PURCHASE AND SALE AGREEMENT
THIS
PURCHASE AND SALE AGREEMENT made as of the 22nd
day of March, 2010.
BETWEEN:
EXETER RESOURCE CORPORATION, a
company duly incorporated under the laws of British Columbia, having its head
office at Suite 1260 – 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx
Xxxxxxxx X0X 0X0
(hereinafter
referred to as the “Vendor”)
AND:
EXTORRE GOLD MINES LIMITED, a
company duly incorporated under the federal laws of Canada, having its head
office at Suite 1260 – 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X
0X0
(hereinafter
referred to as “Purchaser”)
WHEREAS:
A. The
Vendor is the registered and beneficial owner of the assets described in
Schedule “A” hereto (collectively the “Assets”, and individually an
“Asset”).
B. Pursuant
to an arrangement agreement made as of February 5, 2010 (the “Arrangement Agreement” which
includes the Plan of Arrangement (the “Plan of Arrangement”) attached thereto
as Schedule “A”), the Vendor has agreed to sell and the Purchaser has agreed to
purchase the Assets as of the date of this Agreement (the “Effective
Date”) all on the terms and
subject to the conditions set out in the Arrangement Agreement, which transfer
of assets is to be effected pursuant to the Plan of Arrangement as approved by
an order of the Supreme Court of British Columbia under section 288 of the Business
Corporations Act
(British Columbia) granted on March 12, 2010.
C.
The Vendor and the Purchaser have agreed to file a joint election under
subsection 85(l) of the Income
Tax Act, S.C. 1970-71-72, c. 63
as amended (the “Tax
Act”) in respect of such
sale.
NOW
THEREFORE THIS AGREEMENT WITNESSES THAT for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
in consideration of the mutual premises, covenants and conditions herein
contained, the parties hereto agree as follows:
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1.
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VENDOR’S WARRANTIES
AND REPRESENTATIONS
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The Vendor
warrants and represents to the Purchaser that:
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(a)
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it
is duly incorporated under the laws of British Columbia and is a valid and
existing company and is, with respect to the filing of annual reports, in
good standing under the laws of British
Columbia;
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(b)
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it
has all the necessary corporate power and capacity and has taken or
contemporaneously with the execution of this Agreement is taking all
corporate proceedings necessary to enter into this Agreement;
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(c)
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the Vendor is the
registered and beneficial owner of the Assets and has good and marketable
title thereto, free and clear of any charge, encumbrance, lien or
option;
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(d)
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the
Vendor is entitled to sell the Assets to the Purchaser as herein
provided;
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(e)
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the
Vendor is not a non-resident of Canada for purposes of Sections 85 and 116
of the Tax Act.
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2.
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PURCHASER’S
REPRESENTATIONS AND
WARRANTIES
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The
Purchaser represents and warrants to the Vendor that:
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(a)
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it
is duly incorporated under the federal laws of Canada and is a valid and
existing company;
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(b)
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it
has all the necessary corporate power and capacity and has taken or
contemporaneously with the execution of this Agreement is taking all
corporate proceedings necessary to enter into this Agreement;
and
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(c)
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it
is a taxable Canadian corporation, as that term is defined in the Tax
Act.
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3.
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PURCHASE AND
SALE
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3.1 The
Vendor hereby sells, transfers, conveys, assigns and delivers to the Purchaser
and the Purchaser hereby purchases as at the Effective Date all of the Vendor’s
right, title and interest in and to the Assets for an aggregate purchase price
of $150,000,000 allocated among the Assets as set out in Schedule “A”
hereto.
3.2
The purchase price so allocated to a particular Asset is herein called the “Purchase Price” and the
aggregate purchase price for all the Assets is herein called the “Aggregate Purchase
Price”.
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3.3
The Vendor and Purchaser declare that the Purchase Price of each Asset
represents their best estimate of the fair market value of such Asset as at the
Effective Date for purposes of the Tax Act.
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4.
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JOINT
ELECTION
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4.1
The Vendor and Purchaser shall, within the time limit set by subsection 85(6) of
the Tax Act, complete and file a joint election in respect of the Assets in the
prescribed form pursuant to subsection 85(1) of the Tax Act.
4.2 The
Vendor and Purchaser shall elect to transfer and declare that they intend to
transfer each Asset to the Purchaser at an elected amount equal to the Vendor's
cost amount of such Asset for purposes of the Tax Act.
4.3
The elected amount of an Asset is herein called an “Elected Amount” and the
aggregate of the elected amounts of the Assets is herein called the “Aggregate Elected Amount”.
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5.
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PAYMENT OF PURCHASE
PRICE FOR THE ASSETS
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5.1
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The
Purchaser shall pay the Aggregate Purchase Price for the Assets as
follows:
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(a)
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As
to $1.00, by agreeing to issue options to acquire shares of the Purchaser
to holders of options to acquire shares of the Vendor as at the Effective
Date as set out in the Arrangement Agreement;
and
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(b)
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as
to the balance of the Aggregate Purchase Price, by issuing to the Vendor,
as fully paid and non-assessable, one (1) preferred share in its capital
stock having a redemption price equal to such balance (the “Preferred
Share”).
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6.
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ELECTED AMOUNT
ADJUSTMENT CLAUSE
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If at any
time or times after the Effective Date, it is determined that
either:
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(a)
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it
is necessary to change the Elected Amount of the Asset to comply with the
common intentions of the Vendor and Purchaser as hereinbefore expressed,
or
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(b)
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the
Tax Act deems the Elected Amount of the Asset to be an amount which is
different than the amount agreed upon between the Vendor and
Purchaser,
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then in
order to comply with the common intentions of the Vendor and Purchaser as
hereinbefore expressed, the parties shall do all things reasonably necessary to
reflect such change including, for example, filing an amended joint election
pursuant to subsection 85(1) of the Tax Act.
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DECLARATION OF
TRUST
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The
Vendor acknowledges and declares that until such time as title to any Asset has
been recorded in the name of the Purchaser, the Vendor shall hold the legal
title to such Asset in trust as a bare trustee for the Purchaser.
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8.
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BENEFITS OF UNASSIGNED
CONTRACTS
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8.1
Subject to Sections 8.2 and 8.3, if this Agreement, or any other document or
instrument of conveyance which may from time to time be executed and delivered
by the Vendor, fails to convey to the Purchaser any right in or to an Asset
intended to be conveyed to the Purchaser in accordance with the Arrangement
Agreement, the Vendor shall hold such Asset in trust for the benefit of the
Purchaser and execute and deliver such further items as the Purchaser may from
time to time direct in accordance with Section 9.1.
8.2 If
the Vendor cannot lawfully convey to the Purchaser any right in or to an Asset,
including without limitation any right pursuant to a contract, lease, licence or
other document because:
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(a)
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the
terms of any document governing such right prohibit or restrict such
assignment,
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(b)
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the
terms of any document governing such right provide that the right may only
be assigned if the consent of one or more third parties is obtained to
such assignment and any such consent has not been obtained,
or
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(c)
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such
an assignment would contravene any applicable law or any decree, order,
regulation or other rule of any authority having jurisdiction
(collectively, “Applicable
Law”),
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then such
right shall not be conveyed pursuant to Section 3. In such event, to the extent
permitted by law and in a manner approved by the Purchaser in writing, the
Vendor will provide the Purchaser with the benefits of such right and enforce
such right for the benefit of the Purchaser.
8.3
To the extent that the Purchaser is provided with the benefits of any right
pursuant to Section 8.2, the Purchaser will, to the extent that it is able to do
so, perform the obligations of the Vendor under or in connection with such
right, but only to the extent that such performance would not result in any
breach or default under any document governing such right or Applicable
Law.
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9.
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MISCELLANEOUS
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9.1 The
parties hereto shall execute such further and other documents and assurances and
perform such further acts and things as may be reasonably necessary or desirable
to implement this Agreement.
9.2 This
Agreement shall enure to the benefit of and shall be binding upon each of the
parties, their heirs, executors, administrators, successors and assigns, as the
case may be.
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9.3 The
Purchaser shall pay all costs and fees in connection with the transfer of the
Assets to the Purchaser, including federal Goods and Services Tax and provincial
Social Services Tax but not including the Vendor’s income taxes.
9.4
If any provision in this Agreement is held to be unenforceable, such provision
shall be severed from this Agreement. The other provisions of this Agreement
shall be construed as if such unenforceable provision had never been contained
in it.
[EXECUTION
PAGE FOLLOWS]
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IN
WITNESS WHEREOF the parties have executed this Agreement as of the day and year
first above written.
EXETER
RESOURCE CORPORATION
EXTORRE
GOLD MINES LIMITED
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SCHEDULE A
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ASSETS TRANSFERRED
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FMV PURCHASE PRICE
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|||
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Cash
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$ | 25,000,000 | ||
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Prepaid
Expenses
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9,421,473 | |||
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Loans
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42,467,164 | |||
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Loan
Interest
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2,853,181 | |||
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Mineral
Properties
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* | |||
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Shares
of Cognito Limited
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* | |||
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Shares
of Estelar Resources Limited
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* | |||
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Total:
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$ | 150,000,000 | ||
* The
Vendor and Purchaser have agreed to complete the above allocation of the
Aggregate Purchase Price by December 31, 2010.
