Exhibit 10.2.6
AMENDMENT NO. 6 AND WAIVER
AMENDMENT NO. 6 AND WAIVER (this "Amendment") dated as of June 14,
2002, among XX XXXXXX CORPORATION (the "Company"), a corporation organized under
the laws of the State of Colorado, the Lenders named on the signature pages
hereof, and BNP PARIBAS, as successor-in-interest to Banque Paribas, New York
Branch, in its capacity as agent for the Lenders (the "Agent").
WITNESSETH:
WHEREAS, the Company, the Lenders and the Agent have entered into the
Loan Agreement dated as of December 6, 1995, and amended as of April 8, 1998,
August 19, 1998, July 8, 1999, March 26, 2001 and March 25, 2002 (as amended,
modified and supplemented from time to time, the "Loan Agreement"), providing
for certain Loans to be made to the Company by the Lenders to finance the
acquisition and construction of the Project;
WHEREAS, the Company has requested that the Loan Agreement be further
amended and that certain matters be waived by the Lenders, subject and pursuant
to the terms and conditions of this Amendment;
NOW, THEREFORE, the Company, the Lenders and the Agent wish to amend
the Loan Agreement in certain respects, and accordingly, the parties hereto
agree as follows:
Section 1. Definitions. Terms used but not defined herein shall have
the respective meanings ascribed to such terms in the Loan Agreement.
Section 2. Conditions Precedent. The agreements set forth in Sections 3
and 4 of this Amendment shall be subject to the occurrence of the following: (i)
the Lenders receipt of an Officer's Certificate that no Event of Default, which
is not otherwise being waived by the terms hereof, under the Loan Agreement
shall have occurred and be continuing; and (ii) Closing occurring pursuant to
the Agreement described in Section 3 below.
Section 3. Waiver. Subject to the occurrence of the conditions
described in Section 2 above and the Company's and Guarantor's compliance with
the provisions of Section 4 below, the Lenders hereby waive: (i) the default
caused by Company's failure to make the Loan payment due in May, 2002; and (ii)
the requirements and obligations of the Company under Section 8.07 of the Loan
Agreement with respect to the sale by the Company of the crusher at the Project
(the "Crusher") pursuant to the terms and conditions set forth in that certain
Purchase Agreement, dated effective May 14, 2002 ("Agreement"), between
Guarantor and Corner Bay Silver Inc. ("Corner Bay"), a copy of which Agreement
is attached as Exhibit A hereto.
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Section 4. Amendments. The Loan Agreement is amended as follows:
(a) Add the following provision after the last sentence of Section 8.07
of the Loan Agreement:
"Notwithstanding the foregoing provisions of the prior
sentence of this Section 8.07, the proceeds from the sale of the
Crusher pursuant to the Agreement shall, within five (5) days of
receipt by Borrower or Guarantor, be applied in the following
priorities: (i) U.S. $600,000 in payments necessary to remove
mechanics' and materialmen's liens, potential defaults and obligations
to vendors; (ii) U.S. $502,358.80, as payment necessary to pay off the
purchase money security interest lien on the Crusher, currently held by
Xxxx Deere Corporation; (iii) U.S. $950,000 to repayment of the Loans,
50% of which (i.e., U.S. $475,000) shall be applied to Loan payments
due starting in May, 2002, and 50% of which (i.e., U.S. $475,000) shall
be applied to Loan payments due, in reverse order of maturity, starting
with the June, 2003 payment, and (iv) 75% of amounts in excess of the
amounts in (i), (ii) and (iii) above will be applied to Loan payments
in reverse order of maturity, starting in April, 2003, and 25% of which
shall be applied to Loan payments due in order of maturity, starting in
August, 2002."
(b) The text of Section 8.29, which was added to the Loan Agreement by
Amendment No. 5, dated March 25, 2002, is deleted in its entirety and
replaced with the following provisions: "To the extent that Borrower
reduces total trade accounts payable below $2,250,000, the Lenders will
receive payments, which shall be applied to the Principal balance due,
equal to all such reductions."
Section 5. Guarantor Covenant. Guarantor, by its execution of
this Amendment, hereby covenants that: (i) if and to the extent it receives any
payments or proceeds pursuant to the Agreement, it shall cause these proceeds
and payments to be paid and applied as described in Section 4 above; and (ii)
Guarantor's guarantee obligations under the Guarantee Agreement shall remain in
full force and effect.
Section 6. Agent and Lender Covenant. Agent and Lender hereby
covenant to execute such releases of Security Documents with respect to the
Crusher as may be reasonably requested by the Company, in order to pursue the
sale of the Crusher.
Section 7. Documents Otherwise Unchanged. Except as herein
provided, the Loan Agreement shall remain unchanged and in full force and
effect, and each reference to the Loan Agreement shall be a reference to the
Loan Agreement as amended hereby and as the same may be further amended,
supplemented and otherwise modified and in effect from time to time.
Section 8. Counterparts. This Amendment may be executed in any
number of counterparts, each of which shall be identical and all of which, when
taken together, shall constitute one and the same instrument, and any of the
parties hereto may execute this Amendment by signing any such counterpart.
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Section 9. Binding Effect. This Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
Section 10. Governing Law. This Amendment shall be governed
by, and construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be
duly executed as of the day and year first above written.
"BORROWER"
XX XXXXXX CORPORATION
By: /s/Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
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Title: Vice President
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"GUARANTOR"
CANYON RESOURCES CORPORATION
By: /s/ Xxxx X. Xxxxx
---------------------------
Name: Xxxx X. Xxxxx
---------------------------
Title: Vice President
---------------------------
"AGENT"
BNP PARIBAS, as agent for the Lenders
By: /s/ Xxxx Xxxxxxxx
---------------------------
Name: Xxxx Xxxxxxxx
---------------------------
Title: Vice President
---------------------------
"LENDERS"
BNP PARIBAS
By: /s/ Xxxxx Xxx
---------------------------
Name: Xxxxx Xxx
---------------------------
Title: Vice President
---------------------------
By: /s/ Xxxx Xxxxxxxx
---------------------------
Name: Xxxx Xxxxxxxx
---------------------------
Title: Vice President
---------------------------
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XXXXXXXXXX XXXX-XXX
XXXXXXXXXXX XX, XXX XXXX
BRANCH
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxx
---------------------------
Title: Managing Director
---------------------------
By: /s/ Xxxxxx De Xxxxx
---------------------------
Name: Xxxxxx De Xxxxx
---------------------------
Title: Associate Director
---------------------------
NM ROTHSCHILD & SONS LIMITED
By: /s/ X. Xxxxxxx
---------------------------
Name: X. Xxxxxxx
---------------------------
Title: Director
---------------------------
By: /s/ X. X. Xxxx
---------------------------
Name: Xxxxxxxx X. Xxxx
---------------------------
Title: Assistant Director
---------------------------
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EXHIBIT A
PURCHASE AGREEMENT
Canyon Resources Corporation of 00000 Xxxxxx Xxxx Xxxxxxx, Xxxxx 000, Xxxxxx,
Xxxxxxxx 00000
Dear Sirs:
RE: XXXXXX MINE CRUSHING PLANT AND ANCILLARY ITEMS LOCATED IN CALIFORNIA
This letter will set out the general terms and conditions of the proposed
purchase of the Xxxxxx Mine Crushing Plant and Ancillary Items (the "PLANT") of
Canyon Resources Corporation (the "CORPORATION") by Corner Bay Silver Inc. or
such other corporation as may be chosen by Corner Bay Silver Inc. (the
"PURCHASER").
It is the intent of this letter that it set out with sufficient particularity
the details of the transaction contemplated by the parties so that the parties
may establish the general terms of the formal, comprehensive asset purchase
agreement (the "AGREEMENT") to be executed by them and which will be prepared
for the Closing (the "CLOSING"), which will take place within 30 days of the
Corporation's signature of this letter, as more fully set forth at paragraph
4(a) hereof. This letter shall be legally binding and shall be effective as of
its signature by the Corporation, and shall constitute the sole contract between
the Corporation and Purchaser if the final Agreement is not executed within 30
days of Corporation's signature of this letter.
1. ASSETS
The Purchaser will purchase the Plant, which is 100% owned or leased by the
Corporation and more particularly described in Schedule A attached to this
letter. All such assets comprising the Plant will be purchased free and clear of
any encumbrances and will be purchased upon the following terms and conditions:
(a) The Purchaser will purchase the Plant that will include
machinery, equipment and ancillary items as set out in
Schedule A. Such assets as set out in Schedule A are intended
to be removed from the Corporation's property in the State of
California, USA and transported at Purchaser's cost to the
Purchaser's property in Sonora, Mexico by common carrier.
(b) The Corporation will provide all documentation in its
possession related to the design, installation, maintenance,
and operation of items listed in Schedule A, including, but
not limited to, manufacturer's operating and maintenance
manuals, specifications and drawings related to the original
and subsequent installation of equipment, Corporation's
operating and maintenance history, including preventive
maintenance procedures and records and correspondence relating
to purchase, maintenance and operation of equipment. All
warranties and
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maintenance records with respect to machinery, equipment and
ancillary items are to be made available as soon as practical
and transferred to the Purchaser, in all cases before Closing.
(c) The Corporation will give to the Purchaser and its
representatives such access to the property (the "PREMISES")
where the Plant is located, and such other authorization as
may be necessary, to enable the Purchaser and its
representatives to conduct reviews of the Plant and to
complete activities related to the dismantling and movement of
the equipment off-site. The Purchaser will endeavour to remove
all equipment from the Premises within 180 days from the date
this letter is signed by the Corporation. Purchaser will
ensure that the immediate Plant area is left free of all
equipment described in Schedule A and that only concrete
foundations are remaining upon completion.
(d) After Closing, the Corporation will provide as part of the
Agreement, without additional cost, up to 500 hours of use of
the Corporation's 40-ton crane for use in the dismantling and
loading of trucks to transport equipment off-site. The crane
will normally be available to the Purchaser during daylight
hours during a 12-week period after Closing when the equipment
is disassembled and transported. Purchaser will provide fuel,
lubricants, and operator and make the crane available for
preventive and corrective maintenance, as required. The
Corporation will also provide, during the 12-week dismantling
and shipping period, electrical power and water as required
to: (i) test operate machinery and motors, (ii) make repairs
as needed, and (iii) clean and prepare equipment for shipment.
(e) No action taken by the Purchaser or its representatives
hereunder shall constitute a trespass. If, prior to the end of
the date fixed for Closing, the Purchaser elects for any
reason not to proceed with the purchase of the Plant, it may
terminate the Agreement by giving written notice to the
Corporation of its intention to so terminate, whereupon all of
the obligations otherwise imposed upon the Purchaser under the
Agreement shall be of no further force or effect, and
Corporation shall be entitled to retain the down payment of
US$250,000 paid by the Purchaser pursuant to paragraph 2(a).
If the Purchaser has not provided payment of shares pursuant
to paragraph 2(b) within 30 days of the date of acceptance of
this letter, then the Agreement will terminate with no further
obligations between the parties, unless the parties mutually
agree to extend the Closing date, and Corporation shall be
entitled to retain the down payment of US$250,000 paid by
Purchaser pursuant to paragraph 2(a).
(f) The Purchaser will not assume any liabilities of the
Corporation, other than as expressly provided herein. Without
limiting the generality of the foregoing, it is understood and
agreed that the following liabilities are not being assumed by
the Purchaser:
i) sales commission payable with respect to the
transactions described herein,
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ii) insurance coverage of the Plant until the Purchaser
has taken possession and title at Closing, and
iii) any and all environmental liabilities associated with
the Plant.
2. PURCHASE PRICE
(a) Upon the Corporation's signature of this letter, the Purchaser
will pay to the Corporation a down payment of US$250,000 to
secure an exclusive 30-day purchase period for the Plant,
commencing at the date of the Corporation's signature of this
letter. This payment is refundable only if the Corporation's
Board of Directors fails to approve the sale of the Plant or
the Corporation otherwise fails to give effect to the
transaction contemplated herein.
(b) Upon Closing, 850,000 common shares of the Purchaser shall be
issued to the Corporation, subject to appropriate regulatory
approval. It is anticipated that a hold period will be imposed
on the shares. Notwithstanding such restrictions, the
Corporation shall be allowed to sell shares, provided that,
such sales are in compliance with applicable securities laws
and regulations.
(c) If the net price received by the Corporation from the sale of
all of the shares (i.e., net of commissions, discounts, taxes
and other fees for transfer or sale), plus the amount of cash
paid to the Corporation pursuant to paragraph 2(a), is less
than US$2,250,000, the Purchaser shall pay the difference to
Corporation by wire transfer in immediately available funds,
within 10 calendar days after being notified in writing by the
Corporation of the amount of that difference. The Corporation
shall accompany that notice with reasonable documentation that
evidences the amount of net price received by the Corporation.
3. CONDUCT OF BUSINESS
From the date of its signature of this letter until the Closing, the Corporation
will maintain the Plant in the ordinary and usual course, properly insured, will
confer regularly with the Purchaser to report on the status of the Plant and
will not make any decisions likely to have a material effect on the Plant,
including Plant operation, without consulting with and obtaining the approval of
the Purchaser (such approval not to be unreasonably withheld).
4. DATE OF THE AGREEMENT AND CLOSING
(a) The Closing will take place within 30 days of the date of the
Corporation's signature of this letter. If the signature of
this letter has not occurred by May 15, 2002, then the entire
offer to purchase shall be null and void. The Corporation
shall provide usual and normal representations and warranties
in respect of its sole and unencumbered ownership of the Plant
to allow the Purchaser to take free and clear title and
control of the Plant and remove the Plant from the
Corporation's
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Premises. OTHERWISE, CORPORATION MAKES NO IMPLIED OR EXPRESS
WARRANTIES REGARDING THE CONDITION OF THE PLANT OR REGARDING
ITS FITNESS FOR ANY PARTICULAR PURPOSE, AND PURCHASER TAKES
THE PLANT "AS IS".
(b) Closing is subject to the approval by the Boards of Directors
of the Corporation and the Purchaser, as well as all required
regulatory approvals, within the 30-day period described in
Paragraph 4(a).
5. CONFIDENTIALITY
The Purchaser and the Corporation will keep this letter and their mutual
interest in a proposed transaction (as well as all information obtained in
connection with their respective due diligence investigations), including any
negotiations between the Purchaser and the Corporation in respect thereof,
strictly confidential except as required by regulatory authorities. Upon
execution of this letter, the Corporation will cease any and all discussions,
whether direct or indirect, with persons other than the Purchaser, with respect
to the sale of the Plant and will enter into no other discussions with third
parties prior to either of the termination events set forth in paragraphs 1(e)
or 4(b).
6. TERMINATION
This letter may be terminated and the transaction contemplated hereby may be
abandoned or terminated:
(a) at any time by the mutual agreement of the parties hereto,
(b) by the Purchaser, as set forth in paragraphs 1(e) and 4(b); or
(c) by the Corporation, as set forth in paragraph 4(b).
7. GENERAL PROVISIONS
(a) Each party hereto represents and warrants that it is duly
authorized and has all necessary power and authority to
execute and deliver this letter and to perform its obligations
hereunder. It is expressly agreed and acknowledged that no
other agreement or meeting of the minds has been reached.
Accordingly, if for any reason whatsoever the purchase of the
Plant is not consummated, no party hereto shall be entitled to
any form of relief whatsoever, including, without limitation,
injunctive relief or damages.
(b) This letter may be executed in two or more counterparts, any
one of which need not contain the signature of more than one
party, but all such counterparts taken
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together will constitute one and the same agreement and shall
be governed by the laws of the State of California.
(c) Each party hereto shall bear all expenses incurred by it in
connection with this letter, including, without limitation,
the charges of their respective legal counsel, accountants,
financial advisors and finders.
Please indicate your consent and agreement to the foregoing by signing both
copies of this Option to Purchase Agreement in the space provided below and
returning one fully executed copy (which return may be made by fax to (416)
000-0000).
Yours very truly,
Corner Bay Silver Inc.
("Purchaser")
By:
-------------------------------------
Authorized Signing Officer
Agreed to and acknowledged this day of May, 2002.
Canyon Resources Corporation
("Corporation")
By:
-------------------------------------
Authorized Signing Officer
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