EXHIBIT A
STOCK PURCHASE OPTION AGREEMENT,
AGREEMENT NOT TO SELL SHARES, AND
AGREEMENT TO VOTE SHARES FOR MERGER
THIS STOCK PURCHASE OPTION AGREEMENT, AGREEMENT NOT TO SELL
SHARES, AND AGREEMENT TO VOTE SHARES FOR MERGER (this "Agreement")
dated as of January 16, 1997, is by and between U.S. Gold Corporation,
a Colorado corporation ("Stockholder"), and Globex Mining Enterprises
Inc., a Quebec corporation ("Globex").
RECITALS
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A. Globex and Gold Capital Corporation, a Colorado
corporation ("Company"), are parties to a Letter of Intent dated
December 20, 1996, which contemplates a series of transactions by
which Globex will acquire all of the issued and outstanding shares of
common stock of the Company (the "Common Stock") pursuant to a series
of transactions (sometimes referred to hereinafter as the "Acquisition
Transactions") which will include (i) a Loan Agreement (the "Loan
Agreement") between Globex and the Company by which Globex will loan
certain amounts to the Company; (ii) a Stock Purchase Agreement (the
"Stock Purchase Agreement") between Globex and Royalstar Resources
Ltd. ("Royalstar"), regarding the sale to Globex of approximately 47%
of the Common Stock, which is owned by Royalstar; and (iii) an
Agreement and Plan of Merger (the "Merger Agreement"), pursuant to
which, and subject to the terms and conditions contained therein,
Globex would purchase the remaining outstanding shares of the
Company's Common Stock, for and in consideration of 1,285,607 shares
of Globex Common Stock (the "Globex Stock") for every share of common
stock, pursuant to a merger (the "Merger") of the Company with a
wholly-owned U.S. subsidiary of Globex (the "Sub").
B. As of the date hereof, Stockholder owns 2,287,547
shares, or approximately 25% of the outstanding Common Stock of the
Company (the "Shares"), and Stockholder desires to (i) grant to Globex
(or Sub) an irrevocable option to purchase the Shares; (ii) agree to
vote in favor of the Merger (subject to the proxy described in
clause (iii)) all the Shares held by Stockholder; (iii) grant to
Globex (or Sub) an irrevocable proxy covering the shares held by
Stockholder to vote in favor of the Merger; and (iv) enter into an
agreement whereby the Stockholder agrees not to sell any of its Shares
during the Option Period (as defined below).
AGREEMENT
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NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained in this Agreement and other good and valuable
consideration, and intending to be legally bound hereby, the parties
hereby agree as follows:
1. Grant of Option. Stockholder hereby grants to Globex
(or Sub) an irrevocable option (the "Option") to purchase the Shares
in return for 632,094 shares of Globex Stock (the "Purchase Price").
2. Exercise of Option. (a) Globex (or Sub) may exercise
the Option, in whole but not in part, at any time on or prior to the
Termination Date (as defined herein), which period of time shall be
referred to hereinafter as the "Option Period." In the event Globex
wishes to exercise the Option, Globex will send a written notice to
Stockholder (the "Closing Notice") specifying a place and date no
later than five business days following the date of Closing Notice,
for the closing of such purchase (the "Closing").
(b) Notwithstanding the provisions of clause (a)
above, if any waiting period under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, or the rules
and regulations promulgated thereunder (collectively, the
"HSR Act"), applicable to the exercise of the Option shall
not have expired or been terminated, or if any preliminary
or permanent injunction or other order by any court of
competent jurisdiction prohibiting or otherwise restraining
exercise of the Option shall be in effect, in any case, as
of the date specified for the Closing in the Closing Notice,
the period of time during which the Option may be exercised
shall be extended until five business days following the
later to occur of the expiration or termination of such
waiting period or the removal of any such Order.
3. Sale and Purchase. (a) If Globex exercises the Option,
at any Closing hereunder, subject to the terms and conditions hereof,
Stockholders will sell, transfer and deliver to Globex (or Sub) a
certificate or certificates representing the Shares duly endorsed (or
accompanied by duly executed stock powers) to Globex (or Sub) and
otherwise in proper form for transfer, and Globex (or Sub) will
purchase the Shares and will sell, transfer and deliver to Stockholder
a certificate or certificates representing the number of shares of
Globex stock constituting the Purchase Price, duly endorsed (or
accompanied by duly executed stock powers) to Stockholder and
otherwise in proper form for transfer. All such Shares shall be
subject only to those restrictions on transfer, if any, as are placed
on the shares of Globex shares exchanged for shares of stock of the
Company pursuant to the Merger Agreement.
(b) In the event of any change in the number of issued
and outstanding Shares by reason of any stock dividend,
split-up, merger, recapitalization, combination, conversion,
exchange of shares, outstanding options, obligations of the
Company to issue additional Shares or the like, or any other
change in the corporate or capital structure of the Company
that would have the effect of diluting Globex's rights and
privileges hereunder, the number and kind of Shares subject
to the Option and the consideration payable in respect of
such Shares shall be appropriately adjusted to restore to
Globex its rights and privileges hereunder.
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(c) In the event of any change in the number of issued
and outstanding shares of Globex common stock by reason of
any stock dividend, split-up, merger, recapitalization,
combination, conversion, exchange of shares or the like
(except in relation to the Acquisition Transactions
hereunder or financing undertaken by Globex in connection
therewith), or any other change in the corporate or capital
structure of Globex that would have the effect of diluting
the consideration which Stockholder is to receive for the
Shares if Globex exercises the Option, the Purchase Price
payable in respect of such Shares shall be appropriately
adjusted to provide to Stockholder substantially the same
consideration for its Shares.
4. Dividends and Distributions. Until the sale of
Stockholder's Shares at any Closing hereunder, Stockholder will remain
the record and beneficial owner of such Shares and will be entitled to
receive and retain all cash dividends with respect to such Shares
declared prior to the date of Closing and payable to shareholders of
record as of a date prior to the date of the Closing.
5. Agreement to Support Merger. Stockholder agrees,
subject to the terms of Section 7, to vote the Shares held by it in
favor of the Merger pursuant to the terms of the Merger Agreement.
6. Proxy With Respect to the Shares. Stockholder hereby
irrevocably appoints Globex (or Sub) as its attorney and proxy, with
full power of substitution, to vote or to express written consent or
dissent in such manner as such attorney and proxy or its substitute
shall, in its sole discretion, deem proper, and otherwise act
(including pursuant to any corporate action in writing without a
meeting) with respect to all of the Shares which it is entitled to
vote at any meeting of stockholders (whether annual or special and
whether or not an adjourned meeting) of the Company, or pursuant to
written action taken in lieu of any such meeting or otherwise;
provided, however, that Stockholder grants a proxy hereunder only with
respect to the following matters (the "Designated Matters"):
(i) votes or consents with respect to the Merger; (ii) votes or
consents with respect to any action or agreement that would result in
a breach of any covenant, representation or warranty or any other
obligation or agreement of the Company under the Merger Agreement;
(iii) votes or consents with respect to any action or agreement that
would impede, interfere with, delay, postpone or attempt to discourage
the Merger, including, but not limited to, (a) any extraordinary
corporate transaction (other than the Merger), such as a merger, other
business combination, reorganization or liquidation involving Company,
(b) any option, sale, mortgage, transfer or other material transaction
regarding the Tonkin Springs Project in Eureka County, Nevada or any
other material asset of the Company or any of its subsidiaries,
(c) any change in the management or board of directors of the Company,
except as otherwise agreed to in writing by Globex, or (d) any
material change in the present capitalization of the Company; and
(iv) votes or consents relating to any other material change in the
corporate structure or business of the Company. This proxy is
irrevocable, is coupled with an interest sufficient in law to support
an irrevocable proxy and is granted in consideration of and as an
inducement to cause Globex to enter into the transactions contemplated
by this Agreement and the Merger Agreement. This proxy shall revoke
any other proxy granted by Stockholder at any
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time with respect to the Shares and no subsequent proxies will be
given with respect thereto by Stockholder. In addition, if subsequent
to the date hereof Stockholder is entitled to vote the Shares for any
purpose unrelated to the Designated Matters, it shall provide notice
thereof to Globex.
7. Condition to Stockholder's Obligations. The
obligations of the parties to close the transactions contemplated by
this Agreement upon its execution and thereafter shall be subject to
the additional condition that all representations and warranties of
Stockholder (in the case of the obligations of Globex) and Globex (in
the case of the obligations of Stockholder) shall be true and correct
in all material respects as of the date hereof and at and as of the
date of the exercise of the Option and the closing of (i) the Stock
Purchase Agreement and (ii) the Merger Agreement, all with the same
force and effect as though made on and as of the date of this
Agreement.
8. Representations and Warranties of Stockholder.
Stockholder represents and warrants to Globex as follows:
8.1 Ownership of Shares. On the date hereof, the
Shares are all of the shares of the Company's Common Stock currently
beneficially owned by the Stockholder. Stockholder has no rights to
acquire additional shares of the Company's Common Stock, and has
converted all shares of preferred stock of the Company owned by it
into Common Stock. Stockholder currently has, and at the Closing
described in Section 3 will have, good, valid and marketable title to
the Shares, free and clear of all liens, encumbrances, restrictions,
options, warrants, rights to purchase and claims of every kind (other
than the encumbrances created by this Agreement and other than
restrictions on transfer under applicable U.S. Federal and State
securities laws). As set forth on the form 8-K filed by the Company
with the Securities and Exchange Commission on December 19, 1996, and
notwithstanding assertions to the contrary made by Royalstar in a
letter to Company dated January 10, 1997, Stockholder is of the
opinion, based on the advice of its outside counsel, that the
Shareholders' Agreement among Xxxx Xxxxx, Royalstar, the Company,
Stockholder, Tonkin Springs Venture Limited Partnership and Tonkin
Springs Gold Mining Company terminated effective as of the date Xxxx
Xxxxx resigned as an officer and director of the Company.
8.2 Power: Binding Agreement. Stockholder has the
full legal right, power and authority to enter into and perform all of
Stockholder's obligations under this Agreement. The execution and
delivery of this Agreement by Stockholder has been authorized by all
necessary corporate action on the part of Stockholder and will not
violate any other agreement to which Stockholder is a party including,
without limitation, any voting agreement, stockholders agreement,
voting trust or proxy. This Agreement has been duly executed and
delivered by Stockholder and constitutes a legal, valid and binding
agreement of Stockholder, enforceable in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws, now or
hereafter in effect affecting creditors' rights and remedies generally
or general principles of equity. Neither the execution or delivery of
this Agreement nor the consummation by Stockholder of the transactions
contemplated hereby will (i) require any consent or approval of or
filing with any governmental or other regulatory body except for
(x) the filings
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required under the H-S-R Act and (y) filings on Schedule 13D under the
Securities Exchange Act of 1934, as amended, or (ii) constitute a
violation of, conflict with or constitute a default under, any
contract, commitment, agreement, understanding, arrangement or other
restriction of any kind to which Stockholder is a party or by which
Stockholder is bound.
8.3 Continuity of Interest. There is no current plan
or intention by Stockholder to sell, exchange or otherwise dispose of
the shares of Globex's common stock received by the Stockholder.
8.4 Finder's Fees. No person is, or will be, entitled
to any commission or finder's fees from Stockholder in connection with
this Agreement or the transactions contemplated hereby.
9. Representations and Warranties of Globex. Globex
represents and warrants to Stockholder as follows:
9.1 Ownership of Shares. At the Closing described in
Section 3, Globex will have good, valid and marketable title to the
shares of Globex common stock constituting the Purchase Price, free
and clear of all liens, encumbrances, restrictions, options,
warranties, rights to purchase and claims of every kind (other than
restrictions on transfer under applicable Canadian provincial and U.S.
Federal and State securities laws).
9.2 Powers: Binding Agreement. Globex has full legal
right, power and authority to enter into and perform all of its
obligations under this Agreement. The execution and delivery of this
Agreement by Globex has been authorized by all necessary corporate
action on the part of Globex and will not violate any other agreement
to which Globex is a party. This Agreement has been duly executed and
delivered by Globex and constitutes a legal, valid and binding
agreement of Globex, enforceable in accordance with its terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws, now or hereafter in
effect, affecting creditors' reorganization, moratorium and similar
laws, now or hereafter in effect, affecting creditors' rights and
remedies generally or general principles of equity. Neither the
execution of this Agreement nor the consummation by Globex of the
transactions contemplated hereby will (i) require any consent or
approval of or filing with any governmental or regulatory body except
for (x) for the filings required under the H-S-R Act and (y) filings
on Schedule 13D under the Securities Exchange Act of 1934, as amended,
or (ii) constitute a violation of, conflict with or constitute a
default under, any contract, commitment, agreement, understanding,
arrangement or other restriction of any kind to which Globex is a
party or by which it is bound.
9.3 Finder's Fees. No person is, or will be, entitled
to any commission or finder's fees from Globex in connection with this
Agreement or the transactions contemplated hereby.
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9.4 No Intention to Sell Shares. If it exercises the
Option, Globex (or Sub) will be acquiring the Shares for investment
purposes and has no intention of selling such Shares in a public
distribution in violation of applicable securities laws.
10. Covenants of Stockholder. (a) So long as the Option
remains exercisable, Stockholder hereby covenants and agrees with
Globex that, except pursuant to the terms of this Agreement,
Stockholder will not, without the prior written consent of Globex,
directly or indirectly, (i) grant any proxies or enter into any voting
trust or other agreement or arrangement with respect to the voting of
any Shares, (ii) acquire or sell, assign, transfer or otherwise
dispose of any Shares, (iii) enter into any contract, option or other
arrangement or understanding with respect to the direct or indirect
acquisition or sale, assignment, transfer or other disposition of any
Shares, or (iv) directly or indirectly, encourage, solicit, initiate
or, participate in any way in discussions or negotiations with, or
knowingly provide any information to, any corporation, partnership,
person or other entity or group (other than Globex or any affiliate or
associate of Globex) concerning any proposal or offer (a "Takeover
Proposal") for a merger or other business combination involving the
Company or the acquisition in any manner, directly or indirectly, of a
material equity interest in any voting securities of or a substantial
portion of the assets of the Company. Stockholder shall promptly
notify Globex of, and communicate to Globex the terms and status of
any inquiry or proposal with respect to any Takeover Proposal and
shall promptly provide Globex with any such information regarding such
proposal as Globex may request (including delivering copies thereof).
(b) In the event that Globex exercises the Option,
Stockholder hereby agrees, for a period of two (2) years
from the date of Globex's exercise of the Option to vote all
shares of Globex Stock which constitute the Purchase Price
under Section 1 of this Agreement (the "Globex Shares") in
the exact manner specified by Globex, or, at the sole
election of Globex, to grant to Globex a duly executed
irrevocable proxy with respect to the Globex Shares in
accordance with C.R.S. Section 7-107-203(5).
(c) In the event that Globex exercises the Option,
Stockholder hereby grants to Globex a first right of refusal
as related to sales of the Globex Shares by Stockholder to
third-party non-affiliates, for a period of two (2) years
from the date of Globex's exercise of the Option, as
provided herein ("First Right of Refusal").
(i) Stockholder will give Globex written
notice of Stockholder's intention to sell (or deliver in
satisfaction of debt) any of the Globex Shares beneficially
owned directly or indirectly by Stockholder to any person,
except for an Affiliate, as hereinafter defined, such
written notice to provide in reasonable detail, the terms,
conditions and timing of such intended sale (or delivery)
provided that a written notice from Stockholder to the
effect that a prescribed number of shares will be sold at
the prevailing market price shall constitute a valid Sales
Notice ("Sales Notice"). An "Affiliate" of
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Stockholder is defined as any entity in which Stockholder directly or
indirectly owns a greater than 50% interest.
(ii) Globex will have 5 business days from
receipt of the Sales Notice to give Stockholder written
notice of Globex's irrevocable election to exercise its
rights to purchase the shares covered by the Sales Notice
under terms and conditions no less favorable to Stockholder
than those included in the Sales Notice.
(iii) If Globex has not given notice to
Stockholder of its irrevocable intent to exercise its rights
as provided in (ii) and within the required time frame
specified above, Globex shall relinquish any First Right of
Refusal related specifically to those shares included in the
Sales Notice, unless such sale(s) are not consummated by
Stockholder within 30 days of the date of the Sales Notice.
(iv) Any election by Globex not to exercise
its First Right of Refusal as related to any Sales Notice
shall not change or diminish Globex's rights under this
Agreement as related to subsequent Sales Notices.
(vi) Stockholder may sell or transfer any of
the Globex Shares which it beneficially owns directly or
indirectly to an Affiliate provided that such Affiliate
agrees in writing to be bound by the terms of this
Agreement.
11. Remedies. The parties hereto agree that if for any
reason Globex or Stockholder shall have failed to perform its
obligations under this Agreement, then any party hereto seeking to
enforce this Agreement against such non-performing party shall be
entitled to seek specific performance and injunctive and other
equitable relief, and the parties hereto further agree to waive any
requirement for the securing or posting of any bond in connection with
the obtaining of any such injunctive or other equitable relief. This
provision is without prejudice to any other rights that either party
hereto may have against the other party hereto for any failure to
perform its obligation under this Agreement.
12. Termination. This Agreement (other than the provisions
relating to expenses (Section 13), and confidentiality (Section 14))
shall terminate (the "Termination Date") on the earliest of:
(a) the date on which Globex and Stockholder mutually
consent to terminate this Agreement in writing;
(b) the date of successful consummation of the Stock
Purchase Agreement and successful consummation of the
Merger;
(c) the date on which Globex provides written notice
to Stockholder of Globex's intention not to exercise the
Option;
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(d) the date upon which Globex gives written notice to
the Company under the Loan Agreement of its intention not to
make any further advances of funds thereunder; or
(e) August 30, 1997.
13. Expenses. Each party hereto will pay all of its
expenses in connection with the transactions contemplated by this
Agreement, including, without limitation, the fees and expenses of its
counsel and other advisers.
14. Confidentiality. Stockholder recognizes that
successful consummation of the transactions contemplated by this
Agreement may be dependent upon confidentiality with respect to these
matters. In this connection, Stockholder agrees that it will not
disclose or discuss these matters with anyone (other than its legal
counsel and advisors) not a party to this Agreement, without prior
written consent of Globex, except to the extent necessary for filings
required pursuant to the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder or disclosures Stockholder's
legal counsel advises in writing are necessary in order to fulfill
Stockholder's obligations imposed by law, in which events Stockholder
shall give prompt prior notice of such disclosure to Globex.
15. Certain Covenants of Globex
15.1 Stock Purchase and Merger. Globex agrees to use
its reasonable best efforts to negotiate the terms of the Stock
Purchase Agreement and the Merger Agreement in good faith, and to
consummate the closing of the Acquisition Transactions contemplated
thereby.
15.2 H-S-R Act Filings. Globex agrees to make in a
timely manner any filings required to be made by it under the H-S-R
Act in connection with the transactions contemplated by this
Agreement, the Stock Purchase Agreement and the Merger Agreement.
16. Notices. All notices or other communications required
or permitted hereunder shall be in writing (except as otherwise
provided here) and shall be deemed duly given when received by
delivery in person, by telecopy, telex or telegram or by certified
mail, postage prepaid, or by an overnight courier service, addressed
as follows:
If to Globex:
000 - 00xx Xxxxxx
Xxxxx-Xxxxxxx, Xxxxxx, Xxxxxx
Attn: Xxxx Xxxxx
Chief Executive Officer
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with copies to:
Xxxxx, Xxxxxx & Xxxxxx LLP
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxxx, Esq.
If to Stockholder:
U.S. Gold Corporation
00 Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxx
17. Entire Agreement: Amendment. This Agreement, together
with the documents expressly referred to herein, constitute the entire
agreement among the parties hereto with respect to the subject matter
contained herein and supersede all prior agreements and understandings
among the parties with respect to such subject matter. This Agreement
may not be modified, amended, altered or supplemented except by an
agreement in writing executed by the party against whom such
modification, amendment, alteration or supplement is sought to be
enforced.
18. Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors and assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other
parties, except that Globex may assign any or all of its rights and
obligations hereunder to Sub without the consent of Stockholder or the
Company, but no such transfer shall relieve Globex of its obligations
under this Agreement.
19. Governing Law. This Agreement, and all matters
relating hereto, shall be governed by, and construed in accordance
with the laws of the State of Colorado without giving effect to the
principles of conflicts of laws thereof.
20. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an
original and all of which together shall constitute one and the same
document.
21. Severability. Any term or provision of this Agreement
which is invalid or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the
remaining terms and provisions of this Agreement or affecting the
validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable such provision shall be
interpreted to be only so broad as is enforceable.
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22. Further Assurances. Each party hereto shall execute
and deliver such additional documents as may be necessary or desirable
to consummate the transactions contemplated by this Agreement.
23. Third Party Beneficiaries. Nothing in this Agreement,
expressed or implied, shall be construed to give any person other than
the parties hereto any legal or equitable right, remedy or claim under
or by reason of this Agreement or any provision contained herein.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Globex and Stockholder have each caused
this Agreement to be executed by their duly authorized officers as of
the date and year first above written.
GLOBEX MINING ENTERPRISES, INC.,
a Quebec corporation
By: XXXX XXXXX
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Name: XXXX XXXXX
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Title: PRESIDENT
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U.S. GOLD CORPORATION,
a Colorado corporation
By: XXXXXXX X. XXXX
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Name: XXXXXXX X. XXXX
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Title: PRESIDENT
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