Euro-Nevada Mining Corporation, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx 0000 Xxxx, Xxxxxx 00000
TORONTO XXXXXX 00 Xxxxxxxx Xxxxxx XXXX xxxxx 0000, Xxx 0000,
Xxxxxxx, Xxxxxxx X0X 0X0 Tel.: (000) 000-0000 Fax: (000) 000-0000
(000) 000-0000 / Fax (000) 000-0000
March 10, 1999
Via Facsimile Originals by Mail
Addressees: See Attachment A Hereto
Re: Agreement Accepting Offer to Sell Shares of Golden Cycle Gold Corporation
Dear Shareholders of Golden Cycle Gold Corporation:
This letter is intended to confirm the terms of agreement ("Agreement") whereby
the parties listed on Attachment A hereto (collectively, the "Sellers") have
offered to sell to Euro-Nevada Mining Corporation, Inc., a Nevada corporation,
or its nominee ("EN"), and EN has accepted the offer and will purchase, all of
the common shares of Golden Cycle Gold Corporation, a Colorado corporation
("GCG") owned by the Sellers. The Sellers own common shares of GCG in the
amounts and fully diluted percentages described on Attachment A. EN understands
that the Sellers' offer, and EN'S acceptance, contains the following terms and
conditions:
1. Shares Subject to Agreement. The common shares of GCG which are subject to
this Agreement include all of the common shares of GCG, together with all
associated warrants, options and preferential rights, which are owned by the
Sellers (collectively, the "Shares"). The Shares are (i) listed on the Pacific
Stock Exchange, (ii) freely tradeable and unrestricted, (iii) free and clear of
all claims, encumbrances and third party interests, and (iv) constitute
approximately fifty-four and 27/100 percent (54.27%) of all of the fully diluted
common shares of GCG. There are approximately 2,058,450 fully diluted common
shares of GCG, including approximately 180,000 common shares of GCG subject to
unexercised but exercisable option agreements. EN shall establish a subsidiary
into which GCG will be merged through a cash merger. The term of the cash merger
shall be that EN will pay $13.50 in consideration for every share of GCG. EN
shall call a special shareholders meeting to approve the merger no later than
thirty (30) days after the completion of due diligence.
2. Purchase Price. EN shall pay to the Sellers the sum of Thirteen and 50/100
Dollars (US$13.50) in lawful money of the United States of America for each of
the Shares transferred pursuant to this Agreement by the Sellers to EN. The
purchase price shall be paid in immediately available funds at the Closing.
Except as provided in this clause, EN shall not be obligated to pay any further
sums or deliver any further consideration to the Sellers.
3. Exclusive Right; Confidentiality. By this Agreement, the Sellers each have
granted to EN the sole and exclusive right to purchase the Shares, subject to
the terms and conditions of this Agreement. The terms and conditions of this
Agreement shall remain confidential by and among the parties to this Agreement,
and shall not be disclosed to any third party except (i) the respective
officers, directors, employees, advisors, and representatives of each of the
parties having a need to know the terms and conditions of this letter; (ii) if
required for compliance with applicable laws, rules, regulations or orders of a
governmental agency or stock exchange having jurisdiction over the party, or its
parent or affiliated corporations or companies, making the disclosure; or (iii)
to any of the parties' respective consultants, provided that the party making
the disclosure shall first have first received from the person to whom the
disclosure is to be made a confidentiality agreement which shall bind that
person to the confidentiality provisions of this clause.
4. Sellers' Representations. The Sellers, each for themselves and to their
respective best knowledge and belief, hereby represent and warrant to EN as
follows:
(a) Incorporation. If a Seller is a corporation, it is duly incorporated and
organized and is a valid and subsisting corporation in good standing under the
laws of the State of its incorporation.
(b) Corporate Power. If a Seller is a corporation, it has all requisite
corporate power, authority and capacity to carry out the transactions
contemplated by this Agreement, all of which have been duly and validly
authorized by all necessary corporate proceedings.
(c) No Breach. Neither the execution and delivery of this Agreement nor the
observance and performance of the terms and provisions thereof on the part of
each of the Sellers to be observed and performed constitute a violation or a
breach or default under their respective charter documents or by-laws (if a
Seller is a corporation), any provision of any contract or instrument to which
they respectively are a party, or to the best of the knowledge, information and
belief of each of the Sellers, any order, writ, injunction, decree, statute,
rule, by-law, law or regulation applicable to either of them.
(d) Consents and Approvals. The Sellers have now or as of the Closing will have
obtained all consents, approvals or authorizations and will have affected all
filings with regulatory authorities that are required in connection with the
transfer of the Shares to EN.
(e) Fully Disclosed Information. To the best knowledge and belief of each of the
Sellers, the information and statements set forth in all information filed by
GCG with regulatory authorities (1) is in compliance or intended compliance with
applicable laws, and (2) were true, correct and complete and did not contain any
misrepresentations as of the date of such information or statement.
(f) Full Disclosure. There is no fact which any of the Sellers has not disclosed
to EN of which any of the Sellers is aware which materially and adversely
affects the business, prospects, financial condition, operations, property or
affairs of GCG.
(g) Status of Shares. The Shares and the common shares of GCG are as described
in clause I of this Agreement, and as of the date of Closing, (i) there are no
pending, threatened or known claims or defenses adversely affecting the Shares;
(ii) the Sellers, respectively, own all of the right, title and interest in and
to the Shares; (iii) there are no outstanding preferential rights to acquire an
interest in the Shares; and (iv) there are no pending or threatened actions or
proceedings adversely affecting the Shares.
(h) GCG Shares Generally. There exist no current rights, warrants or options
affecting the common shares of GCG other than described in clause 1 above.
5. Due Diligence and Conditions to Closing. Until Closing, the Sellers shall
cooperate with EN, in all reasonable respects, in connection with EN's
performance of due diligence. Sellers agree to assist EN's efforts to obtain
authorization from GCG for access to and review of all available legal,
technical, financial and other pertinent written and electronic records,
information and data relating to the Shares and the material assets of GCG. EN
shall keep and treat all such records, information and data which is not
currently available to the public absolutely confidential. EN shall have
forty-five (45) days from the date ail parties have executed this Agreement
within which to undertake and complete due diligence. Due diligence by EN shall
be considered complete at such time as EN notifies the Sellers in writing,
through the above named addressees, that EN is satisfied that (i) all material
matters are as represented in this Agreement and the various public documents
issued by GCG pertaining to the Shares, GCG's common shares, GCG's assets, and
GCG's obligations, including without limitation environmental obligations; (ii)
there are no material obligations, including without limitation environmental
obligations, of GCG, existing or which could come into existence, which do or
could have a material affect on the current fair market value of GCG or the
Shares; (iii) there are no tax consequences which would materially affect EN in
consummating the acquisition of the Shares; and (iv) there are no regulatory
matters or consequences which do or would materially affect EN in consummating
the acquisition of Shares. EN shall be deemed to be satisfied with
the results of its due diligence as provided in this clause unless EN notifies
ADE and Midas by the end of the due diligence period that EN is not so
satisfied. If EN gives timely notice to the Sellers that it is not satisfied
with the results of due diligence, EN shall be entitled to terminate this
Agreement without any obligation or liability to the Sellers.
6. Regulatory Approvals. The parties shall work together to seek and obtain all
federal and state regulatory approvals required to the consummate this
transaction.
7. The Sellers' Obligations. At Closing, the Sellers shall deliver to EN the
Shares fully and duly endorsed to EN, thereby conveying to EN all of the right,
title and interest in and to the Shares. EN shall not be obligated to purchase
any of the Shares at Closing unless EN will receive at Closing at least 51% of
the fully diluted common shares of GCG from the Sellers. The Sellers shall
convey title to the Shares free and clear of all liens, claims, encumbrances or
interests of third parties of whatsoever nature and kind and subject to the
representations and warranties in clause 4 above.
8. Closing. Unless otherwise agreed, Closing shall occur on or before the fifth
(5th) business day following the date on which the parties have obtained all
consents, approvals or authorizations and affected all filings with federal and
state regulatory authorities necessary and appropriate to permit the transfer of
the Shares to EN. If this transaction is not closed within ninety (90) days
after the end of the due diligence period, this Agreement may be terminated by
any party, provided the terminating party is not in default of any of its
obligations set forth herein. Closing costs shall be paid by the parties as is
usual and customary in Denver, Colorado, and each party shall bear its own legal
and other costs incurred with respect to this transaction.
Please confirm and acknowledge the Sellers' acceptance of the terms and
conditions of the foregoing Agreement at the place indicated below. This
Agreement may be executed in multiple counterparts, and all counterparts taken
together shall constitute one agreement. Similarly, facsimile signatures shall
be deemed the same as original signatures. We look forward to hearing from you.
Very truly yours,
M. Xxxxx Xxxxx
Vice Chairman
Acceptance of Terms and Conditions of Agreement
The undersigned Sellers hereby accept and agree to be bound by the terms and
conditions of the Agreement set forth above.
American Diversified Enterprises, Inc.
By:
Name:
Title:
Date:
Bull & Bear Gold Investors, Ltd.
By:
Name:
Title:
Date:
MIDAS Fund, Inc.
By:
Name:
Title:
Date:
Xxxxxxxxxxx Xxxxx, M.D.
Date:
Havilah Mining Company
By:
Name:
Title:
Date:
Taki X. Xxxxxxxxxx, M.D.
Date:
Monterey OCM Gold Fund
By:
Name:
Title:
Date:
Xx. Xxxxx X. Xxxxxxxx
Date:
Xxxxx X. Xxxxxxx Trust
By:
Name: Xxxxx X. Xxxxxxx, Trustee
Date:
Xxxxxx X. Xxxxxxxx
Date:
The following persons as all successors-in-interest to American Diversified
Enterprises, Inc.
C. Xxxxxx Xxxxx
Date:
Xxxxx Xxxxx Xxxxxx
Date:
Xxxxx X. Xxxxx
Date:
Xxxxx X. Xxxxx
Date:
Xxxx Family Trust
By: Xxxxxxx X. Xxxx, Trustee
Date:
Xxxxxx Xxxxx, Xx.
Date:
Xxxxxx X. Xxxxxx
Date:
Ermitage Global Mining Investment Fund
By:
Name:
Title:
Date:
Xxxxx Xxxx and Xxxx Xxxx, Xxxx Revocable Trust
Xxxxx and Xxxx Xxxx, Individually and as Trustees
Date:
