ARRANGEMENT AGREEMENT AMONG NEVORO INC. - and - NEVORO PLATINUM INC. - and - AURORA METALS (BVI) LIMITED Dated: April 17, 2008
TABLE OF CONTENTS |
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ARTICLE 1 |
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Section 1.1 Definitions |
2 | |||
Section 1.2 Interpretation Not Affected by Headings |
12 | |||
Section 1.3 Number and Gender |
12 | |||
Section 1.4 Date for Any Action |
12 | |||
Section 1.5 Currency |
12 | |||
Section 1.6 Accounting Matters |
12 | |||
Section 1.7 Construction |
13 | |||
Section 1.8 Statutory References |
13 | |||
Section 1.9 Knowledge |
13 | |||
Section 1.10 Disclosure Letters |
13 | |||
Section 1.11 Schedules |
14 | |||
ARTICLE 2 |
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Section 2.1 The Arrangement |
14 | |||
Section 2.2 Implementation Steps by the Company |
14 | |||
Section 2.3 Interim Order |
16 | |||
Section 2.4 Plan of Arrangement |
17 | |||
Section 2.5 Circular |
17 | |||
Section 2.6 Preparations of Filings, etc. |
18 | |||
Section 2.7 Dissenting Shareholders |
19 | |||
Section 2.8 Amendments |
20 | |||
Section 2.9 Shareholder Communications |
20 | |||
Section 2.10 Company Approval of the Arrangement |
21 | |||
Section 2.11 Alternative Transaction Structure |
21 | |||
Section 2.12 Performance by Subco |
22 | |||
ARTICLE 3 |
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Section 3.1 Organization |
22 | |||
Section 3.2 Authority Relative to this Agreement |
23 | |||
Section 3.3 No Conflict; Required Filings and Consent |
23 | |||
Section 3.4 Compliance with Laws, Licences |
24 | |||
Section 3.5 Subsidiaries |
24 | |||
Section 3.6 Capitalization and Listing |
24 | |||
Section 3.7 Reports |
25 | |||
Section 3.8 Shares |
25 |
(i) |
Section 3.9 Listing Requirements |
26 | |||
Section 3.10 No Cease Trade |
26 | |||
Section 3.11 Litigation, Etc. |
26 | |||
Section 3.12 Financial Statements |
26 | |||
Section 3.13 Undisclosed Liabilities |
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Xxxxxxx 0.00 Xxxxxx Xxxxxx Tax Matters |
27 | |||
ARTICLE 4 |
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Section 4.1 Organization and Qualification |
27 | |||
Section 4.2 Authority Relative to this Agreement |
28 | |||
Section 4.3 No Conflict or Breach; Required Filings and Consent |
28 | |||
Section 4.4 Subsidiaries |
30 | |||
Section 4.5 Compliance with Laws, Licenses |
30 | |||
Section 4.6 Capitalization and Listing |
31 | |||
Section 4.7 Shareholder and Similar Agreements |
31 | |||
Section 4.8 Reports |
31 | |||
Section 4.9 Foreign Private Issuer |
32 | |||
Section 4.10 Investment Company Status |
32 | |||
Section 4.11 No Cease Trade |
32 | |||
Section 4.12 Financial Statements |
32 | |||
Section 4.13 Undisclosed Liabilities |
34 | |||
Section 4.14 Title to Properties |
34 | |||
Section 4.15 Property |
35 | |||
Section 4.16 Employment Matters |
35 | |||
Section 4.17 Absence of Certain Changes or Events |
35 | |||
Section 4.18 Litigation, Etc. |
36 | |||
Section 4.19 Taxes |
36 | |||
Section 4.20 Books and Records |
38 | |||
Section 4.21 Insurance |
38 | |||
Section 4.22 Non-Arm’s Length Transactions |
38 | |||
Section 4.23 Environmental |
39 | |||
Section 4.24 Restrictions on Business Activities |
40 | |||
Section 4.25 Material Agreements |
40 | |||
Section 4.26 No Prohibited Payments |
40 | |||
Section 4.27 No Option on Assets |
41 | |||
Section 4.28 Full Disclosure |
41 | |||
Section 4.29 Fees |
41 | |||
Section 4.30 Shell Company |
41 |
(ii) |
ARTICLE 5 |
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Section 5.1 Conduct of Business by the Company |
41 | |||
Section 5.2 Filings and Authorizations |
48 | |||
Section 5.3 Transitional Matters |
49 | |||
Section 5.4 United States Tax Matters |
49 | |||
Section 5.5 Additional Agreements |
50 | |||
Section 5.6 Notices of Certain Actions |
51 | |||
Section 5.7 Securityholder Claims |
51 | |||
Section 5.8 Mutual Covenants |
51 | |||
Section 5.9 Indemnification |
51 | |||
Section 5.10 Additional Covenants of Parent and Subco |
52 | |||
Section 5.11 Additional Covenants of Parent and Subco |
53 | |||
ARTICLE 6 |
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Section 6.1 Mutual Conditions Precedent |
54 | |||
Section 6.2 Additional Conditions Precedent to the Obligations of Parent and Subco |
54 | |||
Section 6.3 Additional Conditions Precedent to the Obligations of the Company |
57 | |||
ARTICLE 7 |
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Section 7.1 Termination |
58 | |||
Section 7.2 Amendment |
60 | |||
Section 7.3 Waiver |
60 | |||
Section 7.4 Termination Fee |
60 | |||
Section 7.5 Effect of Termination |
61 | |||
ARTICLE 8 |
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Section 8.1 Non-Solicitation |
61 | |||
ARTICLE 9 |
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Section 9.1 Further Assurances |
66 | |||
Section 9.2 Notification of Certain Matters |
66 | |||
Section 9.3 Access to Information |
67 | |||
Section 9.4 Expenses |
67 | |||
Section 9.5 Notices |
67 | |||
Section 9.6 Severability |
69 |
(iii) |
Section 9.7 Entire Agreement, Assignment and Governing Law |
69 | |||
Section 9.8 Third Party Beneficiaries |
70 | |||
Section 9.9 Counterparts |
70 | |||
ADDENDA |
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SCHEDULE “A” FORM OF ARRANGEMENT RESOLUTION |
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SCHEDULE “B” FORM OF PLAN OF ARRANGEMENT |
(iv) |
a corporation incorporated under the laws of Canada,
a wholly-owned subsidiary of Parent incorporated under the laws of British Columbia,
a corporation existing under the laws of the British Virgin Islands,
(A) | Upon the terms and subject to the conditions set out in this Agreement (as defined below), the parties hereto intend to propose a statutory plan of arrangement under Section 288 of the Business Corporations Act (British Columbia) whereby the Company and Subco will merge, on the terms set out in the Plan of Arrangement (as defined below) on the basis of the following: |
(a) | the Company and Subco will merge and continue as one corporation with the same effect as if they were amalgamated under Section 269 of the Business Corporations Act (British Columbia), except that the separate legal existence of the Company will not cease and the Company will survive the merger; | ||
(b) | the separate legal existence of Subco will cease without Subco being liquidated or wound-up; | ||
(c) | the property and liabilities of Subco will become the property and liabilities of the Company which will own and hold all property and liabilities which the Company holds before the Arrangement becomes |
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effective and all property and liabilities of Subco, without any transfer by the Company or Subco of any of its property or liabilities; | |||
(d) | each common share of the Company shall be cancelled and the holders thereof shall receive, for each such share, one share in the capital of Parent; and | ||
(e) | Parent will become the holder of all of the outstanding securities of the merged company. |
(B) | The board of directors of the Company has determined that the business combination to be effected by means of the Plan of Arrangement is advisable and in the best interests of the Company and has unanimously approved the transactions contemplated by this Agreement and determined to recommend approval of the Plan of Arrangement and other transactions contemplated hereby to the holders of common shares of the Company; | |
(C) | In furtherance of such business combination, the board of directors of the Company has agreed to submit the Plan of Arrangement and other transactions contemplated hereby to the shareholders of the Company and the Court (as defined below) for approval; and | |
(D) | Certain shareholders of the Company have duly executed and delivered a voting agreement evidencing their agreement to vote, in their capacity as shareholders of the Company, in favour of the transactions contemplated by this Agreement. |
INTERPRETATION
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(a) | changes in general economic conditions or the securities markets; | ||
(b) | changes affecting generally the precious and/or base metals mining sectors in which Parent or the Company conducts business, respectively; | ||
(c) | the announcement of this Agreement or the consummation of the transactions contemplated by this Agreement, or any actions by Parent or the Company taken pursuant to this Agreement, taken as a whole; or | ||
(d) | a change in the market price or trading volume of Parent Common Shares or Company Common Shares provided, however, that any fact, circumstance, change, effect, occurrence or event underlying such change in the market price or trading volume that is not excluded under clauses (a) and (b) hereof, may be considered in determining whether there has been a Material Adverse Change or Material Adverse Effect. |
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Schedule “A”- | Form of Arrangement Resolution |
Schedule “B” - | Plan of Arrangement |
ARRANGEMENT AND RELATED MATTERS
(a) | continue to the jurisdiction of British Columbia prior to the Meeting; | ||
(b) | as soon as reasonably practicable and in any event on or before May 6, 2008, bring an application before the Court pursuant to section 291 of the BCBCA for the Interim Order in a manner and form acceptable to Parent, acting reasonably, providing for, among other things, the calling and holding of the Meeting, and thereafter proceed with and diligently pursue obtaining the Interim Order in such form; | ||
(c) | fix a record date for the purposes of determining Shareholders entitled to receive notice of the Meeting and vote thereat of April 21, 2008, and shall not change the record date without the prior written consent of Parent; | ||
(d) | convene and hold the Meeting as soon as reasonably practicable and in any event on or before June 5, 2008 in accordance with the Interim Order and applicable Laws for the purpose of considering the Arrangement Resolution and for any other proper purpose as may be set out in the Circular and agreed to by Parent; | ||
(e) | except to the extent required by a Governmental Entity, not adjourn, postpone or cancel (or propose any adjournment, postponement or |
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cancellation of) the Meeting without the prior written consent of Parent; | |||
(f) | solicit and take all steps necessary (including relevant disclosure in the Circular) to allow Parent and any Subsidiary of Parent, directly or through representatives, to solicit from Shareholders proxies in favour of the Arrangement Resolution and against any resolution submitted by any other Shareholder and take all other action that is necessary or desirable to secure the approval of the Arrangement Resolution by Shareholders; | ||
(g) | provide notice to Parent of the Meeting and allow representatives of Parent and its legal counsel to attend and speak at the Meeting; | ||
(h) | subject to obtaining such approvals as are contemplated by the Interim Order, bring an application, as soon as reasonably practicable after the Meeting but in any event not later than three (3) Business Days thereafter, before the Court pursuant to section 291 of the BCBCA for the Final Order in a manner and form acceptable to Parent, acting reasonably, and thereafter proceed with and diligently pursue obtaining the Final Order in such form; | ||
(i) | subject to obtaining the Final Order and the satisfaction or waiver of the conditions set forth in Article 0, xxxx all steps and actions, including without limitation, making all necessary filings with Governmental Entities, including the Arrangement Filings, to give effect to the Arrangement, in a manner and form acceptable to Parent acting reasonably; | ||
(j) | instruct counsel of the Company to bring the applications referred to in subsections (b) and (h) of this Section 2.2 in co-operation with Parent’s counsel on a timely basis; | ||
(k) | permit Parent and its counsel with a reasonable opportunity to review and comment upon drafts of all materials to be filed by the Company with the Court or any Securities Regulatory Authority in connection with the Arrangement (including the Circular and any supplement thereto or amendment thereof) prior to the service and/or filing of those materials and accept the reasonable comments of Parent and its legal counsel, provided the same are in compliance with the Company’s disclosure obligations under applicable Laws. In addition, the Company will not object to legal counsel of Parent making such submissions on the hearing of the motion for the Interim Order and the application for the Final Order as such counsel considers appropriate, |
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provided the same, in the reasonable opinion of the Company or its counsel, are not in any manner detrimental, adverse or prejudicial to the Company or the Shareholders. The Company shall also provide to Parent’s counsel on a timely basis with copies of any notice of appearance and evidence or other court documents served on the Company or counsel to the Company in respect of the application for the Interim Order and the Final Order or any appeal therefrom and of any notice, whether written or oral, received by the Company indicating any intention to oppose the granting of the Interim Order or the Final Order or to appeal the Interim Order or the Final Order; and | |||
(l) | not (i) file any material with the Court in connection with the Arrangement or serve any such material, or agree to modify or amend material so filed or served, or (ii) send to the Registrar, for endorsement and filing by the Registrar, the Arrangement Filings, except in either case with Parent’s prior written consent, such consent not to be unreasonably withheld or delayed. |
(a) | for the class of Persons to whom notice is to be provided in respect of the Arrangement and the Meeting and for the manner in which such notice is to be provided; | ||
(b) | that the requisite approval for the Arrangement Resolution shall be two-thirds of the votes cast on the Arrangement Resolution by the Shareholders, present in person or by proxy at the Meeting; | ||
(c) | that, in all other respects, the terms, restrictions and conditions of the Company’s articles and by-laws, including quorum requirements and all other matters, shall apply in respect of the Meeting; | ||
(d) | for the grant of the Dissent Rights as contemplated in the Plan of Arrangement; | ||
(e) | for notice requirements with respect to the presentation of the application to the Court for the Final Order; | ||
(f) | that the Meeting may be adjourned or postponed from time to time by management of the Company with the consent of Parent, without the need for additional approval of the Court; and |
(g) | that the record date for Shareholders entitled to vote at the Meeting will not change in respect of any adjournment(s) or postponement(s) of the Meeting. |
(a) | the Company and Subco will merge and continue as one corporation with the same effect as if they were amalgamated under Section 269 of the Business Corporations Act (British Columbia), except that the separate legal existence of the Company will not cease and the Company will survive the merger; | ||
(b) | the separate legal existence of Subco will cease without Subco being liquidated or wound-up; | ||
(c) | the property and liabilities of Subco will become the property and liabilities of the Company which will own and hold all property and liabilities which the Company holds before the Arrangement becomes effective and all property and liabilities of Subco, without any transfer by the Company or Subco of any of its property or liabilities; | ||
(d) | each common share of the Company shall be cancelled and the holders thereof shall receive, for each such share, one share in the capital of Parent; and | ||
(e) | Parent will become the holder of all of the outstanding securities of the merged company. |
(a) | Parent and the Company shall cooperate in the preparation of the Circular as described in Section 2.5 and in the preparation of applications, filings, submissions and requests for the approval of, and appropriate notification of, any Governmental Entity with jurisdiction over the transactions contemplated hereby (including the Appropriate Regulatory Approvals) and the preparation of any documents reasonably deemed by Parent to be necessary or desirable to discharge their respective obligations under applicable Laws in connection with this Agreement or the Arrangement and to obtain the Appropriate Regulatory Approvals at the earliest possible date. The Company agrees that, if requested to do so by Parent, it will participate in any meeting(s) with any Governmental Entity in respect of any applications, filings, submissions, requests, investigations or other inquiry related to this Agreement or the Appropriate Regulatory Approvals. | ||
(b) | Each of Parent and the Company shall furnish to the other, on a timely basis, all information as may be reasonably required to effectuate the foregoing actions, and each covenants that no information so furnished by it in writing in connection with those actions or otherwise in connection with the consummation of the Arrangement will contain any Misrepresentation. Each of the Parties will ensure that the information relating to it and its Subsidiaries, which is provided in the Circular will not contain any Misrepresentation. |
(c) | Each of the Company and Parent shall promptly notify the other if at any time before the Effective Date it becomes aware that the Circular, an application for Appropriate Regulatory Approvals or any other filing under corporate or Securities Laws contains a Misrepresentation, or that an amendment or supplement to the Circular or such other document, as the case may be, is otherwise required that corrects that Misrepresentation, and the Company will cause the same to be distributed to the Shareholders (including registered and beneficial Shareholders), the Board of Directors of the Company, the auditors of the Company and any other required Persons and filed as required under applicable Law. | ||
(d) | The Company shall ensure that the Circular complies with all applicable Laws and, without limiting the generality of the foregoing, that the Circular does not contain a Misrepresentation (other than any information provided in writing for the purpose of inclusion provided by Parent or Subco, which Parent shall ensure does not contain a Misrepresentation). Without limiting the generality of the foregoing, the Company shall ensure that the Circular provides the Shareholders with information in sufficient detail to permit them to form a reasoned judgment concerning the matters to be placed before them at the Meeting and include in the Circular a statement that the Board of Directors of the Company is of the opinion that the consideration to be received by Shareholders under the Arrangement is fair, from a financial point of view, to the Shareholders and has unanimously, after receiving legal advice, determined that the Arrangement Resolution is in the best interests of the Company and that the Board of Directors of the Company unanimously recommends that Shareholders vote to approve the Arrangement Resolution. | ||
(e) | Parent shall ensure that the information provided by Parent for inclusion in the Circular will constitute full, true and plain disclosure of all material facts relating to the Parent Common Shares to be issued pursuant to the Arrangement. |
(1) | This Agreement may, at any time and from time to time before or after the holding of the Meeting but not later than the Effective Time, be amended by mutual written agreement of the Parties hereto without, subject to applicable Law, including, for greater certainty, the Interim Order and the Final Order, further notice to or authorization on the part of any of the Shareholders, and any such amendment may, without limitation: |
(a) | change the time for the performance of any of the obligations or acts of the Parties including an extension of the Outside Date; | ||
(b) | waive any inaccuracies or modify any representation or warranty contained herein or in any document to be delivered pursuant hereto; | ||
(c) | waive compliance with or modify any of the covenants contained herein or waive or modify the performance of any of the obligations of the Parties; and | ||
(d) | waive compliance with and modify any conditions precedent herein contained; |
(2) | The Plan of Arrangement may also be amended as provided for therein. |
(1) | The Company represents and warrants to and in favour of Parent, and acknowledges that Parent is relying upon such representations and warranties in entering into this Agreement, that, as of the date of this Agreement: |
(a) | the Board of Directors of the Company, following consultation with its legal advisors has unanimously: (A) determined that the Arrangement is fair to the Shareholders of the Company and it is in the best interests of the Company for the Arrangement to be consummated and the Board of Directors of the Company to support it on the terms of this Agreement; and (B) approved the entering into of this Agreement and the making of a recommendation that Shareholders vote in favour of the Arrangement Resolution; and | ||
(b) | each director and officer of the Company intends to vote, in his or her capacity as a Shareholder, in favour of the Arrangement Resolution. |
(2) | At the reasonable request of Parent from time to time, the Company shall provide Parent with a list (in both written and electronic form) of the Shareholders, together with their addresses and respective holdings of Company Common Shares, and a list of participants and book based nominee registrants such as CDS & Co. and CEDE & Co. and non-objecting beneficial owners of Company Common Shares, together with their addresses and respective holdings of securities. The Company shall from time to time require that its registrar and transfer agent furnish Parent with such additional information, including updated or additional lists of Shareholders, and lists of securities positions and other assistance as Parent may reasonably request in order to be able to communicate with respect to the Arrangement to the Shareholders entitled to vote on the Arrangement Resolution under applicable Laws. |
(1) | Parent is a company incorporated and existing under the laws of Canada. Subco is a company incorporated and existing under the laws of British Columbia. Each of Parent and Subco has all necessary corporate power and authority to own its respective assets and conduct its respective businesses as now owned and conducted. Parent and Subco are each duly qualified to carry on business and are in good standing in each jurisdiction in which the character of their respective properties or the nature of their respective activities makes such qualification necessary, except where the failure to be so qualified will not, individually or in the aggregate, have a Material Adverse Effect. | |
(2) | All of the outstanding securities of Parent and its Subsidiaries are duly authorized, validly issued, fully paid and non-assessable (and, where required, properly registered) and were issued in compliance with all applicable Laws. All of the outstanding securities of Parent’s Subsidiaries are owned, directly or indirectly, by Parent or a Subsidiary of Parent. Except pursuant to restrictions on transfer contained in the articles or by-laws (or their equivalent) of the applicable Subsidiary of Parent, the outstanding |
securities of each Subsidiary of Parent which are owned by Parent (or by another Subsidiary of Parent) are owned free and clear of all Encumbrances and neither Parent nor any of its Subsidiaries is liable to any Subsidiary of Parent or to any creditor in respect thereof. |
(3) | Parent has made available to the Company complete and correct copies of its Constating Documents as well as the Constating Documents of each of its subsidiaries, in each case as in effect on the date of this Agreement. |
(1) | The Parent Common Shares constituting the Share Consideration to be issued pursuant to the transactions contemplated herein will, upon issue, be issued as fully paid and non-assessable shares and not subject to any Liens, or pre-emptive rights and will be listed and posted for trading on the TSX. | |
(2) | The Parent Common Shares to be issued in connection with the transactions contemplated herein will not be subject to any statutory hold or restricted period under the securities legislation of any province or territory of Canada |
and, subject to restrictions contained therein in respect of “control distributions”, will be freely tradeable within Canada by the holders thereof. |
(3) | Subject to the truth and accuracy of the representation and warranty of the Company in Section 4.30, the Parent Common Shares to be issued with the transactions contemplated herein will not be subject to any statutory hold or restricted period under the 1933 Act or the rules promulgated thereunder, or under any blue sky or state securities laws, subject to restrictions on transfer applicable to “affiliates” (as defined under the 0000 Xxx) of Parent following the Closing. |
(1) | To the knowledge of the Company, except as set forth in the Company Disclosure Letter, the Company and each of its Subsidiaries is in compliance in all material respects with all applicable Laws, each of the Company and its Subsidiaries has all material licenses, permits, concessions, orders, leases, authorizations or approvals of, and has made all required registrations with, any Governmental Entity that is required in connection with the ownership of their respective assets or the conduct of their respective operations as presently carried on or as contemplated to be carried on in the future and each of them has complied in all material respects with and is in compliance with all such licenses, permits, concessions, orders, leases, authorizations, approvals and registrations. |
(2) | To the knowledge of the Company, none of the Company or any of its Subsidiaries has received any written or, to the knowledge of the Company, oral notice of revocation or non-renewal of any such licenses, permits, concessions, orders, leases, authorizations, approvals or registrations, or of any intention of any Governmental Entity to revoke, refuse to renew or amend any of such licenses, permits, concessions, orders, leases, authorizations, approvals and registrations and, to the knowledge of the Company, all such licenses, permits, concessions, orders, leases, authorizations, approvals and registrations should continue to be effective in accordance with their terms in order for the Company and its Subsidiaries to continue to conduct their respective businesses as they are currently being conducted and as they are contemplated to be conducted in the future. |
(3) | Except as set forth in the Company Disclosure Letter, none of the Company or any of its Subsidiaries is in conflict with, or in default (including cross defaults) under or in violation of: (i) its articles or by-laws, or (ii) to its knowledge, any agreement, arrangement or understanding to which it or by which any of its properties or assets is bound or affected. |
(4) | Except as set forth in the Company Disclosure Letter, no person or entity other than the Company or its Subsidiaries owns or has any proprietary, financial or other interest (direct or indirect) in any of the licenses, permits, concessions, orders, leases, authorizations, approvals or registrations referred to in this Section 4.5. |
(1) | The authorized capital of the Company consists of $500,000 divided into 50,000,000 Company Common Shares with a par value of $0.01 each. As at the date of this Agreement there are 19,981,476 Company Common Shares validly issued and outstanding as fully paid and non-assessable shares in the capital of the Company. Except as disclosed in the Company Disclosure Letter, there are no options, warrants, conversion privileges, entitlements, calls or other rights, shareholder rights plans, agreements, arrangements, understandings, commitments, or obligations (pre-emptive, contingent or otherwise) of the Company or any of its Subsidiaries to issue or sell any shares or other securities of the Company or of any of its Subsidiaries. Except as set forth in the Company Disclosure Letter, there are no outstanding bonds, debentures or other evidences of indebtedness of the Company or any Subsidiary. No Shareholder is entitled to any pre-emptive or other similar right granted by the Company or any of its Subsidiaries. |
(2) | There are no outstanding contractual obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Company Common Shares or any securities of any of its Subsidiaries. No Subsidiary of the Company owns any Company Common Shares. |
(1) | The Company is subject to the filing obligations imposed by Section 13 of the 1934 Act. The Company Common Shares are quoted for trading on the OTCBB. | |
(2) | To the knowledge of the Company, except as disclosed in the Company Disclosure Letter, the Company has filed (including, as applicable, on XXXXX) or furnished, as applicable, with the Securities Regulatory Authorities and all applicable self-regulatory authorities the Company Public Documents. The Company Public Documents, to the knowledge of the |
Company, at the time filed or furnished, (i) did not contain any misrepresentation and (ii) complied in all material respects with the requirements of applicable securities legislation and the rules, policies and instruments of all Securities Regulatory Authorities having jurisdiction over the Company. As of their respective dates (or, if amended prior to the date hereof, as of the date of such amendment) the Company Public Documents filed or furnished with the SEC did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances in which they were made, not misleading. The Company has not filed any confidential material change or other report or other document with any Securities Regulatory Authorities or stock exchange or other self-regulatory authority which at the date hereof remains confidential. |
(1) | To the knowledge of the Company, the audited consolidated financial statements of the Company as at and for the 12 month periods ended on each of December 31, 2006 and December 31, 2005, including the notes thereto and the unaudited consolidated the report by the Company’s auditors thereon and the related management’s discussion and analysis and the Company’s unaudited financial statements as at and for the 12 months ended December 31, 2007, including the notes thereto have been, and in respect of any subsequent periods prior to the Effective Date will be, prepared in accordance with U.S. GAAP applied on a basis consistent with prior periods and present fairly the consolidated financial position and results of operations of the Company and its Subsidiaries taken as a whole, as of the respective dates thereof and for the respective periods covered thereby (except as otherwise |
indicated in such financial statements or the notes thereto). There are no outstanding loans made by the Company or any of its Subsidiaries to any executive officer or director of the Company or any of its Subsidiaries. | ||
(2) | The management of each of the Company and each of its Subsidiaries has implemented and maintained a system of disclosure controls and procedures designed to provide reasonable assurance that material information relating to the Company and its Subsidiaries, is made known to the management of the Company by others within those entities and reported within the time periods prescribed by Law, which disclosure controls and procedures are, given the size of the Company and the nature of its business, effective in alerting on a timely basis the Company’s Chief Executive Officer and its Chief Financial Officer to material information required to be included in the Company Public Documents. The Company and its Subsidiaries maintain internal control over financial reporting. Such internal control over financial reporting is effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company and its Subsidiaries; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP and that receipts and expenditures of the Company and its Subsidiaries are being made only in accordance with authorizations of management and directors of the Company and the Subsidiaries; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the assets of the Company and its Subsidiaries that could have a material effect on its financial statements. Except as set forth in the Company Disclosure Letter, to the knowledge of the Company, prior to the date of this Agreement there are no significant deficiencies in the design or operation of, or material weaknesses in, the internal controls over financial reporting of the Company and its Subsidiaries that are reasonably likely to adversely affect the Company’s or its Subsidiaries’ ability to record, process, summarize and report financial information. | |
(3) | To the knowledge of the Company, except as disclosed in the Company Disclosure Letter, since January 1, 2006: (i) neither the Company nor any of its Subsidiaries nor, to the knowledge of the Company, any director, officer, employee, auditor, accountant or representative of the Company or any of its Subsidiaries has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or |
methods of the Company or any of its Subsidiaries or their respective internal accounting controls, including any complaint, allegation, assertion, or claim that the Company or any of its Subsidiaries has engaged in questionable accounting or auditing practices, and (ii) no legal counsel representing the Company or any of its Subsidiaries, whether or not employed by the Company or any of its Subsidiaries, has reported evidence of a material violation of Securities Laws, breach of fiduciary duty or similar violation by the Company, any of its Subsidiaries or any of their respective officers, directors, employees or agents to the Board of Directors of the Company or any committee thereof or to any director or officer of the Company or to the board of directors of any of its Subsidiaries or any committees thereof or to any director or officer of any Subsidiary. | ||
(4) | To the knowledge of the Company, the Company has provided adequate accruals in accordance with U.S. GAAP in its audited consolidated financial statements for the period ending December 31, 2006 and its unaudited consolidated financial statements for the period ending December 31, 2007 for any unpaid liability of the Company and each of its Subsidiaries in respect of Taxes for the period covered by such financial statements, whether or not such liability is shown as being due on any Tax Return. |
(1) | Except as set out in the Company Disclosure Letter, the Company and each of its Subsidiaries has duly filed, or has caused to be filed, within the times and in the manner prescribed under the applicable Law all federal, provincial, territorial, local and foreign Tax Returns required to be filed by it and those Tax Returns were true, complete and correct in all material respects and reflect accurately all liabilities for Taxes for the period(s) covered thereby and that no material fact has been omitted therefrom. The Company and each of |
its Subsidiaries has paid, collected, withheld and remitted, or caused to be paid, collected, withheld and remitted to the appropriate Governmental Entity, all Taxes that are due and payable, collectible or remittable by it including any such amounts payable, collectible or remittable by it in connection with amounts paid or credited to any present or former employee, on or before the date of this Agreement. Except as set out in the Company Disclosure Letter, no extension of time in which to file any Tax Returns is in effect. Since December 31, 2007, neither the Company, nor any of its Subsidiaries has incurred any liability in respect of Taxes, other than in the ordinary course of its business none of which liabilities in respect of Taxes are material. No Encumbrance for Taxes has been filed or exists other than for Taxes not yet due and payable. | ||
(2) | Except as set out in the Company Disclosure Letter: (i) there are no claims or reassessments of Taxes in respect of the Company or any Subsidiary that have been issued and are outstanding and there are no outstanding issues which have been raised and communicated to the Company or any Subsidiary by any Governmental Entity in any jurisdiction, whether or not the Company or any of its Subsidiaries files Tax Returns in such jurisdiction; (ii) no Governmental Entity has challenged, disputed or questioned the Company or any Subsidiary in respect of Taxes or Tax Returns; (iii) none of the Company or any Subsidiary is negotiating any draft assessment or reassessment with any Governmental Entity; (iv) to the knowledge of the Company, there are no contingent liabilities for Taxes of the Company or any Subsidiary, other than as disclosed in the audited consolidated financial statements of the Company for the period ending December 31, 2006 and unaudited consolidated financial statements of the Company for the period ending December 31, 2007; (v) none of the Company or any Subsidiary has received any indication from any Governmental Entity that an assessment or reassessment of the Company or any Subsidiary is proposed in respect of any Taxes, regardless of its merits, and (vi) none of the Company or any Subsidiary has executed or filed with any Governmental Entity any agreement or waiver extending the period for assessment, reassessment or collection of any Taxes. |
(3) | Neither the Company, nor any of its Subsidiaries is subject to, party to or a member of any partnership or other arrangement or contract that is treated as a partnership for income tax purposes. |
(4) | To the extent that the Company or any of its Subsidiaries was resident in Canada at any time for the purposes of the Tax Act, for all material transactions between (i) the Company or any of its Subsidiaries and (ii) any non-resident Person with whom any of them was not dealing at arm’s length during a taxation year commencing after 1998 and ending on or before the |
Effective Date, the Company or any of its Subsidiaries, as the case may be, has made or obtained records or documents that meet the requirements of paragraphs 247(4)(a) to (c) of the Tax Act. | ||
(5) | The Company has delivered to Parent correct and complete copies of all Tax Returns, examination reports, and statements of deficiencies assessed against, or agreed to by the Company and its Subsidiaries since December 31, 2003. |
(6) | Other than as set out in the Company Disclosure Letter, since July 20, 2007, the Company has not owned any property that is taxable Canadian property, property that is described in the inventory of a business carried on by the Company in Canada, or eligible capital property in respect of a business carried on by the Company, as each of those terms is defined in the Tax Act. |
(7) | To the Company’s knowledge, there are no facts or circumstances, and the Company does not have a plan or intention to take or refrain from taking any action, that would be reasonably likely to prevent the transactions contemplated by this Agreement and the Plan of Arrangement from qualifying as a reorganization pursuant to Section 368 of the Code. |
(1) | Except as to the matters described in the Company Disclosure Letter, there has been no Environmental Condition, and in respect of the Company and each Subsidiary of the Company, there exists no Environmental Condition, which, individually or in the aggregate, has a Material Adverse Effect. Neither the Company, nor any of its Subsidiaries has received a notice, directive, advisory or other communication from any Governmental Entity of any Environmental Condition that could, individually or in the aggregate, have a Material Adverse Effect. |
(2) | Except as to matters described in the Company Disclosure Letter, the Company and each Subsidiary of the Company has all Environmental Approvals required pursuant to Environmental Laws in respect of the current operations of the Company and each such Subsidiary of the Company and is in compliance with such Environmental Approvals except where any non-compliance could not, individually or in the aggregate, have a Material Adverse Effect. |
(3) | The Company Disclosure Letter lists all reports and documents which are in the possession or under the control of the Company and which relate to the environmental matters affecting the Company, the Company Mining Rights or the real property and leasehold interests set forth in the Company Disclosure Letter pursuant to Section 4.16 hereof. Copies of all such reports and documents have been provided to Parent or Subco. To the knowledge of |
(a) | the Company shall, and shall cause each of its Subsidiaries to, conduct its and their respective businesses in the ordinary course of business consistent with past practice except as may be required in order to comply with the terms of this Agreement; | ||
(b) | without limiting the generality of subsection (a) above, and except as otherwise expressly permitted or required by this Agreement, the Company shall not, directly or indirectly, and shall cause each of its Subsidiaries not to: |
(i) | issue, sell, award, pledge, dispose of, encumber or agree to issue, sell, award, pledge, dispose of or encumber any Company Common Shares, or other securities of the Company or any shares or other securities of its Subsidiaries, or any calls, conversion privileges or rights of any kind to acquire any Company Common Shares or other securities of the Company or any shares or other securities of its Subsidiaries; | ||
(ii) | sell, pledge, lease, assign, dispose of, encumber or agree to sell, pledge, lease, assign, dispose of or encumber any material property or assets of the Company or any of its Subsidiaries or any interest in any material property or asset of the Company or any of its Subsidiaries; | ||
(iii) | except as set out in subsection (c) of this Section 5.1, amend or propose to amend the memorandum and articles of association or other Constating Documents of the Company or any of its Subsidiaries; | ||
(iv) | amend or file any Tax Returns, except as required by Law; | ||
(v) | split, consolidate, combine or reclassify any outstanding shares or other securities of the Company or any Subsidiary or undertake any other capital reorganization; | ||
(vi) | redeem, purchase or offer to purchase any Company Common Shares or other securities of the Company or any shares or other securities of any of its Subsidiaries; | ||
(vii) | declare, set aside or pay any dividend or other distribution (whether in cash, securities or property or any combination thereof) in respect of any securities of the Company or any Subsidiary; |
(viii) | reorganize, amalgamate or merge the Company or any of its Subsidiaries with any other Person; | ||
(ix) | reduce the stated capital of the shares of the Company or of the securities of any of its Subsidiaries; | ||
(x) | acquire or agree to acquire (by merger, amalgamation, acquisition of stock or assets or otherwise) any Person, or make any investment either by purchase of shares or securities, contributions of capital, property transfer or purchase of any property or assets of any other Person or enter into any new joint venture, partnership or other such arrangement; | ||
(xi) | enter into, directly or indirectly, an investment in or acquisition of, whether individually or with any other Person, any asset or an interest in any asset; | ||
(xii) | Except as set forth in the Company Disclosure Letter incur, authorize, agree or otherwise commit to incur any indebtedness for borrowed money or any other material liability or obligation or issue any debt securities, except for (i) the borrowing of working capital in the ordinary course of business consistent with past practice which borrowings will not, individually or in the aggregate, be material, or guarantee, endorse or otherwise (as an accommodation) become responsible for, the obligations of any other Person or make any loans or advances or (ii) borrowings from Parent; | ||
(xiii) | adopt a plan of liquidation or resolutions providing for the liquidation or dissolution of the Company or any of its Subsidiaries; | ||
(xiv) | except as set forth in the Company’s Disclosure Letter, pay, discharge, satisfy or settle any claims, liabilities or obligations other than (i) the payment, discharge, settlement or satisfaction, in the ordinary course of business consistent with past practice, of liabilities reflected or reserved against in the Company’s financial statements or incurred in the ordinary course of business consistent with past practice and which are not material and (ii) any claims, liabilities or obligations incurred by the Company in connection with the preparation, negotiation, and consummation of this Agreement and the transactions contemplated hereby; |
(xv) | waive, release, authorize, amend, recommend or propose any release or relinquishment of any material contractual right, any license, lease, contract or other document or any other legal rights or claims; | ||
(xvi) | enter into any interest rate, currency swaps, xxxxxx, caps, collars, forward sales or other similar financial instruments; | ||
(xvii) | except as required by U.S. GAAP, or any other generally accepted accounting principles to which any Subsidiary may be subject or any applicable Laws, make any changes to the existing accounting practices of the Company or any Subsidiary or make any election in respect of Taxes inconsistent with past practice; | ||
(xviii) | waive, release, grant or transfer any rights of value, including Company Mining Rights, or modify or change any existing licence, lease, contract or other document; | ||
(xix) | except as otherwise provided herein, exercise any material rights arising under any contract, agreement, lease, license, arrangement or other document or refrain from exercising such rights without, in either case, the prior written approval of Parent; | ||
(xx) | abandon or fail to pursue any application for any material licence, permit, order, authorization, consent, approval or registration; | ||
(xxi) | terminate the employment of any senior management employee, except if such termination is for just cause; | ||
(xxii) | implement a shareholder rights plan; or | ||
(xxiii) | announce an intention, enter into any formal or informal agreement, or otherwise agree or commit to do any of the foregoing; |
(c) | Notwithstanding any other provision of this Section 5.1, the Company shall, prior to the Meeting, continue to the jurisdiction of British Columbia; | ||
(d) | the Company shall not, and shall cause each of its Subsidiaries not to: |
(i) | increase the remuneration or benefits payable or to become payable to its directors or officers (whether from the Company or any of its Subsidiaries); or enter into or modify any employment, severance, or similar agreements or arrangements with, or grant any bonuses, salary increases, severance or termination pay to, any officer of the Company or any of its Subsidiaries or members of any of their respective board of directors; other than pursuant to agreements already entered into as disclosed in the Company Disclosure Letter; or | ||
(ii) | except with respect to the consummation of the transactions contemplated hereby, hire any managerial employee, independent contractor or consultant of the Company or any of its Subsidiaries without the prior written consent of Parent (not to be unreasonably withheld or delayed); |
(e) | the Company shall not, and shall cause each of its Subsidiaries not to establish, adopt, enter into, amend or waive any performance or vesting criteria or accelerate vesting, exercisability or funding under any plan for the benefit or welfare of any directors, officers, current or former employees of the Company or any of its Subsidiaries; | ||
(f) | the Company shall and shall cause its Subsidiaries to ensure their current material insurance (or re-insurance) policies are not cancelled or terminated or any of the coverage thereunder is permitted to lapse, unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance and re-insurance companies of nationally recognized standing providing coverage equal to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect; | ||
(g) | the Company shall and shall cause its Subsidiaries to: |
(i) | use commercially reasonable efforts to preserve their respective business organizations and goodwill, to keep available the services of its and their officers and employees as a group and to maintain satisfactory relationships with suppliers, distributors, customers and others having business relationships with them; | ||
(ii) | not take any action or enter into any transaction which would, or which reasonably may be expected to (A) render any representation or warranty made by the Company in this |
Agreement inaccurate, (B) result in a breach of any of the Company’s covenants or obligations under this Agreement, (C) cause any condition in Section 6.1 or Section 6.2 to become incapable of satisfaction, or (D) materially delay the successful completion of the transactions contemplated by this Agreement or render the transactions contemplated by this Agreement incapable of completion; | |||
(iii) | promptly notify Parent orally and in writing of the occurrence of any Material Adverse Change or Material Adverse Effect or any change, event, occurrence or state of facts which could reasonably be expected to become a Material Adverse Change in respect of, or to have a Material Adverse Effect on, the Company Mining Rights or the Company, in the normal course of its or any of its Subsidiaries’ businesses or in the operation of its or any of its Subsidiaries’ properties and of any governmental or material third party complaints, investigations or hearings (or communications indicating that the same are being contemplated) or any material developments in relation to any of the foregoing, and the Company shall consult with Parent in respect of any matters relating to the foregoing; | ||
(iv) | not enter into any agreement, contract, lease, license or other binding obligation of the Company or any of its Subsidiaries: (A) containing (1) any material limitation or restriction on the ability of the Company or any of its Subsidiaries to engage in any type of activity or business (including following the transactions contemplated hereby) or (2) any material limitation or restriction on the manner in which, or the localities in which, all or any material portion of the business of the Company or any of its Subsidiaries or, following consummation of the transactions contemplated hereby, all or any material portion of the business of Parent or any of its Subsidiaries, is or would be conducted, (B) that would reasonably be expected to materially delay or prevent the consummation of the transactions contemplated by this Agreement, or (C) that involves or would reasonably be expected to involve payments outside the ordinary course of business; | ||
(v) | except as disclosed in the Company Disclosure Letter, not incur or commit to incur any capital expenditures or enter into any agreement obligating the Company or any of its Subsidiaries to provide for future capital expenditures outside the ordinary course of business and which are not material; and |
(vi) | not pay, discharge, settle or compromise any claim, action, litigation, arbitration or proceeding; |
(h) | the Company shall and shall cause each of its Subsidiaries to: |
(i) | use commercially reasonable efforts to duly and timely file all Tax Returns required to be filed by it on or after the date of this Agreement and all such Tax Returns will be true, complete and correct in all material respects and no material fact shall be omitted therefrom; | ||
(ii) | timely withhold, collect, remit and pay all Taxes which are to be withheld, collected, remitted or paid by it to the extent due and payable, including any instalments in respect of Taxes; | ||
(iii) | not make or rescind any express or deemed election relating to Taxes; | ||
(iv) | except as disclosed in the Company Disclosure Letter, not make a request for or pursue the obtaining of any Tax ruling or enter into any material agreement with any taxing authorities or consent to any agreement, extension or waiver extending the period for assessment, reassessment or collection of any Taxes; | ||
(v) | not settle or compromise any assessment, reassessment, claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes; and | ||
(vi) | not change any of its methods of reporting income, deductions or accounting for income Tax purposes from those employed in the preparation of its income Tax Return for the tax year ended December 31, 2006, except as may required by applicable Laws; |
(i) | the Company shall not and shall cause its Subsidiaries not to authorize or enter into or modify any contract, agreement, commitment or arrangement, to do any of the matters prohibited by the other paragraphs of this Section 5.1; | ||
(j) | the Company shall use its reasonable commercial efforts to maintain the listing of the Company Common Shares on the OTCBB until the Effective Date and shall cooperate with Parent and use reasonable commercial efforts to take, or cause to be taken, all actions and do or cause to be done all things, reasonably necessary, proper or advisable on its part under applicable Laws and rules and policies of the OTCBB to enable the delisting by the Company of the Company Common |
Shares from the OTCBB and the deregistration of the Company Common Shares under the 1934 Act as promptly as practicable after the Effective Date; | |||
(k) | the Company shall execute and deliver, or cause to be executed and delivered, at the closing of the Arrangement and the transactions contemplated hereby such customary agreements, certificates, resolutions, opinions and other closing documents as may be reasonably requested by Parent; | ||
(l) | the Company shall use its commercially reasonable efforts to complete the transactions contemplated hereby by the Outside Date; | ||
(m) | the Company shall, in all material respects, conduct itself so as to keep Parent fully informed as to the material decisions or actions required or required to be made with respect to the operation of its business and the businesses of each of its Subsidiaries; and | ||
(n) | the Board of Directors of the Company shall recommend to the Shareholders the approval of the Arrangement, shall not withdraw, modify or qualify (or propose to withdraw, modify or qualify) in any manner adverse to Parent such recommendation or the obtaining of Shareholders approval that is inconsistent with such recommendation, and shall promptly publicly reconfirm such recommendation upon the reasonable request from time to time of Parent, except as expressly permitted by Article 8. |
(1) | Subject to Section 5.10(3), each of Parent and Subco and the Company, as promptly as practicable after the execution and delivery of this Agreement, will: (i) make, or cause to be made, all such filings and submissions under all Laws applicable to it, as may be required or desirable for Parent and Subco and the Company to consummate the Arrangement, and (ii) use all commercially reasonable efforts to take, or cause to be taken, all other actions necessary, proper or advisable in order for it to fulfil its obligations under this Agreement including fulfilling as soon as is practicable any reasonable requests for additional information from any Governmental Entity. Subject to any applicable Laws, the Parties will coordinate and cooperate with one another in exchanging such information and supplying such assistance as may be reasonably requested by each in connection with the foregoing including providing each other with copies of all notices and information supplied or filed with any Governmental Entity (except for notices and information which Parent and Subco or the Company, in each case acting reasonably, considers confidential and sensitive which may be exchanged on |
a “counsel only” basis and filed on a confidential basis), and all notices and correspondence received from any Governmental Entity. | ||
(2) | Each of Parent and the Company shall furnish to the other, on a timely basis, all information as may be reasonably required to effectuate the foregoing actions, and each covenants that no information so furnished by it in writing in connection with those actions or otherwise in connection with the consummation of the Arrangement will contain any Misrepresentation. | |
(3) | In the event that Parent files a registration statement with the SEC pursuant to Section 5.10(3) hereof, then the Company shall use its commercially reasonable efforts to take all necessary action to permit Parent to file such registration statement, including providing audited annual financial statements and unaudited interim financial statements, company and shareholder information and any other required material, in each case as Parent may reasonably request, in order to comply with applicable Securities Laws and rules of the SEC. The Company shall use its commercially reasonable efforts to cause its independent auditor to deliver to Parent for inclusion in the registration statement an audit opinion covering any audited financial statements of the Company that are to be included in the registration statements by Regulation S-X or other applicable Securities Laws or rules of the SEC. The Company shall further use its commercially reasonable efforts to cause its independent auditor and any other of its advisors providing any expert information for inclusion in the registration statement to furnish Parent a consent permitting such inclusion and the identification in the registration statement of such advisor. For the purposes of this paragraph “expert information” is such material as is described in Section 11(a)(4) of the 1933 Act. |
(a) | except as expressly contemplated or permitted by this Agreement and applicable Laws use all commercially reasonable efforts to obtain the approval of the Arrangement Resolution by the Shareholders; | ||
(b) | use all commercially reasonable efforts to obtain all necessary waivers, consents and approvals from other parties to material agreements, leases and other contracts or agreements required or deemed advisable with the Arrangement; | ||
(c) | use all commercially reasonable efforts to defend all lawsuits or other legal, regulatory or other proceedings challenging this Agreement or the consummation of the Arrangement or any other related matters contemplated hereby; | ||
(d) | use all commercially reasonable efforts to oppose, cause to be lifted or rescinded any injunction or restraining order or other order adversely affecting the ability of the Parties to consummate the Arrangement or any other related matters contemplated hereby; and | ||
(e) | use all commercially reasonable efforts to effect all necessary or appropriate registrations and other filings and submissions of information requested by Governmental Entities. |
(a) | to obtain all consents, approvals and authorizations as are required to be obtained by the Company or any Subsidiary under any applicable Laws or from any Governmental Entity which would, if not obtained, prevent or materially impede the completion of the Arrangement and the transactions contemplated hereby or have a Material Adverse Effect; | ||
(b) | not take any action or permit any of its Subsidiaries to take any action that would render, or may reasonably be expected to render, any representation or warranty made by it in this Agreement untrue in any material respect at any time prior to the Effective Date or termination of this Agreement, whichever is first; and | ||
(c) | to fulfill all conditions and satisfy all provisions of this Agreement. |
(1) | Parent agrees that all rights to indemnification for acts or omissions occurring prior to the Effective Time existing as of the date of this Agreement in favour of the directors or officers of the Company as provided in its Constating |
Documents or in written contracts in effect on the date of this Agreement, shall survive the Arrangement and shall continue in full force and effect until the earlier of the expiration of the applicable statute of limitations with respect to any claims against directors or officers of the Company arising out of such acts or omissions and the sixth anniversary of the Effective Date, and Parent hereby assumes, effective upon consummation of the Arrangement, all such indemnification obligations of the Company with respect to any matters arising prior to the Effective Time. | ||
(2) | In the event the Company or any of its successors or assigns: (i) consolidates with or merges into any other person and shall not be the continuing or surviving corporation or entity of such consolidation or merger; or (ii) transfers all or substantially all of its properties and assets to any person, then, and in such case, proper provision shall be made so that Parent, shall assume the obligations set forth in this Section 5.8. |
(1) | Parent shall promptly advise the Company in writing of any: |
(a) | event, condition or circumstance that might be reasonably expected to cause any representation or warranty of Parent contained in this Agreement to be untrue or inaccurate on the Effective Date (or, in the case of any representation or warranty made as of a specified date, as of such specified date); | ||
(b) | Material Adverse Effect on Parent or any event, occurrence or development which would be reasonably expected to have a Material Adverse Effect on Parent; and | ||
(c) | material breach by Parent of any of its covenants, obligations or agreements contained in this Agreement. |
(2) | Parent shall perform all obligations required to be performed by it under this Agreement, cooperate with the Company in connection therewith, and do all such other acts and things as may be necessary or desirable in order to consummate and make effective, as soon as reasonably practicable, the transactions contemplated by this Agreement and, without limiting the generality of the foregoing, Parent shall: |
(a) | use commercially reasonable efforts to satisfy or cause to be satisfied as soon as reasonably practicable all conditions precedent that are set forth in Article 6; and |
(b) | use commercially reasonable efforts to have lifted or rescinded any injunction or restraining order or other order relating to Parent which may adversely affect the ability of the parties to consummate the transactions contemplated hereby. |
(3) | In the event that, due to an amendment to the 1933 Act, a change in the SEC’s interpretation of the 1933 Act or a decision of a court which provides that orders of Canadian courts such as the Final Order do not qualify under Section 3(a)(10) of the 1933 Act, the exemption from registration under Section 3(a)(10) of the 1933 Act is not available for any reason to exempt the issuance of Parent Common Shares in accordance with the Arrangement from the registration requirements of the 1933 Act, then (unless Parent shall reasonably determine that another registration exemption is available and that the Parent Common Shares issued in the Arrangement would not be restricted securities within the meaning of Rule 144 under the 1933 Act, subject to restrictions on transfer applicable to “affiliates” (as defined in Rule 405 under the 1933 Xxx) xx Parent following the Closing, and the Company, acting reasonably based on advice of United States counsel, agrees with such determinations) Parent shall take all necessary action to file a registration statement on Form F-4 (or on such other form that may be available to Parent) in order to register the issuance of the Parent Common Shares in accordance with the Arrangement, and shall use its reasonable commercial efforts to cause such registration statement to become effective as promptly as practicable. As promptly as practicable after the registration statement has become effective, the Company shall mail the Circular to its Shareholders. |
(1) | The Company acknowledges and agrees that Parent may issue additional Parent Common Shares after the date hereof in connection with a subsequent equity or convertible security financing, or in connection with an acquisition, and that as a result the pro forma ownership interest in Parent held by the former Shareholders may be diluted to a material degree. |
(2) | Parent and Subco acknowledge and agree that they are fully aware of the current status of the Settlement in respect of the Company Mining Rights and that the existence of such matters will not give rise to a right of Parent or Subco to terminate this Agreement. |
(a) | the Interim Order shall have been obtained in form and substance satisfactory to each of the Parties, acting reasonably, and shall not have been set aside or modified in a manner unacceptable to such Parties, acting reasonably, on appeal or otherwise; | ||
(b) | the Arrangement Resolution shall have been approved by Shareholders at the Meeting in accordance with the requirements of the Interim Order; | ||
(c) | the Final Order shall have been obtained in form and on terms satisfactory to each of Parent and the Company, acting reasonably, and shall not have been set aside or modified in a manner unacceptable to such parties, acting reasonably, on appeal or otherwise; | ||
(d) | the Arrangement Filings shall be in form and substance satisfactory to the Parties hereto, acting reasonably; and | ||
(e) | there shall not be in force any Laws, ruling, order or decree, and there shall not have been any action taken under any Laws or by any Governmental Entity or other regulatory authority, that makes it illegal or otherwise directly or indirectly restrains, enjoins or prohibits the consummation of the Arrangement and the transactions contemplated hereby in accordance with the terms hereof or that results or could reasonably be expected to result in a judgment, order, decree or assessment of damages, directly or indirectly, relating to the transactions contemplated hereby which has a Material Adverse Effect. |
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(a) | all consents, authorizations, waivers, permits, exemptions, reviews, orders, rulings, decisions and approvals of, and any registrations and filings with, any Governmental Entity and the expiry, waiver or termination of any waiting or suspensory periods, in each case that Parent and Subco reasonably consider to be necessary or desirable in connection with, or required to permit the Parties to consummate the Arrangement shall have been obtained, received or concluded or, in the case of waiting or suspensory periods, shall have expired or been terminated, each on terms that are satisfactory to Parent and Subco, acting reasonably; | ||
(b) | Parent and Subco shall have determined, acting reasonably, that (x) no act, action, suit or proceeding shall have been taken or threatened in writing before or by any Governmental Entity in Canada or elsewhere, whether or not having the force of Law, and (y) no Law shall have been proposed, enacted, promulgated or applied, in either case: |
(i) | which, if the Arrangement were consummated, would have a Material Adverse Effect; or | ||
(ii) | which would prevent or materially delay the completion of the Arrangement; or | ||
(iii) | seeking to prohibit or limit the ownership or operation by Parent and Subco of any material portion of the business, assets or property of the Company or any of its Subsidiaries or to compel Parent and Subco or their Subsidiaries to dispose of or hold separate any material portion of the business, assets or property of the Company or any of its Subsidiaries as a result of the Arrangement; |
(c) | (i) all representations and warranties of the Company qualified by references to materiality or by the expression “Material Adverse Change” or “Material Adverse Effect” shall be true and correct in all respects, and (ii) all representations and warranties not qualified by references to materiality or by the expression “Material Adverse Change” or “Material Adverse Effect” shall be true and correct in all material respects, in either case as if made on and as of the Effective Date, except to the extent such representations and warranties speak as of an earlier date, in which event such representations and warranties shall be true and correct as of such earlier date, and Parent and Subco shall have received a certificate of the Chief Executive Officer and the Chief Financial Officer of the Company addressed to Parent and Subco and dated as of the Effective Date confirming the same, such certificate |
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to be in form and substance satisfactory to Parent and Subco, acting reasonably; | |||
(d) | the Company shall have complied with all covenants and obligations in all material respects that are to be complied with under this Agreement at or prior to the Effective Date and Parent and Subco shall have received a certificate of the Chief Executive Officer of the Company addressed to Parent and Subco and dated as of the Effective Date confirming the same, such certificate to be in form and substance satisfactory to Parent and Subco, acting reasonably; | ||
(e) | since the date of this Agreement, there shall not have occurred a Material Adverse Change or any one or more changes, effects, events, occurrences or states of facts that, either individually or in the aggregate, have a Material Adverse Effect; | ||
(f) | all third party and other consents, waivers, permits, exemptions, orders, approvals, agreements and amendments and modifications to agreements or arrangements that Parent and Subco reasonably consider to be necessary or desirable shall have been obtained or received on terms that are satisfactory to Parent and Subco acting reasonably, and reasonable evidence of this shall have been delivered to Parent and Subco; | ||
(g) | the directors of the Company and each of the Subsidiaries shall have adopted all necessary resolutions and all other necessary corporate action shall have been taken by the Company and each of its Subsidiaries to permit the consummation of the transactions contemplated herein; | ||
(h) | Dissent Rights shall not have been exercised with respect to more than 5% of the Company Common Shares in connection with the Arrangement and Parent shall have received a certificate dated the day immediately preceding the Effective Date of the officer of the Company to such effect; | ||
(i) | TSX shall have conditionally approved the listing thereon of Parent Common Shares to be issued pursuant to the Arrangement as of the Effective Date, or as soon as possible thereafter, subject only to compliance with the usual requirements of the TSX; | ||
(j) | Parent shall have reasonably received an opinion (the “Title Opinion”) of Montana counsel, in form and substance reasonably satisfactory to Parent, as to the Company’s interest in the Company |
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Mining Rights. Within 30 Business Days after Parent’s receipt of the Title Opinion Parent may notify the Company that it is not satisfied, acting reasonably, with the results of the Title Opinion and that it has elected to terminate this Agreement, failing which Parent and Subco will be deemed to have accepted the Title Opinion and this condition will no longer apply; and | |||
(k) | the Company shall have continued to the jurisdiction of British Columbia in accordance with Section 5.1(c). |
(a) | (i) all representations and warranties of Parent and Subco qualified by references to materiality or by the expression “Material Adverse Change” or “Material Adverse Effect” shall be true and correct in all respects, and (ii) all representations and warranties not qualified by materiality or by the expression “Material Adverse Change” or “Material Adverse Effect” shall be true and correct in all material respects, in either case as if made on and as of the Effective Date, except to the extent such representations and warranties speak as of an earlier date, in which event such representations and warranties shall be true and correct as of such earlier date, and except, in each case, where any failure or breaches of representations and warranties would not have a Parent Material Adverse Effect, and the Company shall have received a certificate from two senior officers of Parent and Subco addressed to the Company and dated as of the Effective Date confirming the same, such certificate to be in form and substance satisfactory to the Company, acting reasonably; | ||
(b) | Parent and Subco shall have complied with all covenants and obligations in all material respects that are to be complied with under this Agreement by Parent and Subco at or prior to the Effective Date, except where any breach or non-compliance would not materially impede the completion of the Arrangement and the Company shall have received a certificate from two senior officers of Parent and Subco addressed to the Company and dated as of the Effective Date |
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confirming the same, such certificate to be in form and substance satisfactory to the Company, acting reasonably; and | |||
(c) | The Parent Common Shares comprising the Share Consideration issuable at the Effective Time shall have been approved for listing on the TSX and, subject to any restrictions applicable to a control person of Parent, will be freely tradeable by the holders thereof. |
(a) | at any time prior to the Effective Time by mutual consent of Parent and the Company; | ||
(b) | by Parent, if Parent and Subco are not in material breach of their respective obligations under this Agreement and any representation or warranty on the part of the Company set forth in this Agreement fails to continue to be true and correct, in any material respect, or there has been a breach of or failure to perform any covenant or agreement on the part of the Company set forth in this Agreement which failure, breach or failure to perform (i) would cause the conditions set forth in Section 6.1 or Section 6.2 not to be satisfied, and (ii) either cannot be cured or is not waived by Parent at or before the Effective Time and has not been cured prior to the tenth Business Day following receipt by the Company of written notice of such breach from Parent; | ||
(c) | by the Company, if the Company is not in material breach of its obligations under this Agreement and any representation or warranty on the part of Parent or Subco set forth in this Agreement fails to continue to be true and correct, in any material respect, or there has been a breach of or failure to perform any covenant or agreement on the part of Parent or Subco set forth in this Agreement, which failure, breach or failure to perform (i) would cause the conditions set forth in Section 6.1 or Section 6.3 not to be satisfied, and (ii) either cannot be cured or is not waived by the Company at or before the Effective Time and has not been cured prior to the tenth Business Day following receipt by Parent of written notice of such breach from the Company; |
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(d) | by either Party if the Arrangement has not been consummated by the Outside Date, provided that the right to terminate this Agreement pursuant to this Section 7.1(d) shall not be available to a Party if any action of such Party or the failure of such Party to perform any of its obligations under this Agreement required to be performed at or prior to the Effective Time shall have resulted in the conditions contained in Article 6 not having been satisfied prior to the Outside Date; | ||
(e) | by Parent if: (i) the Board of Directors of the Company withdraws, modifies, changes or qualifies (or resolves to do so) its approval or recommendation of this Agreement or the Arrangement in a manner adverse to Parent and Subco; or (ii) the Board of Directors of the Company or any committee thereof or the board of directors or any committee thereof of any of the Subsidiaries approves or recommends an Acquisition Proposal or the Company or any Subsidiary enters into a written agreement in respect of an Acquisition Proposal; or (iii) the Board of Directors of the Company or any committee thereof fails to publicly recommend or reaffirm its approval or recommendation of the Arrangement within two calendar days of any written request to do so by Parent; or (iv) the Board of Directors of the Company or the board of directors of any of the Subsidiaries or the Company or any of its Subsidiaries publicly proposes or publicly states its intention to do any of the foregoing; | ||
(f) | by either Party, if the Shareholders do not approve the Arrangement Resolution in the manner directed by the Court; | ||
(g) | by Parent, if Parent and Subco are not in material breach of their respective obligations under this Agreement and there has been an intentional, wilful or deliberate breach or failure to perform any covenant or agreement on the part of the Company set forth in Article 2, Section 5.1(g)(ii), Section 5.1(n), Section 5.2, Section 5.5, Section 5.8 or Article 8 of this Agreement; | ||
(h) | by the Company, if the Company proposes to enter into a definitive agreement with respect to a Superior Proposal in compliance with the provisions of Section 8.1, provided that the Company has previously paid to Parent the applicable Termination Fee and further provided that the Superior Proposal did not result from a breach by the Company of its obligations under Section 8.1 of this Agreement; and | ||
(i) | by either Party, if a Governmental Entity or court of competent jurisdiction shall have issued a non-appealable final order, decree or ruling or taken any other non-appealable final action, in each case, |
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having the effect of permanently restraining, enjoining or otherwise prohibiting the transactions contemplated hereby; provided that the right to terminate this Agreement under this Section 7.1(i) shall not be available to any Party whose material failure to fulfill any obligation under this Agreement has been the principal cause of or resulted in such order, decree, ruling or action. |
(1) | Subco shall be entitled to a termination fee of $250,000 (the “Termination Fee”) upon the occurrence of any of the following events (each a “Termination Fee Event”) which shall be paid by the Company to Subco within the time specified in respect of each such Termination Fee Event: |
(a) | this Agreement is terminated pursuant to Section 7.1(e) or Section 7.1(g), in which case the Termination Fee shall be paid to Subco on the third Business Day following such termination; or | ||
(b) | this Agreement is terminated in accordance with Section 7.1(d) or Section 7.1(f) and a bona fide Acquisition Proposal has been publicly announced by any person other than Parent or Subco and not withdrawn, and an agreement in respect of an Acquisition Proposal is entered into or agreed to by the Company or any of its Subsidiaries or an Acquisition Proposal is completed during the twelve (12) months following the termination of this Agreement, in which case the Termination Fee shall be paid to Subco on the earlier of the date that an Acquisition Proposal is entered into or agreed to or concurrently with the consummation of the Acquisition Proposal. |
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(a) | the Company shall not be obligated to make more than one payment under Section 7.4(1) if one or more of the events specified therein occurs; | ||
(b) | the Termination Fee shall be paid by the Company to Subco by wire transfer in immediately available funds to an account specified by Subco; and | ||
(c) | the obligations of the Company under this Section 7.4 shall survive the termination of this Agreement, regardless of the circumstances thereof. |
(1) | On and after the date of this Agreement, the Company shall not, and shall cause its Subsidiaries not to directly or indirectly, through any officer, director, employee, advisor, investment banker, representative, agent or otherwise: |
(a) | make, solicit, assist, initiate, encourage or otherwise facilitate (including by way of furnishing non-public information, permitting or facilitating (as applicable) any visit to any facilities or properties of the Company or any Subsidiary, or entering into any form of written or oral agreement, arrangement or understanding) any inquiries from or submissions of proposals or offers (whether or not in writing and whether or not delivered to Shareholders) from any other Person (including from any of such Person’s officers, directors or employees) relating to (i) any liquidation or winding-up, dissolution, consolidation, reorganization, recapitalization, merger, take-over bid, amalgamation or arrangement involving the Company or any of its |
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Subsidiaries; (ii) any acquisition or purchase (or any lease or other arrangement having the same economic effect as a sale) in a single transaction or a series of related transactions of all or a material portion of the assets of, or of more than 20 percent of any class of the share capital, voting securities or other equity interests (including Company Common Shares) in, the Company or any of its Subsidiaries; (iii) any similar transaction or business combination of, or involving, the Company or any of its Subsidiaries, other than with Parent or Subco; (iv) any sale of any interest in any material mineral property owned by the Company or any Subsidiary; or (v) any proposal or offer (written or oral) to do, or public announcement or other public disclosure of an intention to do, any of the foregoing from any Person other than Parent or Subco (any of such foregoing inquiries or proposals being referred to herein as an “Acquisition Proposal”); | |||
(b) | participate in any discussions or negotiations regarding, or furnish to any Person any information with respect to, any Acquisition Proposal or otherwise cooperate in any way with, or assist or participate in, facilitate or encourage, any effort or attempt by any other Person to make an Acquisition Proposal; | ||
(c) | withdraw, modify, qualify or change, or propose publicly to withdraw, modify, qualify or change, in any manner, the approval or recommendation of the Board of Directors of the Company or any committee thereof of this Agreement or the transactions contemplated hereby; | ||
(d) | agree to, approve or recommend or remain neutral with respect to, or propose publicly to agree to, approve or recommend or remain neutral with respect to, any Acquisition Proposal; or | ||
(e) | accept or enter into, or publicly propose to accept or enter into, any letter of intent, agreement in principle, agreement, arrangement, understanding or undertaking related to any Acquisition Proposal or requiring the Company to abandon, terminate or fail to consummate the Arrangement or providing for the payment of any break, termination or other fees or expenses to any Person in the event that the Company or any of its Subsidiaries completes the transactions contemplated hereby or any other transaction with Parent or any of its affiliates agreed to prior to any termination of this Agreement, whether formal or informal; |
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hereof and ending at the time of the approval of the Arrangement Resolution by Shareholders, to engage in discussions or negotiations with or provide information pursuant to Section 8.1(3) below to any Person in response to an unsolicited bona fide written Acquisition Proposal which is not withdrawn if and only to the extent that: (i) it has received such unsolicited bona fide written Acquisition Proposal from an arm’s length third party for 100% of the Company Common Shares (or all or substantially all of the Company’s assets) that did not otherwise result from a breach of this Article 8: (A) that is not subject to any financing condition and in respect of which any required financing to complete such Acquisition Proposal has been demonstrated to the satisfaction of the Board of Directors of the Company, acting in good faith (after receipt of advice from its financial advisors and its outside legal counsel), has been obtained, (B) that is not subject to any due diligence and/or access condition for a period of more than 10 Business Days, and (C) that the Board of Directors of the Company has determined in good faith (after consultation with its financial advisors and with its outside legal counsel) is reasonably capable of completion without undue delay taking into account all legal, financial, regulatory and other aspects of such Acquisition Proposal and the party making such Acquisition Proposal and such Acquisition Proposal would, if consummated in accordance with its terms, but without assuming away the risk of non-completion, result in a transaction which is more favourable, from a financial point of view, to the Shareholders than the Arrangement (including any amendment to the terms and conditions of the Arrangement proposed by Parent and Subco pursuant to this Section 8.1) (any such Acquisition Proposal being referred to herein as a “Superior Proposal”); (D) prior to providing any information or data to any such Person or entering into discussions or negotiations with any such Person who has made an Acquisition Proposal, the Company has complied with Section 8.1(3); and (E) the Board of Directors of the Company determines in good faith after consultation with outside legal counsel and financial advisors, as reflected in the minutes of the meeting of the Board of Directors of the Company, that the failure to take such action would be inconsistent with its fiduciary duties under applicable Laws. | |||
(2) | The Company shall immediately cease and cause to be terminated and shall ensure that the officers, directors, employees, representatives and agents of the Company and each of its Subsidiaries immediately cease and cause to be terminated, any existing solicitations, discussions, negotiations or activities with any Person(s) (other than Parent and Subco) that may be on-going with respect to any potential Acquisition Proposal whether or not initiated by the Company or any of its Subsidiaries and shall as soon as possible request the return or destruction of all confidential information (and all materials including or incorporating any confidential information) provided (or |
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prepared) in connection therewith. The Company shall not release any third party from or waive or provide any consent in respect of any confidentiality or standstill agreement. | |||
(3) | From and after the date of this Agreement, the Company shall immediately notify Parent, at first orally and then promptly (and in any event within 24 hours) in writing, of any proposal, inquiry, offer (or any amendment thereto) or request relating to or constituting an Acquisition Proposal, any request for discussions or negotiations or any inquiry that could lead to an Acquisition Proposal or any request for non-public information relating to the Company or any of its Subsidiaries in connection with an Acquisition Proposal or for access to the properties, books or records of the Company or any Subsidiary by any Person of which any of the Company’s or any of its Subsidiaries’ directors, officers, employees, representatives or agents became aware, or any amendments to the foregoing. Such notice to Parent shall be made, from time to time, first immediately orally and then promptly (and in any event within 24 hours) in writing and shall indicate the identity of the Person making such proposal, inquiry, offer, request or contact, all material terms and conditions thereof and such other details of the proposal, inquiry or contact known to the Company or any of its Subsidiaries and shall include copies of any such proposal, inquiry, offer or request or any amendment to any of the foregoing. The Company shall also provide such other details of the proposal, inquiry, offer or request, or any amendment to the foregoing, as Parent may reasonably request. The Company shall keep Parent promptly and fully informed of the status including any change to the material terms of any such proposal, inquiry, offer or request, or any amendment to the foregoing, and will respond promptly to all inquiries by Parent with respect thereto. | ||
(4) | During the period commencing on the date hereof and ending upon the approval of the Arrangement Resolution by the Shareholders, the Company may accept, approve or recommend, or enter into any agreement (a “Proposed Agreement”) with any Person relating to, any unsolicited Acquisition Proposal that did not otherwise result from a breach of Article 8 which is not withdrawn if and only if: (i) the Acquisition Proposal constitutes a Superior Proposal and does not provide for the payment of any “hello”, “break”, termination or other fees or expenses to the other party in the event that the Company or any of its Subsidiaries completes the transactions contemplated by this Agreement or any similar other transaction with Parent or any of its affiliates agreed to prior to any termination of this Agreement; (ii) the Company has complied with Section 8.1(1)(a) through Section 8.1(1)(e), inclusive; (iii) such Acquisition Proposal is in writing and Parent has been provided with a copy of the document containing such |
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Superior Proposal; (iv) five Business Days shall have elapsed from the later of (A) the date Parent received written notice of the Company’s proposed determination to accept, approve, recommend or enter into any agreement relating to such Superior Proposal, and (B) the date Parent received a copy of such Superior Proposal and Proposed Agreement; (v) if Parent and Subco have proposed to amend the terms of the Arrangement or other terms of the Arrangement during the five Business Day period referred to above (which Parent and Subco have the right but not the obligation to do), the Board of Directors of the Company (after receiving advice from its financial advisors and outside legal counsel) shall have determined in good faith that the Acquisition Proposal continues to constitute a Superior Proposal compared to the terms of the Arrangement as proposed to be amended by Parent and Subco; (vi) the Board of Directors of the Company, after consultation with outside legal counsel, determines in good faith that the failure to take such action would be inconsistent with its fiduciary duties under applicable Laws; (vii) the Company concurrently terminates this Agreement pursuant to Section 7.1; and (viii) the Company has previously paid to Parent the Termination Fee payable pursuant to Section 7.4. | |||
(5) | The Company acknowledges and agrees that, during the five Business Day period referred to in Section 8.1(4), or such longer period as the Company may approve for such purpose, Parent and Subco shall have the opportunity, but not the obligation, to propose to amend the terms of this Agreement and/or the Arrangement. If Parent elects to amend the terms of this Agreement to increase the amount of the Share Consideration, the value of the increased Share Consideration shall be determined based on the volume weighted average price of the Parent Common Shares for the 20 trading days prior to the date Parent notified the Company that it elected to so amend this Agreement, and the value of the Share Consideration so determined will be deemed to be equal to an Acquisition Proposal in the same amount that is payable in cash. The Board of Directors of the Company will review any proposal by Parent and Subco to amend the terms of this Agreement and/or the Arrangement in order to determine, in good faith in the exercise of its fiduciary duties, whether Parent and Subco’s proposal to amend this Agreement and/or the Arrangement would result in the Acquisition Proposal not being a Superior Proposal compared to the terms of this Agreement and/or the Arrangement as proposed to be amended. The Board of Directors of the Company shall promptly reaffirm its recommendation of the Arrangement by press release after: (x) any Acquisition Proposal (which is not determined to be a Superior Proposal) is publicly announced or made; or (y) the Board of Directors of the Company determines that a proposed amendment to the terms of this Agreement and/or the Arrangement would result in the Acquisition Proposal not being a Superior Proposal. Parent and |
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its counsel shall be given a reasonable opportunity to review and comment on the form and content of any such press release. Nothing in this Agreement shall prevent the Board of Directors of the Company from responding through a directors’ circular or otherwise as required by applicable Securities Laws to an Acquisition Proposal that it determines is not a Superior Proposal. The Company also acknowledges and agrees that each successive modification of any Acquisition Proposal shall constitute a new Acquisition Proposal for purposes of this Section 8.1 and shall initiate a new five Business Day period. | |||
(6) | The Company shall ensure that the officers, directors and employees of the Company and each of its Subsidiaries and any investment bankers or other advisors or representatives retained by the Company and any of its Subsidiaries in connection with the transactions contemplated by this Agreement are aware of the provisions of this Section 8.1, and the Company shall be responsible for any breach of this Section 8.1 by such officers, directors, employees, investment bankers, advisors or representatives. |
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(1) | Except as provided for in Section 9.4(2), each Party shall pay its own expenses incurred in connection with this Agreement, the completion of the transactions contemplated hereby and/or the termination of this Agreement, irrespective of the completion of the transactions contemplated hereby. |
(2) | Parent shall pay to the Company, in immediately available funds to an account designated by the Company, the reasonable documented expenses of the Company’s BVI counsel incurred in connection with the transactions contemplated by this Agreement not to exceed C$80,000, in the event that this Agreement is terminated in accordance with Sections 7.1(a), (c), (d), (f) or (i) therein. However, it is agreed that no payment will be made by Parent if the Termination Fee is payable pursuant to Section 7.4. If the Termination Fee becomes payable after the payment by Parent of the amount contemplated herein, it is agreed that the Termination Fee will be increased to reflect such amount paid by Parent to the Company. |
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Facsimile: (000) 000-0000
0000 Xxxxxxxx Xxxxx Xxxx
000 Xxx Xxxxxx
Xxxxxxx, XX X0X 0X0
Xxxxxx
Facsimile: (000) 000-0000
Suite 204
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxx, XX X0X 0X0
Xxxxxx
Facsimile: (000) 000-0000
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000 Xxxxxxx Xxxxxx
P.O. Box 49314
Suite 2600, Three Bentall Centre
Xxxxxxxxx XX X0X 0X0
Facsimile: (000) 000-0000
(1) | This Agreement and the Exclusivity Agreement constitute the entire agreement and supersede all other prior agreements and undertakings, both written and oral, between the Parties with respect to the subject matter hereof. Other than as set forth in such agreements, no representation or warranty has been given by any Party to another. |
(2) | This Agreement: (i) is not intended to confer upon any other Person any rights or remedies hereunder; (ii) shall not be assigned by operation of law or otherwise, except that Parent and Subco may assign all or any portion of its rights under this Agreement to any Affiliate provided such Affiliate executes and delivers a counterpart of this Agreement pursuant to which it agrees to be bound by the terms of this Agreement as if it were Parent and Subco but no such assignment shall relieve Parent and Subco of its obligations hereunder; and (iii) shall be governed in all respects, including validity, interpretation and effect, exclusively by the Laws of Ontario, and the laws of Canada applicable therein, without giving effect to the principles of conflict of laws thereunder. |
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NEVORO INC. |
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By: | (signed) “Xxxxxxx X. Xxxxxx” | |||
Name: | Xxxxxxx X. Xxxxxx | |||
Title: | President, CEO | |||
NEVORO PLATINUM INC. |
||||
By: | (signed) “Xxxxxxx X. Xxxxxx” | |||
Name: | Xxxxxxx X. Xxxxxx | |||
Title: | President, CEO | |||
AURORA METALS (BVI) LIMITED |
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By: | (signed) “A. Xxxxxxx Xxxxxxxxxx” | |||
Name: | A. Xxxxxxx Xxxxxxxxxx | |||
Title: | President & Director | |||
FORM OF ARRANGEMENT RESOLUTION
1. | The arrangement (the “Arrangement”) under Section 288 of the Business Corporations Act (British Columbia) (the “BCBCA”) involving Aurora Metals (BVI) Ltd. (the “Company”), pursuant to the arrangement agreement (the “Arrangement Agreement”) among the Company, Nevoro Inc. and Nevoro Platinum Inc., dated April 17, 2008, all as more particularly described and set forth in the Management Information Circular (the “Circular”) of the Company dated •, 2008, accompanying the notice of this meeting (as the Arrangement may be or may be modified or amended) is hereby approved. |
2. | The plan of arrangement (the “Plan of Arrangement”) involving the Company and implementing the Arrangement, the full text of which is set out as Schedule ”B” to the Arrangement Agreement (as the Plan of Arrangement may be or may have been modified or amended) is hereby approved. |
3. | Notwithstanding that this resolution has been passed (and the Arrangement adopted) by the shareholders of the Company or that the Arrangement has been approved by the Supreme Court of British Columbia, the directors of the Company are hereby authorized and empowered without further notice to or approval of the shareholders of the Company: (i) to amend the Arrangement Agreement or the Plan of Arrangement to the extent permitted by the Arrangement Agreement or the Plan of Arrangement; and (ii) subject to the terms of the Arrangement Agreement, not to proceed with the Arrangement. |
4. | Any officer or director of the Company is hereby authorized and directed for and on behalf of the Company to execute, under the seal of the Company or otherwise, and to deliver such documents as are necessary or desirable to the Registrar under the BCBCA in accordance with the Arrangement Agreement for filing. |
5. | Any officer or director of the Company is authorized to execute and deliver all other documents and do all acts or things as may be necessary or desirable to give effect to this resolution. |
FORM OF PLAN OF ARRANGEMENT
OF THE BUSINESS CORPORATIONS ACT (BRITISH COLUMBIA)
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(a) | the Company Common Shares in respect of which Shareholders who have exercised a Dissent Right in accordance with Article IV (and the right of such Shareholder to dissent with respect to such Company Common Shares has not been terminated or ceased to apply to the Shareholder) will be deemed to have been transferred to the Company and such holders cease to have any rights as Shareholders other than the right to be paid the fair value of their Company Common Shares in accordance with Article IV; | ||
(b) | at the time of the step contemplated in section 3.2(a), with respect to each Company Common Share transferred pursuant to section 3.2(a): |
(i) | the holder of such Company Common Share will cease to be the holder of such Company Common Share; | ||
(ii) | the holder’s name will be removed from the central securities register of the Company with respect to such Company Common Share; | ||
(iii) | legal and beneficial title to such Company Common Share will rest in the Company and the Company will be and be deemed to be the transferee of such Company Common Share and such Company Common Share shall be cancelled; | ||
(iv) | the certificate representing such Company Common Share shall be deemed to have been cancelled; and |
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(v) | the holder of such Company Common Share shall be deemed to have executed and delivered all consents, assignments and waivers, statutory or otherwise, required to effect such transfer; |
(c) | after the step described in Section 3.2(a), the Company and Subco will merge with the same effect as if they were amalgamated under Section 269 of the BCBCA, except that the separate legal existence of the Company will not cease and the Company will survive the merger; | ||
(d) | without limiting the foregoing, at the time of the step described in Section 3.2(c), the separate legal existence of Subco will cease without Subco being liquidated or wound-up; the Company and Subco will continue as one company; and, as a result, the property and liabilities of Subco will become the property and liabilities of the Company; | ||
(e) | at the time of the step described in Section 3.2(c) and from and after this time: |
(i) | the Company will own and hold all property of the Company and Subco, and, without limiting the provisions hereof, all rights of creditors or others will be unimpaired by such merger, and all obligations of the Company and Subco , whether arising by contract or otherwise, may be enforced against the Company to the same extent as if such obligations had been incurred or contracted by it; | ||
(ii) | the Company will continue to be liable for the obligations of the Company and Subco; | ||
(iii) | all rights, contracts, permits and interests of the Company and Subco will continue as rights, contracts, permits and interests of the Company as if the Company and Subco continued and, for greater certainty, the merger will not constitute a transfer or assignment of the rights or obligations of either of the Company or Subco under any such rights, contracts, permits and interests; | ||
(iv) | any existing cause of action, claim or liability to prosecution will be unaffected; | ||
(v) | a legal proceeding being prosecuted or pending by or against either the Company or Subco may be continued by or against the Company; |
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(vi) | a conviction against, or ruling, order or judgment in favour of or against either Subco or the Company may be enforced by or against the Company; | ||
(vii) | each Company Common Share shall be cancelled and the holders thereof shall receive, for each such Company Common Share, the Share Consideration; | ||
(viii) | each common share in the capital of Subco shall be cancelled and the holders thereof shall receive, for each such share, one common share in the capital of the merged company; | ||
(ix) | in consideration of the issuance of Parent Common Shares, the merged company shall issue to Parent one common share in the capital of the merged company for each Parent Common Share issued; | ||
(x) | the capital of the common shares of the merged company and the stated capital of the shares of Parent issued by Parent pursuant to Section 3.2(e)(vii) will be as follows: |
(A) | the stated capital of the common shares issued by Parent pursuant to Section 3.2(e)(vii) shall be an amount equal to the lesser of the fair market value of the Company Common Shares immediately prior to the merger and the paid up capital, as that term is defined in the Tax Act, attributable to the Company Common Shares immediately prior to the merger; and | ||
(B) | the capital of the common shares in the merged company issued to Parent pursuant to Section 3.2(e)(ix) will be an amount equal to the aggregate of the paid up capital, as that term is defined in the Tax Act, attributable to the shares of Subco and the Company Common Shares immediately prior to the merger; |
(xi) | the name of the merged company shall be “[Aurora Metals Inc.]”; | ||
(xii) | the address of the registered and records office shall be Xxxxx 0000, Xxxx Xxxxx, 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, X.X. X0X 0X0; | ||
(xiii) | the merged company shall be authorized to issue an unlimited number of common shares; |
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(xiv) | the notice of amalgamation of the merged company shall be substantially in the form attached as Appendix I to this Plan of Arrangement; | ||
(xv) | the notice of articles of the merged company shall be substantially in the form attached as Appendix II to this Plan of Arrangement; | ||
(xvi) | the articles of the merged company shall be substantially in the form attached as Appendix III to this Plan of Arrangement; | ||
(xvii) | the first annual meeting of the merged company will be held within 18 months from the Effective Date; and | ||
(xviii) | the first directors of the merged company following the merger shall be the persons set out in the notice of articles referred to in Section 3.2(e)(xv), |
(a) | On or immediately prior to the Effective Date, Parent shall deliver or arrange to be delivered to the Depositary certificates representing the requisite Parent Common Shares required to be issued in accordance with the provisions of subsection 3.2(e) hereof, which certificates shall be held by the Depositary as agent and nominee for Former Shareholders for distribution to such Former Shareholders in accordance with the provisions of Article V hereof. | ||
(b) | In accordance with the provisions of Article V hereof, Former Shareholders shall be entitled to receive the Share Consideration to which they are entitled pursuant to Section 3.2(e), hereof. |
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(a) | are ultimately determined to be entitled to be paid fair value of the Company Common Shares in respect of which they have exercised Dissent Rights will be deemed to have irrevocably transferred such Company Common Shares to the Company pursuant to section 3.2(a); or | ||
(b) | are ultimately not entitled, for any reason, to be paid fair value for the Company Common Shares in respect of which they have exercised Dissent Rights will be deemed to have participated nunc pro tunc in the Arrangement on the same basis as a holder of Company Common Shares that has not exercised Dissent Rights as at and from the time specified in sections 3.2(c), (d) and (e) and will receive, and be entitled to receive, only the consideration for each Company Common Share on the basis set forth in sections 3.2(c), (d) and (e), |
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(a) | Upon surrender to the Depositary for cancellation of a certificate which immediately prior to the Effective Time represented one or more outstanding Company Common Shares which were cancelled in accordance with subsection 3.2(e) hereof, together with such other documents and instruments as the Depositary may reasonably require, the holder of such surrendered certificate shall be entitled to receive in exchange therefor, and the Depositary shall deliver to such holder following the Effective Time, a certificate representing the Parent Common Shares to which such holder is entitled to receive in accordance with subsection 3.2(e) hereof. | ||
(b) | After the Effective Time and until surrendered for cancellation as contemplated by Section 5.2(a) hereof, each certificate which immediately prior to the Effective Time represented one or more Company Common Shares shall be deemed at all times to represent only the right to receive in exchange therefor the entitlement to the Share Consideration which the holder of such certificate is entitled to receive in accordance with Section 5.2(a) hereof. |
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(a) | Subject to Section 6.1(b), (d) and (e), Parent, Subco and the Company reserve the right to amend, modify or supplement this Plan of Arrangement at any time and from time to time, provided that each such amendment, modification or supplement must be (i) set out in writing, (ii) agreed to in writing by Parent, Subco and the Company, (iii) filed with the Court and, if made following the Meeting, approved by the Court, and (iv) communicated to the holders of Company Common Shares if and as required by the Court. | ||
(b) | Notwithstanding anything herein or in the Arrangement Agreement, Parent and Subco shall be entitled, at any time prior to or following the Meeting, to modify this Plan of Arrangement to increase the consideration Parent is prepared to make available to Shareholders pursuant to the Arrangement whether or not the Board of Directors of the Company has changed its recommendation, provided that Parent and Subco shall use their commercially reasonable efforts to provide not less than one Business Day’s prior written notice of such proposal to the Company. Any such amendment, modification or supplement to this Plan of Arrangement shall become part of this Plan of Arrangement for all purposes. | ||
(c) | Any amendment, modification or supplement to this Plan of Arrangement may be proposed by the Company, Parent or Subco at any time prior to the Meeting, provided that the Company (except in the case of amendments contemplated in Section 6.1(b)), Parent and Subco shall have consented thereto in writing, with or without any other prior notice or communication. Any such proposed amendment, modification or supplement to this Plan of Arrangement shall become part of this Plan of Arrangement for all purposes. | ||
(d) | Any amendment, modification or supplement to this Plan of Arrangement that is approved by the Court following the Meeting shall be effective only if (i) it is consented to in writing by each of Parent, Subco and the Company (except in the case of amendments contemplated in Section 6.1(b)), (ii) it is filed with the Court (other than amendments contemplated in Section 6.1(b) or (e), which shall not require such filing), and (iii) it is communicated to and, if required by the Court, consented to by holders of the Company Common Shares voting in the manner directed by the Court. |
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(e) | Any amendment, modification or supplement to this Plan of Arrangement may also be made following the Effective Time unilaterally by the merged company, provided that it concerns a matter which, in the reasonable opinion of the merged company, is of an administrative nature required to better give effect to the implementation of this Plan of Arrangement and is not adverse to the financial or economic interests of the Former Shareholders. Notwithstanding the foregoing, no amendment, modification or supplement to this Plan of Arrangement made following the Effective Date shall be effective prior to the filing of the Arrangement Filings. |