GOVERNING LAW
12.1 This Agreement shall be governed by and construed in accordance with the
laws of the Province of British Columbia.
13. COUNTERPARTS
13.1 This Agreement may be signed by facsimile and in one or more counterparts
14 SEVERABILITY
14.1 Any provision or provisions of this Agreement which contravene any
applicable law or which are found to be unenforceable shall, to the extent of
such contravention or unenforceability, be deemed severable and shall not cause
this Agreement to be held invalid or unenforceable or affect any other provision
or provisions of this Agreement.
15. NOTICES
15.1 Any notice, consent, direction or other instrument required or permitted to
be given under the provisions of this Agreement shall be in writing and may
be given by delivering same or mailing same by prepaid registered mail or
sending same by telegram, telex, telecommunication or other similar form of
communication in each case addressed as follows:
57
- 8 -
(a) if to PCR, at:
Pacific Canada Resources Inc.
Xxxxx 0000, 000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Fax No.: 000-000-0000
Attention: Xx. Xxx X. Xxx, Managing Director
(b) if to Tsaparas, at:
c/o Minco Mining and Metals Corporation
Xxxxx 0000, 000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Fax No.: 000-000-0000
Attention: Xx. Xxxxx Xxxxxxxx
(c) if to XxXxxxxxx, at:
c/o Minco Mining and Metals Corporation
Xxxxx 000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Fax No.: 000-000-0000
Attention: Xx. Xxxxx XxXxxxxxx
(d) if to Cai, at:
c/o Pacific Canada Resources Inc.
Xxxxx 0000, 000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Fax No.: 000-000-0000
Attention: Xx. Xxx X. Xxx
(e) if to Xxxxx, at:
c/o Pacific Canada Resources Inc
Xxxxx 0000, 000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Fax No.: 000-000-0000
Attention: Xx. Xxxxxx Xxxxx
58
- 9 -
(f) if to Xxxxxxxxx, at:
c/o Teck Exploration Ltd.
000 Xxxxxxx Xxxx
#00-00 Xxx Xxx Xxxxxxxx
0000 Xxxxxxxxx
Fax No.: 00-000-0000
(g) if to the Corporation, at:
Minco Mining and Metals Corporation
Xxxxx 0000, 000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Fax No.: 0-000-000-0000
Attention: Xx. Xxxxx Xxxxxxxx, Chairman & C.E.O.
Any notice, requisition, consent, direction or other instrument aforesaid, if
delivered, shall be deemed to have been given or made on the day in which it was
delivered and if sent by telegram, telegraph, telecommunication or other similar
form of communication shall be deemed to have been given or made on the next
business day following the day on which it was so sent and if mailed shall be
deemed to have been given or made on the seventh business day following the date
on which it was so mailed. Any party hereto may given written notice of change
of address in the same manner in which any notice shall thereafter be given to
it as above provided at such changed address.
IN WITNESS WHEREOF the parties hereto have duly executed these presents.
THE CORPORATE SEAL OF PACIFIC
CANADA RESOURCES INC. was hereunto
affixed in the presence of:
__________________________________ C/S
Authorized Signatory
__________________________________
Authorized Signatory
59
- 10 -
SIGNED, SEALED and DELIVERED by
XXXXX XXXXXXXX in the presence of:
-----------------------------------
Signature
----------------------------------- -----------------------------------
Address XXXXX XXXXXXXX
-----------------------------------
-----------------------------------
-----------------------------------
Occupation
SIGNED, SEALED and DELIVERED by
XXXXX XxXXXXXXX in the presence of:
-----------------------------------
Signature
----------------------------------- -----------------------------------
Address XXXXX XxXXXXXXX
-----------------------------------
-----------------------------------
Occupation
60
- 11 -
SIGNED, SEALED AND DELIVERED by
XXX XXX in the presence of:
-----------------------------------
Signature
----------------------------------- -----------------------------------
Address XXX XXX
-----------------------------------
-----------------------------------
Occupation
SIGNED, SEALED AND DELIVERED by
XXXXXX XXXXX in the presence of:
-----------------------------------
Signature
----------------------------------- -----------------------------------
Address XXXXXX XXXXX
-----------------------------------
-----------------------------------
Occupation
SIGNED, SEALED AND DELIVERED by
XXXXX XXXXXXXXX in the presence of:
-----------------------------------
Signature
----------------------------------- -----------------------------------
Address XXXXX XXXXXXXXX
-----------------------------------
-----------------------------------
Occupation
61
- 12 -
THE CORPORATE SEAL OF MINCO
MINING AND METALS CORPORATION
was hereunto affixed in the presence of:
----------------------------------- C/S
Authorized Signatory
-----------------------------------
Authorized Signatory
62
SCHEDULE "A"
------------
TO:
RE: SHAREHOLDERS AGREEMENT DATED FEBRUARY ___, 0000 XXXXXXX XXXXXXX XXXXXX
RESOURCES INC., XXXXX XXXXXXXX, XXXXX XxXXXXXXX, XXX XXX, XXXXXX XXXXX,
XXXXX XXXXXXXXX AND MINCO MINING AND METALS CORPORATION
The undersigned, _________________________________, hereby acknowledges having
received __________common shares of MINCO MINING AND METALS CORPORATION (the
"Common Shares") for the purpose of security for indebtedness of _____________.
In consideration of the security interest granted in the Common Shares, the
undersigned hereby acknowledges that the Common Shares are subject to the
restrictions contained in the Agreement (a copy of which has been received and
reviewed by the undersigned) and agrees that the Common Shares will not be sold
by the undersigned except in compliance with the Agreement.
DATED: _____________________________
PER: _______________________________
63
This is SCHEDULE "O" of the Assignment of Contracts and
Share Purchase Agreement dated for reference February 19, 1996
between Minco Mining and Metals Corporation and
Pacific Canada Resources Inc.
PACIFIC CANADA RESOURCES INC.
000 XXX XXXXXX, 0XX XXXXX, XXXXXXX, XXXXXXX, X0X 0X0
TEL: (000) 000-0000 FAX: (000) 000-0000
CONFIDENTIAL
BY FACSIMILE: 604-688-8030
January 2, 1995
Xx. Xxxxx XxXxxxxxx
Minco Mining & Metals Corporation
Suite 1870
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Dear Colin:
RE: CONFIDENTIALITY AGREEMENT
Pacific Canada Resources Inc. ("PCR") and Minco Mining and Metals
Corporation ("MINCO") are contemplating a possible business transaction (the
"TRANSACTION"). In connection with this possible Transaction, each of us will
need to review information held by the other as part of a due diligence process.
As set out in this letter, each of us agree that, as a condition to each of us
furnishing such information to the other, each will be required to treat
confidentially such information and any other information each of us or our
agents furnish to the other, whether furnished before or after the date of this
letter (collectively, the "EVALUATION MATERIAL").
Each of the parties agrees not use the Evaluation Material in any way
detrimental to the other, and that such information, as well the existence,
nature and scope of the discussions between us, will be kept confidential by
each of the parties and their agents; provided, however, that any of such
information may be disclosed to the parties' directors, officers, employees and
representatives and to individuals acting in similar capacities on their behalf,
who need to know such information for the purposes of considering the
Transaction, (it being understood that such directors, officers, employees
1
64
and representatives shall be informed by each of the parties of the
confidential nature of such information and shall be requried by each of the
parties to treat such information confidentially).
Without the prior written consent of an authorized officer of each of
the parties, as applicable, or such other persons as such officers may
designate, the parties will not disclose, and each of the parties will direct
their directors, officers, employees and representatives not to disclose, to
any person, any of the Evaluation Material or the fact that discussions are
taking place concerning the potential Transaction unless, in the opinion of
legal counsel, disclosure is required to be made under any applicable
securities laws or regulations; provided, however, that if either party
proposes to make any disclosure based upon the opinion of legal counsel as
aforesaid, such party will advise and consult with the other party prior to
such disclosure concerning the information which is proposed to be disclosed.
The term "person" as used in this letter shall be broadly interpreted to
include, without limitation, any corporation, company, partnership, or
individual.
If either party is required by legal process to disclose any Evaluation
Material supplied to it or to its representatives, it is agreed that such party
will provide the other party with prompt notice of such requirement(s), so that
such other party may seek either an appropriate protective order, or waive the
requirement to comply with the provisions of this letter.
If an agreement regarding the proposed Transaction is not reached
between us subsequent to the review of the Evaluation Material, each party will
promptly, upon request, deliver to the other party the Evaluation Material
provided to it, without retaining any copies of it.
The term "Evaluation Material" does not include any information which:
(i) becomes generally available to the public other than as a
result of improper disclosure by a party or its
representatives;
(ii) was available on a non-confidential basis prior to its
disclosure to a party; or
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(iii) becomes available to a party on a non-confidential basis from a
source other than from the other party (the "OTHER PARTY") or its
representatives, provided that such source is not bound by an
obligation of confidentiality to such Other Party or to its
representatives.
No representation or warranty is made by either party or its agents,
consultants, representatives or advisors as to the completeness or accuracy of
the Evaluation Material and each party agrees that neither party, nor its
agents, consultants, representatives or advisors shall have any liability to the
other party, or to any of its agents, consultants, representatives or advisors
resulting from the use of the Evaluation Material.
Each party (an "INDEMNITOR") agrees to indemnify and save harmless the
other party (an "INDEMNITEE") and its directors, officers, employees and agents
from any loss whatsoever, arising out of a breach by an Indemnitor of any of the
terms and conditions set out in this letter.
It is further understood and agreed that no failure or delay by either
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise thereof preclude any
other or further excercise thereof, or the exercise of any other right, power or
pivilege hereunder.
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If you are in agreement with the foregoing, would you kindly so indicate
by signing a copy of this letter and returning it to me by facsimile.
Yours truly,
/s/X.X. Xxxxx
-------------
Xxxxxx X. Xxxxx
Vice-President
I have read the letter set out above and, by my signature below, I indicate that
I agree to the terms set out in such letter.
Minco Mining and Metals Corporation
By: /s/ Xxxxx XxXxxxxxx
-------------------------
Xxxxx XxXxxxxxx
Date: January 2, 1996
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THIS IS SCHEDULE "P" OF THE ASSIGNMENT OF CONTRACTS AND SHARE PURCHASE
AGREEMENT DATED FEBRUARY 19, 1996 BETWEEN MINCO MINING AND METALS
CORPORATION AND PACIFIC CANADA RESOURCES INC.
THIRD PARTY LIABILITIES OF PCR
CATEGORY OR THIRD PARTY AMOUNT
----------------------- ------
1. Legal and Accounting Services $22,000
2. Consulting $75,800
A.C.A Xxxx International Limited 5,800
Kaisun Group (Canada) Inc. 40,000
1066098 Ontario Inc. 30,000
3. TOTAL $97,800
